Samuel Ropert, Project Leader of this report
Forecasts up to 2018: markets spurred by innovation and connected devices
Coinciding with CES 2015, IDATE is publishing its latest reports on the wearables and consumer electronics (CE) sectors – providing readers with the latest news on market developments by type of product and by region.
In 2018, 123 million wearables will be sold, representing a 70% CAGR over the estimated over 20 million in 2014.
• Smart watches will lead the wearables market from 2015, thanks to a more mature market overall and the release of the Apple Watch in early 2015.
• The wristband sales units should decrease from 2017 onwards as their main features will probably have been embedded into smart watches and these should be cheaper thanks to economies of scale.
• Sales of connected glasses should be marginal in volume as many doubts have arisen around the real involvement of developers providing innovative applications. Moreover, the price is very discouraging for the mass market for now as it reaches 1,500 USD.
Ongoing rise in CE device sales up to 2018
CE device sales will grow from 2.4 billion units in 2014 to 3.6 billion in 2018 or by an average 8.6% a year: This includes the sale of televisions, cable, satellite, terrestrial and IP STBs, computers, smartphones, tablets, home and handheld consoles, DMAs, Blu-ray players and DVRs.
Growth will be carried by portable media device and digital media box sales
• Portable media devices (smartphones, tablets, handheld consoles):
- Will be the most dynamic CE segment: +12.3% annual growth, on average, from 2014 to 2018.
- Smartphones and tablets becoming more and more popular.
• Digital media Boxes (home consoles, DMA, DVR, Blu-ray players): The growth in sales will be solid and steady up to 2018: an average +9.8% per year.
• TV segment (+1.4% a year, on average) will show signs of recovery: Between 2006 and 2012, households outfitted themselves with smart–LED–HD1080p televisions. The slump in sales that began in 2012 is expected to last until 2015. The arrival of value-added smart TVs, along with a drop in the price of UHD and OLED sets, should help pull TV sales out of their funk starting in 2016.
• Computer and STB segments will enter a period of structural decline
- STB sales (+1.2% a year, on average) will increase slightly between 2014 and 2017, before dropping due to an acceleration of the cord-cutting phenomenon in developed countries, and to the cloudification of devices.
- Computers (-4.2% a year, on average): as tablets continue to become more popular, computer sales will start to shrink in 2015. Little by little, the tablet is becoming the personal computing device of choice, and edging out the classic computer.
The 2014 digiworld summit "drawn from life" by Aurélie Bordenave, alias Léely. Discover all the strong moments. (texts are in french or in english)
Plenary: Business models, Rethinking the telcos business models in the 5G era
Keynote : Smart Glasses
Business models: Rethinking the telcos business models in the 5G era
Disruptive innovations: one step towards 5G
Smart City & Mobile living
Seminar "TV everywhere"
Seminar : "Business models: M2M & Internet of Things - Smarter objects, smarter processes"
Europe on the rebound ?
TV & facing Mobility
Le digiworld summit 2014 a réuni autour des questions de la mobilité près de 1 200 participants et 140 speakers du monde numérique. Les vidéos des moments forts de ces deux journées.
- L'interview de Laurent Solly, DG de Facebook France
- L'interview de Carlos Moreno, "La ville nous parle"
Consultant de l'IDATE
The study on how the online shift is affecting content industries analyse four main segments: books, recorded music, vide0 games and video products. Presentation.
For each sector, it provides readers with detailed market figures, analyses the move to the internet, its impact on industry structure and revenue sharing, and delivers market forecasts up to 2018, both global and for seven key national markets.
Alexandre Jolin, the Project manager for the report remarks that, “the global content market topped €140 billion in 2014, or only just over 1% more than in 2012, which marked a record low since the onset of electronic distribution channels”. Keeping in mind that 37% of content industries’ revenue come from these online distribution channels, or double the amount in 2010, albeit with huge disparities between the segments: 13% for books versus 67% for video games.
Content dematerialisation produces certain common effects to these different segments, despite the characteristics of books, recorded music, video games and video:
• a rise in subscriptions, at the expense of per-unit sales
• lower prices, which, combined with piracy, has an impact on household spending
• simplification of the value chain, with technical costs and intermediaries having less of an influence, which benefits consumers as well as those involved in creating, publishing and producing content
• piracy has a significant effect, although it seems to be stabilising thanks to new unlimited offerings, at least in developed markets
• a trend towards concentration upstream (production/editing) and downstream (distribution)
The various segments of the content industry are expected to follow different trajectories in the next five years:
• Publishing, which has only just started the process of dematerialisation, is likely to see revenues stagnate.
• Music, video and video games are likely to continue to grow or return to growth.
• The overall dematerialisation rate will reach 63% in 2018.
IDATE has identified the following key factors in digital content market development:
• a tighter link between purchase of a physical copy and a dematerialised copy
• the rise of the 'service' function, which allows personalised content recommendations
• innovative pricing models, individualised for each type of content (yield management)
Household spending expected to be back on the up
Falling in recent years, household spending on cultural products and services should start to increase from 2014, reaching 84.20 EUR per year worldwide in 2018. We nevertheless expect to see huge regional disparities, as North American households will continue to be by far the heaviest spenders on cultural goods and services, totalling an average €375 per household in 2018.
Source: IDATE, Content Economics, September 2014
Would you like to discover ous study ? This way.
Valérie CHAILLOU Head of Research, Telecoms Business Unit, IDATE
IDATE has released its report to provide UFB market estimates for 2013 and up to 2018 and addresses the following key questions:
• What are the levels of current UFB ARPUs and how could there evolve in the 5 coming years?
• How to justify possible differences from one country to another?
• What are some of the most likely development scenarios for the ultra-fast broadband market?
• What are the main criteria to take into consideration?
Valérie Chaillou, the Project manager for the report remarks that “the tremendous cost of new gen access networks makes monetizing them a crucial issue. Ultrafast-boradband (UFB) access providers' supply-side strategies are aimed at ensuring enough customers who will upgrade to a UFB service in order to generate substantial income.”
The UFB market stood at 120 billion EUR in 2014, and is forecast to grow by 76% over the next five years to reach 181 billion EUR in 2018. In 2013, the global UFB market stood at an estimated 103 billion EUR, and is forecast to exceed 181 billion EUR in 2018. This includes all ultra-fast broadband systems, i.e. FTTH/B, FTTN + VDSL and FTTLA + DOCSIS 3.0. In terms of customer numbers in the different regions, FTTH/B alone accounted for 41% of the market in 2013, or 42.2 billion EUR.
Based on the current status of each of the markets being examined in this report – i.e. the United States, Japan, Germany, Spain, France, the UK and Switzerland – and how the players’ positioning is likely to shift with respect to the two scenarios listed above, IDATE has established an estimate for ultra-fast broadband ARPU at the end of 2013 and at the end of 2018.
We have distinguished two main categories of ultra-fast broadband plan: first-time plans and upgrade plans. An ISP may attach one or several objectives to its product line strategy. These can include increasing ARPU, limiting customer loss (churn), maintaining its competitive edge, reacting to increased competition in the broadband market, etc.
Sketching out two extreme scenarios allows us to assess the development trends for UFB ARPU, based in particular on how operators are positioning themselves with respect to increasingly powerful content providers who know it is entirely in their interest for ultra-fast networks to become widely available. So ISPs are either a) refocusing their energies on their network business and offering value-added services (VAS) tied to system management (data storage, security, authentication, etc.) – under a scenario we call "FTTx as smart pipe" – or b) becoming involved in the direct supply of services and applications such as TV and video to end users, with an approach built around "tiering and premium services".
by Yves Gassot, CEO, IDATE & Didier Pouillot, Director of the Telecom Strategy Business Unit, IDATE
The 2014 DigiWorld Summit sessions devoted to telecoms gave off a certain serene, so as not to say optimistic vibe. Was it because of the huge numbers that each one trotted out, whether talking about mobile customer growth (over 9 billion users by the end of the decade), the exploding Internet of Things (80 billion connected things in 2020, according to IDATE), mobile traffic growth (triple that of wireline traffic) or the speeds expected from Advanced LTE (up to 100 times faster than 3G)...
5G needs to put Europe back on the map
So the watchwords for all of the speakers at this year’s Summit were erasing the past decade which, for a great many telcos, has been synonymous with shrinking revenue and margins in Europe’s five biggest markets (EU-5) since 2008, as underscored by Didier Pouillot, Head of IDATE’s Telecom Strategies Business Unit. Synonymous too with spending well below their counterparts in the US, and lagging behind in 4G rollouts, even though real progress has been made in terms of coverage. So the gauntlet has been thrown down: Europe needs to be back on the map, and amongst the world’s telecom hardware and service leaders by the time the 5G era rolls around, i.e. by around 2020, even if the South Koreans in 2018 and the Japanese in 2020 will be keen to show off their chops at the Winter and Summer Olympics, respectively.
From a technical standpoint, the race to superfast mobile appears to be well out of the gate. Frédéric Pujol, Head of IDATE’s Wireless Business Unit, listed the assets of LTE, which has now become a global standard, and how LTE Advanced will move things even further along with frequency aggregation, HetNets (Heterogeneous Networks) that will make it easier to manage small cells, optimised multicast protocols (especially important knowing that video is expected to account for more than 50% of traffic), eMBMS, etc. Although far from being standardised, 5G will take datarates higher still, delivering speeds in the Gigabit/s. But, as several speakers pointed out, the future will also mean multi-network access, taking into consideration the particular constraints surrounding the deployment of the Internet of Things, for instance, as not all objects are connected via cellular networks – but rather via NFC or low frequency radio networks, like the ones deployed by Sigfox.
What alternative wireless technologies can do… while waiting for 5G
There was a lot of talk about Wi-Fi in Montpellier. There was Silano Lo, CEO of Ruckus Wireless, one of Silicon Valley’s top equipment suppliers. She spoke in particular about the progress made by new generations of Wi-Fi, which will be fully integrated into telcos’ infrastructure, so subscribers will no longer have to login and enter a password. She also reminded us that Wi-Fi was a central part of
Comcast and other American cable companies’ strategies, both as way to secure customer loyalty and enter the wireless market. These strategies are also found in Europe, with companies like Liberty Global and BT, with Wi-Fi enabling wireline telcos to operate as MVNOs, combining homespots and hotspots, while minimising the amount of traffic being relayed over cellular infrastructure.
Speakers on the various panels offered nuanced answers to the question of whether high-speed and ultra high-speed mobile access will come to replace wireline access. All came together to emphasise that, in emerging economies, mobile broadband will be the main channel for Internet growth, even if Christophe Wilhelm, Senior VP Strategy & Innovation for Thales Alenia Space, did stress that satellite-based – both geostationary and in medium and low-earth orbit (MEO/LEO) – and unconventional solutions such as balloons and even drones, will also have a role to play.
The superfast revolution will require a stronger core
For Michel Combes, CEO of Alcatel-Lucent, the debate is no longer about whether fixed or mobile systems will emerge triumphant: convergent infrastructures and ultra high-speed mobile will no longer be able to avoid public and private small cell architectures, pulling optical fibre closer and closer to user premises. For Mr Combes, the revolution is not confined to superfast access but, more fundamentally, will go by way of concepts such as SDN (Software Defined Network) and virtualisation with NFV (Network Function Virtualisation), which will give network operators access to control and command functionalities that ensure the networks’ reliability and security. If the smartphone has become the measuring stick of innovation for consumers, and the cloud revolution has begun, the network revolution that connects one to the other, is still to come.
Telcos on the offensive: working to change regulation and business models
Naturally, telecom carriers also talked about how to get back on their feet. Following through on what Michel Combes had to say, Telefónica’s Global Head of Public Strategies and Regulatory affairs, Carlos Lopez-Blanco, and Deputy CEO of Orange, Pierre Louette, want to see Europe deliver a strategic action plan in the very near future. More specifically, Carlos Lopez-Blanco shared his wishlist for the new Commission:
• more relaxed regulation that leaves greater leeway for commercial negotiations;
• increased harmonisation in the application of the regulatory framework, and emergence of a European regulator;
• a level playing field that puts an end to the asymmetry in the regulation imposed on telcos and the laissez-faire attitude towards the dominant positions enjoyed by OTT companies.
This last demand goes beyond sector-specific regulation, however. By the same token, how the ongoing consolidation in Europe plays out is largely in the hands of anti-trust authorities. But the representatives of Telefónica and Orange did not simply express their frustration with regulatory constraints. They also sketched the future of their business models, emphasising the promise they see in the development of 4G and mobile data traffic, in the cloud and M2M, along with the potential offered by partnerships with content providers and verticals, while not excluding the possibility of offering exclusive products and their own OTT services. This was an opportunity for them to make clear that their support of an open Internet must not relegate them to the status of dumb pipe.
To go further…
The presentations :
> Didier Pouillot, Director of the Telecom Strategy Business Unit, IDATE, « rethinking the telcos business model »
> Jaehyun YEO, Senior Researcher, KISDI, "Future Networks: Challenges & Opportunities"
> Ambroise Popper, VP/GM M2M BU, Sequans Communications, "Closing Keynote "
> Carlos LOPEZ, Telefónica, "Rethinking the Telcos business models in the age of 5G "
> Soline Olszanski, VP Strategy & Innovation, Hub One, "4G Critical and Professional"
Europe’s telecommunications sector is in a major state of flux these days, due to a combination of changes in Brussels and an acceleration in market consolidation deals.
• The formation of a new Commission in Brussels, and the introduction of Junker’s investment package, which could include funding for telecoms infrastructure, although no figures or details on the allocation scheme have yet been released.
• The particular way this new Commission’s Digital Single Market project team is being structured around a vice-president and a commissioner. Many have commented on the lack of cohesion between the statements issued thus far by Messrs Andrus Ansip and Günther Oettinger.
• Questions over Ms Kroes and the outgoing Parliament’s legacy. The Recent Council of Telecommunications Ministers demonstrated how hard it will be to stick to the agenda that focused on three issues: a) net neutrality b) roaming in Europe c) coordinating spectrum management policies. Despite being substantial, the revisions to the initial text proposed by the Italian president failed to achieve a consensus, and were rejected by operators and most members.
• The launch of a new review. The Commission will also need to establish a timetable to begin reviewing the directives as planned. The process will include a review of relevant market definitions, and will probably result in the proposal of an even shorter list of markets subject to ex ante analysis of SMP.
• By replacing “European single market for telecommunications” with the “Digital single market” in Europe, the Commission is also looking to highlight telecoms-adjacent legal provisions, such as those relating to privacy and intellectual property. In another vein, it also needs to back the OECD’s efforts to put an end to OTT companies’ abusive tax evasion practices, while its antitrust powers will need to rule on whether Google is abusing its dominant position. And coming up soon are the Transatlantic Trade and Investment Partnership (TTIP) negotiations over new digital economy dossiers…
At the same time, we are tempted to say that real life goes on, and may even be accelerating
Europe’s telecom services markets are still in a slump, but many do seem to be getting back onto a more solid footing. The most striking trend is the rising M&A fever: after the finalisation of major deals in Germany (O2-Eplus) and in France (Altice/Numericable-SFR), we find out that BT, which had been displaying growing ambitions for several quarters (stepped up fibre rollout plan, combined with the launch of BT Sports and the acquisition of 4G frequencies) were also looking to take over O2 UK or EE. Hutchison (3), the smallest of Britain’s four mobile operators has said it would be willing to buy the operator that BT does not.
A veteran proponent of fixed-mobile convergence in the superfast era, Vodafone – which had already integrated Cable & Wireless in the UK, Kabel Deutschland in Germany and cableco Ono in Spain – has now set its sights on Liberty Global. Present in a dozen countries in Europe, the takeover of Liberty Global would give Vodafone majority control over Virgin Media in the UK, whose cable network covers close to 50% of British homes, full ownership of UPC-Ziggo which covers 75% of households in the Netherlands, and in its main market of Germany, control over the top two cable companies, covering close to 90% of the country’s households.
Of course, antitrust authorities will need to examine all of these deals, and may well impose certain “remedies”. We should also add that other (public) proposals are also underway, including: Orange’s bid to bolster its assets in Spain by taking control of Jazztel; Altice/Numericable’s acquisition of (the Portuguese-owned stake) in Portugal Telecom; and the possibility that Brazil’s Oi (with which the Portuguese incumbent had formed a joint venture) could merge with Telecom Italia, or its Brazilian subsidiary, TIM! Should these deals go through – or at least the major ones – they will tip the balance of power dramatically, which could well trigger another round of M&A deals in response.
Securing loans does not appear to be an issue, and the financial markets are apparently not put off by debt to EBITDA ratios of more than four or five to one. But analysts will be scrutinising the deals’ P/E multiples and the true outlook for synergies (or at least positive scale effects) being forecast for the future entities’ EBITDA.
The "TV Everywhere" Executive Seminar at the 36th annual DigiWorld Summit helped shed some light on new viewer behaviours, the possibilities opened up by hybridisation and cloud technologies, and how they will impact video watching down the road, both inside and outside the home.
TV Everywhere becoming an habit
On-demand viewing has become one of the most widely adopted new behaviours, whether via catch-up, TVoD or SVoD. IDATE nevertheless underscored that on-demand access to content can be limited by regulatory or contractual restrictions, especially when it comes to feature films.
Accessing video content from anywhere is not yet commonplace behaviour, particularly for users on the move. This can be explained in part by technological constraints in certain locations, and by the fact that TV service providers do not make all of their content, particularly live programmes, available for mobile viewing.
• Any device
Despite the proliferation of new screens and the rapid rise in viewing on smartphones and tablets, most users still watch their programmes on their home TV, even in the most mature markets. To achieve a convincing “any device” viewing experience, service providers also need to address the issue of continuity/handover between devices.
François ABBE (Founder & CEO, Mesclado) recalled that Disney had signed an agreement with Google and Apple, thanks to which a Disney video purchased from the iTunes store could be played on an Android device, and vice-versa, which is a good first step towards providing users with a seamless experience.
The television will be the source of different challenges, depending on the broadcaster and their specific distribution issues. Vincent FLEURY (CTO and Deputy CEO for New Media, France Medias Monde), whose core challenge is to deliver the same services to all users, sees the TV as “just one screen among others,” whereas Laurent FRISCH (Vice-President Digital, France Televisions) and Valery GERFAUD (General Manager, M6 Web) believe the television remains the screen of choice for watching live programmes, and for catch-up or time-shifted viewing.
• Any Content
Because the ways for accessing video products are so fragmented, and given the glut of content available, consumers today appear more willing to pay for services that can meet their need for more structured and personalised solutions.
For IDATE, one of the biggest challenges for video services is to deliver personalised content that also takes the viewing device and situation into account. Here, the issues surrounding big data and recommendation engines are especially crucial.
Didier LEBRAT (CTO, Sky) also stressed the massive investments that Sky has made in content, and in improving quality to create a sense of value for its customers, and noted that Sky+ On Demand users now watch more pay-TV content than free to air content.
Hybridisation and new video distribution configurations
Vincent GRIVET (Group Head of Broadcast Development, TDF) reminded us that all-IP for video is not yet possible, but that on-demand viewing is on the rise. The two trends thus require hybrid solutions to be deployed. If HbbTV is expected to provide a response to this demand, it does not appear to be quite as hybrid as what was being promised three years ago. Vincent FLEURY believes the industry expected a lot more from connected TV and that, today, it is much easier to access the Web on a TV set via ISPs’ boxes and mobile solutions. His main focus is on bringing connectivity to locations that are today without it.
Darko RATKAJ (Senior Project Manager Technology & Innovation, EBU) focused on the needs of today’s users, and drew a parallel between classic TV viewing, which remains a shared experience, and on-demand viewing which is still a sort of top-up. He believes the issue is knowing whether a video platform truly meets users’ needs, in terms of both quality and coverage – the latter being not just geographical but demographic as well. Ratkaj says that hybrid solutions do exist, but not in the sense that a specific network or a technology can solve all the problems. What is important is delivering the right service under the right conditions, not whether it is delivered over a broadcast or broadband network.
Yves BOUDREAU (VP Mediacom Technology Strategy, Ericsson) has been watching the “prosumer” phenomenon develop: if vendors do not design solutions tailored to users’ behaviour, prosumers will create their own "Frankenstein video" solutions. Broadcasters, programmers and technology providers need to join forces to create products that satisfy consumers’ new demands, even if it means running the risk of it being the solutions provided by Internet giants like Google, Amazon or Apple that gain the upper hand.
We are seeing hybridisation develop around broadcast networks that have no native return path. But the momentum depends on the TV service’s business model:
• pay-TV providers such as Sky or DirecTV are capable of defining the user experience thanks to their DVRs, and so meet customers’ new demands efficiently;
• for free to air TV, the problem of standards currently appears to be a real obstacle to the development and adoption of truly viable hybrid solutions. Broadcasters need to make sizeable investments in developing their applications, which is a direct result of the huge technological fragmentation of application ecosystems. Laurent FRISCH pointed out that, in the multitude of technologies that exist today, not all are equal. TV networks are not necessarily taking a position, but rather waiting for a solution to take hold as the industry standard. Without a single or unified solution, Smart TV will not take off.
Jean-Hubert LENOTTE (Director of Strategy, Eutelsat) notes that network operators are also taking initiatives in the arena of hybridisation, spurred by the fact that, while consumers still watch a great deal of linear TV, the time spent doing so is not increasing, whereas the time spent watching on-demand and time-shifted programmes is on the rise. So market players need to be able of providing live interactivity to boost the appeal of programming. If clients such as Sky and Canal+ want to keep control over their viewers and develop their boxes and products themselves, Eutelsat is developing a smart LNB solution for other clients, in other words two-way LNBs that make it possible to integrate a return path directly in the user’s satellite dish, and so do away with the need to connect the STB to the Internet. He also reminded us that satellite makes it possible to deliver on-demand content in HD and even UHD to locations with no broadband coverage.
For TV channels, hybridisation also means the development of new business models and new partnerships:
• for Didier LEBRAT, marketing the Now TV OTT service allows his company to target consumers who want a lot of flexibility, and do not necessarily want to subscribe to BSkyB’s satellite TV plan;
• Vincent FLEURY believes that hybridisation does not apply only to technical networks but is also a way to access new consumers: he underscored the importance of syndication, and recommended using the means made available by new video platforms such as YouTube and Facebook;
• according to Laurent FRISCH, broadcasters and new entrants will need to create new “hybrid” TV channels that combine linear and non linear programmes, to reinvent their value proposition;
• Valery GERFAUD reported that the percentage of ad revenue generated by catch-up TV for the M6 group is proportionate to the time spent watching the network’s catch-up TV (i.e. compared to their live programming), thanks to a solid monetisation of catch-up TV.
Lastly, Marc LE DAIN (Associate Partner, IBM Consulting Services) stressed that hybridisation also applies to customers whose behaviour differs depending on the type of programme being watched (his presentation on slideshare)
Uncertainties over switching to an unicast only model
Telcos’ and cablecos’ networks both have a return path that enables the development of advanced video products for their pay-TV customers. Plus, their point-to-point networks can use software-based security solutions that are cheaper than the broadcasting world’s conditional access systems.
Yves BOUDREAU reminded us that the Internet was not initially developed to distribute TV, and is currently not capable of taking over from free to air and pay-TV, if ever broadcasting networks were shut down in the near future. There are still lingering questions over how much telcos would need to spend to satisfy consumer demand, under a unicast-only model. For Jean-Hubert LENOTTE, the combination of broadcasting and broadband is still the most efficient solution today, especially from an economic standpoint.
Distributing TV services via LTE broadcast, thanks to eMBMS technology, is another possible new alternative for video distribution. Pierre-François DUBOIS (VP of Product Development, Orange Technocentre) pointed out that all LTE smartphones are already outfitted with an eMBMS chipset capable of receiving broadcast streams.
The technology has already been deployed commercially in South Korea, and expected to develop in other countries soon, even though uncertainties remain over the right business model, especially on mobiles. For Yves BOUDREAU, the combination between broadcasting and LTE does make it possible to create a product that consumers could be willing to pay for.
Cloud technologies’ growing role in video distribution
The development of cloud-based television and video distribution solutions is upending how all of the TV industry’s veteran players operate. Cloud TV technologies make it possible to move steadily to a more flexible model that enables swift rollouts for new services, and which alters the investment structure to an on-demand model.
nPVR technologies, for instance, make it possible to move the intelligence in operators’ networks, which would mean that STBs would no longer need to be equipped with a hard drive. Valery GERFAUD nevertheless pointed out that, should this type of solution develop, it could very well undermine catch-up TV revenue.
Cloud technologies also make it possible to solve new editorial issues tied to Social TV, such as Rising Star, centred around interactivity with viewers. According to Valery GERFAUD, incorporating interactivity into the very heart of a TV programme may be very popular with viewers, but it also creates new technical issues that need to be managed. Only the cloud enables broadcasters to handle such huge surges in traffic, from a flexibility and cost perspective. Mr Gerfaud believes that quality of service remains a very real problem, as users will quickly turn off a poor quality video, which means the provider loses money.
For Xavier POUYAT (Senior Program Manager, Azure Media Services), the cloud also allows content to have an existence that goes beyond the aired programme: e.g. for an interactive episode of the series "Bref", more than a million personalised videos were generated in three days, thanks to the cloud.
Source: Canal Plus
These technologies are also expected to be crucial in the coming years to enabling TV services to make the transition to ultra high definition, which represents both a technological and economic challenge, as Jérôme RENOUX (Regional Sales Director, Digital Media, Southern Europe, Akamai Technologies) reminded us. The introduction of new compression formats, such as HEVC, will no doubt also make a vital contribution to future developments, for both HD and UHD. Pierre-François DUBOIS hopes that, thanks to HEVC, 85% of Orange’s IPTV Orange will have access to HD programming.
They are also likely to play a major role in merging and streamlining workflow for TV industry players all down the line, to be able to tackle live and on-demand viewing on any device imaginable.
Not just a technical, but a legal issue as well
TV Everywhere and the cloud naturally create issues in the realm of user identification, and so of privacy and data protection.
While the trend around the world is towards monetising internet users’ personal data, Alain BENSOUSSAN (lawyer with the firm, Alain Bensoussan) reminded us that the notion of data ownership has no legal status: Facebook has thus given its one billion users a right that, legally speaking, does not exist, as no sovereign state recognises ownership of personal information.
In addition, while some 100 countries have adopted data protection and freedom regulation, it appears that, with big data, individuals have no control over the data that pertain to them, or do not know the data pertain to them. The important thing with big data is not knowing the name of the person behind the screen, but rather the ability to predict with more than 90% accuracy who is there and what they are going to want. So we are moving towards anonymous personalisation.
Lastly, Alain BENSOUSSAN introduced the concept of “privacy by design”, which consists of designing products and services with “privacy inside”, to reduce the anxiety-provoking aspect for users, which is one of Facebook’s chief selling points.
If you want to go further read "Live TV vs. on demand viewing: what does tomorrow’s world have in store for broadcasting?"
> You are interested by our work ? You will find our study about Future TV 2025 in our shop
Our guests' presentation are interesting you ?
> Here is the general presentation of Florence Leborgne, from Idate.
>Here is the presentation from Marc Le Dain (Associate Partner, IBM Consulting Services) : http://fr.slideshare.net/DigiWorldIDATE/tv-everywhere-41808106
> Here, you will find the presentation from Laurent Frish (Vice-President Digital, France Televisions) "TV + Digital").
Published in COMMUNICATIONS & STRATEGIES No. 96
Interview with Jean-Louis MISSIKA, Deputy Mayor of Paris in charge of urban planning
Conducted by Yves Gassot, CEO, IDATE-DigiWorld Institute
C&S: The Smart City concept is often criticized for seeking new markets for digital technology rather than tackling the phenomena that make the management of our cities increasingly complex. What is your view?
Jean-Louis MISSIKA: I do not think it is a fair criticism. Digital technologies have undeniably created the conditions for important changes in our ways of living, inhabiting and consuming. They are now part of our everyday lives and, surely, their impact will increasingly spread throughout the multiple ways we, as humans, interact.
Beyond what they create as opportunities for individuals, digital technologies are fundamental for cities – and among them the city of Paris. Urban systems are confronted with major challenges on the economic, social and environmental fronts. Energy transition, and more generally the management of scarce resources, climate change and the biodiversity challenges drive us to analyze all the solutions available now and in the future to build a more sustainable city - the city of tomorrow. Digital technologies and, in particular, their potential in terms of coordination and rational use of scarce resources, are high on the policy agenda. This is not simply to create a market for them; this is about using all the possibilities offered by technology.
I definitely think it can be a win – win development for both the city and the companies if these firms are working with those involved in the challenges of the city like urban planners and system operators.
Additionally, we are witnessing a boom of young, innovative companies and startups, but also the citizens themselves – both from Paris and outside – who develop digital solutions for the city. This is clear evidence of what is at stake here: it is for local authorities to allow the digital revolution to spread in the society so that innovation does not only occur through large companies but also thanks to citizens' initiatives.
C&S: How would you rate the strategy of Paris, using a broad comparison between the very holistic, top-down approach of projects emerging in the context of new towns and in Asia, and the more bottom-up approach that seems to be primarily based on using multiple data repositories ('open data') associated with urban systems?
J.-L. M: We are definitely leaning towards the "bottom up" approach to building Paris as a smart city.
Collective intelligence is an effective way to source the best ideas. And it does work well in Paris in part because we provide people with the appropriate means to implement projects: workspaces, coaching, financing, public spaces to experiment… and data.
This is one of the pillars of a smart and sustainable city: a place where the technology is used for people, by people, to include them in the life of the city and in the process of public decisions.
Let me refer to a recent project. We have worked over the last 6 months since the election to reach a greater transparency and citizen involvement in the City operations, by creating a platform for the development, discussion and adoption of community projects. These are chosen by the Parisians and are financed through a participatory budget. 5% of the total investment program, which represents 426 million euros, has been flagged for programs chosen directly, through vote, by the Parisians.
Within the next months, Parisians will even be able to share the benefit of their expertise and creativity by suggesting investment ideas directly.
Another way to involve people is crowdsourcing. We have developed the "DansMaRue" mobile application which Parisians use to signal local problems and even identify spots for "urban greening" (buildings, walls, squares, abandoned urban places). It is this type of exchanges with Parisians we want to implement to make our City better.
This is a genuine urban revolution in the making: the role of local governments of world-cities is to understand, support and leverage the benefits of this revolution. European cities, I believe, have a major role to play in leading this transformation. Their governance is well geared towards citizen involvement and this should alleviate the risks of the "systemic city" or the "cybernetic city".
C&S: Do you have any models or at least references to guide your project for Paris?
J.-L. M: Many interesting models exist throughout the world and we are discussing extensively with many cities facing the same challenges.
That being said, from our discussions we retain one key conclusion: each of these cities has developed its own good practices with its own cultural frame. I think there is no single model of smart city and it would be ineffective to copy-and-paste alien models or ready-to-use solutions in a fast-changing environment.
We have our own model based on an iterative approach that uses successful experiments in Paris. We have been working for several years to make Paris a strong city in the digital sector and a breeding ground for innovation. I would say that over the last 10 years or so we have created the conditions for the emergence and development of a strong ecosystem. Thanks to all these efforts, Paris has experienced a lot in recent years and is now a world leader in innovation and most certainly the top European city.
There are well-known examples of successes such as Velib ', Autolib', Paris Wifi, among other experiments such as heating a residential building thanks to the energy produced by data centers, data vizualisations of the Paris transport system, smart street furniture, … Many of those locally-grown success stories are helping to build our own project of smart city and to deploy these experiments on a larger scale as standards for the city of tomorrow.
Paris is actually creating international benchmarks for smart city, though it is not as recognized as it should be. Through calls for innovative projects led by the Paris Region Lab at the initiative of the City, we facilitate the emergence of intelligent solutions on subjects as diverse as intelligent street furniture, energy efficiency or assistance home support for seniors. Paris provides entrepreneurs and businesses of all sizes with a single territory and open trials. It also runs a network – an open innovation club – that organizes meetings between the largest companies and startups. We are even deploying this initiative in other French cities, at their own request.
C&S: What priority initiatives have been selected for the Smart City project in Paris?
J.-L. M: One billion euros will be invested by 2020 in order to make Paris the international benchmark in innovation related to land use, the participatory democracy, sustainable development, the digital economy and energy transition.
Our smart city approach is threefold: open city (open data), digital city (potential of digital technologies and their application to improve the quality of life of Parisians) and the inventive city (which is built by transversal networks and innovation).
Each of these pillars shall contribute to our 4 main targets.
One of the most important is the food supply because no city in the world is capable of ensuring its food self-sufficiency in the present state of our know-how and our food is responsible for almost 40% of our ecological footprint. We have recently launched a call for projects titled: "Innovative Urban Greening" which consists, among other objectives, in experimenting with the urban agriculture of the future.
Another challenge is the energy of the city. 90% of the energy of the Paris metropolis is provided by fossil fuel or nuclear energy. From a territorial point of view, it is an imported energy. In addition to the on-going effort on renewable energies (with a certain success for geothermal energy), the focus is increasingly on energy recovery. We must go ahead and draw from their hidden resources. These resources are at the core of the circular economy: a waste produced by someone is a resource for someone else.
An example in Paris is the Qarnot Computing start-up which has invented a radiator-computer: by dissipating all the energy consumed by data processors in the form of heat, the Q-rads make it possible to heat free of charge and ecologically any type of building (housing, professional premises, collective buildings) according to the needs of their users. A low rent housing building has been fitted out with these Q.rads radiators: the inhabitants do not have to pay for their heating anymore and their ecological footprint is zero.
The third challenge is urban mobility. This can no longer be dealt with through the option of car versus collective transport. New systems of mobility are emerging: they concern the technology of vehicles (electric cars, rubber-tired tram), but above all the technology of services (rental among individuals, sharing, car-pooling, multi modal applications, etc.), and they often open the way for the emergence of new chains of values and new players.
In Paris, the massive adoption of Autolib' and Velib' shows the power of attraction of sharing and self-service.
Last challenge is planning for the future of urban spaces and architecture. In order to take into account new ways of working, living or trading we need to be able to test multifunction buildings that combine housing, offices, community spaces, show-rooms and services to people. This mixed use on the scale of a building implies more flexible Local Urban Plans and an adaptation of safety rules. The new way of working implies home-office, mobile office, co working and remote working centers. The new way of living requires community spaces in the building, a greater use of roofs, community gardens, shared utility rooms, services to the person, sorting and recycling. New trading methods integrate ephemeral shops, shared showrooms and fablabs.
C&S: Paris as a city, and you in particular, have worked hard to ensure that digital is also an opportunity to redevelop business in Paris, which is threatened to become a purely residential city. What connection do you see between support for start-ups, incubators and nurseries, and a policy of the Smart City type?
J.-L. M: The City of Paris is an innovative city at the forefront of digital technology, as evidenced by the ranking of PricewaterhouseCoopers. The emergence of Silicon Sentier in the heart of Paris in recent years, or important events such as Futur en Seine and the Open World Forum illustrate the growing dynamism of our city in terms of digital innovation.
Notably, in our incubators, many innovations are related to digital technologies. They create value in all areas of the city and aim to serve people in a better way.
As an example, the Moov'in city competition launched in June 2013 by the City of Paris in partnership with the RATP, SNCF, JC Decaux and Autolib' aimed at bringing out new web-based and mobile services focused on mobility in Paris and the Ile de France region. One hundred ideas were generated through this process; seven of them were awarded a prize. Among them, the Paris Moov' solution is a route calculation application that integrates all public transport modes available in the Ile de France region and suggestions of activities once arrived at destination.
Some incubators and clusters that we support are directed specifically to the city and urban services (energy, transport, water, logistics, etc.).
This is for example the case of the Paris Innovation Massena incubator where we work with large corporations like SNCF or Renault. We help them and they accompany us to build our Smart City project.
In addition, the creation of incubators or Fab Lab continues with determination and ambition displayed, particularly with the MacDonald converted warehouse or the Halle Freyssinet, the future world's largest incubator (1000 start-up companies). New places at the forefront of innovation combining incubators, coworking spaces will continue to be created and its ecosystem of innovation will be internationalized. This is the only way for Paris to be in the top attractive and competitive cities in the world.
C&S: How do you pilot a 'Smart City' project? (Is it through a task force outside the main city services? Or through a cross-functional structure involving all the services?) How did you structure management of the Paris project?
J.-L. M: The smart city is a cross-cutting subject, which means we have no other way to do it than keeping good interaction among the administrative units.
All large cities are confronted with the issue of finding the appropriate scale of governance and new governance tools. The model of organization of local administrations is outdated. The large vertically-organised departments (urban planning, roadways, housing, architecture, green spaces) are facing the challenges of intelligent networks, project management, citizen participation that require a much more cross-cutting and horizontal coordination.
Paris has historically been organized in large vertical services to deal, for example with roads, architecture, urban planning and so on. For this reason, we have chosen to address the question of the Smart City within the City of Paris through a steering committee composed of elected officials and a cross-cutting taskforce driven at the General Secretariat - the body that oversees all directions.
This "smart city" mission is a project accelerator. Its aim is to raise awareness on this subject within and throughout the services but also to manage the relationship with our key partners of major urban infrastructure. It supports the deputy mayors on each of their missions and brings global thinking to structure a coherent overall strategy in the multiplicity of initiatives and concrete actions led by all the services.
C&S: On a more mundane level, the deployment of digital applications in the city is also organized on the basis of a telecommunications infrastructure (fiber access, 4G, WiFi, ...). Are you satisfied with the existing equipment and deployments underway at the initiative of private operators? How do you cooperate with them particularly in light of concerns over radio transmitters?
J.-L. M: While the City of Paris has no formal jurisdiction over this subject, we consider it is our role to ensure that all Parisians can access clear and transparent information on the deployment of base stations, and to take their concerns into account while ensuring the development of new technologies. This led us to sign a mobile telephony charter in 2003 with the telecom operators. His latest release in 2012 has set maximum exposure levels to radiofrequency fields and clear procedures for consultation with residents.
Jean-Louis MISSIKA is deputy mayor of Paris in charge of urbanism, architecture, projects of Greater Paris, economic development and attractiveness. From 2008 to 2014, he was deputy mayor of Paris in charge of innovation, research and universities. Prior to his local mandates, his professional career included various managerial positions in the public and private sectors.
François Barrault,President, IDATE
Opinion piece first published in Les Echos, 28 November 2014
Every, or almost every, European has one or several mobile phones. Most have a smartphone. Despite which, the mobile revolution has only just begun.
By the end of the decade, there will be more than 9 billion mobile users on the planet. Mobile traffic will be ten times what it is today, increasing at three times the rate of wireline traffic. Mobile and wireless (Wi-Fi) systems will be the top clients for optical fibre networks. Video will account for more than 50% of mobile traffic. In Africa, cellular networks and €50 smartphones will add hundreds of millions of new Internet users to the online population…
This will create several challenges for Europe. The first concerns our telecommunications industry, which has not been spared the vicissitudes of the latest developments. At least there was a possibility: 4G. A new, more powerful generation of mobile networks, capable of providing Internet applications with high quality access. Massive investments, but also an opportunity to differentiate oneself and break out of a somewhat frustrating competition model that tends to boil down just to price. In most European markets, in fact, and despite the advent of 4G, revenue continues to decline and margins are struggling to stabilise, which naturally undermines telcos’ investment capabilities. The impact of a reasonable consolidation on national markets is also needed put an end to this type of price war, while waiting for the emergence of a European market populated by somewhat more pan-European players. Let’s be optimistic: the first major M&A deals are about to be approved, and a new European Commission is almost in place. The adventure is only just beginning. We can also add that 4G is a universal standard, which is first for the industry, and that its future evolution (LTE Advanced) is already in the works, offering concrete improvements including even faster connections, while the first spectacular offerings from 5G will no doubt be upon us before the decade is out.
Europe’s telecom industry, which was a mobile market leader for some time, fell behind with 4G and is far from having caught up, if we compare its 4G status with that of South Korea or the United States. It would be a catastrophe for the situation to repeat itself with 5G. First, for our operators and consumers. But also for the telecommunications industry associated with it, and which continues to represent one of Europe’s far too rare digital assets thanks to companies such as Ericsson, Alcatel-Lucent, Gemalto and Oberthur.
But there is a second challenge, as well. These 4G and 4G+ networks are the first to be all IP. They will accelerate the transition from a fixed to a mobile Internet that began with 3G and Wi-Fi. This is true in both emerging economies and our own markets. And for the Internet’s top players. Google was quick to see the need to invest in Android. Facebook’s message to market analysts over the past two years has focused chiefly on the growth of its mobile users. Amazon is investing in its own tablets to protect access to its e-commerce. Netflix and YouTube have understood that video was going to account for a major percentage of mobile traffic. And even Microsoft has adopted the slogan: “mobility first!”.
At the same time, we want to believe that the future is not written in stone. A very profound transformation of the Web has begun thanks to mobile: integration of location-based solutions, the intimacy of wearable technology (glasses, watches, clothing) that can act as our wallets, monitor our health and our environment (home, car, smart city) in real time… We have seen machine-to-machine (M2M) begin to really take off in recent months, and it already represents millions of connections. The Internet of Things is becoming a reality. All of these (still tiny) waves that are building up to the future mobile Internet will be combined with the power of cloud architectures, to constitute a no doubt majority share of the data-driven economy.
These two challenges are closely intertwined, even if each will also play out separately. It would be dangerous for Europeans to become complacent in their views, or to resign themselves to a schism between the network-based economy, which could be the victim of harsh sector-specific regulation, and the economy of OTT applications which must not enjoy the impunity of offshore companies. Lastly, in addition to technological feats, we need to recognise the tremendous importance of a third challenge: namely creating trust between the industry’s players and regulators, and between those two parties and the consumer.
Chairman of IDATE
These topics will be revisited at IDATE’s 36th annual DigiWorld Summit, next year in Montpellier. Stay in touch at: www.digiworldsummit.com