Between competition and complementarity
IDATE newest market insight offers an overview of the pay TV market in the main European countries and in the United States. It describes the different models of subscription-based video on demand offerings (SVoD): supply-side strategies and description of main players’ services. It lastly analyses the SVoD services developments compared to the pay TV global market.
SVOD seems ready to compete with traditional VOD offerings
Brought to the spotlight thanks to the success of services like Netflix and Hulu, SVOD seems poised to compete with traditional VOD offerings, and even position itself as a true rival of pay TV, the audiovisual market's leading revenue generator.
Mainly originating in the United States, SVOD services are starting to gain ground elsewhere, in part through the expansion of the US services (note the growth of Netflix in Latin America and in several European countries), and in part thanks to the reaction of local stakeholders who are structuring their own SVOD offerings in addition to existing stand-alone services.
Comparison of changes in the number of subscribers to a pay TV offering, Hulu Plus and Netflix in the United States(Millions of suscriber households)
Source: IDATE, Market Insight "Pay-TV vs SVoD", March 2013, based on operators' data
Many video market actors are highly involved in the development of on-demand services
Although the pay TV operators themselves appear to be highly involved in the development of on-demand services, allowing them to broaden the range of services offered to their subscribers and/or reach out to new audiences, many other players are also positioning themselves in this niche, such as free-to-air TV channels, special-interest TV channels, content producers, DVD and Blu-ray rentals players, and Internet industry players.
These services stand out owing to the size of their catalogues, but also their accessibility closely linked to their role in operators' strategies.
Will SVoD offers create a cordcutting effect and replace traditional Pay-TV offers ?
Current discussions concerning the cord-cutting risk that these SVOD services could induce lead us to wonder about their potential to replace traditional pay TV offerings. But apart from the pricing element (which clearly plays in favour of SVOD services), the type of content offered and its positioning in the media chronology, the modes of accessing the content and these services' ability to hold copyrights seem to highlight the fragility of these offerings in comparison to those of linear television. Despite the popularity of these SVOD services and the soul searching they are inducing among traditional pay TV industry players, they still account for a very weak share of the market (less than 2 % of total pay TV and SVOD revenues). Between now and 2017, even if their market share does increase, it should not exceed 4 % of global sales, of which over half will continue to be generated in the United States market. The competition between SVOD and pay TV is undeniable; however, it hinges more on the new players' ability to induce traditional players to overhaul the sector than on their ability to threaten the sector in the medium term.
Florence Le Borgne-Bachschmidt, Head of the TV & Digital content Practice, IDATE.
She joined IDATE in July 1998 and is now head of our TV & Digital content Practice. Florence’s prime area of focus is the development of digital media technologies (terrestrial, cable and satellite TV, digital cinema, video and TV on the web) and specifically the economic, strategic and micro-economic aspects of these sectors. Her analyses also cover media company strategies in general. Before coming to IDATE, Florence worked as the Head of Research in the Nord-Pas-de-Calais Regional Development Agency's Economic Observation department, where she devoted herself primarily to issues relating to the Information Society, the development of telework and the mastery of key technologies. Florence is a graduate of the Lille school of management EDHEC (Ecole of Hautes Etudes Commerciales).
> More information available at: www.idate.org
Florence Le Borgne-Bachschmidt
Head of the TV & Digital Content Practice
More than 1.5 billion TV households worldwide in 2017
The TV market is a sector on the precipice of unprecedented upheaval. IDATE publishes every six months an observatory of the traditional TV market and our study reveals the chief forces driving the industry’s growth and transformation – exploring key market trends and supplying volume and revenue forecasts up to 2017.
According to IDATE, the number of TV households worldwide will reach 1.544 billion in 2017 (+9.1% in 5 years).
• Cable will the remain the chief access channel (554.0 million households in 2017) but will gradually lose ground to satellite and IPTV which will account for 32.1% and 8.6% of TV households, respectively, at the end of 2017.
• Despite the development of hybrid TV solutions, terrestrial TV will continue its decline and drop down to number three spot by 2017, with a roughly 23% share of the global market.
• The development of hybrid solutions that combine live programming on broadcast networks (terrestrial and DTH) and OTT video services over the open Web is a key variable in the future development of the various TV access modes.
IDATE's take on current industry moves
"The current acquisition of Virgin Media by Liberty Global underlines the strategy of internationalisation in the Pay-TV Market. More globally, the United States continue to set the trends and consolidate their leadership in this market," says Florence Le Borgne-Bachschmidt, head of the TV & Digital Content Practice at IDATE. She insists: "Pay-TV is nearing saturation in the world’s more developed TV markets. The emergence of new OTT video services on televisions and other connected devices increases the threat of cord-cutting. For a great many pay-TV providers in the West, emerging markets therefore represent vital sources of future growth."
Spotlight on the breakdown of Pay-TV: TV access and premium pay-services
In some of cable TV’s traditional strongholds, access services still account for the bulk of pay-TV subscriptions with e.g. 57.1% of pay-TV households in Japan & 74.6% of pay-TV households in Germany.
In France, the development of multi-play services including access to a basic IPTV package tends to increase the share of households subscribing to an access only service.
In contrast, in the United Kingdom or Italy, this type of offer tends to be disappearing, which is in the UK visible by stopping to sell the Virgin Media M package.
Florence Le Borgne-Bachschmidt, Head of the TV & Digital Content Practice
More information on our regulary published World TV Observatory available here
About Florence Le Borgne: She joined IDATE in July 1998 and is now head of our TV & Digital content Practice. Florence’s prime area of focus is the development of digital media technologies (terrestrial, cable and satellite TV, digital cinema, video and TV on the web) and specifically the economic, strategic and micro-economic aspects of these sectors. Her analyses also cover media company strategies in general. Before coming to IDATE, Florence worked as the Head of Research in the Nord-Pas-de-Calais Regional Development Agency's Economic Observation department, where she devoted herself primarily to issues relating to the Information Society, the development of telework and the mastery of key technologies. Florence is a graduate of the Lille school of management EDHEC (Ecole of Hautes Etudes Commerciales).
Head of "Video Distribution" Practice
Cordcutting: Is Europe ready?
Cord-cutting, which describes the phenomenon of traditional television services' customer drain, is at the heart of the new competence in the audiovisual landscape. IDATE recently published an in-depth market report dealing with this topic and it proposes a complete benchmark of new video offers in the United States and analyses the best practices. The study provides also conclusions on potential impacts of this phenomenon in Europe.
The phenomenon of cord-cutting can be regarded in a broader perspective of evolution in access to television and video services. This threat to the established MVPDs1 is in fact symptomatic of a broader set of upheavals in the television industry. Various factors contribute to these changes: the economic crisis, which fuels tensions surrounding the primary income of the established players (advertising and subscription); an underlying trend of on-demand video consumption and changing usage habits that threaten to shatter lucrative TV packaging schemes; the entry of Internet players who master these new usage habits and are a step ahead when it comes to user interfaces, a key element in the future.
The traditional television players – channels and distributors – are thus facing a scissor effect. TV channels are seeking alternative growth models that include enhanced B2B with distributors and entry into the online market to serve as a springboard for advertising growth. For their part, distributors are seeing Internet players encroach onto their networks, while rights holders and TV channels continually weigh the benefits of partnering with them. The instability is constant. For Jacques Bajon, report’s project manager: “The key issue at stake is this process of disintermediation, and the TV industry's inability to team up only reinforces the trend.”
In the United States, players' strategies are thus primarily defensive:
• Rights holders and TV channels still hesitate between choosing traditional distributors and the new ones (i.e. Internet-based);
• Distributors are attempting to retain their subscribers with multi-screen offerings and by focusing on the Internet access growth engine (itself a vehicle for disintermediation!) and – in a new trend – by working together.
Europe, with a subscription TV market that still has its growth drivers, may think that it is preserved from the tension across the pond, but its dependency on the US industry is twofold. Europe lags behind in many ways in terms of content and technology. It is dependent on US audiovisual products, and the entrants in the Internet market that master technology and interfaces come from the United States.
What is the solution? Risky changes.
• Rights holders must make the release windows and network-centric agreements model suppler to make content available. In Europe, the production industry must structure itself without further delay. In Europe, and to a lesser extent in the United States, TV channels fund audiovisual production and thus play a video library management role that must be strengthened, as in the film industry.
• TV packagers must do away with their lucrative but ossifying model of packaging channels and instead offer consumers what they want.
• Distributors must distribute, whether over managed networks or the Internet, and they should be paid for this service (and not the contrary, which is currently the case for wireline operators).
OTT video services will continue to grow and influence the TV access market because this is what users are demanding: flexibility and richness of content offerings, prices (a monthly subscription to Netflix equals the purchase price of a DVD), "anywhere, any terminal" usage habits – unlike operators' segmented offerings, and user-friendliness (these new entrants usually offer much more accomplished consumption interfaces).
Jacques BAJON, Head of "Video Distribution" Practice
More information on our website about the in-depth market report dealing with this topic
About Jacques: He joined lDATE in November 2000, working as a Director of Studies. His assignments primarily involve strategic and sector-specific examination of the television/video and its distribution modes, from broadcast to telecoms/IP. He more specifically addresses digital delivery ecosystems and linked services. Jacques’s previous experience includes freelance analyst for the Eurostaf / Les Echos group, carrying out market research and analysis of media and telecommunications industry companies, in addition to gaining experience in market analysis working for Ericsson. Jacques holds a post-graduate research degree (DEA) in International Economics (Université Paris X Nanterre) , a Master in Strategic Management of Innovation (Toulouse Graduate School of Management), and followed a training session in Investments in Telecom Networks from Télécom ParisTech.
Head of Consumer Electronics & Digital Entertainment Practice at IDATE
In 2013, hardware & games will represent 60 billion EUR in revenues, against 53bn EUR in 2012
Despite the profound changes that are going through it, the global market for hardware & video games will grow up from 2013 to attain 79 billion Euro in 2016. This study follows the development of key indicators for the sector over five years and makes an appraisal of the key markets: Home consoles - Handheld consoles - Offline games - Online games - Mobile phone games.
Following the recent announcements at the CES 2013 can we believe in a recovery of the hardware market in short or mid-term?
In 2012, the home consoles market segment (hardware and software sales) could generate 37% of total video game revenues. Given the regular growth of the online games and mobile platform games market segments, the home console segment is expected to shrink in the coming years. Let us recall that the latter accounted for nearly 60% of total market revenues in 2004. In spite of the arrival of a new generation of consoles, resulting in double-digit growth over several years, the home console segment will account for a "mere" 41.1% of the total global market by 2016.
Three factors are bringing about a shift in the home consoles market segment:
1. The arrival of Nintendo's Wii U, its first new generation console – pending the likely release of competing devices by Microsoft in 2013 and Sony Computer Entertainment in 2014 – is without a doubt the most pivotal event as the year approaches its end. Like its big brother, the Wii U will deliver a new gaming experience to the fickle and much sought-after consumers, be they experienced or casual gamers. This machine introduces pioneering features, and there is no doubt game designers will put them to use and conjure up new gameplay. Nintendo's machine should prove to be a winner. Yet it is still too early to know whether the Wii U console will enjoy the same degree of success as the Wii.
2. Competitors Sony and Microsoft will be paying particular attention to the Wii U's sales figures, given how off-guard they were caught by the Wii's success.
They now realise that their health will be determined by the level of innovation they bring to the gaming experience. The question remains as to which part of the console they will focus their innovation efforts on. 4K resolution could be an option, although this would require that gamers replace their TV sets, and 4K home cinemas are still quite pricy. The most likely path would be to beef up their machines' ubiquitous and multiscreen functionality, and rethink the interaction peripherals with an emphasis on voice recognition and motion sensing. As for infrastructures for delivering services, they have no choice but to invest in the cloud as done by Sony Computer Entertainment, which acquired Gaikai for USD 380 million in mid-2012.
3. According to IDATE, revenues from digital sales via home consoles will reach EUR 2.9 billion in 2012. These include video games, video and music. This represents one fifth of all turnover generated by the sale of content for platforms. By 2016, IDATE reckons that income from the digital sale of content via home consoles will account for 60% of income generated by these platforms.
Project Manager Laurent Michaud
Laurent Michaud is the Head of Consumer Electronics & Digital Entertainment Practice. Laurent acts as project manager for market reports on the rise of Smart Home, Game, Music and Electronics. He adresses technological, industrial and strategic issues through a point of view of innovation. He provides his clients with expert technical-economic analysis of strategic issues relating to consumer electronics and entertainment.
> More information available at: www.idate.org
Head of consumer electronics & digital entertainment practice, IDATE
Each year IDATE conducts studies on video games and accompanies enthusiastic project developers who rub shoulders with a market that will make them no concessions. Laurent Michaud, Head of the Consumer Electronics & Digital Entertainment practice at IDATE shares it takes on this in the article below.
It is now nearly 12 years that I have observed the sector with the eyes of a player and economist. We have dealt with all the issues that have made the news: we are going to cover our third home console marketing campaign, in the early 2000s we studied massively multi-player games, the advent of video games on mobile phones, then Occasional Gamer, in-game advertising, the App Store phenomenon, Serious Gaming, cloud gaming, games on smart TV, social gaming... In the background, dematerialisation remains the common denominator for all of them.
Alongside these studies, we have helped nearly forty project carriers by providing expertise regarding the techno-economic feasibility of their games, the industrial positioning of their company, their internationalisation strategy, construction of their business model, design of their outline business strategy...
These 12 years in practice enable me to draw some conclusions on what we are experiencing today as a crisis in the growth of the on-line games sector and a more acute crisis that could become a reality for certain traditional actors (those who develop games on physical media).
Video gaming is in crisis and the companies affected are not the least known: Gameforge, BigPoint, Zynga, but also THQ, Sega, Turbine to name only those... and I am not mentioning the myriad of small companies not really known for the big hit, which were formed to develop games for mobile phones, tablets or on Facebook and which are struggling to obtain a return on quite modest investments in a market where supply is abundant and it is difficult to differentiate oneself.
What are the causes of this crisis, beyond the effects of increased competition? I count four:
1. The video game evolves in phases of growth and decline determined by the life cycle of the hardware. Game consoles register their activity in physical cycles of at least six years. We are currently experiencing a downward cycle, a transition phase between two generations of home consoles characterised by income from the sale of games for these machines down by 12% between 2011 and 2012 and by 20% for the turnover generated by console sales.
2. We observe massive player support for Free2Play on smartphones, tablets, social networks, in games on browsers or MMOs and soon on smart TVs. Controlled inflation of the price of games for home and handheld consoles maintains the income for this segment but basically players demonstrate to us that the model of the future is Free2Play, of which these are some eloquent examples:
- The British studio BossAlien published CSR Racing and quickly recorded a monthly turnover of $12 million,
- According one of its directors, the Norwegian studio Supercell recorded a turnover of $500,000 per day with Clash of Clans,
- When there is no income, there is always the level of "monthly active users" that shows the attractiveness of games carried by the F2P model - 32 million for League of Legend from Riots Games (no profit conversion rates available), 50 million for Farmville 2 (with, according to observers, a conversion rate of around 2%).
- An unprecedented wave of MMO games is passing from a subscription payment model to Free2Play: Aion from NC Soft, Age of Conan from Funcom, Star Wars, The Old Republic from EA, Gotham City Impostors from Warner Interactive, DC Universe from SOE, City of Heroes Freedom from NC Soft…
Not to subscribe to this model supported by a large majority of players may constitute a medium-term risk for publishers.
3. In the on-line games market segment the crisis generates its effect on the first generation of developer-publishers. After a successful first game, these companies have recorded considerable and sometimes dramatic growth as regards their income and size of workforce. They now encounter difficulties with their "second game" which struggles to achieve the support of players who had been seduced by the first. However, the on-line games market segment will continue to record a two-figure growth up until 2016. IDATE estimates that the on-line games market will increase from €15 billion at the end of 2012 to more than 23 at the end of 2016 and will eventually represent a little less than 30% of the global market which could rise to €60 billion. If the market continues to grow at that rate it is value creation that will very largely make up for value loss. This observation underlies reasoning on the, as yet inexhaustible, capacity of the Internet to allow innovative game experiences.
4. In the on-line games environment, the operational risk of a game rests synthetically on four elements: content, business model, technical services, marketing and communications. These four pillars necessary for success rest themselves on new skills: community management, collection, processing and analysis of usage data, business and pricing strategy, industrial intelligence... These tasks are often underestimated by development studios more inclined to create content than conceive its publishing, marketing etc.
Thus, the economic rule "adapt or perish" was never more true than today in the games industry, and never has this rule applied as rapidly as today. Production times for terminals are being reduced on many platforms (mobile phones, tablets, social networking and browsers): as a result, the "time to market" is very short as, at times, is the time that separates the developer from failure.
This statement is difficult to hear: the developer, as Peter Molyneux said so well in a recent interview on Games Industry International, "is not supposed to make games for money. He is also reluctant to talk about monetisation." The games sector is recent and, since the industrialisation of the development market segment in the mid-90s, the job of the studio has been to create a games experience, not to take on board its commercialisation, carry out its marketing or pricing. This role is still regularly seen as falling to the editor. Today you, large and small developers, should know that that era is past and that your job also consists in selling, if not in integrating upstream of the production chain some thoughts relative to the marketing of the game.
A few reasons for bounce-back
If the crisis is real, the video games sector knows how to rebuild its declining segments, renew entertainment experiences, innovate; blaze a trail beyond the beaten track. This character trait offers some grounds for hoping to see the sector rebound in the very short term.
Here are four good reasons for bounce-back:
1. The next generation of home consoles
I am not dealing at length with the arrival of new home consoles that will boost the industry and, in 2015, hardware included, represent 40% of its income.
2. The promise of games on mobile platforms
Neither am I referring in detail to what games represent on mobile platforms, smartphones and tablets that seem particularly well-behaved in terms of market and complementary, even symbiotic, uses. This segment will hold a share of some 15 % of the market up until 2016 as against some 11 % of the income accruing to games on handheld consoles.
I will, on the other hand, insist on my two crazes:
3. The smart TV game
The arrival of the television connection changes the conditions of use for this terminal. Potentially it introduces a level of interactivity that makes it no longer a passive-consumption device. The connection promises enriched experiences regardless of the nature of the content - audiovisual, social, commercial, entertainment or informative.
In this context, the video game could be an accelerator for the market development of interactive applications on smart TV. It will demonstrate its effectiveness by providing a convincing user experience (with an interaction-immersion accessory, voice recognition and motion detection), based on a viable business model.
Games on on-line TV already seem to be taking five directions:
i) The downloading of occasional games on the set-top box from the ISP. In France, Free offers such a service on its Revolution box in partnership with TransGaming:
ii) Games synchronised with live-broadcast audiovisual programmes. Visiware, (through its PlayAlong offer) synchronises the television viewer, who can be a virtual contestant, with more than 800 games and live-broadcast programmes worldwide.
iii) The deployment of an application used by the television manufacturer or by a third party such as Google: EA has just announced, and it went more-or-less unnoticed, that two of these occasional games were available on Samsung's smart TV and controllable by the South Korean company's Galaxy phones. These are Game of Life and Monopoly.
iv) Cloud gaming is a technology that can home-deliver streamed games via the Internet on a connectable TV. The games consoles were also quick in response as Gaikai, one of the most promising cloud gaming service providers was acquired by Sony Computer Entertainment in early July for 380 million USD.
v) Access to games via social networks: Facebook is a platform of omnipresent coverage, found on most connectable devices (tablets, smartphones and computers). It is also available on smart TV and will provide access to the games catalogue that it offers on computer.
These guidelines lead to or induce convergence, better collaboration between the television actors (channels, programme producers), telecommunications and Internet actors (Internet access and service providers), consumer electronics manufacturers and video games actors. It operates at the technological, content and economic level and in any event it opens a new market segment, especially with the arrival of EA.
4. The ubiquitous or continuous game
Today, one can distinguish three types of ubiquity in video games.
- The first is a ubiquity of service: the ranking, challenges, friends' games list etc. are ubiquitous. We find this feature on Game Center or Facebook.
- The second is a ubiquity attached to games. Boostr, developer and publisher of the Urban Rivals game with 25 million players, sets its strategy on ubiquity. This game is available on social networks, tablets, smartphones and on its website. I have single access available, which gives me the possibility of playing indiscriminately on any one of these four single platforms that I pick up according to my wants and the terminal that I have at hand. I also play Football Manager quite a lot, but I open a different game on each platform, which breaks the continuity of the game experience.
- The third is a ubiquity carried by connected objects. This ubiquity took shape in October 2011 under the game name Activision Skylanders. This game is based on action figures equipped with NFC technology and interacting with the home console and the game. These small figures are placed on a pedestal and are recognised and displayed on the screen. They keep in memory the experience gained during the game until the next connection to another console. 30 million figures have been sold to date worldwide.
In conclusion, video gaming is experiencing successive crises, which, in the end, are technological and industrial adjustments related to its strong ability to innovate and recreate: to me these adjustments seem necessary for a sector that, finally, seems soon set to reach economic maturity.
Responsable de la practice Digital Home & Entertainment, IDATE
More information available on ourwebsite.
Opening day of the 34th Summit: The future of the digital economy according to its leaders
This morning IDATE Chairman François Barrault opened the 34th edition of the DigiWorld Summit in Montpellier. The Summit has become one of the must-attend events each year for playmakers in the telecom, Internet, television and video game industries. It will bring together more than 1,200 participants and 130 speakers from over 20 countries around the world.
IDATE and the members of the DigiWorld Institute are putting the spotlight on “Game Changers: Cloud, Mobile, Big Data” for this year’s Summit. The objective of the event is to discuss the factors that will lead to the emergence of the next decade’s digital leaders.
Executives from device and cloud heavyweights as well as content providers and telecom operators will present their views on these subjects over the next two days.
John Chambers, CEO of Cisco, affirms that the pace of innovation today is the fastest it has been in the past 25 years.
Hans Vestberg, CEO of Ericsson, stresses the need to combine a strategy of vertical integration and openness to “capture the innovation of other players.” For Ben Verwaayen, CEO of Alcatel-Lucent, Europe should speed up LTE rollouts despite the economic uncertainties. Qualcomm Chairman Paul Jacobs, riding high on the success of the firm’s technology, which is used in many smartphones and tablets, predicts a “sixth sense, in that everything will be connected around us.
In addition to such distinguished speakers, the DigiWorld Summit is also recognized for its detailed preparation of the themes and the series of sessions based on IDATE analysis. During the opening session the Institute’s experts will each present an overall analysis of their focus sectors. They will highlight the dominant role of three game-changing factors applicable to all the links in the value chain:
- Mobile’s irresistible momentum, with the battle of the OSs and then LTE, which is expected to be central to the new differentiation strategies to break out of the price wars.
- The Cloud, which for IDATE is not limited to externalized enterprise computing (“cloud computing”) but includes application distribution architectures (including for audiovisual content), shaking up traditional roles.
- Big Data, an asset that all players will be looking to capitalize on through real-time applications, aiming to enhance their services and offerings (devices, content, connectivity services, storage and application platforms, etc.).
Three important voices offer a counterpoint to IDATE’s analyses: Ben Verwaayen, the boss of Alcatel-Lucent, Léo Apotheker, former chief of SAP and HP, and Carsten Schloter, CEO of Swisscom. Overall the messages converge, with all three insisting on one point: Europe has a lot going for it. However, these pluses are particularly concentrated in the telecom industry, which is currently suffering multiple ills: the economic situation, its relative disintegration and the constraints of a world where traffic is exploding but applications tend to lean in favor of over-the-top (OTT) players.
The sessions on November 15 will be devoted to sketching a potential next-generation telco. Presenters include Terry Denson, Vice President of Global Strategy for Verizon, Stéphane Roussel, CEO of SFR, Jean-Ludovic Silicani, Chairman of ARCEP. The heads of Ericsson and Orange, Hans Vestberg and Stéphane Richard, will close the debate. Some big names in traditional content (the BBC) and new online platforms (like Netflix) will also be present. A conclusion will be given by players that hold promising futures in platforms with IBM, Amazon, BT and Cisco.
Also note that five executive seminars will be presented on November 14 and 15, on the following topics:
- Impacts on privacy, with the input of Google and CNIL.
- Key issues for next-generation networks: FTTx, LTE, etc.
- Expectations surrounding the rise of smart cities.
- Perspectives related to the concept of smart TV.
- New business models for video gaming.
> Follow live the plenary sessions: Live streaming DWS12 !!!
> More information about our program and our speakers on the website DigiWorld Summit 2012
Responsable DigiWorld Summit, DigiWorld by IDATE
A l’approche du DigiWorld Summit 2012, l’IDATE livre son analyse de la situation de l'économie numérique européenne
A l’occasion d’une conférence de presse organisée à Paris ce jour, le DigiWorld Institute by IDATE a livré son analyse de l’avenir de l’Europe des Télécoms et de la Télévision.
Quelques mois après la publication du DigiWorld Yearbook et quelques semaines avant le DigiWorld Summit, le DigiWorld Institute by IDATE, Institut spécialisé dans le domaine des télécommunications, médias et Internet, livre son analyse de la situation de l'économie numérique européenne à travers la situation exemplaire des secteurs des télécommunications et de l'audiovisuel. Cette conférence a également été l’occasion de présenter le programme du prochain DigiWorld Summit. Alors que la dernière édition du DigiWorld Yearbook avait été l'occasion d'attirer l'attention sur l'accentuation des faiblesses de la zone, le DigiWorld Institute by IDATE revient sur les grands enjeux auxquels l'Europe de la télévision et des télécommunications doit faire face.
Télécoms et Télévision européenne : Le point de basculement ?
Côté Télécoms, Yves Gassot, Directeur Général de l’IDATE, affirme : « Après avoir globalement réussi l'introduction d'une concurrence effective favorable au consommateur et dans une certaine mesure à l'innovation, l'Europe doit prendre en compte la situation inquiétante du secteur ».
Cela se traduit notamment par :
- une récession qui s'accompagne d'une pression sur les marges et l'investissement, à un moment où il faut accélérer les déploiements des réseaux fixes et mobiles à très haut débit et supporter l'explosion des trafics,
- un contexte peu favorable pour définir de nouveaux business models, lesquels sont pourtant indispensables pour répondre aux challenges lancés par des géants de l'Internet,
- une difficulté pour progresser vers un "single European market" tandis que s'accélère la consolidation aux Etats-Unis et que s'affirment des opérateurs de taille mondiale à partir des économies émergentes.
Côté audiovisuel, pour Gilles Fontaine, Directeur Général adjoint de l’IDATE, « ce serait une erreur de sous-estimer les points forts de l'industrie européenne ». En effet, la part de marché des chaînes de télévision et des distributeurs reste élevée alors que la production cinématographique est, dans une certaine mesure, le garant, d'une création autonome originale. Cependant, compte-tenu du poids des studios hollywoodiens, il serait illusoire de vouloir construire ex-nihilo un ou des champion(s) européen(s) des nouveaux services vidéo. La dissociation des droits « à la demande et linéaires » favorisera en effet les services nord-américains. Ce sont les raisons pour lesquelles il apparaît indispensable de favoriser une gestion des fenêtres, intégrée au sein des groupes de télévision dans un contexte où la SVOD est l’outil d’entrée des chaînes en clair sur le marché du péage.
Si les marchés de la télévision vont encore rester nationaux, une certaine internationalisation est cependant possible, voire indispensable. Pour cela, il faudra réviser le rôle respectif des chaînes et des producteurs dans la production de télévision (et non de cinéma). Par exemple, il faudrait également étudier la possibilité de lancer une chaîne jeunesse publique européenne disposant d'une base commune aux différents services publics européens.
DigiWorld Summit 2012 : Quelle place pour l'Europe au moment où l'émergence d'un nouvel ordre économique numérique mondial se met en place ?
Durant cette conférence, François Barrault, Président de l'IDATE, a présenté le programme du prochain DigiWorld Summit 2012. Ce sommet abordera le contexte mondial d'évolution des différents maillons de la chaîne du numérique avec des sessions plénières de haut niveau traitant des Smart Devices, des industries du contenu, des telcos et des plates-formes, des villes numériques,…
Le DigiWorld Summit est un rendez-vous incontournable qui permet de prendre la mesure des enjeux économiques et stratégiques pour les acteurs du secteur. Seront abordés des thèmes clés à travers une série de séminaires portant sur :
- Les Villes numériques
- Les contenus dans le Cloud
- Les réseaux de nouvelle grenaison (fixe et mobile)
- Big Data et protection des données personnelles
Le DigiWorld Summit est également l’occasion de mettre en avant le potentiel exceptionnel du territoire au cœur duquel cette conférence se tient depuis sa création :
- Les jeux vidéo seront à l’honneur durant une journée complète de conférences et de rencontres professionnelles organisées en partenariat avec le Montpellier in Game, événement que Montpellier Agglomération propose pour la troisième année consécutive.
- Les entreprises et start-up innovantes seront mises à avant à l’initiative de La Région Languedoc-Roussillon qui organise des rencontres B2B au travers du Networking by Sud de France Développement
Le DigiWorld Summit en bref
- Plus de 1400 participants attendus
- Plus de 130 intervenants
- Les présentations des analyses des consultants de l’IDATE
- Plus de 20 nationalités représentées
- Des sessions plénières de très haut niveau et 5 séminaires et conférences spécialisés
- Une sélection d'une trentaine d'exposants proposant des démonstrations et présentant leurs innovations
De très nombreuses occasions de networking durant une soirée d’ouverture à l'Opéra Comédie et une soirée de gala exceptionnelle sur le site d'IBM
> Découvrez le nouveau site internet du DigiWorld Summit 2012
Florence LE BORGNE-BACHSCHMIDT
Head of the TV & Digital content Practice, DigiWorld by IDATE
The penetration of digital television in TV households passes the 50% mark
Publication of the twenty-fifth edition of the “World Television Market” report, is an opportunity for IDATE’s Media team to put into perspective the fundamental changes in the audiovisual industry, in France, in Europe and worldwide. For Florence Le Borgne-Bachschmidt, "It is particularly important to put into context the transformational movements in television, which have never been greater than they are today, in order to measure the revolution taking place”. This report, founded on a very detailed database, provides key information (terrestrial TV, satellite, cable, IPTV, pay-TV etc.), for nearly 40 countries and 5 geographical areas.
TV access modes
According to IDATE, the number of TV households worldwide will reach 1.502 billion in 2016 (+9.4% in 5 years).
- Cable will the remain the chief access channel but will gradually lose ground to satellite and IPTV which will account for 30.0% and 7.3% of TV households, respectively, at the end of 2016.
- Despite the development of hybrid TV solutions, terrestrial TV will continue its decline and drop down to number three spot by 2016, with a roughly 26% share of the global market.
- The development of hybrid solutions that combine live programming on broadcast networks (terrestrial and DTH) and OTT video services over the open Web is a key variable in the future development of the various TV access modes.
According to IDATE, the penetration of digital TV households worldwide will come to 77.6% of TV households in 2016. Three factors in particular will shape the development of digital TV:
- Governments’ ability to steer the digital switchover of national terrestrial broadcasting networks
- Cable companies’ investments in upgrading their infrastructure
- How popular IPTV and satellite pay-TV services are with TV households.
According to IDATE, the global TV industry’s revenue will come to €340.1 billion in 2012:
- Pay-TV revenue will grow by 12.1% between 2012 and 2016, or by an average 2.9% annually.
- Ad revenue will enjoy even stronger growth of 21.2% between 2012 and 2016.
- Public financing/licensing fees will continue to increase significantly (+7% in 5 years).
Pay-TV providers going international
- Pay-TV is nearing saturation in the world’s more developed TV markets. The emergence of new OTT video services on televisions and other connected devices increases the threat of cord-cutting.
- For a great many pay-TV providers in the West, emerging markets therefore represent vital sources of future growth.
Florence LE BORGNE-BACHSCHMIDT
Head of the TV & Digital content Practice
> Executive seminar "Content in the Cloud" within the frame of the DigiWorld Summit 2012 – 14 November 2012
> More information about this study available on our website
Head of consumer electronics & digital entertainment, IDATE
What will change for the video game industry
Recently, IDATE has published its in-depth study of Cloud Gaming. The gaming industry has been gradually making the shift to digital over the last decade and cloud gaming is the next step in the process. This study examines the challenges facing the industry-wide and commercial deployment of cloud gaming in terms of technology and services. It also identifies the major industrial challenges across the value chain and the growth engines that will encourage development of this new market segment.
Cloud gaming: Another step forward in the game industry’s shift to digital
For 40 years, the video game sector has been considered a market with two distinct yet interdependent sides:
- the hardware side, which is subject to Moore’s law and governed by a life cycle characterized by the integration of:
- innovative technologies in the video game sector promoting innovation in gameplay,
- features related to video games that can target an audience beyond just gamers,
- service and consumption innovations related to the game sector but also to building user relationships;
- the software side, which is wholly dependent on the equipment side, from design and development to distribution and consumption.
Beginning in the 2000s, online gaming practices and digital distribution began slowly taking over market share. Ten years later, this share continues to grow, today representing more than half of the revenue generated by this sector. Every single market segment in this industry is affected by the digitization of practices and distribution, from home consoles and handheld consoles to smartphones, tablets and connected TVs.
In this context, cloud gaming represents another giant step forward in the game industry’s transition to digital distribution. Sony Computer Entertainment’s purchase of Gaikai demonstrates—and may even strengthen—cloud gaming’s role as a disruptive technology.
Cloud gaming may eventually eradicate (or at least mitigate) this hardware/software division by limiting the impact hardware has on gaming software. In other words, with cloud gaming, video games are likely to become less and less dependent on the device they are being played on. At the same time, we should begin to see more and more game accessories on the market because the accessories are quickly becoming the key element in providing users with the best immersive and interactive gaming experience possible.
With that in mind, IDATE has identified a number of challenges related to cloud gaming’s deployment and commercial success in the video game market. These include technological challenges related to network infrastructure, bandwidth, latency and remote computing and processing; and challenges related to services, their business and pricing models, the need for cross-platform and ubiquitous services, and their user-friendliness, especially on connected TV, where video games seem to have great potential (especially when they are tied in to TV programs).
Finally, IDATE has identified ten market challenges across the value chain. These challenges also represent growth drivers for this new market segment and will affect many players—not just cloud gaming service providers (CGSPs), but also game developers of all genres, AAA and casual game publishers, distributors, physical and digital retailers, console manufacturers, consumer electronics manufacturers, peripheral manufacturers, major Web players, TV channels and telecommunications operators.
Head of consumer electronics & digital entertainment, IDATE
> More information about this study available on our website
Deputy CEO, IDATE
After the USA, the supply of video streaming services finally surges in Europe. Either US-based Internet players (Amazon, YouTube, NetFlix) or Europe TV groups backed projects (Canal+, BSkyB), new services mostly rely on subscription video-on-demand and benefit from increasing bandwidth, TV sets Internet connectivity and new video devices, including the laptop and the iPad.
More on-demand video usages calls for a repositioning of TV channels as « events makers » : more live, more sport, more reality show with viewers interacting. But video-on-demand also threatens the smaller niche channels whose programming mainly relies on reruns of catalogue shows.
The surge of over-the-top streaming video services also heralds an increasing competition for capturing the distribution role. Wired telecoms networks operators (cable, ADSL/Fibre) have more and more captured the commercial management of services and have become packagers and have interposed themselves between the TV channels and the consumers. But the cloud provides an opportunity for right holders and TV channels to favor a self-distribution strategy, as it exists in the case of free-to-air Digital Terrestrial Television or free-to-air satellite. In the USA, the threat of self-distribution is a powerful leverage for TV channels to increase the fees they perceive from cable-operators. Finally, major Web players (Google, Amazon, Apple, Facebook), experts in data management, position themselves as « digital stores », proposing a one-stop-shopping for all available content, and offer a seamless access over all networks and all devices.
The pace of this reorganization of video distribution will depend on a series of factors, among which the roll-out of connected TV sets and the trade-off of right holders between television distribution and Internet streaming distribution.
Digiworld by IDATE proposes different kind of research solutions helping to understand the digital world:
In-depth Market reports:
- Next Gen TV:2020 – a snapshot of current trends and a prospective analysis of the audiovisual landscape in 2020
- Cloud Gaming – what will change for the video game industry
Ongoing watch services for high-potential markets:
- World Connected TV Market – understanding the evolving distribution chain of OTT video services on TV: trackers and forecasts for service revenues & connected devices figures as well as detailed player sheets
- World FTTx Market – the most complete database for fixed ultrafast-broadband networks (FTTH/B, FTTLA, FTTx+LAN, VDSL): trackers and forecasts for subscribers and homes passed available for more than 70 countries and for more than 150 operators
- World LTE Market – seizing the new business opportunities for the mobile ultrafast-broadband networks was never that simple: trackers for subscribers, revenues & spectrum data available for more than 40 countries and more than 90 operators
Collaborative Research Programs – because in a world of open innovation knowledge of the technological developments and new business models must be shared:
- Distributing content in the cloud – understanding the economics of content distribution in the cloud
- From Next Gen Networks to Next Gen Telcos – to anticipate how telcos' positioning might change with NGN rollouts
Deputy CEO, IDATE
Florence LE BORGNE
Director of the TV & Digital content Business unit