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


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

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


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



Service typology

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

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

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

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

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

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

Business models and service positioning

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

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

Competitive environment

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

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

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

Competitive environment

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

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

the price differential with local pay-TV offerings;

the prevalence of piracy of audiovisual and cinematic content;


Find out more about the various internal factors

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

the relevance of the marketing positioning of the services;

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

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


More information about these issues

Profitability conditions and the challenge facing Europe

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

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

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

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

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

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




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Connected TV: Accelerating OTT video development


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

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


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

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

More information about main trends

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

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


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

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

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




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Vogo : le spectateur devient téléspectateur

Qui ne s’est jamais senti frustré lors d’un match de se retrouver trop loin pour apprécier telle ou telle action sportive ? Qui n’a jamais eu envie d’appuyer sur "pause" ou "ralenti" pour mieux voir un joueur, un détail ? Vogo vous a entendus et répond à votre demande grâce à sa technologie qui a donné naissance à l’application bien connue aujourd’hui.

Vogo vous permettra de revoir les actions au ralenti, de faire des arrêts sur images, des retours en arrière, pour mieux apprécier certains moments en proposant plusieurs angles de vue. En résumé, vous spectateur, choisissez de devenir téléspectateur au moment qui vous convient. L’application est disponible sur tous les supports ; smartphones, tablettes... L’équipe de Vogo est composée de professionnels du broadcast, passionnés de sport. Et s’ils étaient 4 à l’origine, ils sont aujourd’hui 10 à avoir aménagé dans leurs nouveaux locaux tout récemment.


En direct du stand de Vogo dans le village numérique


Désormais, Vogo se développe aussi hors de la sphère sportive, dans les concerts, les défilés de mode. Et demain, ce sera la dimension commerce électronique dans laquelle Vogo se lancera en proposant par exemple d’acheter le tee-shirt de votre joueur préféré pendant le match ! En résumé, l’expérience utilisateur se trouve augmentée et enrichie. C’est Christophe Carniel, fondateur de Vogo, qui nous a accueillis sur le stand. Pour lui, le DigiWorld Summit 2015 permet de montrer que sa société participe à l’écosystème de la région Languedoc-Roussillon et de rencontrer de futurs partenaires.

S’il avait un souhait pour les prochaines éditions, ce serait "d’encourager les synergies entre le public et les start-up présentes au village numérique".


Mobile Gaming, 23 Milliards d’euros d’ici 2018 !

infog google vs apple 2018

Google versus Apple : les deux géants tirent le marché vers le haut et s’affrontent au travers de business models différents


L’économie des jeux sur les plateformes nomades est remarquablement efficace, et la concurrence qui s’exerce entre Apple et Google l’est tout autant.

L’App Store d’Apple et Google Play sont les deux principaux appstores du marché en volume d’applications disponibles et téléchargées.

On notera qu’en juillet 2014, ils comptabilisaient chacun plus de 1 million d’applications, loin devant Windows Phone Store, Amazon Appstore et Blackberry World. Aujourd’hui, ces deux appstores rassemblent à eux seuls  quasiment 80% des applications disponibles.

Les chiffres clés du marché mobile mondial à 2018

•    Le nombre de jeux mobiles dépasse de loin le nombre de jeux disponibles sur les autres plateformes de jeux,  offrant de nombreuses perspectives aux grands acteurs.

•    Le marché du jeu mobile s’élève à 12.8 milliards EUR en 2014. 72.6% de la valeur est générée par le jeu sur smartphone et atteindra vraisemblablement les 15 Milliards d’euros d’ici 2018

global mobile market generated by smartphone and tabletsDes modèles économiques innovants : Le free2play séduit de plus en plus de joueurs

Sur téléphone mobile, les 20 plus gros succès de l’année 2014 aux États-Unis sont des Free2Play. Ils étaient 18 en 2013.

•    Sur iTunes Store d’Apple, les jeux payants ne représentent plus que 8% du catalogue, contre 47% en 2012.

•    Le modèle Free2Play cohabite avec le modèle Pay-per-Download, mais le premier est bien plus répandu. Même les acteurs « historiques » du jeu vidéo investis dans le jeu nomade ou les « pure players » du jeu nomade ont passé le cap du Freemium, EA et Gameloft en tête.

Ce modèle a vocation à d’abord séduire le joueur avant de le faire payer. Une fois conquis, ce dernier paiera des objets virtuels en fonction de son attraction au jeu et de ses objectifs d’évolution à l’intérieur du jeu.

Pour retrouver toutes les informations concernant l’étude Mobile Gaming et les études associées, cliquez-ici

Plus d’informations sur l’expertises et les événements de l’IDATE sur :

www.idate.org          www.digiworldsummit.com          www.digiworldweek.com          www.gamesummit.pro


Nouveau cycle de conférences de prospective numérique sur les enjeux de l’Internet, de la télévision et des télécoms à 2025

logo DWFuture generique 2015

A l’occasion de la sortie de la nouvelle édition de son DigiWorld Yearbook, l’IDATE présente son nouveau cycle de conférences de prospective numérique sur les enjeux de l’Internet, de la télévision et des télécoms à 2025 !

La première session DigiWorld Future  se déroulera le 16 juin au Palais Brongniart, à Paris,  dans le cadre du Festival Futur en Seine en partenariat avec la Ville de Paris et Cap Digital.

A partir des analyses des experts de l’IDATE, les débats seront animés par Marjorie Paillon, Journaliste, Tech 24, Philippe Escande, Rédacteur en Chef, Le Monde et Gilles Babinet, avec les contributions exceptionnelles de :

sebastienbazin lowaxellelemaire lowMaurice Levy lowfrederic mazzella lowrichardstephaneOROUSSAT low














The TV market wading into new waters

Florence Le Borgne-Bachschmidt

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

Worldwide video & television revenues will increase from EUR 392bn in 2012 to 483bn in 2017


Although video consumption has never been heavier than it is today, the video market’s total income has been shrinking due to the steady drop in revenue from physical video distribution, and traditional television’s business models are being seriously undermined by over-the-top (OTT) video distribution.
According to IDATE, television and video revenue stood at €392.2 billion in 2012 and is expected to reach €483.0 billion in 2017.

  • To date, linear television will continue to generate nearly 91% of video market revenues.
  • The market share of the video on demand gains momentum compared to the physical video with 7.0% and 2.1% of the total video market by value in 2017 and +49.6% and +150.5% respectively between 2012 and 2017.

Global TV revenue will come from EUR 358.3 billion in 2012 to EUR 483.9 billion in 2017.

  • Pay-TV revenue will grow by 22.7% between 2012 and 2017, or by an average 4.2% annually, to reach €210.2 billion in 2017.
  • Ad revenue will enjoy even stronger growth of 25.8% between 2012 and 2017, to reach €191.4 billion in 2017. Public financing/licensing fees will continue to increase significantly (+7.5% in 5 years) to reach more than €37 billion in 2017.
Global TV industry’s revenue distribution, end 2012

Global TV revenue breakdown, 2012

Source: IDATE

In this context, the number of TV households worldwide will reach 1.647 billion in 2017 (+9.9% in 5 years) and the number of digital TV households worldwide will come to 1.443 billion in 2017, which translates into 87.6% of TV households.

  • Cable will the remain the chief access channel (571.7 million households in 2017) but will gradually lose ground to satellite and IPTV which will account for 32.4% and 8.5% of TV households, respectively, at the end of 2017.
  • Despite the development of hybrid TV solutions, terrestrial TV will continue its decline and drop down to number three spot by 2017, with a roughly 24.4% share of the global market.

As of video hard copy sales, they will total EUR 10.3 billion in 2017, they are a part of a continuous decline as the global market will have shrunk to half of what it was in 2012. Blu-ray will be the most common format, while the rental market will overtake the permanent sales market.

Meanwhile, video on demand (VoD) revenue will reach EUR 34 billion in 2017, which is 150% more than in 2012

  • OTT video will continue to be the biggest earner, generating 74% of total revenue.
  • VoD will still be the dominant model on managed networks. It will generate €6.6 billion in 2017 versus €2.2 billion for subscription video on demand (S-VoD).

This analysis is an extract from our World TV & New Video Services Markets Status Report + Database which we propose within our ongoing monitoring of Television & OTT markets.


Next Gen TV: OTT and on-demand services

Gilles Fontaine


Deputy Managing Director
Director of the Business Unit TV & Digital Content Business Unit, IDATE

The video distribution chain is evolving. Traditional programming models have been turned on their head (shortened release windows; Netflix releasing all episodes of a series all at once); video consumption on tablets is growing, before connected TVs really take off; and linear TV is relying on social networking faced with the growing strength of Internet platforms with a native specialisation in personalised recommendations.

Evolution in action

The various categories of player are seeing their historical models under threat. Cable and IPTV network operators have had to review their content distribution strategies. Some (Comcast) are strengthening their offerings to compete with OTT services, while others (Telecom Italia) are offering as a minimum a combination of linear television and on-demand services without quality of services guarantees. Television channels, whose core business is aggregation, want to keep their added value in a climate of growing on-demand. On the one hand, the major free channels are looking to promote live events to maintain the link with their mass audience; on the other hand, pay-TV services are introducing VOD to increase their attractiveness and are also investing in exclusive rights.

VOD service revenue worldwide

Fragmentation before convergence?

The growing number of offerings and players coming onto the video market is leading to fragmentation. New players, from the Web and also consumer electronics manufacturers, are coming out with new free or paid services that fi ll market segments ripe for exploitation, such as subscription-based VOD services, which compete with pay-TV, and ad-supported premium programming, which competes with the catch-up TV services of free channels.
The lines between linear services and on-demand services are likely to blur with the advent of mixed services that combine linear (or relinearised) television and directly competing on-demand programming. Fragmentation is also occurring due to the proliferation of proprietary ecosystems that are breaking away from the traditional ‘standardisation’ of television distribution and reception. In an effort to both promote their proprietary devices and to exploit customer loyalty, TV manufacturers and developers of mobile phone, tablet and connected TV operating systems are seeking to create their own ecosystems.
However, this fragmentation should be reversed in the medium term as a few distribution platforms start to dominate, offering the major content services and differentiating themselves by the quality of experience delivered to their customers. We should see the situation return to something like the traditional television model, where the various distributors are generally offering the same services, but packaged differently.

We can therefore identify three opposing visions for the long-term evolution of video content distribution:

  • The traditional model of packaging access and content together: Using an intelligent network equipped with a smart box, telcos and cablecos distribute packages that they have negotiated with content service providers or directly with the producers.
  • The self-supply model: Strong-brand content services use the open Internet to reinforce or re-establish a direct link with consumers.
  • The digital store model: E-commerce sites offer all content and make it available to consumers through recommendation and personalisation engines.

Long-term growth outlook for on demand television services

What impact will we see on the market?

While digitisation will bring more growth to certain developed markets, the next decade will show a marked decline in linear television revenue in the video sector, and a corresponding increase in new on-demand services. For the incumbent audiovisual operators, their capacity to generate revenue from these new services will dictate whether they can sustain their levels of turnover. They will, for all that, only find growth opportunities in emerging markets.

TV: the top on-demand service market in 2022

About the Digiworld Yearbook

While digitisation will bring more growth to certain developed markets, the next decade will show a marked decline in linear television revenue in the video sector, and a corresponding increase in new on-demand services. For the incumbent audiovisual operators, their capacity to generate revenue from these new services will dictate whether they can sustain their levels of turnover. They will, for all that, only find growth opportunities in emerging markets.

digiworld yearbook 2013
197 pages that deliver the finest market insights from IDATE experts who track the changes at work in the globe’s telecom, Internet and media industries throughout the year.

the DigiWorld Yearbook is published in English and French and available in print and PDF format. An iPad edition, developed by Forecomm, is also available.

The 2012 edition can be downloaded for free
The 2013 edition is available for purchase. Print: €99.99, incl. VAT; PDF and iPad: €54.99, incl. VAT


  • You can have a look at the digiworld yearbook 2013, purchase it or even download the 2012 version for free at : www.digiworld.org/yearbook/

Cord Cutting

Jacques Bajon

Head of "Video Distribution" Practice

Cordcutting: Is Europe ready?


Cord-cutting, which describes the phenomenon of traditional television services' customer drain, is at the heart of the new competence in the audiovisual landscape. IDATE recently published an in-depth market report dealing with this topic and it proposes a complete benchmark of new video offers in the United States and analyses the best practices. The study provides also conclusions on potential impacts of this phenomenon in Europe.

The phenomenon of cord-cutting can be regarded in a broader perspective of evolution in access to television and video services. This threat to the established MVPDs1 is in fact symptomatic of a broader set of upheavals in the television industry. Various factors contribute to these changes: the economic crisis, which fuels tensions surrounding the primary income of the established players (advertising and subscription); an underlying trend of on-demand video consumption and changing usage habits that threaten to shatter lucrative TV packaging schemes; the entry of Internet players who master these new usage habits and are a step ahead when it comes to user interfaces, a key element in the future.

The traditional television players – channels and distributors – are thus facing a scissor effect. TV channels are seeking alternative growth models that include enhanced B2B with distributors and entry into the online market to serve as a springboard for advertising growth. For their part, distributors are seeing Internet players encroach onto their networks, while rights holders and TV channels continually weigh the benefits of partnering with them. The instability is constant. For Jacques Bajon, report’s project manager: “The key issue at stake is this process of disintermediation, and the TV industry's inability to team up only reinforces the trend.”

In the United States, players' strategies are thus primarily defensive:

Rights holders and TV channels still hesitate between choosing traditional distributors and the new ones (i.e. Internet-based);

Distributors are attempting to retain their subscribers with multi-screen offerings and by focusing on the Internet access growth engine (itself a vehicle for disintermediation!) and – in a new trend – by working together.

Quarterly changes in video subscribers (net additions) of US MVPDs, Q1 2010 –
Q2 2012 (thousands subscribers)

Europe, with a subscription TV market that still has its growth drivers, may think that it is preserved from the tension across the pond, but its dependency on the US industry is twofold. Europe lags behind in many ways in terms of content and technology. It is dependent on US audiovisual products, and the entrants in the Internet market that master technology and interfaces come from the United States.

What is the solution? Risky changes.

Rights holders must make the release windows and network-centric agreements model suppler to make content available. In Europe, the production industry must structure itself without further delay. In Europe, and to a lesser extent in the United States, TV channels fund audiovisual production and thus play a video library management role that must be strengthened, as in the film industry.

TV packagers must do away with their lucrative but ossifying model of packaging channels and instead offer consumers what they want.

Distributors must distribute, whether over managed networks or the Internet, and they should be paid for this service (and not the contrary, which is currently the case for wireline operators).

OTT video services will continue to grow and influence the TV access market because this is what users are demanding: flexibility and richness of content offerings, prices (a monthly subscription to Netflix equals the purchase price of a DVD), "anywhere, any terminal" usage habits – unlike operators' segmented offerings, and user-friendliness (these new entrants usually offer much more accomplished consumption interfaces).

Jacques BAJON,
Head of  "Video Distribution" Practice

More information on our website about the in-depth market report dealing with this topic

About Jacques: He joined lDATE in November 2000, working as a Director of Studies. His assignments primarily involve strategic and sector-specific examination of the television/video and its distribution modes, from broadcast to telecoms/IP. He more specifically addresses digital delivery ecosystems and linked services. Jacques’s previous experience includes freelance analyst for the Eurostaf / Les Echos group, carrying out market research and analysis of media and telecommunications industry companies, in addition to gaining experience in market analysis working for Ericsson. Jacques holds a post-graduate research degree (DEA) in International Economics (Université Paris X Nanterre) , a Master in Strategic Management of Innovation (Toulouse Graduate School of Management), and followed a training session in Investments in Telecom Networks from Télécom ParisTech.


Mobile Video

Market and forecasts 2010-2015: smartphone and tablet traffic skyrocketing

IDATE has just released its “Mobile Video” report which takes a look at the mobile video market and its different business models, technologies and core devices. It also provides readers with an analysis of the market and forecasts for its development up to 2015, along with key data on the stakeholders, traffic and sales.

“The global mobile video market (cellular networks only) was worth an estimated 4.3 billion EUR in 2010, and forecast to reach 12.6 billion EUR in 2015, which translates into a compound annual growth rate (CAGR) of 24% for the period. The increase is even more impressive when looking at traffic volume (i.e. number of video minutes) which is due to rise at an average annual rate of more than 80% over the next five years. OTT (over-the-top, i.e. online) traffic accounts for the majority of video viewing time on mobile networks: 60% in 2010, and increasing to 70% in 2015,” says Project manager and Senior consultant Samuel Ropert.

Breakdown of video minutes consumed on mobile networks worldwide in 2010, by type of network infrastructure

Mobile video market in the biggest countries in 2010

The United States and Japan top the ranks of the world mobile video market on cellular networks. Over in Europe, Italy is the biggest market at close to 300 million EUR, followed by Germany. Italy owes its status to heavy take-up levels combined with an attractive selection of content, such as championship football, which stimulates usage and sales revenue. The price of a basic mobile video service is also much cheaper in Italy than in other countries, plus users have the ability to pay by the week and not just by the month as is usually the case.
Japan’s mobile video market is being undermined by the broadcast video market (which is not covered in this report) which is free for users, but which generates hundreds of millions of euros in ad revenue.

Mobile video market in million EUR, Europe-Top 5, 2010-2015


Project manager

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