idate fontaine - trends on the ott market - june 2013

Copyright © IDATE 2013

5 key questions (and possibly answers)

on the OTT market Gilles Fontaine

Director of the TV & Digital content unit, IDATE

June 2013

Copyright © IDATE 2013 2

Is OTT a niche market ?

Is OTT a bet on the connected TV success ?

Is it a telco vs OTT battle?

Are OTT services competitive ?

How big will the market be ?


In most countries, over 50% of TV HH do not get advanced TV

services from their TV provider

Still a long way to go for digitisation of cable

IPTV not the universal model

4

Most of the on-demand market is not served


Source: 2012 Frank N. Magid Associates, Inc.

Devices with which consumers connect TVs to the Internet, USA

Netflix reached 27 m US subs without the connected TV set !

Game consomes leads the TV set connectivity

OTT up to the TV set

0

100

200

300

400

500

600

700

800

2012 2013 2014 2015 2016 2017

TV set STB Blu ray DMA/DMR DVR Home Console

Connectable TV HH prospect 2012-2017 (millions)


Tablets already generate more video starts than smartphones

Tablet more suited to long-form than PC and smartphones

7

It’s no longer PC vs TV: Is tablet a game changer ?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012

Share of video starts per device

Phone

Tablet

PC


To face the pure-players competition…

9

TV network operators moving to OTT

Source: IDATE, February 2012


To address the 2nd Tv set…

Source : adapted from Verizon

Verizon partnered with LG & Samsung Connected TV sets & DVD players



To complement the broadcast networks…

Source: IDATE


HbbTV roll out in Europe, as of end 2012


13

A strong push of US services


Source: IDATE, based on operators

…with original content

Original video programming from Internet players, Feb. 2013

Editor No. Format/genre Comments

Amazon 6 6 original comedy and children’s series pilots to be shown

on its Amazon Prime video service

The creator will receive a $55,000 payment, up to 5 percent of Amazon’s net receipts

from toy and t-shirt licensing, and other royalties and bonuses

Netflix 7 2 original current series and 5 on the agenda (2013/2014)

Lilyhammer Comedy-drama, House of Cards Political-drama,

Arrested Development Comedy, Derek Comedy-drama,

Hemlock Grove Horror/Thriller, Narcos Drama,

Orange Is The New Black Comedy-drama

Hulu 3 10 new series announced of which 3 are wholly

original to Hulu

Battleground Political drama

3 original Hulu series:

• Spoilers, a kind of movie club; Up to Speed, a travelogue; We Got Next,

a "bro-mantic comedy"

• 7 other titles, for which Hulu bought exclusive streaming rights

Sony Crackle x10 Short form series: 13 to 15 episodes of 5 to 7 minutes each

Move to Long form series

Long form on the agenda: The Unknown is six 30-minute episodes,

the other two are Monster Heist and Strand Street

Yahoo! >50 Yahoo! produces more than 50 original shows (clips)

and 300 episodes per month

Comedy, Entertainment, Fashion & Beauty

Food & Cooking, Health & Wellness, News & Information, Sports & Fitness

YouTube 180 YouTube Original Channels: Automotive, Beauty,

Comedy, Dance, Entertainment, Family Oriented,

Film and Animation, Finance, Food, Gaming, Hispanic,

Health, Home & Garden, How-to, Music, News,

Pets and Animals, Science and Technology,

Sports, Travel, Urban, Women's Interests

End 2012:

• top 25 original channels are now averaging over a million views every week

• 800 million users are watching 4 billion hours every month,

• The number of people subscribing has doubled y/y

• And partners are reaching the 100k subscriber mark

5x faster than they were just two years ago

Outside the USA, 10-20 channels in France, UK, Germany, Japan.


Due in less than one year

Source: the company

…and acquisition of exclusive "first run" video content

Netflix's streaming-content obligations (billions)


Source: IDATE based on operators' data

Emerging pure players in Europe…

European OTT services available in multiple countries

…Probably like the critical size

Services Targeted countries Comments

Acetrax Austria, Ireland, Italy, France, Germany, Liechtenstein,

Switzerland, United Kingdom

The Acetrax application is integrated into LG, Samsung, Philips, Toshiba and Panasonic television sets as

well as Toshiba tablets The service is also available on PCs

Cinemalink Benelux Only available on PC

Film2Home Sweden, Norway, Finland, Denmark Purchase and rental of movies online and in stores. Available on computers, mobile phones, Smart TV

and IPTV services. The service should continue its deployment outside the Nordic countries.

Headweb Sweden, Norway, Finland, Denmark Available on Mac, PC, Boxee, Linux and Playstation 3

Movieurope Europe European films in their original version with optional subtitles in English There is currently an offering for

Swedish, Norwegian, Finnish, Icelandic, Danish, Estonian and Austrian. French, Italian, Spanish, Polish

and German language packs are expected.

MUBI Europe United Kingdom, Ireland, Denmark, Sweden, Finland,

Norway, France, Belgium, Netherlands,

Luxembourg, Germany, Austria, Switzerland, Italy, Spain,

Portugal

Offers international, classic and independent cinema. Also a site for discussion and interaction between

moviegoers. Available on computers, PS3, Sony Bravia. Based in London, Paris, New York and Palo Alto,

the service is technically available anywhere

UniversCiné France, Belgium Initiative of independent French producers and distributors

Viewster UK, Germany, Spain, France, Italy, Netherlands, Belgium,

Poland, Sweden

Voddler Sweden, Norway, Denmark, Finland, Spain Available on PC, smartphone and tablet, in French, Spanish and Swedish

Zattoo Switzerland, Germany, Spain, France, Denmark, United

Kingdom

"Live" TV channels on the Internet. Offer is tailored to each country. Available on PC, Mac, smartphones

and tablets (compatible with Windows, Android, Linux, Mac OS X)


Organize their own competition

Strategic goal of self-distribution

National rather than pan-European

17

Incumbent broadcasters on the move


First on SVOD

First on catch-up TV

Aggressive pricing

18

A real value proposition for consumers

Monthly cost comparison of pay TV and on-demand

services in the United States

Monthly cost comparison of pay TV and on-demand

services in the United Kingdom


New services’ share in 2020

The new services market will benefit from the development of SVOD, more accurately

targeted advertising for premium programming and, over time, connected TV.

New services will represent 12% of the world video services market in 2020, versus

3% in 2011. This share may be markedly higher in some countries.

12% 13% 14% 14% 19% 20% 24%

0%

25%

50%

75%

100%

New video services share by country - 2020 New video services share - World - 2011

97%

3%

Linear Tv On-demand services

•Subscription to a video-on-demand service (SVOD)

•Paying for on-demand video on a per-unit basis (VOD)

•Free short and amateur content

•Free professional long content (catch-up)

Source: IDATE

TV



Managed networks’ share in 2020

Faced with the ubiquity of broadband, the slow rise of connected TV sets and innovation

in OTT services, managed networks’ share of the new services market will fall to 30%

in 2020, compared to 43% in 2011. Managed networks’ share of the new video services market, by country, 2011 and 2020

2011

2020

Source: IDATE

54%

82%

48%

35%

47%

65%

58%

49% 49%

37%

31% 28%

23% 19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

France Japan USA Germany UK Italy Spain


idate fontaine - trends on the ott market - june 2013

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