Idate fontaine - trends on the ott market - june 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

 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 ?

2


Most of the on-demand market is not served
 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


OTT up to the TV set
 Netflix reached 27 m US subs without the connected TV set !
 Game consomes leads the TV set connectivity

Connectable TV HH prospect 2012-2017 (millions)

Devices with which consumers connect TVs to the Internet, USA

800
700
600
500
400
300
200
100
0
2012
TV set

2013
STB

2014
Blu ray

2015
DMA/DMR

2016
DVR

2017
Home Console
Source: 2012 Frank N. Magid Associates, Inc.

6


It’s no longer PC vs TV: Is tablet a game changer ?
 Tablets already generate more video starts than smartphones
 Tablet more suited to long-form than PC and smartphones

Share of video starts per device
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Phone
Tablet
PC

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012

7


TV network operators moving to OTT
 To face the pure-players competition…

Source: IDATE, February 2012

9


 To address the 2nd Tv set…

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

Source : adapted from Verizon

10


 To complement the broadcast networks…
HbbTV roll out in Europe, as of end 2012

Source: IDATE

11


A strong push of US services

13


…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.

Source: IDATE, based on operators

14


…and acquisition of exclusive "first run" video content

Netflix's streaming-content obligations (billions)

Due in less than one year
Source: the company

15


Emerging pure players in Europe…
 …Probably like the critical size

European OTT services available in multiple countries
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)

Source: IDATE based on operators' data

16


Incumbent broadcasters on the move
 Organize their own competition
 Strategic goal of self-distribution
 National rather than pan-European

17


A real value proposition for consumers
 First on SVOD
 First on catch-up TV
 Aggressive pricing
Monthly cost comparison of pay TV and on-demand
services in the United States

18

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.
New video services share - World - 2011

New video services share by country - 2020
100%

3%

12%

13%

14%

14%

19%

20%

24%

75%

50%

25%

97%
0%

LinearTV
Tv

On-demand services

• Free short and amateur content
• Free professional long content (catch-up)
Source: IDATE

20

• Subscription to a video-on-demand service (SVOD)
• Paying for on-demand video on a per-unit basis (VOD)

Copyright
IDATE 2013
Copyright©© IDATE 2012

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
90%
82%
80%
70%
60%

65%
58%
54%

50%

49%

49%

48%

47%
37%

40%

35%
31%

30%

2011
28%

2020

23%
19%

20%
10%
0%
France

Japan

USA

Germany

UK

Source: IDATE

21

Copyright
IDATE 2013
Copyright©© IDATE 2012

Italy

Spain


22


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