Online TV in Germany Web TV Monitor 2012

Commissioned by the Bavarian Regulatory Authority for

Commercial Broadcasting – BLM

October 2012

Goldmedia GmbH Strategy Consulting

Prof. Dr. Klaus Goldhammer | Christine Link

Oranienburger Str. 27 | 10117 Berlin-Mitte | Germany Tel. +49 30-246 266-0 | Fax -66 | Info[at]Goldmedia.de

www.Goldmedia.com | www.WebTVMonitor.de

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Disclaimer

All content of document has been

researched and created to the best of

our knowledge. For errors or

omissions, the publisher cannot take

any responsibility.

The publisher does not take

responsibility or liability for the activities or omissions that occur

based upon the contents and

recommendations of this study.

The reproduction of household

names, trade names, brands,

trademarks, etc. in this publication,

even without special labeling, does

not imply that such names in terms of

trademark and trade protection laws

would be regarded as free and usable

by anyone. All the above mentioned

and possibly protected brands and

trademarks are, without restriction, subject to the provisions of the

applicable trademark law and the ownership rights of the respective

registered owners.

1,424

199

Web-TV-Angebote insgesamt/Aussand

Dargestellte Angebote/Antworten

Web TV Monitor 2012 Research objectives and methodology

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Client and objectives

Client:

Goldmedia‘s study on the use of German online TV was produced for the Bavarian Regulatory Authority for Commercial Broadcasting (BLM)

Study objectives:

Give overview of the German online-TV market

Quantify and categorise online-TV market in Germany through survey of all providers

Describe use and economic state of online TV in Germany

Provide market analyses and forecasts for online TV in Germany

Project time frame: July to October 2012

Primary data research through survey of all German online-TV providers (n=1,424 German online-TV channels) via online and offline questionnaires

Response: data on 198 online-TV channels (corresponding to the consumption quote of 14% )

Survey period: August 22nd – October 7th 2012

13 interviews with industry experts and representatives

Secondary data through online desk research

All data also available at www.webtvmonitor.de

Methodology

Response rates Web TV Monitor 2012

14%

Web TV channels/ Displayed channels/ sent responded

4

Goldmedia’s six-attribute definition of an online-TV channel

Own or licensed content*

German target audience (German language or subtitles)

Video is a central feature of the site

Browser based / accessible online

Comply with legal standards (no pornography etc., imprint)

Content is active (i.e. updated regularly)

1

If an online-

TV channel fulfills all six

of these

requirements, it is included

in the database.

2

3

4

5

6

* Because it was not possible to reliably code editing of content, data on content editing could not be gathered in the survey.

Source: Goldmedia Web TV Monitor 2010

Final demand

Devices

Technical distribution

Aggregation/ platforms

Content/video producers

5

Online TV 2012: Online videos distributed

by a high number of platforms/devices

Value chain Online TV 2012

STB Smart TV PC/Mac Tablets Smartphone

Quelle

: G

old

media

, BLM

Web

-TV

-Monitor

2012

; ohne W

erb

eve

rmark

ter

Other companies/

industry

Private persons

Conventional media

TV Print Radio Film

Internet-only providers

NGO/insti- tutions

Media centers Video centers Interactive multimedia portals

YouTube Social media Channel website Applications

Users

Web streaming 3G/4G

1,275 1,418 1,424

11% 0.4%

2010 2011 2012

1,424 online-TV channels in Germany – slight growth compared to 2011

6

Between 2010 and 2012, the online-TV industry increased to about 6 percent; churn rate: more than 200 services were suspended between 2011 and 2012, and more than 200 later accrued

Cf. Online radio: in the past years, about 800 channels were suspended per year

Key facts

Number of online-TV channels and development compared to the previous years in Germany (2010 to 2012)

Source: Goldmedia, BLM Web TV Monitor 2010-2012

Growth compared to 2010 Growth compared to 2011

Video sharing

Non-commercial

online TV channels

Corporate video/ video shopping

Online sub-brands of TV channels

Online sub-brands of print and radio

media

Online TV channels (Internet-only)

Media and video centers

Interactive

multimedia portals

2012: 1,424 German online-TV channels: Corporate TV division rising since 2010

Source: Goldmedia, BLM Web TV Monitor 2010 and 2012, rounding differences possible, Logos serve only as examples

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31%

29%

17%

11%

5%

4%

2%

0.4%

34%

31%

16%

8%

4%

4%

3%

1%

0% 10% 20% 30% 40%

Share of different types of online-TV services in %

2012

2010

In-house

production

78%

Produced by

cooperation/

trade partners

13%

Produced by users

4%

Produced by other

suppliers

5%

Content sources/production types of online-TV channels 2012*

3/4 of the videos provided are in-house productions of the online-TV channels

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On av., the video portfolio of an online-TV channel consists of 78 percent of in-house productions

On av., 4 percent of the content are videos produced by users

Online-TV market gains professionalism, which means providers increasingly rely on trustworthy and professionally produced videos since they offer better marketing opportunities

Cooperation with news and other agencies is still important

Key facts

* Without YouTube

Source: Goldmedia, BLM Web TV Monitor 2012, n=198 out of 1,424 services

151 166 194

451

2010 2011 2012 2016*

2012: About 6 billion hits per month – share of video hits has grown to 17% since 2011

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Increase of video hits to 17 percent from 2011 to 2012, according to the estimation of the onlineTV channels, 451 million hits per day and consequently a CAGR of 20 percent expected by 2016 (94 percent of the providers expects a rise of hits to 220 percent on average until 2016, 6 percent expect a stagnation in video outreaches)

2012: 86 percent of the hits were from Germany, 14 percent were from abroad

Video hits per day (in millions) of the recorded online-TV services in Germany

Key Facts

* Prediction according to estimation of the providers. Source: Goldmedia, BLM Web TVMonitor 2010, 2011, 2012

Picture: Fotolia_36404518_S_© nabihaali - Fotolia.com_Foto Filmrolle

Live Stream Live stream

25 28

34

9 11

16

0

5

10

15

20

25

30

35

40

2011 2012 2016

Live-Stream

Video on Demand

Evaluation of the responding online-TV providers:

development ø-viewing duration in min. per hit*

2012: Average viewing duration of 11 min. per video. For live-streaming, even 28 min.

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*Merely evaluation of the survey answers, no emphasis on hits

Source: Goldmedia, BLM Web TV Monitor 2012, n=198 out of 1,424 services

Picture: Fotolia_36404518_S_© nabihaali - Fotolia.com_Foto Filmrolle

Key facts

In 2012, the ø viewing duration per video hit increased by 2 minutes for VoD and by 3 minutes for live streams compared to 2011

Providers expect a further rise to 16 and 34 min. per hit. That would correspond to a CAGR of 12% and 6% between 2011 and 2016

However, the actual average viewing duration in the total market should be lower according to Goldmedia‘s estimation, since there is still a strong dominance of short clips on the side of the provider. UGC content is also being hit

Question: “How long are your videos used per hit (continuous use of a video) on average and which development do you expect?“

Ave

rage v

iew

ing d

ura

tion p

er

hit

s in

min

ute

s

11% 18%

38%

2%

5%

16%

87% 77%

46%

2011 2012 2016

PC/Laptop

über Smart TV/ Spielekonsolen/ Apple TV etc.

über mobile Geräte

PC /Laptop

Devices used for hits of online-TV content 2011, 2012 and

2016

2012: Every fifth online-TV hit via mobile devices – five percent via smart TV

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Source: Goldmedia, BLM Web TV Monitor 2012, n=198 out of 1,424 services

Key facts

In 2012, 23 percent of the total online-TV hits occurred via mobile or devices connected to TV-sets

In 2016, the number is going to more than double according to estimations of the online-TV channels

Rise in use esp. through increasing spread of devices in user households

Partly providers whose growth in outreach in 2012 resulted exclusively from the increasing use of smart TV

Esp. due to differentiated solutions for digital encoding the app launch of a number of online-TV channels is still expected

via mobile devices

+

via smart TV/video

game consoles/

Apple TV etc.

2012: Every second online-TV channel retrievable via apps or mobile-optimised sites

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*Merely evaluation of the answers of the survey, no emphasis on hits

Source: Goldmedia, BLM Web TV Monitor 2011, n=166 out of 1,418 services, Goldmedia, BLM Web TV Monitor 2012, n=198 out of 1,424 services

Picture: Ivo_Berg_2012

Share of online-TV channels, which provide mobile apps/websites*

Question: “Do you offer a mobile app/an optimised website for mobile devices for your online-TV service?”

12.7%

51.0%

2011 2012

+

Yes, already

available

23%

No, but

planned

26% No, not even

planned

13%

Not yet

decided

38%

Approximately one in five online-TV provider is already present on smart TV portals

Due to more and more IP TVs being sold, a smart TV app is increasingly attractive for online-TV channels

But, current device producers on the market have very different solutions. Therefore, there are barriers, esp. for small providers

Established TV brands regard themselves as value added for platforms, while platforms partly demand money for admission to the portal

Usability is not fully developed yet

Presence of the online-TV providers on smart TV platforms 2012

23% of the channels already provide their own smart TV app – 26 percent are planning to

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Key facts

Question: “Do you already offer your online-TV service via smart TV

platforms and do you plan to use these platforms?“

Source: Goldmedia, BLM Web TV Monitor 2012, n=198 out of 1,424 services

Picture: Fotolia_42653760_S_© guukaa - Fotolia.com_Smart TV Icon

72% 67%

61%

13% 15%

16%

6% 9% 11%

1% 1% 2%

8% 8% 10%

2011 2012 2016

sonstige Wege

andere soziale Netzwerke

Facebook

Youtube

Website

*regardless whether they

occurred via stationary or mobile devices

Distribution of hits via different platforms for online TV

2011, 2012 and 2016*

Hits via own website are declining – social networks on the rise

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Source: Goldmedia, BLM Web TV Monitor 2012, n=198 out of 1,424 services

Key facts

In 2011, almost 3/4 of all video hits of the online-TV channels occurred via their own website

By 2016, online-TV providers expect a decline to 61 percent

Social networks, esp. YouTube, are becoming increasingly important, in 2016 they will generate about 30 percent of the total hits

In 2016, one in10 hits will occur via other ways, such as co-operating platforms and networks (also apps)

For the providers themselves, it is important to be present on all platforms

Miscellaneous

ways

Other social

networks

YouTube

Facebook

Website

Advertising and marketing still main sources of financing for online TV

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Online TV‘s business models 2012

Share of fee-based services in %

Source: Goldmedia, BLM Web TV Monitor 2012, 1,424 services

Free 95%

Partially fee-based

3%

Fee-based 2%

57%

86%

89%

94%

96%

98%

99%

99%

100%

100%

100%

20%

14%

5%

6%

2%

2%

1%

1%

23%

6%

2%

1%

0% 20% 40% 60% 80% 100%

Mediathek/Multi-Channel-Portal

Sonstiges/Nicht zuzuordnen

Corporate TV

Videoshopping

Web-TV-Angebot (Online-Only)

Submarke klassischer TV-Medien

Nichtkommerzieller Web-TV-Sender

Submarke klassischer Print-Medien

Video-Sharing-Plattform

Submarke klassischer Radio-Medien

Kommunikationsportale

Kostenlos Teilweise kostenpflichtig Kostenpflichtig

Media and video centers

Other/unassigned

Corporate TV

Video shopping

Online-TV service (Internet-only)

Sub-brands of TV channels

Non-comm. Online-TV channels

Sub-brands of print media

Video sharing platforms

Subbrands of radio stations

Interactive multimedia portals

free Partially fee-based fee-based

Available

61%

Unavailable

39%

Display advertising

28.8%

Online video advertising

36.5%

In-text advertising

20.9%

Keyword Marketing

5.3%

Sponsoring 1.5%

Affiliate Marketing

0.4%

Three out of five online-TV channels financed by advertising, particularly by video ads

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Ad-supported online-TV services 2012

95 percent of all recorded online-TV services are free, 61 percent are financed by advertising, which means one third are financed by alternative sources, partly by marketing budgets

On average, video ads contribute 37 percent to the total ad revenue

Key facts

“Do you offer advertising in accordance to your online-TV

service?”

Average share of types of advertising

according to total online ad revenue

Soruce: Goldmedia, BLM Web TV Monitor 2012, n=198 out of1,424 online-TV services

Rise of daily video hits to currently 151 million hits (status as of 10/2012)

Between 2010 and 2012, the daily increase of hits is 13%; in 2016, 451 million daily hits are expected – rise in use infringing all platforms; however, VoD stronger than linear online-TV

Also the average viewing duration increases to 11 min. for VoD and to 28 min. for live-streaming; further growth expected

Increase in outreach in 2012 partly not due to additional users of a website but esp. due to the distribution of additional portals, platforms and technical

devices in user households significance of channel websites decreases in the future, social networks/apps gain in importance

Esp. at live sports events (Olympic Games, European championship 2012) providers achieve new records with live streaming and catch-up TV

Web TV Monitor 2012 Executive summary – part 1

Online-TV market in Germany

1,424 online-TV channels in Germany (status as of 10/2012)

Growth of 0.4% up until 2011 (churn: 200 p.a.)

At least 46 percent are sub-brands of conventional media, 17% of TV

Corporate TV: increasing provider numbers; declining share of Internet-only channels and sub-brands of print media in the total market

On average, 78% of the videos of an online-TV channel are produced in-house

Professionalisation of the online-TV industry: more and more trustworthy and professionally produced content due to better marketing possibilities

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Usage

Web TV Monitor 2012 Executive summary – part 2

Trends

Zunehmende Smart TV Geräteausstattung in den Haushalten

TV-EPGS mit integrierten Web-TV-Sendern wird Nutzung weiter erhöhen

Mit gemeinsamen Portal aller Web-TV-Sender würde Akzeptanz steigen

Klassisches Pay-TV könnte von Web-TV-Nutzung kannibalisiert werden

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Economic situation

Use of devices

2012: Hits via mobile devices rose to 18%, smart TV to 5% of the total hits, expected total growth of 53% by 2016

51% of the online-TV channels with a mobile and 23% with smart TV app

For a number of online-TV brands the app launch is still expected, delay due to partially demanding solutions for digital encoding

2/3 of the channels expect a shift of use dominance from the stationary to the mobile distributive channel

German online-TV channels: cost coverage of 71%

95% of all online-TV channels are free; merely 61% are ad-supported; alternative financing partly by marketing budgets of the channels

Brutto ad revenues of online video: 195 million € in 2011 (according to OVK)

Most important ad revenue driver for online TV is online video advertising

Marketing possibilities growing due to increasing professionalization

However, the earnings of fee-based services with an annual growth of 66% by 2016 have the highest growth potential

Households increasingly equipped with smart TV-sets

TV EPGs with integrated online-TV channels will further increase in use

Having a common portal, the online-TV channels’ acceptance would rise

Conventional pay TV could be cannibalized by online-TV use

Hits and further information also available at www.webtvmonitor.de

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Goldmedia GmbH Strategy Consulting

Prof. Dr. Klaus Goldhammer | Christine Link

Oranienburger Str. 27 | 10117 Berlin-Mitte | Germany Tel. +49 30-246 266-0 | Fax -66 | Info[at]Goldmedia.de

www.Goldmedia.com | www.webtvmonitor.de