5 key questions (and possibly answers)
on the OTT market
Gilles Fontaine
Director of the TV & Digital content unit, IDATE
...
 Is OTT a niche market ?
 Is OTT a bet on the connected TV success ?
 Is it a telco vs OTT battle?
 Are OTT services c...
 Is OTT a niche market ?

Copyright © IDATE 2013
Most of the on-demand market is not served
 In most countries, over 50% of TV HH do not get advanced TV
services from the...
 Is OTT a bet on the connected TV success ?

Copyright © IDATE 2013
OTT up to the TV set
 Netflix reached 27 m US subs without the connected TV set !
 Game consomes leads the TV set connec...
It’s no longer PC vs TV: Is tablet a game changer ?
 Tablets already generate more video starts than smartphones
 Tablet...
 Is it a telco vs OTT battle?

Copyright © IDATE 2013
TV network operators moving to OTT
 To face the pure-players competition…

Source: IDATE, February 2012

9

Copyright © I...
TV network operators moving to OTT
 To address the 2nd Tv set…

Verizon partnered with LG & Samsung Connected TV sets & D...
TV network operators moving to OTT
 To complement the broadcast networks…
HbbTV roll out in Europe, as of end 2012

Sourc...
 Are OTT services competitive ?

Copyright © IDATE 2013
A strong push of US services

13

Copyright © IDATE 2013
…with original content

Original video programming from Internet players, Feb. 2013
Editor

No.

Format/genre

Comments

A...
…and acquisition of exclusive "first run" video content

Netflix's streaming-content obligations (billions)

Due in less t...
Emerging pure players in Europe…
 …Probably like the critical size

European OTT services available in multiple countries...
Incumbent broadcasters on the move
 Organize their own competition
 Strategic goal of self-distribution
 National rathe...
A real value proposition for consumers
 First on SVOD
 First on catch-up TV
 Aggressive pricing
Monthly cost comparison...
 How big will the market be ?

Copyright © IDATE 2013
New services’ share in 2020
 The new services market will benefit from the development of SVOD, more accurately
targeted ...
Managed networks’ share in 2020
 Faced with the ubiquity of broadband, the slow rise of connected TV sets and innovation
...
 Is OTT a niche market ?
 Is OTT a bet on the connected TV success ?
 Is it a telco vs OTT battle?
 Are OTT services c...
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Idate fontaine - trends on the ott market - june 2013

  1. 1. 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. 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 ? 2 Copyright © IDATE 2013
  3. 3.  Is OTT a niche market ? Copyright © IDATE 2013
  4. 4. 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 Copyright © IDATE 2013
  5. 5.  Is OTT a bet on the connected TV success ? Copyright © IDATE 2013
  6. 6. 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 Copyright © IDATE 2013
  7. 7. 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 Copyright © IDATE 2013
  8. 8.  Is it a telco vs OTT battle? Copyright © IDATE 2013
  9. 9. TV network operators moving to OTT  To face the pure-players competition… Source: IDATE, February 2012 9 Copyright © IDATE 2013
  10. 10. TV network operators moving to OTT  To address the 2nd Tv set… Verizon partnered with LG & Samsung Connected TV sets & DVD players Source : adapted from Verizon 10 Copyright © IDATE 2013
  11. 11. TV network operators moving to OTT  To complement the broadcast networks… HbbTV roll out in Europe, as of end 2012 Source: IDATE 11 Copyright © IDATE 2013
  12. 12.  Are OTT services competitive ? Copyright © IDATE 2013
  13. 13. A strong push of US services 13 Copyright © IDATE 2013
  14. 14. …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 Copyright © IDATE 2013
  15. 15. …and acquisition of exclusive "first run" video content Netflix's streaming-content obligations (billions) Due in less than one year Source: the company 15 Copyright © IDATE 2013
  16. 16. 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 Copyright © IDATE 2013
  17. 17. Incumbent broadcasters on the move  Organize their own competition  Strategic goal of self-distribution  National rather than pan-European 17 Copyright © IDATE 2013
  18. 18. 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 Copyright © IDATE 2013
  19. 19.  How big will the market be ? Copyright © IDATE 2013
  20. 20. 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
  21. 21. 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. 22.  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 ? 22 Copyright © IDATE 2013
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