For the fourth consecutive year, the Madrid Audiovisual Cluster publishes the Study on Audiovisual Content and Technology in the Community of Madrid. In the 2011 edition of the Study, an updated analysis of the audiovisual industry from a business perspective has been carried out.

blankIn 2008, the Madrid Audiovisual Cluster decided to carry out a study on the economic aspects and technological development of the audiovisual sector in the Community, mainly for two reasons: the need to know the real situation of the audiovisual industry in the region, and with the aim of repeating it annually in order to determine the trends in the sector.

This work has been carried out annually based on the accounts that a selection of companies in the audiovisual sector deposit in the Mercantile Registry. These companies must be domiciled in the Community of Madrid and have maintained commercial activity in the last three years, therefore data referring to self-employed workers are not taken into consideration.

As a result of this analysis, we can say that digital convergence, the multiplication of broadcast media or the entry of new agents in the scenario of the so far considered as "audiovisual sector" require a reasoned delimitation to define the current audiovisual sector. What exactly do we mean today when we talk about “audiovisual sector”?

Great protagonists in this transformation have been the new technologies; Internet or mobile telephony which, thanks to their democratization in the social sphere, are considered new and potential platforms for the consumption of content, even conditioning the production and management systems of the companies that create said content. The same is happening with entertainment software, video game or interactive content companies that, for the first time, are going to be considered as part of the audiovisual industry due to the digital perspective that the industry is adopting.

In the fourth edition of this study, an updated analysis of the audiovisual industry has been carried out from a business perspective, in which different forms of management, diverse markets, a wide variety of products, and all of this under different approaches to the activity of the sector interact. considering the traditional industry versus the new one and the degree of action and involvement of the agents of the audiovisual value chain from the creation and production of content to its subsequent dissemination,

A detailed analysis

The audiovisual sector analyzed in the region has the following characteristics: Global turnover and employment:

  • The audiovisual industry represents approximately 4% of the Regional GDP (2009), which represents a significant volume of billing as well as employment.
  • The turnover generated in 2009 reached the figure of 7,650 million euros, and in employment, around 28,000 jobs, figures that have experienced a certain drop in recent years (-8% in turnover and -11% in employment compared to to 2008) due to the economic crisis, which affects all the productive sectors of the region.

Company profile:

  • High degree of business fragmentation: 75% of the companies studied are micro-enterprises (turnover of less than 2 million euros), especially those dedicated to the production of audiovisual content.
  • Dual configuration: A small number of companies account for more than 90% of the turnover generated, as well as a high number of micro-enterprises accounting for the rest of the turnover.

Changes in the sectoral structure:

This is a period marked by the proliferation of new companies that have seen an opportunity in the digital perspective that the industry is adopting. The entry of technology companies into the audiovisual industry stands out, such as software development companies, distributors and implementers, application developers and network architectures that help the audiovisual industry adapt more easily to new challenges and become more competitive.

  • “Traditional” nature of the industry: 85% of the turnover is contributed by companies that engage in “traditional” activities in the audiovisual value chain. This phenomenon is due to the strong presence of audiovisual production companies in the region, all national broadcast TV channels and foreign distributors or majors that have established their commercial headquarters in the Community of Madrid.
  • Multiplication of supports and exploitation windows: The companies dedicated to the "Aggregation and Distribution of Contents" contribute 60% of the total sales figure of the sector (2009), compared to 40% of those focused on the "Creation and Edition of Contents”.
  • Important role of the "new" audiovisual: It has experienced a year-on-year growth of close to 16% in its turnover compared to almost 2% of the "traditional", highlighting the trend of content producers and distributors for innovation in their products and diversification to adapt to new formats. The growth of companies dedicated to the creation of video games (+21% compared to 2008) and interactive and digital leisure content (+80% compared to 2008) stands out, although they still contribute low volume figures to the industry.
  • Business movements: The process of digital convergence has increased the levels of competition between channels, causing concentration operations (merger between Telecinco and Cuatro and the possible operation in La Sexta and Antena 3) in a clear fight for market shares in the face of the multiplication of channels and content offer.
  • Sharp outsourcing of services: Technical content editing companies (post-production, sound, digital effects, dubbing, etc.) have experienced growth of close to 50% compared to 2008. These figures are a sample of the trend of large companies for allocating its resources and infrastructure to tasks with greater added value that define its business and subcontracting services to specialized companies.
  • Financial repercussion: The investment in technology and the increase in products offered to the market have narrowed the margins of the companies while maintaining a healthy economic-financial structure (ROE: 7.7%; ROA: 2.4%).

Access to the full study.

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By • 20 Oct, 2011
• Section: Books, Business