Pay-TV vs SVoD
Florence Le Borgne-Bachschmidt
Florence Le Borgne-Bachschmidt, Head of the TV & Digital content Practice, IDATE.
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
Satellite Broadcast: Main trends and impacts for the industry
Maxime Baudry
Co-Head of Satellite Practice at IDATE
Satellite TV broadcast booming in emerging countries
Satellite TV broadcast is put in the forefront with our analysts attending the Satellite 2013 summit in Washington, USA from march 18 to 21 2013
Satellite broadcasting is currently being led by the explosive development in emerging countries. According to IDATE’s findings, there were at year-end 2012, 372 million satellite households with more than a half located in emerging countries. As an example, the Indian satellite pay-TV market registered a growth of 20 million households in only two years, to reach an estimated base of 51 million subscribers at the end of 2012.
World's current satellite TV broadcast market
Between 2008 and 2011, close to 100 million households worldwide switched over to satellite TV, which is almost identical to how many viewers terrestrial TV lost during that time. To compare, cable TV gained 55.5 million households and IPTV 26.4 million during that period.
Breakdown of the globe’s TV households by access technology
Source: IDATE, World TV Markets, August 2012
Satellite TV is booming in emerging countries
Satellite broadcasting is currently being led by the explosive development in emerging countries. According to IDATE’s findings, there were at year-end 2012, 372 million satellite households with more than a half located in emerging countries. As an example, the Indian satellite pay-TV market registered a growth of 20 million households in only two years, to reach an estimated base of 51 million subscribers at the end of 2012.
Impacts of TV broadcasting for the satellite industry
These developments have great impact on satellite capacity, as it is estimated that emerging countries roughly accounted for 90% of the new satellite capacity leased in 2012. According to SES, the weight of emerging countries in the total demand of satellite capacity worldwide will move from 69% in 2012 to 76% in 2019. Whereas the Western Europe and North American markets are expected to register a CAGR of -0.3% and -0.5% respectively, the Latin American market will for instance grow at a CAGR of 6.3% and the Eastern European one at +3.3%.
Maxime Baudry
Co-Head of Satellite Practice at IDATE
m.baudry@idate.org
More information on Satellite Broadcast in our TV observatory
World TV Market
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.
Accessing TV
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).
Cord Cutting
Jacques Bajon
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.
Quarterly changes in video subscribers (net additions) of US MVPDs, Q1 2010 –
Q2 2012 (thousands subscribers)
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.
DigiWorld Summit 2012
"Game Changers: Mobile, Cloud, Big Data"
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
DigiWorld Summit: Key players
"Game Changers: Mobile, Cloud, Big Data"
They are the key players of the Digital news and the Digital World… they will be at the DigiWorld Summit !
Tivo launches its new box: "Tivo Stream". The device allows one to watch programming that has been record on the TiVo Premiere on any iOS device on the local network. An upgrade for the Android TiVo application is in the works so Android devices should be able to use the device soon. ..
How this type of Personal Cloud will coexist with cloud-based DVR solutions?
Jason WONG, senior Director of International Products, TIVO will participate to the session Smart Devices ecosystems vs. Open Cloud on November 14 at 11:00 am.
Netflix which is now involved in Europe, announced last week that the company added 1.2 million new US customers during the third quarter, bringing their subscriber total to 25.1 million -- almost a third of all homes with broadband… Nevertheless, Morgan Stanley analysts to insist that Netflix needs to raise prices: the company spends more on content as a percentage of subscriber revenue (62%) than cable networks,. They consider that Netflix’s $8-per-month Internet streaming service is too cheap. The problem of course is that Netflix cannot ignore the growing threats from Amazon, HBO and the coming RedBox/Verizon joint venture …
Ted SARANDOS, Chief Content Officer, Netflix, will be one the keynote speaker on November 15 at 10:20.
Verizon is very close to launch its joint venture with RedBox (CoinStar group) to compete with Netflix with a video streaming product…
Terry DENSON, VP, FiOS TV Content Strategy & Acquisition, Verizon will be present to the session From NGN to Next Gen Telcos on November 15 at 11:15am.
> More information on the website DigiWorld Summit 2012.
DigiWorld Summit 2012
Christine BARRE
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
World Television Market
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.
Digital inroads
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.
TV revenue
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
f.leborgne@idate.org
> 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
Google TV must prove its worth
Jacques Bajon
Head of the Video distribution practice at IDATE
Sony has been marketing a Google TV Box in France since end-September, providing access to Web content, music & video entertainment and apps on its TV sets. This bid follows the first launches mid-year in the USA and roll-outs in the United Kingdom, Netherlands and Germany.
Google TV is adopting an original stance with a value proposition that focuses on Internet access and applications (few still available for TV) on the television set, within what is heralded as a seamless interface. Yet early feedback from the USA seems rather ambivalent on this latter point.
In terms of entertainment services, and despite the combined content offered by Google and Sony, the resistance of TV channels to give access to their content could be a burden. Unfortunately for Google, it cannot fully lean on its basic DNA, that of being a search engine, for exploitation on all video streams. Web/TV content indexing (linear or not) in unison with a transverse search engine would indeed change our consumption patterns. This is rather the revolution that is now anticipated, although such change does not depend on Google alone. Google TV's open approach is both its strength and its weakness. By nudging open the door to a world of convergence and unprecedented modes of consumption, it is also, for these very same reasons, warding off content rights holders.
Costing 200 EUR, twice as much as Apple TV and more within the price range of the XBOX 360 or PS3 game consoles, Google TV's current value proposition will be a real challenge to overcome, particularly in France where more than 10 million households subscribe to digital cable and IPTV.
Consumers will be the frontline judges, either endorsing or not endorsing Google's promise to deliver a revolutionary and user-friendly browsing system. This wide-scale endorsement will either open or close future windows of opportunity for incorporating TV channel content in the service, and even opportunities for forming integration partnerships with triple-play operators. This is where the future market really lies.
Jacques Bajon
Head of the Video distribution practice
j.bajon@idate.org
> To learn more about the Connected TV Watch Service : www.idate.org
Content facing distribution in the Cloud
Gilles FONTAINE
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
Gilles FONTAINE
Deputy CEO, IDATE
g.fontaine@idate.org
Florence LE BORGNE
Director of the TV & Digital content Business unit
f.leborgne@idate.org
Language
Categories
- Digital Content
- DigiWorld
- DigiWorld Economic Journal
- FTTx
- Internet
- LTE
- Mobile
- Satellite
- Telecom
- TV & Video
- Video Games
Recent Posts
- Africa and Middle East LTE forecasts
- World Telecom Services
- Interview with FRANK PILLER Aachen University, Germany / MIT Media Lab, USA
- Residential LTE vs. Satellite broadband
- Viewpoint on the latest changes for LTE chipsets device landscape