24May/160

Video On Demand: Europe’s main markets in the aftermath of Netflix world conquest

LEBORGNE-Florence_NB

Florence Le Borgne
Head of the TV & Digital Content Practice, IDATE DigiWorld

Generally speaking, the arrival of Netflix in a new market results in increased programming costs for its competitors.

 

Using North America as an example, this trend is expected to continue and grow in the coming years, which will question the profitability of such investments.

TVOD_value_sharing

 

Service typology

There are generally three types of pay video-on-demand (VOD) services:

TVOD (Transactional Video-On-Demand) services, which include:

EST (Electronic Sell-Through), also known as DTO or 'Download To Own', is like the traditional sale of physical videograms, but in digital form.

DTR (Download To Rent) is like the traditional rental of videograms, but in digital form.

SVOD (Subscription Video-On-Demand) services, which are based on the dominant pricing model used for linear pay-TV: subscriptions

It is common for the same service to offer several pricing models.

Business models and service positioning

The transactional video-on-demand model is based on revenue sharing between the service provider and the rights holders. Contracts between these two parties can be exclusive, but rarely so. The catalogues of transactional video-on-demand services are usually very large (from 10,000 to hundreds of thousands). Although most TVOD services are non-specialised, consumption is mainly focused on movies.

The business model of SVOD is similar to that of pay-TV. Content rights are purchased at fixed price, regardless of actual consumption. The rights may be exclusive for a given period of time and territory. SVOD catalogues have tended to be available for unlimited consumption so far, including many non-exclusive and older titles (over 5 years old). Although most SVOD offerings are non-specialised, fiction series tend to be promoted and consumed the most. Original and exclusive new content is increasingly used for differentiation. There are currently two contrasting marketing strategies used: strategies based on a volume/cost ratio; and differentiation strategies based on premium or special interest positioning.

Competitive environment

The VOD sector as a whole is witnessing strong growth in Europe, driven by a large increase in the number of services emerging in most countries. Between February 2012 and December 2015, the number of services available in the EU increased by a factor of 5.7 on average.

Although the market share in value terms is still dominated by DTR in Europe (56.5% of the total VOD market), this market segment has been the slowest growing segment over the last five years (+215% on average in EU countries between 2010 and 2015). Revenues from subscription services are experiencing stronger growth: a growth rate of 1,824% over the same period. They generated nearly one-third of VOD revenues in Europe in 2015, whereas they only accounted for 7.6% in 2010.

The true start of the SVOD market in a particular country is often whenever Netflix launches there. Note that Netflix is often the main beneficiary of the rapid growth in subscribers that its launch creates. The arrival of the North American giant does, however, trigger a response from the main players in FTA television and pay-TV. It is the combination of all these elements that contributes to better awareness of these services among the general public and facilitates their adoption.

Competitive environment

The growth and success of video-on-demand services can be very different depending on the market. There are various internal factors:

the propensity for local consumers to pay for access to content;

the price differential with local pay-TV offerings;

the prevalence of piracy of audiovisual and cinematic content;

...

Find out more about the various internal factors

Various issues specific to the structure of on-demand services and players' strategies also play a role:

the relevance of the marketing positioning of the services;

the existence of partnerships with distributors who already have a subscriber/equipment base;

the effectiveness of recommendation systems, which help increase consumption and provide a better user experience;

...

More information about these issues

Profitability conditions and the challenge facing Europe

The issue of achieving profitability with transactional services is not as critical as for subscription services. Because most transactional service costs are variable costs, proportional to consumption, these services are not expensive to create and only become so when the content is actually consumed.

Therefore, there are no real obstacles to creating new services and the costs of entry into the market are low. This explains the abundance of existing services and the great diversity of players in this segment.

The economy for SVOD services is more delicate: as well as technical and marketing costs, content acquisition costs can be regarded as fixed costs because the content is purchased at a fixed price, regardless of consumption. To that can be added costs related to development or acquisition of a recommendation tool. Subscription services therefore have significant costs even before they have started to recruit subscribers.

If the European industry cannot create some European champions of their own to compete with the US giants, many European players may disappear as the market rationalises.

Discover the perspectives,  key trends, and scenarios about the TV market for the next decade through our dedicated report and register to DigiWorld Future 2016 

DWF15 video report v3For the publication of the 16th edition of the DigiWorld Yearbook (pre-order now), IDATE is organizing a conference based on the detailed analysis of the current situations and some forecasts by IDATE experts on the major digital sectors, the discussion will deal with the great trends and challenges that will disrupt the digital markets by 2025.

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24May/160

Telco’s Connected Objects Strategies : how to compete with OTT players

ROPERT_Samuel

Samuel Ropert
Director of Studies, IDATE DigiWorld

The connected object market today shows a real complementarity between the major players in terms of their current positionings, aligned with their core business.

In the longer term, however, IDATE DigiWorld anticipates that competition will grow in ferocity, around the platforms and services which are set to be the next source of revenues.

worldM2M_market_Telcos_connected_objects_strategies

The automotive market

Around the connected car business, is key for Internet giants and telcos. Competition today is, in the main, on the platform side as both telcos and Internet giants are aiming to position themselves here today. Indeed, it is the platform that is the cornerstone of the next connected car strategy. Looking further ahead, the main competitors will most likely be OTT service providers, as they will offer services by exploiting the data generated by sensors in the vehicle – Uber-like companies are one example. Some industry incumbents are already engaged in the battle: earlier in 2016, GM invested half a billion USD in Lyft, the main competitor to Uber. The major involved players are AT&T and Verizon on the side of the telcos and Google (and Apple to a lesser extent) for Internet players.

The wellness market

This market is very recent. Telcos are absent from its value chain, with the exception of very limited volumes of cellular objects. They only focus on the distribution side, where the reselling business can grab them a sale commission on wearable objects, linked to smartphones. OTT Internet players are eying this promising consumer market for the opportunities it will offer in the near future to manipulate and monetise masses of personal data.

The healthcare market :

A specific market for a long time, its very promising market has been in the growing numbers of potential ‘clients’ as their age increases. The key objectives of healthcare applications are to optimise the treatment of disease and to save costs for national healthcare services. Even though solutions will be provided in partnership with experts, both telcos and Internet players will be push platforms and services.

The smart home market

It will be the arena for immense competition in the next few years. It is considered as a growth area for fixed telcos which are already facing competition from cablecos. On the side of the OTT Internet player, smart home applications are seen as a complementary way to follow their consumers/audience, even though they have different approaches. Competition – again, it will be heavy – will on the platform and services side as all players will be wanting to manage the data.

Today, the industrial Internet market is considered as an extension of the Industrial M2M business for telcos. The Internet giants are notable by their absence, even though some could provide cloud-based tool: Google, and Amazon with its specific IoT AWS offering, are prime examples. Analogous with traditional online services, the main threat for telcos is that they yet again become the pipe, and only the pipe. They have, however, anticipated the connectivity commodity trend by offering data platform solutions and related services. The ARPU from connectivity is very limited and the telcos expect only a small share of connected devices will be equipped with a SIM card. Before services, telcos have backed their core business, by setting their eyes on LPWA technologies (SIGFOX or LoRa) or collaborating on LPWA-like cellular ones such as the NB-IoT ahead. They are also backing the next 5G technologies, which aim to empower various verticals, including healthcare, manufacturing, smart cities and the automotive. It will be a tough battle, given that Internet giants are global by definition. Moreover, compared with traditional Web services, the main difference is that Internet giants manufacture their own objects, providing almost an end-to-end solution of product, platform and services on top. Faced with this kind of solution, traditional players in the industry will also suffer from the invasive nature of the OTT Internet players and their fierce competition.

Find out more information on "Telco's Connected Objects Strategies" in our dedicated market report

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27Apr/160

Connected TV: Accelerating OTT video development

BAJON_Jacques

Jacques Bajon
Director of Media & Digital Content Business Unit, IDATE DigiWorld

The development of connected TV is inextricably bound up with the widespread availability of high-speed Internet access, a shift to more and more individual viewing and the proliferation of smart devices in the home.

 

Together, these three elements are steadily revolutionising how viewers access their TV programmes, and providing them with an array of new functions and features. TV sets can be connected to the Internet in several ways. Using:
a smart or connected TV (direct connection, via Ethernet or Wi-Fi),
a connected set-top box,
a streaming box or stick,a connected game console,
or a smart Blu-ray player.

In 2015, almost three-quarters of the televisions being shipped are Smart TVs, even if their owners may not systematically take advantage of the Internet connection. At the same time, the market for streaming devices – whose main purpose is to play online videos – is progressing rapidly. Within this market that is still populated by a great many solutions and services, several trends are taking shape:
the way users access and employ connected TV services has become more simple, and shifted from Internet-centric to video-centric;
managing connectivity with users’ personal devices has become a key issue, with app systems playing an increasingly central role;
OTT services are moving to the TV and making real strides;
...

More information about main trends

Technological progress in a variety of areas is helping to bolster the market’s development, be it the growing ubiquity of broadband and superfast broadband access in the consumer market, major improvements in video optimisation and compression (HEVC), or the advent of innovative features such as casting which allows users to send video content from a personal device to the television. The main stakeholders in the connected TV ecosystem can be broken down into three categories, based on their original sector of activity: consumer electronics (CE) companies, TV market players and the Internet’s leaders.
CE industry players are working to improve their software interfaces, either through dedicated developments such as Samsung has done with Tizen, or by acquiring another company, as LG has done with WebOS. The aim is to capture the added-value in the marketplace, whether in the arena of services and/or by selling high-end devices.
Players from the TV universe are developing their OTT products, and working to bolster their position on the software side of the equation with more open and hybrid platforms. The connected TV could enable them to renew ties with consumers, and better monetise their plans. Broadcasters and pay-TV providers, especially in the United States, are therefore starting to roll out complete OTT plans which include a live component
Lastly, companies such as Google, Amazon, Facebook and Microsoft that dominate the Internet, are very knowledgeable about software, and changing consumer habits. So they are in the best position to deliver a top-notch user experience, whether in terms of smooth and intuitive interfaces, or providing recommendations based on user data. Their increasingly vertical positioning – covering everything from the content to the device – is also bolstering their potential to capture a growing portion of the video entertainment market.

In this way, many scenarios are emerging for Connected TV to 2025, and will determine which industries are likely to increase their control over this environment:

Impact_scenarios_TV_connectee_2025_IDATE_DigiWorld_OTT_VA

The size of the OTT video market will vary considerably under these scenarios, depending on how the environment evolves and so which industries prevail, and The popularity of the different devices will also evolve along the same lines.

Discover the perspectives,  key trends, and scenarios about the TV market for the next decade through our dedicated report and register to DigiWorld Future 2016 

DWF15 video report v3For the publication of the 16th edition of the DigiWorld Yearbook (pre-order now), IDATE is organizing a conference based on the detailed analysis of the current situations and some forecasts by IDATE experts on the major digital sectors, the discussion will deal with the great trends and challenges that will disrupt the digital markets by 2025.

Register

 

 

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7Apr/160

Wearables: new connected devices

ROPERT_Samuel

Samuel Ropert
Director of studies, DigiWorld IDATE

In 2018, the wearables market in value should exceed 22.5 billion EUR. Again, the growth will differ from object to object mainly because of the different price per object.

 

Wearable objects refer to daily consumer objects like wristband, watches, glasses, headsets or activity trackers with embedded sensors and connected mainly indirectly to the internet though a device/hub (through short range technology mainly). Wearable products are used in different applications, even though fitness, wellness and lifestyle are obviously the major segments, in volume notably.  Some opportunities could be seen at the entreprise level which aims to integrate into their premises wearable solutions to improve process and productivity.

The wearable ecosystem is mainly dominated by object manufacturers which are very numerous. Some of them are pure players like Fitbit or Jawbone, others are traditional consumer electronics manufacturers (Sony, Samsung, etc).
Other manufacturers come from the sports world like specialized sport accessory players (Garmin, Suunto or Polar) or sportswear brands with Nike and Adidas chiefly.  On the connectivity side, very few M2M mobile carriers are involved in the wearables market, only AT&T has a real involvement in this segment.  Data-centric players are positioned on the platform business. Most of the pure players like Runtastic, Runkeeper benefit from the product makers allowing them to collect information from their different objects.
The platform is actually the enabler to build services on the top of devices. On the top of the wearable devices, new services should emerge thanks to data exploitation/exchange. In terms of market adoption, surveys show that it is still very limited for now. They illustrate that watches are the most excited wearable devices, but a majority of the consumers seems not to be so enthusiastic to buy one of them. On the market side, according to IDATE, in 2018, 123 million wearable devices should be sold representing a 70% CAGR from the 10 million sold in 2013. Nevertheless, this growth is not homogeneous for each category of wearables. The smart watches will lead the market with 80 million units by 2018 mainly because of the Apple Watch sales starting from 2015. In 2018, the wearables market in value should exceed 22.5 billion EUR. Again, the growth will differ from object to object mainly because of the different price per object.

Wearables_vertical_markets_Samuel_Ropert

Related DigiWorld Research Reports
Internet of Things
Wearables and its verticals
Data Monetization
World Consumer Electronics Markets

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7Apr/160

Internet of Things

ROPERT_Samuel

Samuel Ropert
Director of studies, IDATE DigiWorld

A fast-growing market with 42 billion connected objects in 2015 and the promise of +14% annual growth up to 2025

 

IDATE has published its analysis of and forecasts for the global Internet of Things (IoT) market. An opportunity to deliver a synthesis of the Institute’s many reports on the matter (smart cars, M2M, smart grids, smart cities, smart toys…) to examine a market which, although developing rapidly, still raises a host of questions: is it really taking off, and how fast? Which business models seem the most reliable? Which market players and countries are in the best position to benefit from this new stage in the Internet’s evolution?

Although the Internet of Things is a powerful concept, it is not necessarily a market in and of itself. IoT encompasses a very disparate array of fields that need to be examined separately, to obtain an accurate understanding of their particular features, and their true growth potential.

IDATE forecasts that the global IoT market will grow from a base of 42 billion objects in 2015 to 155 billion in 2025, which translates into an average annual increase of 14%.
Unsurprisingly, the Internet of Objects (IoO) represents the bulk of the IoT market (80%), thanks to its widespread adoption by a number of sectors, and to the very low cost of tags.
The Connected information devices segment is the second largest in terms of volume, representing 13% of connected things, and set to grow by an average 13% a year up to 2025.
M2M (machine to machine) represents only 6% of connected things today.
And the smallest market in terms of volume is also the newest: Wearables & connected objects with 1% in 2015. But it is also the market that will grow the fastest over the next 10 years: by an average 30% per annum up to 2025.

World Internet of Things market, 2013-2025

schema_Internetofthings

Source: IDATE DigiWorld, “The Internet of Things”, October 2015

Compared to the size of the Internet of Objects and Connected information devices segments, the rest of the market is splintered between a host of vertical markets:
the utilities market is reporting rapid growth, stimulated by regulations and public policies;
the electronic equipment and automotive markets are also among the largest today, while the consumer electronics industry is incorporating connectivity into more and more traditional products, such as cameras.

The different sectors’ contribution to the global Internet of Things market, in 2015

schema_Internetofthings2

Source: IDATE DigiWorld, “The Internet of Things”, October 2015

Is the IoT market changing shape?
To provide a clearer strategic analysis of this disparate set, IDATE has chosen to break down the Internet of Things market into four key areas. A distinction can be drawn between consumer and business products, on the one hand, and between the different types of connectivity, on the other:
silo connectivity: a close loop of dedicated links between objects and servers, using direct connectivity or a hub, e.g. a smart meter or a payment terminal;
interconnected connectivity: different types of communication between the objects themselves, mainly through the same hub, e.g. appliances in the home such as a washing machine that signals the end of the cycle on the TV screen.

The report provides a detailed analysis of the resulting, four key IoT markets:
M2M, which covers production loops and closed loops based on applications;
Wearables and connected objects which, by definition, do not talk to each other;
Industrial Internet, which refers to the smart factory concept, with interactions between multiple applications that need to optimise their internal processes;
The smart home, a concept under which applications can communication with one another without having to go through the Internet.

The Internet of Things market

schema_internetofthings3

Source: IDATE DigiWorld, “The Internet of Things”, October 2015

Discover the perspectives,  key trends, and scenarios about the Internet market for the next decade through our dedicated report and register to DigiWorld Future 2016 

DWF15 video report v3For the publication of the 16th edition of the DigiWorld Yearbook (pre-order now), IDATE is organizing a conference based on the detailed analysis of the current situations and some forecasts by IDATE experts on the major digital sectors, the discussion will deal with the great trends and challenges that will disrupt the digital markets by 2025.

Register

 

 

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10Mar/160

A strong potential for FTTH/B development in LATAM…

CHAILLOU_Valerie84x126

Valérie Chaillou
Director of Studies, Strategy Business Unit, IDATE

but facing important heterogeneity from one country to another in terms of demographics, economics and players’ involvement.

 

The FTTH/B market remains at an early stage in the LATAM region: at end 2015, there were 3.65 million subscribers and 20.1 million Homes Passed in the 16 countries analysed in the panorama. Most countries are still focusing on the expansion and availability of traditional Broadband throughout their whole territory. The region is also facing economic difficulties: the disparity is not only between countries, but also inside countries, which can explain why Superfast Broadband is not a priority yet.

One of the main characteristics of the region is its heterogeneity: the involvement of national authorities differs a lot from one country to another as they include or not the telecommunications infrastructures in their overall development strategy. On the regulatory side, there are no specific rules devoted to the enhancement of superfast Broadband in general and FTTH/B in particular.

At end 2015, the largest FTTH/B market in LATAM is Mexico, which now slightly overpasses Brazil with 1.29 million subs (vs 1.25 million subs in Brazil). Both countries represent more than 69% of the regional number of subscribers, which is representative of the demographics. Another country showed a very interesting growth, Colombia, which now counts more than 1.3 million Homes Passed and 150,000 subscribers.

On the largest markets, competition seems to have had a positive impact and really enhanced FTTH players to enlarge and/or accelerate their rollouts. This is for instance the case in Brazil, Argentina, Mexico, and Chile. The kind of players involved in FTTH can also be quite different when comparing the countries. In some cases (Argentina, Mexico, Chile, Uruguay…), the incumbents play a key role and are really active in this new market. But in most cases, the first rollouts have been initiated by small private players, focused on limited areas, at least in the short/medium term. As an example, the Mexican market grew significantly during 2015, with +46% subscribers: the competition between two leading players, Telmex on one side and TotalPlay on the other side, seems to positively drive the market. On its side, the Brazilian market grew a little bit less (+ 32% subs) and is also driven by the strong involvement of national players, but also of small players rolling out in very located areas.

Since 2013, we have seen the emergence of pan-regional players, in particular when coming to the Caribbean islands. Cable & Wireless Communications, through its brand name LIME, is a leading player in Barbados and Jamaica, where it is involved in FTTH rollouts. Another player was cable operator Columbus Communications, which operated under the brand name Flow in Barbados and Jamaica but also in Grenada ad Trinidad & Tobago. At beginning 2015, Cable & Wireless acquired Columbus Communications and decided to provide its Superfast Broadband services under the Flow brand in most markets. Even if Docsis 3.0 is the main infrastructure, the cableco also rolled out some FTTH networks in small areas.

In larger countries, we can of course mention Telefonica Group, which applies a strategy dedicated to each market where it is present. Then, America Movil is another important LATAM player through its brand Claro. America Movil is also deploying both FTTLA+Docsis 3.0 and FTTH networks, depending on the concerned country.

The involvement of such kind of pan-regional players could represent a great opportunity for the enhancement of FTTH/B in the region as, even if not obvious for the moment, they could decide to adopt a common strategy on the different market, one supporting another…

Generally speaking, the LATAM region has a strong potential for FTTH, because of its demography and the dynamism of its real estate market. But it also encounters difficulties due to the fact that the international interconnectivity is not always efficient. For instance, in Bolivia, the international interconnectivity is undersized, which has an impact on the real capacities that ISPs are able to provide to their customers.

However, we have seen very positive signs for FTTH since 2013: the growths in terms of both coverage (Homes Passed) and take up rate (subscribers) are impressive (respectively +46 and +57% in 2014, then +27% and +39% in 2015).The FTTH offering seems to have encountered a great success towards end users. Most players provide Triple Play services that include TV services. And several players have launched 1 Gbps solutions few months ago now.

Number of FTTH/B Homes Passed in LATAM countries

schema_FTTH-B

Source: IDATE, on behalf of the FTTH Council LATAM Chapter

When comparing the LATAM region with other ore mature ones in the world, it is obvious that the potential is very high because the market is at its very early stage. But it is also noteworthy to mention that, in terms of penetration rates (number of subscribers on total numbers of households in a country), 9 LATAM countries have entered the global ranking as of September 2015, with rates from 1.76% (Brazil) to more than 47% (Uruguay, where the penetration rate is even higher than in the leading European countries in the ranking!).

IDATE publishes a half-yearly updated FTTx observatory, gathering qualitative and quantitative data of 70 countries and +150 players – see details online

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1Mar/160

420 million connected cars generating a €9 billion connectivity market in 2020

ROPERT_Samuel

Samuel Ropert
Director of Studies, IDATE DigiWorld

 

 

 

IDATE has just released its latest market report on connected cars, which is part of its ongoing series on the Internet of Things and M2M. The report provides an opportunity to take stock of a major market whose rate of development appears to be accelerating, with a series of announcements, veteran industry leaders such as Mercedes talking about driverless cars, the rise of newcomers such as Tesla, and connected car projects coming out of China, as foreshadowed by the new joint-venture between Internet giant, Alibaba and one of China’s first car-makers, SAIC Motors.

This is a market that every stakeholder along the value chain is gearing up for.

The strategy of most manufacturers is to make their cars connected. The main driver here is based on the regulation related to safety issues in Europe and the underlying revenue opportunity for them. In the USA, the recent GM announcement to embed 4G modules in all new cars is seen as a key trigger for market take-off. For telcos, the revenue opportunity could be interesting as the connected car will generate traffic that telcos will charge for indirectly (through the automobile manufacturer).

All main M2M mobile carriers are involved in the connected car space, as the connected car represents one of the major markets in volume. In a context where their traditional mobile revenues are flat and even declining in some regions, providing mobile connectivity in cars is a key business opportunity for telcos. Beyond car-related applications in driver assistance, from the perspective of a telco, the car can be seen as an additional cellular device, with a potential high-consumption service profile with such usage as the mobile Internet, entertainment on demand and mobile hotspot features. The prime business model remains the traditional wholesale relationship (B2B2C), even though some telcos like AT&T try to address end users directly through B2C models (through a retail data plan) and the integration of an automotive into the mobile share plan.

For Internet players, the strategy here is clear: the automobile is an additional connected device just as smartphones, tablets and laptops and needs to be addressed. However, Apple and Google do not have really the same approach. Indeed, whereas Apple aims to introduce its technology to interface with its products, Google is promoting the embedment of its technology into the car as a regular device. Google also wants to collect data to provide the most accurate advertising as possible, such as a related point-of-interest, based mainly on location.

A market that is starting to take off

On the market side, according to IDATE, in 2020, 420 million automobiles will be connected, representing a 34% CAGR on the 74 million connected vehicles in 2014. Nevertheless, this growth is not homogeneous for each category of connected cars. The embedded systems will lead the market by 2020.

Asia will lead the connected car market in 2020. Europe benefits from a 39% CAGR by 2020, mainly thanks to eCall regulation, entering onto market by end-2018.

In 2020, connectivity revenue for connected cars will exceed 9 billion EUR. In value, North America will be the leading zone, mainly due to higher ARPU than anywhere else in the world both for telematics and infotainment offerings. This encompasses direct connectivity through embedded systems but also indirect revenue related to smartphone usage. The major issues to be raised here are on the real willingness of the user to pay for such services. To encourage users to subscribe, telcos and manufacturers are already contemplating different revenue models including share plans. All the same, adoption is likely to remain limited over the next five years.

Forecast for connected car evolution, by implementation technique
worldwide, 2020 (%, Million units)

Schema_cars

The headlines are full of the self-driving vehicle, which is on everyone’s lips in the industry. Automation could be framed at six levels, ranging from zero autonomy to fully automated. The leading manufacturers are, at the first steps, mainly luxury car providers. The traditional car manufacturers are focused on the semi-autonomous route, but the ‘upstarts’ from the realm of the Internet, such as Google and Apple, are straightaway testing the waters of the fully autonomous car. Nevertheless, many issues need to be removed to see the self-driving car market take off. Currently, they are legal (on how to handle accident responsibility), cultural (seeing no real demand from end users) and economical (on who will fund the infrastructure).

 Find out more information on "Content economics market" in our dedicated market report

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26Feb/160

The Internet of trust

Gassot-Yves

Yves Gassot
CEO, IDATE DigiWorld

 

 

 

IDATE DigiWorld kicked off the year by renewing its Board. Many thanks to the outgoing members of the Board who have been at our side these past three years, to those who have agreed to stay on for another term, starting with our Chair, François Barrault, and to all the new members who have done us the honour of putting their trust in us. (New Board appointees)

At the meeting in January, IDATE DigiWorld corporate members were also invited to discuss the topics that would be addressed during the coming year, and particularly the one that would serve as the central theme for the 2016 DigiWorld Summit on 15 to 17 November in Montpellier. The majority voted for the topic of trust in the digital world.

The latest headlines no doubt had something to do with it, including the especially difficult transatlantic negotiations seeking to reach an agreement over the Privacy Shield which is to replace the Safe Harbor agreement signed in July 2000. As of this writing, we still do not know if the agreement will be ratified by US and European authorities, and whether it will provide a response to the criticisms that led the European Court of Justice to declare it invalid last October. We have already seen that the lack of an agreement between two such closely bound economies puts not only platforms such as Facebook at odds with European regulation, but also the data circulation and storage practices associated with trade, which are businesses’ lifeblood.

It was nevertheless explained to us that even with a redeployment of cloud architectures inside the EU, European users would not necessarily have the full assurance of being able to rely on European laws to protect their private data. So there needs to be a convergence of the legal environments that govern privacy guarantees. The situation is naturally complicated by terrorism (including cyber-terrorism) which is pushing States to demand access to networks and platforms, which they believe is vital to enabling them to carry out their responsibilities as a policing force.

But digital trust is also a multifaceted issue that extends well beyond these transatlantic negotiations. Below are just a few of the topics that could be explored at the upcoming DigiWorld Summit (for a detailed presentation go to):

The privacy paradox: big traffic, little trust

What are some of the more innovative security solutions today (biometrics, abacus, etc.)?

Technology and the value chain: what are the true prospects offered by blockchains and permissionless distributed databases?

New business models: real time bidding and programmatic ad buying vs. ad-blocking

Telcos’ dilemma: monetise data or become trusted third parties?

As always, the plenary sessions devoted to these questions will be completed by high-level thematic forums that explore the ins and outs of hot topics such as ultra-fast access, 5G, the IoT, new TV and video behaviours, FinTech and more!

So mark your calendars for November in Montpellier. In the meantime, enjoy this issue of our Newsletter, and be sure to check out the latest news from IDATE DigiWorld and find out what our teams are up to!

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26Feb/160

DigiWorld Summit 2016: The Internet of Trust

Logo-DWS2016_WEB400x150

Debate over the crucial role that trust will play in the digital economy’s future

 

The 38th annual DigiWorld Summit will run from 15 – 17 November 2016, and have as its central theme: The Internet of Trust. It will be an opportunity to engage in a meaningful international debate over digital trust issues – starting with security and privacy – which have become major sources of concern for all of the ecosystem’s stakeholders.

As the number of reported cyber-attacks worldwide is growing by close to 40% a year, we expect that upcoming stages in digital technologies’ evolution will only amplify the phenomenon. And this to such an extent that any future scenario is possible: from a continuation of the current chaos to a breakdown in trust that would lead to the construction of a new digital economy, which will no doubt differ in many respects from the one we know today.=

Are we reaching a tolerance threshold for online trust?
How can veteran digital industry players (equipment suppliers, telcos, IT companies) capitalise on the current climate?
Are verticals threatened by the situation or, on the contrary, on the winning side of trust and security issues?
Do we need a new regulatory framework to govern, or reassure, market players and consumers?

The need for a profound reassessment of security and trust issues seems inevitable: massive increases in spending on security solutions, rise in protectionist behaviour (use of ad-blockers, battle against botnets, etc.), avoidance tactics (piracy and circumvention), clarification of the terms governing access to private data and the management of digital identities and online reputation… There is no shortage of issues and threats affecting the rate of adoption of digital technologies, but which could also prove to be opportunities for all market players.

> Use and misuse of trust
Will trust be a key parameter in tomorrow’s Internet?
The privacy paradox: Usage is high, trust is low: Are we reaching a tolerance threshold for online trust?
Digital trust at the heart of customer relations? How do Internet companies and verticals gain their customers’ trust?
Can we trust digital world players? Can the Internet giants continue to be both the arbiters and targets of their users’ trust issues?
Can the digital world trust us? Focus on piracy: Can businesses trust their customers?

> Trust technologies
   A broad field of innovation for market leaders and start-ups
Innovative security solutions: biometrics, etc.: What can we expect from the next wave of innovations in the arena of cyber security and data control?
Blockchains and decentralized trust: Will today’s trusted third parties be cut out of the loop?

> Trust altering the digital value chain
Will trust be a game-changer?
Trusted third parties & digital coaches: Will we see new trusted third parties emerge (banking, post, health…)
Do we need more secure enablers? New growth enablers for telecom and IT industry leaders?
What role for telcos? Monetise data or become trusted third parties?

> Business model crash test
Will the current and future business models for trust-sensitive advertising and IoT markets be suited to the new climate?
Real time biding and programmatic ad buying: Can online advertising survive and adapt to the loss of trust?
Big Data and the Internet of Things: Will successful trust management be key to the future of IoT and monetisation initiatives?

> Regulation of trust, and trust in regulation
    How can regulation stimulate usage and innovation while also safeguarding against threats and transgressions in the digital economy?
Trust and anti-trust: what about platforms? Can and must online platforms be regulated?
Safe Harbor and Privacy Shield – the new deal: Can a balance be struck between conflicting European and US positions?
Cybersecurity and terrorism: Are the future credibility of and trust in the digital economy bound up with the fight against global threats?

A unique international forum for debate and networking

> Thematic Forums

  • Connected Things Forum
  • Fibre Networks Forum
  • TV & Video Forum
  • FinTech Forum
  • Mobile Networks Forum
  • Digital Africa Forum
  • Game Summit

> DigiWorld Week
   A full week of symposiums and partner events (13 – 21 November 2016)

> The DigiWorld Awards
    Recognising the best digital start-ups created by French entrepreneurs abroad

Key facts & figures

Europe’s trailblazing conference on the digital economy

The DigiWorld Summit is an annual event organised and hosted by IDATE experts, with the support of DigiWorld Institute members. Every year it holds ultra high-level international debates on the core issues shaping the digital economy, with the finest speakers and industry insiders.

Participants: 1,200 participants at the DigiWorld Summit and more than 5,000 at DigiWorld Week
Speakers: 120 speakers from around the world; 400 at DigiWorld Week
Partners and sponsors: over 100 partners and sponsors (businesses, public sector, media…)
Social media: 15,000 tweets (trending topics) and 2,000 live followers

Speakers in 2015 included: Jimmy WALES, Founder, Wikipedia – Peter VERHOEVEN, Managing Director EMEA, Booking.com – Alex SCHLEIFER, Head of Design, Airbnb – Eric DENOYER, CEO, Numericable-SFR – Dan JUDKINS, Head of Global Design and Development, Hasbro Inc. – Carlo d’ASARO BIONDO, President EMEA strategic relationships, Google – WEN Rui, Director of national Business Development, Youku Tudou – Sebastien SORIANO, Chairman, ARCEP – Bruno LASSERRE, Chair, French Competition Authority… > for more, go to www.digiworldsummit.com

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25Feb/160

M2M: a new momentum

ROPERT_Samuel

Samuel Ropert
Director of Studies, IDATE DigiWorld

 

A Eur 30 billion worldwide market driven by automotive, consumer electronics & utilities

This IDATE DigiWorld report, published along a worldwide database, analyses the overriding trends and changes taking place in the M2M market around the globe. It explores the driving forces behind the market's growth and transformation, including an examination of major market trends, plus volume and value forecasts up to 2019 by geographical area and 25 countries.

Over the next few years, the M2M market will clearly be driven by three key verticals: automotive, consumer electronics and utilities.

In recent years, the market has been driven by a few major verticals like Fleet management, Industrial asset management and Security. But the overall market in volume remains small, with potential for each market in tens of millions.

In the upcoming years, there will be new major verticals (including Automotive, Connected consumer electronics and Utilities). Potential volume is definitely higher by expanding towards consumer objects (billions) rather than industrial objects only. Moreover, regulations will stimulate automotive in Europe and utilities though public policies in some regions worldwide. However, while they will theoretically drive the market, certain barriers could obstruct growth in these sectors. In the short term, some applications in these key verticals are recurrently delayed (as with the eCall regulation in Europe which is now expected to be rolled out from October 2018) and have a potential impact on the traditional M2M market. Moreover, the utilities market is seen as less attractive with business opportunity being somewhat limited for Telcos (concentrator will only be cellular connected). UK is a key exception as a cellular concentrator will be installed in almost all households (in two main regions out of the three).

In the future, the market will be focused on emerging segments like healthcare with remote patient monitoring and smart homes.

The M2M market is still growing very fast

In 2014, the number of active M2M modules (all technologies included) reached 1.2 billion units. They will top over 4.1 billion by 2019 with a 29% CAGR.

In 2015, the cellular market is expected to represent 290 million modules worldwide for a total market of 30 billion EUR. The annual growth of the M2M market is around 10% in value and 26% in volume, compared with 2014. Most revenues will come from software and IT services.

Asia-Pacific will dominate Europe and North America in volume only. Europe will still lead in value, followed by Asia-Pacific. Since 2012, China has led the M2M world and has overtaken the USA in terms of cellular modules installed.

M2M players seeking business opportunities beyond their core expertise

M2M offers them attractive opportunities for Telcos, as, despite low and declining ARPU, projects offer high lifetime value, reduced churn rate and average deals representing thousands of SIM cards. Connectivity alone should represent more than 20% of total SIM cards for European telcos. Telcos are also trying to consolidate and reinforce their position on connectivity by looking at partnerships with LPWA providers, allowing them to address emerging applications.

Representing two thirds of the market, IT services are key in M2M and all players along the value chain are therefore attempting to position themselves by grabbing a piece of this lucrative market. Main players are looking at new services based on the cloud and Big Data (though analytics mainly), allowing them new business opportunities.

Finally, module providers are also challenged to break even in a market where unit prices are falling. In addition to services, they also attempt to offer connectivity services helping them provide end-to-end offering (MVNO acquisitions by Sierra and Neul purchased by Huawei).

schema_new_momentum

Find out more details regarding market M2M in our dedicated market report

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