Post-production in the cloud: a new strategy for technical industries?

Gilles Fontaine

Deputy Managing Director
Director of TV & Digital Content Business Unit


Like with cloud computing that moves computing power and certain applications to remote servers, the post-production industry is also seeing a growing number of cloud-based solutions coming onto the market.

This trend is a response to the growing complexity of the TV value chain. The production of programmes on the one hand, and their distribution on the other, once represented two sequential processes. But now that video on demand – and the distribution of video programmes on the Web in general – are flourishing, distribution strategies can now retroact on content to produce different versions that are better adapted to a given platform, device or target audience.

Media Asset Management: a key link in the chain

This interaction between production and distribution has resulted in the emergence of media asset management systems that consist of storing, archiving, cataloguing, annotating and retrieving programmes for delivery over multiple networks, of inserting targeted ads, and indexing for search engines and social networking sites. Video solutions providers today need to be able to supply producers with centralised and shared management solutions for their content, where the post-production stage interfaces directly with the process of preparing programmes for distribution.

At the same time, technical industries are suffering from the ever accelerated rate of technological innovation which, although improving the performance of their solutions, also require constant expenditures, and give an advantage to new entrants who acquire the latest technologies available, while the competition is still trying to amortise the last round of investments in hardware. Post-production customers are also under tremendous pressure to lower programming costs, due to increased competition in the TV sector which is operating in a climate of economic uncertainty. In addition to centralising the services, a cloud-centric approach allows post-production companies to pool their equipment and to have variable costs, exchanging investments in hardware and licences for computer or application time.

Cloud-based post-production solutions offer different levels of service, ranging from remote storage to the use of editing applications (via lower quality rendering that can be accessed on an ordinary desktop computer) and, possibly down the line, additional functions like indexing. These solutions offer several advantages:

• costs correlate directly to actual use;

• workflow is generally optimised thanks to the use of a single storage location;

• all of the parties involved have access to the programme in production, regardless of their location, and service providers have access to the latest technological developments.

But there are risks involved as well:

• the content’s security;

• the need for a telecommunications network (between the service provider and the cloud service, and on the service provider’s premises) with a guaranteed level of quality;

• lack of compatibility between the different cloud solutions.

Integrating key functions in the cloud

We are seeing a growing number of post-production solutions, being marketed by companies like Grass Valley, Adobe, Aframe, Sony and Avid. The solution being sold Avid is an ambitious one, offering a service platform in the cloud that combines all of the essential functions of programme production and management. The platform is intended to be employed not only with Avid editing and post-production solutions, but also solutions that help customers monetise their content (producing different versions of programmes, integration of Consumer Analytics) and those that enable the creation and management of metadata. The company also has plans to create a marketplace. Not all of the applications hosted on this open platform will be developed by Avid, as some could be supplied by partner companies. This approach is nevertheless an expression of Avid’s desire to build on its core business, i.e. post-production solutions, to expand into content distribution. In doing so, it hopes not only to generate new revenue steams, but also and above all, to secure the loyalty of its customers who, once they have embraced the platform, will have no need to switch to another provider.

The cloud-based service platform according to AVID

Avid Everywhere - A Vision for the Future of the Media Industry

Source: Avid: Avid Everywhere - A Vision for the Future of the Media Industry

Fewer barriers to entry

The development of cloud-based solutions, which are still in their infancy, indeed appears to be in line with customers’ needs for solutions that are both more centralised and more collaborative. It is also an expression of the emergence of media asset management as a key stage in programme production and distribution. Lastly, it is a reflection of the need of technical industries grappling with a tough economic equation to seek out complementary business opportunities along the technical video chain. But these solutions also represent a threat to existing service providers: the cloud lowers the barriers to entry into the post-production market, and so ushers in more competition, based not on the financial ability to acquire the necessary hardware and licences, but rather on creative excellence.


Next Gen Home Consoles: the Eighth and Final Generation?

MICHAUD Laurent 

Laurent Michaud
Head of Consumer Electronics & Digital Entertainment Practice 



By 2016, the segment of the home consoles share will increase to 42.6% of video game market total revenue, or 35 billion EUR.

Many are claiming that this will be the last generation for consoles as cloud computing and network technologies have shown that they could make console hardware obsolete. However, this is not going to happen in the next seven to eight years, which is the typical life cycle of a home console.

We have released our latest report, “Next Gen Consoles”, performed under our on-going monitoring service of the worldwide video games market. This report explores the technical specifications of the latest generation of home consoles, their features and the gaming and non-gaming services they deliver. It focuses on machines produced by Nintendo (Wii U), Sony (PlayStation 4) and Microsoft (Xbox One),recognised as the leading players in this still very lucrative market, and purveyors of the most spectacular gaming experiences.

Figure 1: Video game market worldwide by segment, 2013–2017 (Billion EUR)

World Videe Game market growth 2013-2017, by segments

Source: IDATE, December 2013

Console manufacturers and their publishing partners have already made the transition to dematerialization. This can be seen with the ability of next-gen consoles to use the cloud for content and data storage services, content streaming, multiplayer and social features and even remote gaming. Console manufacturers will eventually be offering their own cloud gaming offerings. In this context, console manufacturers will exploit second screens. These could be a tablet, smartphone or dedicated platform and could offer synchronous or asynchronous and complementary or substitutable use in terms of game experience.

Several 'social' features have also been added because social networks have proved to be important for the gaming experience and for revenues, as well as for loyalty. Console manufacturers have therefore integrated the ability to share game images and videos on social networks, such as Facebook and YouTube. As well as these new features, console manufacturers have retained and improved their gesture recognition devices and added or improved voice recognition.
The online services available to players generally require a paid subscription. While Sony and Nintendo offer some particularly attractive free services, Microsoft has made its online services paid only.

The catalogue of games available on each console, including exclusive games, is an important issue for hardcore gamers, who set the tone and trends in gaming. At launch, Microsoft was ahead of its competition in terms of volume of games available on physical and downloadable media.
However, according to NeoSeeker1, the trend was reversed in the weeks following launch.

Technical specifications can also distinguish one console from another. Although the Wii U is clearly behind its competitors in terms of graphics and processing power, its game library does not necessarily require high performance hardware. On the other hand, Sony and Microsoft are battling it out over the respective power of their machines, which is an important issue for early adopters.
Since the previous generation of consoles launched in the mid-2000s, there have been many new technological innovations. We have therefore seen many initiatives appear in the home console market segment, especially with regard to home mini-consoles. There are now a dozen challengers, including Valve/Steam, nVidia, Ouya, GameStick, eSfere, Razer Edge, Bluestacks and its Gamepop console, Green Throttle, and Mad Catz and its micro-console M.O.J.O. Few of these will see much success but the Steam console would be IDATE's favourite to take some market share.

While these new challengers are mainly focusing on video games, the three leading console manufacturers are continuing to position their devices as entertainment centers over and above gaming.

Video Game & Digital Entertainment Programme


Our Video Game & Digital Entertainment programme offers a unique watch service that tracks all video market segments, and provides users with data and analysis that draw on our own database, and on our series of reports and insights on the key issues shaping the video game industry:
The World Video Games market:
database and its analysis report
Cloud gaming
Social gaming
Mobile gaming
Next Gen Home consoles

More on Video Game Markets:


Comcast, Time Warner, Netflix, Verizon: redrawing America’s TV landscape

Gilles Fontaine

Deputy Managing Director
Director of TV & Digital Content Business Unit


Three recent deals are reshaping the video distribution landscape in the United States. The first is Verizon’s takeover of Intel’s media division, after the latter decided not to launch its own OTT service. The carrier will use Intel technologies to better integrate OTT solutions into its own internet plans, but perhaps and above all to roll out its own internet TV service, which would be available even outside the carrier’s service area.

The second is US cable market leader Comcast’s acquisition of Time-Warner cable, which still needs to be approved by anti-trust authorities. The deal would increase the new entity’s market clout in both OTT services and with American studios. The third major deal is the agreement between Netflix and Comcast, whereby the cableco would be paid to guarantee high quality network access for Netflix customers.

Cable High-Speed Internet and video subscribers in the USA

These three deals are milestones in that:

• They take net neutrality debates to a commercial negotiation between services and network operators. If Netflix and Comcast managed to reach an agreement, there is no longer a need for specific regulation, provided network access is still supplied under non-discriminatory conditions.

• They attest to the pressure that triple play operators are under to protect their place in the video distribution chain. Cable TV customers in the United States are a shrinking population, whereas broadband cable customers constitute the majority. As a result, securing good terms from the TV networks has become vital to video distributors’ economic well-being.

• They reveal that size does matter when going head to head with increasingly globalised internet companies. A portion of competition in video distribution today is playing out in the realm of technological innovation. Comcast has been spending heavily on R&D on new video services for the past several years – investments that need to be amortised over a larger number of customers than what it has now.

• Ubiquitous online distribution heralds the disconnection, first between video access services and, second, the supply of premium services, and could augur a future split in the companies that currently supply them both.


Global LTE forecasts

Frédéric Pujol, Head of the radio technologies & spectrum practice, IDATE

Frédéric PUJOL
LTE Lead analyst, IDATE

More than 1.3 billion LTE subscriptions worldwide by the end of 2017, generating a total €400 billion in revenue


According to our CEO, Yves Gassot: ‘the success of LTE is no doubt the most spectacular illustration of the inexorable rise of wireless. Plus the allocation of new frequency bands to mobile operators, the expected progress with LTE Advanced, the interleaving with managed Wi-Fi, and the perspectives of M2M/IoT are bound to further drive this momentum in the coming years’.

Alongside these technological strides, we are also seeing users, and the services and applications industry moving over en masse to the mobile internet. This is naturally having a considerable impact on the internet giants, and consumer electronics, component and PC suppliers -not to mention e-commerce vendors, and banking, gaming, TV and advertising companies…

The most important LTE Markets

Les plus importants marchés LTE

Source: IDATE

Among the many effects on the telecoms sector, three of the most momentous are that:

• LTE and its developments are likely to provide the industry with the opportunity to make good on promises to consumers over the innovation potential of access, not only for smartphones and the latest social media service. It will mean managing services tiered by quality and speed in a way that is clear to consumers, and accepted by internet companies. The rollout of LTE is also a good time for operators to redefine their business models for the internet era.

The price wars that have broken out in some markets, not least across Europe, reduce competition to the single parameter of price, which makes it difficult to sell different levels of quality. This is weighing on both margins and capex. The LTE era is likely to also be the era of market consolidation in the form of M&A and broad infrastructure sharing agreements – albeit under terms set by competition authorities and sector-specific regulation;

This consolidation will not remain confined to the wireless sector, and is already encompassing mergers with cable companies and wireline telcos. Ultra high-speed mobile systems require small cells and have massive backhauling needs. In addition to the expected interleaving of fixed and mobile infrastructures, the wisdom of bundles that include wireline and wireless services is becoming clear. All of which points to an entire industry that will need to be overhauled in the coming years.

Top 10 LTE operators (Q2 2013)

Top 10 LTE operators (Q2 2013)

Source: IDATE

Main LTE trends

• 119 million LTE subscriptions as of mid-2013 in the top 10 markets. Close to 130.5 million LTE subscriptions worldwide.
• Total LTE revenue in 2013 estimated at €57 billion.
• Rapid growth of LTE coverage in South Korea (100%) and the US.
• We forecast more than 1,313 million LTE subscriptions worldwide, by the end of 2017.
• Close to 450 mobile operators have committed to launching LTE.
• Close to 1,000 LTE devices as of mid-2013.
• Already 19 LTE frequency bands in use in Q2 2013.
• TD-LTE is still a emerging ecosystem with only 2 million subscriptions at the end of 2013.
• Video represents close to 60% of LTE traffic.
• LTE is also used for fixed services.

As of mid-2013 there were more than 130 million LTE subscriptions worldwide, compared to 69 million at the end of 2012. The 100 million mark was passed in June 2013, with the US, Japan and South Korea leading the pack.
More than 54% of LTE subscriptions in mid-2013 were in the US, with Verizon Wireless supplying the majority of them. The operator had covered 96% of the US population at that time.
200 commercial LTE networks – both FDD and TDD as of mid-2013: only 20 TD-LTE networks and 180 LTE FDD networks.
LTE-Advanced was launched in the second half of 2013 in South Korea.
The top three LTE operators are Verizon Wireless, AT&T and NTT Docomo.

Download the complete report LTE 2014: Markets & Trends


Inventory of FTTH/B in Europe




Head of Research, Telecoms Business Unit, IDATE


A noticeable new impetus from some FTTH/B incumbents with a significant impact on coverage growth

Europe (EU-35) reported a solid 33% increase in the number of FTTH/B subscribers in 2013. FTTH/B coverage continues to progress fast in Europe with a growth of 22% in the period. There were more than 9.5 million FTTH/B subscribers in the EU-35 at end 2013, and nearly 41 million homes passed.

During 2013, several countries showed a real dynamism both in terms of coverage and take up rates. Even with not comparable to other larger markets due to its demographic characteristics, Switzerland is leading the panorama in terms of percentage of new subscribers in the total FTTH/B subscribers' basis (70% of FTTH/B subscribers at end 2013 are new subscribers). The country is followed by much larger markets such as Turkey, Spain and Poland (where, respectively, 46%, 39% and 32% of FTTH/B subscribers are new 2013 subscribers). In Turkey, the competition between Turk Telekom and Turkcell SuperOnline is very strong and, even if entered later on the market, the incumbent has now overpassed its competitor in terms of coverage.

Number of FTTH/B subscribers per country in Europe

(countries with more than 200 K subscribers)
Number of FTTH/B suscribers per country in Europe

Source: IDATE for FTTH Council Europe

Elsewhere in Europe, pioneering Scandinavian countries, sometimes already considered as mature, are still leading the European market. The Danish FTTH/B market grew by 30% in 2013 in terms of number of subscribers. This growth is mostly due to the dynamism of Waoo!, the joint venture created by 15 utilities, a very innovative and rare model in Europe: all utilities provide services under the same commercial brand name but operate their own independent and local networks. In Finland, such as in neighbouring countries, many local players are deeply involved in FTTH/B rollouts, without waiting for one large player to deploy a nationwide infrastructure. This seems to correspond to end users' needs: FTTH/B connections are more and more considered as a utility and therefore often included in the apartment monthly rental. Then, Sweden still shows an interesting dynamism: in 2013, the number of subscribers increased by 18%.

Then, on other markets, FTTH/B subscriptions also increased significantly. In the total, 16 countries present a 30% or more growth in terms of subscribers in 2013, among which France, Netherlands, Portugal, Spain, and even Germany and the UK, not known as exemplary countries as regards FTTH/B strategy.

In terms of players involved in FTTH/B projects, alternative carriers are still leading the way, representing a 45% of the total homes passed in EU35 at end 2013 (nearly 68% considering EU39, which shows the important role of those players in Russia and Ukraine!). Among them, we can note the dynamism of Vodafone which significantly increased its coverage in both Portugal and Spain.

Number of FTTH/B homes passed per country in Europe

(countries with more than a million homes passed)
FTTH/B homers passed per country in Europe

Source: IDATE for FTTH Council Europe

The number of local authorities launching FTTH/B rollout projects on their territory is increasing a little bit but they still represent only some 11.9% of homes passed in EU35. Few new projects launched by local authorities have been noted during 2013. There are some interesting rollouts in France in the context of the national program for superfast broadband, but most of them are still in the very beginning of the process. They represent some 450,000 homes passed end 2013.

Then, of course, incumbents are important players in all European countries. They represent 43.1% of HP in EU35 at end 2013, +5% compared to 2012. Several incumbents have considerably accelerated their rollouts in 2013. The most dynamic is Telefonica in Spain, with 1.3 million new homes passed between December 2012 and December 2013. Then come Orange in France (+849,000 HP), Turk Telekom in Turkey (+500,000 HP), KPN/Reggefiber in the Netherlands (+385,000 HP) and TeliaSonera in Sweden (+350,000 HP). The recent involvement of Swisscom in Switzerland is also noticeable: the incumbent, previously much more focused on FTTN+VDSL, has decided to accelerate its FTTH coverage and added 198,000 new homes passed to its footprint in 2013.

More data on our FTTx Whitepaper Updated with 2014 figures

More information on Worldwide panorama of FTTx rollout Status report & database


Ultra-fast broadband world market




Head of Research, Telecoms Business Unit, IDATE


Ultra-fast broadband revenues will grow by 95% over the 5 next years to reach 182 billion EUR in 2017

We have released the latest issue of our World FTTx database, which is part of our ongoing service covering the ultra-fast broadband market. It provides key data on this market across the globe, covering more than 70 countries and 150 key players, and providing forecasts up to 2017.

Valérie Chaillou, FTTx lead analyst at IDATE, notes “growth perspectives remains still high when superfast technologies (For definition of superfast platforms we have considered here 3 main architectures: FTTH/B, FTTN and FTTLA) represent 22% of broadband access subscriptions at mid-2013, and we expect ultra-fast broadband revenues will grow by 95% over the 5 next years to reach 182 billion EUR in 2017”

Compared growth of VDSL and FTTH/B subscribers, 2012-2017 & Breakdown of Ultra-fast broadband technologies, at mid-2013

Source: IDATE, December 2013

• Eastern Europe will see its take up rate increase from 28% to 49% in 5 years, much higher than in Western Europe during all the period, from 21% at end 2012 to 32% at end 2017.

• FTTH/B is the leading ultra-fast broadband solution, far from FTTLA then VDSL : FTTH/B represents 66% of FTTx subscriptions at mid 2013, compared to 22% for FTTLA and 12% for FTTN+VDSL

• But the regional breakdown is very heterogeneous
- FTTH/B is clearly the technology of choice in APAC whereas
- FTTLA is leading the ultra-fast broadband market in Western Europe and North America.
- VDSL is a technology of choice for several European incumbents.
- Latin America and Middle East countries are at the very beginning of their NGA rollouts: they will participate to the global growth of superfast broadband more and more in the coming years.

• There are still questions from large players regarding the opportunity to deploy FTTH/B or VDSL, mainly in Europe.
- Several parameters are to be taken into account among which, of course, the required investment. Nevertheless FTTH/B rollouts did progress in certain European countries which are encouraging at a time when EU Telcos are seeing their margins shrinking.
- Some players are betting on the future capacities of copperbased networks.

Top 10 FTTx worldwide players, at end 2013

Source: IDATE, December 2013

FTTH Operators ranking: 6 Asian and 4 American telcos make up the world’s Top 10

Only one player involved in large FTTN+VDSL deployment among them (AT&T), then two cablecos
upgrading their infrastructures to FTTLA (Comcast and TWC). 7 operators among this top 10 have choosen the FTTH/B technology.

More data on our FTTx Whitepaper Updated with 2014 figures

More information on Worldwide panorama of FTTx rollout Status report & database


Edito by Yves Gassot

Yves Gassot


Round-up for 2014

It’s hard, in the first editorial of the year, to avoid laying out the overriding themes that we expect to see play out over the next twelve months. But it is still too early for me to deliver a complete summary of the year gone by, which has become the much-anticipated task of our DigiWorld Yearbook.
You will also need to wait until the next Executive Note to find out the central topic selected for this year’s DigiWorld Summit (but you can already mark your calendars for November 18, 19 and 20).

What I can share with you, however, is our belief in the profound relevance of certain issues, by summarising three topics that we have chosen to explore in this year’s Collaborative Research Programme (CRP 2014). These are think tanks open to existing IDATE member companies and those wanting to join, who will work for close to a year with a dedicated team of our analysts on the following subjects:

Telecoms USA: model or counter-model?

Following thorough on the two projects carried out in Brussels in 2012 and 2013 on telcos’ new business models, and the new European policy options being considered, we will work to deepen our understanding of the specific points that explain the different directions being taken on either side of the Atlantic.

The internet of things: will everything be connected?

We are going to analyse the true potential of the internet of things, by taking account of the developments that need to occur in the technical environment, difficulties in generating income from both consumer objects and industry applications and, finally, governance and personal data ownership issues, with tie-ins to our 2013 think tank on personal data

What will tomorrow’s TV and video networks look like?

Here we are building on the 2013 Video as a Service think tank by exploring issues surrounding the future of television and video distribution networks, and by analysing long-term scenarios for the delivery of TV and video products, taking particular account of the cooperation and convergence between networks, i.e. hybridisation involving both fixed and cellular networks

Other topics may be added to the CRP. For instance, we are contemplating an ambitious project that aims to define what could be a comprehensive, metropolitan area-scale digital investment strategy, going beyond marketing clichés and segmented vertical approaches.

I can also tell you that the next issue of Communications & Strategies (DigiWorld Economic journal) will be published in March, and is shaping up to be a promising one. It will be devoted to scoring Europe’s telecommunications sector, and examining potentially clashing policies.
And, finally, a reminder that the best way to delve into the subjects that are consuming our teams is though the reports that we publish every month as part of our annual Market Research programme.


What will the video industry look like 10 years from now?

Gilles Fontaine

Deputy Managing Director
Director of TV & Digital Content Business Unit


Some views on the future of video from the IDATE think tank

The “Video As A Service” programme, which was managed by IDATE experts as part of the DigiWorld Institute’s Collaborative Research Programme, brought together 25 audiovisual industry professionals to explore what the future holds for the sector.

Over the course of three seminars held from September to November 2013, they discussed their views and those of the guest speakers, before establishing a consensus on the future of consumer behaviour, services and distribution. Although the complete results of the programme are available only to the think tank’s participants, we can share some of the more interesting ideas to emerge.

Lower barriers to entry

The leading media industry companies’ competitiveness used to be based on their control over three things: content, the networks and the devices. But video-on-demand offers are coming to undermine the exclusive content model, and the internet does away with the need to obtain a DTT broadcasting licence, or to negotiate with network operators that package pay-TV solutions. Added to which, the television is becoming an open access device.

Arrival of global players

If content production is already a relatively global business, distribution is still largely a national affair, controlled by national companies. But new entrants have a global footprint in mind.

Accelerated rate of technological development

For a long time, technological innovation in the audiovisual sector advanced at a snail’s pace. But the growing complexity of programme distribution today requires solutions that evolve as quickly as the internet does.

Software excellence becoming a key competitive edge

Intelligence centralised in the cloud to optimise the network, understanding where and how users are consuming their content, catering to a variety of devices, customising offers, offering the best possible user interface, making IT expertise a central part of media operators’ business.

More complex regulatory framework

Regulation that is specific to the audiovisual market, which in France is particularly strict, is not the only regulation to apply to the industry’s companies. With the increasing globalisation of both the markets and the companies that populate them, new sector-specific regulations, such as those concerning data privacy and net neutrality in some instances, or more generally the growing role played by common competition law, can result in a greater disconnect between cultural and economic regulation.

2014 Collaborative Research Programme: “What will tomorrow’s TV and video networks look like?”

In terms of screen time, traditional broadcasting networks are still the top distributors of TV programming. Depending on the country, terrestrial, satellite, cable and IPTV networks account for the majority of viewers’ screen time. But on-demand viewing is becoming increasingly popular with users, and increasingly available on portable devices.

In addition, the different networks are undergoing, and will continue to undergo performance-boosting upgrades, including the switch to DVB-T2 or DVB-Sx, the adoption of HEVC and VP9, and increased throughput on both fixed and mobile networks. Fixed and mobile internet networks want to incorporate linear multicasting.

All of which is creating new video distribution configurations. Hybrid solutions are already making the most of broadcast and unicast systems by combining fixed broadcasting and internet networks, and will soon include mobile broadcasting and internet systems as well. From a more general perspective, fixed and mobile internet networks can appear to be increasingly interchangeable, or at the very least complementary.

Further down the road, the dividing lines between the different types of network are bound to dissolve more and more: cellular networks providing last mile connections for fixed networks, the (already begun) convergence of fibre and cable, and the first forays into a unified wireless terrestrial network, capable of delivering both broadcast TV channels and unicast video services.

The longstanding configuration of TV broadcasting silos and services appears to be giving way to a more expansive view of hybrid systems, combinations that can be reconfigured according to the type of service being supplied and how mature the market is. Bringing this vision to full fruition would involve a sizeable change not only in the way spectrum is managed, but also in how technical distributors operate and how they interact with service providers.

To explore these various topics in depth, one of the IDATE think tanks in 2014 will be devoted to the question: “What will tomorrow’s TV and video networks look like?”


Cord-cutting: can Netflix revive the cable industry?

Florence Le Borgne-Bachschmidt


Florence Le Borgne
Head of the TV & Digital content Practice, IDATE.


In summer 2013, the American media made a steady diet of the record drop in pay-TV subscribers in the United States between mid-2012 and mid-2013 (-911,000 subscribers) – giving credence to the cord-cutting scare, whereby pay-TV customers were cancelling their regular plans en masse and turning instead to SVoD services, offering chiefly films and TV series for a very affordable price of less than $10/month.

Still no massive change in the American market

It is true that the second quarter of 2013 was marked not only by another drop in cable TV customer numbers (-159,000 for Comcast and -93,000 for Time Warner Cable, the market’s top two players), but this is not in itself an isolated event as American cablecos have been losing subscribers since 2001. What was exceptional was the drop in customer numbers for the country’s two satellite pay-TV providers, Dish TV and DirecTV, which lost 78,000 and 84,000 subscribers, respectively. If, at the same time, the two IPTV plans continued to enjoy an upswing in customers (+140,000 subscribers for FiOS TV and +231,000 for U-Verse), it was not enough to offset the loses being posted by the main broadcasting networks.

So third quarter results were eagerly awaited. The figures released on 30 September 2013 revealed that satellite subscriptions were back on the up, and IPTV customer numbers had increased slightly. Meanwhile, cable continued to lose customers but in a way that was consistent with third quarter results in previous years.

Video ARPU continues to rise

It should also be mentioned that while cable TV subscriber numbers have decreased, average per user revenue (ARPU) has increased. For Comcast, video ARPU has been rising steadily, standing at $161.07/month in Q3 2013 – which is $10 more than in Q3 2012 and $22 more than in Q3 2011. Charter Communications’ total video revenue rose by 7.4% over the past 12 months, despite a 3.3% decrease in its video subscriber base. While Time Warner Cable saw its video revenue shrink by 4.4% between Q3 2012 and Q3 2013, the decrease is smaller than the 6.1% drop in subscriber numbers during that time.

Equally noteworthy is that cable TV subscribers are also watching premium content supplied by vendors other than their traditional pay-TV provider.

A strategy of alliances with European cable companies

In the UK, where American-born Netflix is also present, it is just as hard to measure the company’s impact on pay-TV subscriptions. Market leader, Sky Digital, reported a slight increase in TV subscribers (+203,000 subscribers) between the time Netflix launched and Q3 2013, whereas cableco Virgin Media reported a slight decrease (-10,000 subscribers) in its pay-TV customers during that time, but an overall increase in paying customers (+200,000).

It seems unlikely that the partnership between Netflix and Virgin Media will drive existing Virgin customers to cancel their pay-TV plans. In fact, for an extra £5.99 a month, Virgin subscribers with a TiVo (i.e. 49% of them) have been able to access Netflix directly on their TV set since mid-November 2013.

Also present on Swedish pay-TV provider ComHem customers’ TiVo since 20 January 2014, Netflix could actually prove an incentive to sign up for a cable pay-TV plan.


New generation consoles born under a cloud sign

MICHAUD Laurent 

Laurent Michaud
Head of Consumer Electronics & Digital Entertainment Practice 



After having first been dependent on computing and display power to dazzle gamers, the success of home consoles was next shaped by innovation in consumer electronics and IT. Earlier generation consoles had adopted this prerequisite, and their manufacturers had innovated by outfitting them with a DVD and later a Blu-Ray or HD DVD player, an accelerometer and an inclinometer, gesture recognition capabilities and even, for Nintendo in the mid-90s, with a hard drive.

For this new generation of consoles – which came on the market from late 2012, starting with Nintendo’s Wii U, up to late 2013 with Sony’s PS4 and Microsoft’s Xbox One – innovation lies less in the technology than the software. It lies in services for the whole family, from VoD to gaming, by way of web browsing. And it lies in the gaming experience, opening it up to an array of social dimensions.

The cloud as a springboard for innovation

After the first announcements from console makers, aware of how much innovation influences the success of home consoles, but without imagining that innovation could be in a realm other than technological, financial analysts gave a rather tepid welcome to the latest generation of machine. Of course, this meant overlooking the fact that innovations on the service and user side of the equation are now growth drivers in and of themselves, and vital to Sony, Microsoft and Nintendo’s success. Knowing this also helps understand where companies seeking to rival these three titans – e.g. Valve/Steam, nVidia, Ouya, GameStick, eSfere, Razer Edge, Bluestacks and its Gamepop console, Green Throttle, Mad Catz and its MOJO micro-console, etc. – are coming from.

Consoles getting social

Consoles have become social creatures. Console makers are working to satisfy gamer expectations, which have been clearly expressed by the success of social networking sites and of game publishers like Zynga, King, 6Waves, Pretty Simple, EA… Their machines are now equipped with sharing, communication and linking features, which should help consoles capitalise on the viral effect of a game’s sudden huge surge in popularity, just as Facebook and the iTunes and Android app stores already do.

The companion screen, home consoles’ ubiquitous helper

Consoles will help promote the companion screen and ubiquitous gaming. We have already seen companion screen app initiatives in the realm of TV, introduced by broadcasters and ISPs. The video game sector’s manufacturers could easily give birth to a second generation of applications that link the TV with a tablet, smartphone or PC. The companion screen goes hand in hand with the growing ubiquity of content. It is on every gamer’s wishlist and will no doubt be ushered formally into the equation with this new generation of consoles.

Is the hard copy dead?

Next gen consoles have taken one step closer to the web in their clear and decisive positioning on solutions that use the cloud for storage and computing. These include services like remote control, game downloads, interacting with other gamers, rankings, challenges, VoD, etc. But a host of questions remain over console-makers’ and their partners’ desire to do away with hard copies entirely over the next six or seven years. All have no doubt thought long and hard about it. If we are seeing the first signs of it today, it is no doubt with a view to having full command of all-digital gaming by the end of this console generation’s lifespan. In any event, the transition needs to be considered in light of new HD picture formats. An ultra high definition picture will “weigh” four times what an HD picture does, but should benefit from significant progress in compression techniques, beyond the capacities of H265, and so be transmitted with ease over the networks.