- Content vs user experience : Where to invest - Race for content

1. Content vs user experience
Where to invest?
Digital Content
15-16 November 2017

2. (Premium) Content is king (again!)
Digital Content

3. Copyright © IDATE 2017, 3
An unprecedented race for content
Telcos and cablecos integrating upstream
in the chain
48.5b USD 85b USD
30b USD 3.8b USD
4.5b USD
725m EUR
Source: IDATE-DigiWorld, November 2017Source: IDATE-DigiWorld, November 2017
Few but major audiovisual group acquisitions
Examples of Movies / Series / Sports rights acquisitions in Europe

4. Copyright © IDATE 2017, 4
TV broadcasters integrating TV/OTT production
An unprecedented race for content
Source: IDATE-DigiWorld, November 2017
Recent integration of TV production companies by TV broadcasters
Amount Date
21st Century Fox (Endemol
Shine)
ChannelFlip / 01/2012
Canal+ StudioBagel Several million
EUR
03/2014
09/2013
Discovery Revision3 30 million USD 05/2012
Disney Maker Studios 950 million USD 03/2014
DreamWorks Animations Big Frame
AwesomenessTV
15 million USD
33 million USD
04/2014
05/2013
Fremantle (Bertelsmann/RTL) Divimove.
Stylehaul
BroadbandTV
/
107 million USD
36 million USD
01/2015
11/2014
06/2013
Hearst AwesomenessTV 81 million USD 12/2014
ITV
Legendary Media Geek & Sundry
Smart Girls
Nerdist Industries
3BlackDot
/
/
/
/
08/2014
10/2014
07/2012
01/2016
Otter Media (joint venture
between Chernin and AT&T)
Fullscreen between 200
million USD and
300 million USD
09/2014
ProSieben Collective Digital Studio (CDS) 83 million USD 07/2015
Rightster Base79 ($77.4 M – 07/2014)
et Viral Spiral ($6.3M)
77.4 million
USD
6.3 million USD
07/2014
07/2014
RTL Group StyleHaul 85 million USD 11/2014
Sky Diagonal View 03/2017
TF1/Mediaset Studio 71 53 million EUR 01/2017
Warner Bros. Machinima 18 million USD 03/2014
Webedia Mixicom 1
Paramaker
Melberries
75 million EUR
/
1.4 million EUR
09/2015
09/2015
02/2014
Source: IDATE-DigiWorld, Video Content: The New El Dorado?, June 2017
Integration of MCNs by TV broadcasters

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Sports &
other
content
GAFA and other Internet giants are also part of the race
An unprecedented race for content
Series &
Movies
Source: IDATE-DigiWorld, November 2017

6. Copyright © IDATE 2017, 6
Sports rights are exploding…
Investments in TV series also:
•Budgets for flagship series are growing strongly
- Game of Thrones = season 1: between 50 and 60 million USD
season 7 : around 100 million USD
A fierce competition leading to spiralling premium rights costs
Increase of domestic costs of the main TV sports rights during the last
renegotiations
Source: IDATE-DigiWorld, according to sports leagues, November 2017
Evolution of annual expenditure from Netflix and Amazon
in content acquisition and production (in billion EUR)
Source: Business Insider
20%
41%
60%
71%
80%
100%
180%
386%
Ligue 1
NCAA Basketball
NFL
Premier League
Bundesliga
MLB
NBA
NCAA Football

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Competition always pushed prices up
•Either to keep the rights
•Or to kill the competitors!
Competition is not new!
Evolution of the price for the rights to Ligue 1&2 / of pay-TV
penetration in France
Source: IDATE-DigiWorld, November 2017
Evolution of the price for the rights to Premiere League/ of pay-TV
penetration in the UK
Source: IDATE-DigiWorld, November 2017

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What’s new is :
•The nature of the competitors
•Their financial means
•The saturation of the pay-TV market / of linear TV consumption
A new speculative bubble?
But competitors are!
0
20
40
60
80
100
120
140
160
180
2010 2011 2012 2013 2014 2015 2016
Evolution of total revenues (in billion USD)
Source: IDATE-DigiWorld, according to annual reports, November 2017
Evolution of pay-TV penetration and live linear TV consumption in
the USA
Source: IDATE-DigiWorld, World TV & Video Services Markets, July 2017
81%
82%
83%
84%
85%
86%
87%
88%
89%
250
260
270
280
290
300
2010 2011 2012 2013 2014 2015 2016
Live linear TV viewing time Pay-TV penetration
Inminuesperday
In%ofTVHH

9. An appetite for something other than
premium content
Digital Content

10. Copyright © IDATE 2017, 10
Fictional content
•But adapted to a consumption on mobile screens
•And shorter
User generated content
•Cf. the phenomenon of the YouTubers
New online short news
•New ways of showing the world as it is
An appetite for other content
Source: Brut
Source: Fablabchannel
Source: YouTube
The future of content or
just a part of the future?
•Will eSport dethrone football?

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The other way to attract and retain the users?
A need for a better user experience

12. Content vs user experience
Digital Content

13. Copyright © IDATE 2017, 13
Where to invest?
Premium
content: a
must have
to attract
subscribers
?

14. About IDATE DigiWorld
IDATE DigiWorld is one of the foremost European ICT expert houses specializing in telecom, media & internet markets and digital territories. Since 1977, our team
delivers consultancy services, market intelligence solutions & networking opportunities aiming to an in-depth understanding of the digital world and to
supplement our clients’ strategic decision-making. We are proud that every year more than 400 public bodies & multinational companies all over the world renew
their trust in our services. Learn more about our three activities:
• DigiWorld Research, time-tested analysis and consultancy solutions
• IDATE Consulting, an independent observatory of digital markets and innovation
• DigiWorld Institute, a European think tank open on the world
Florence LE BORGNE
TV & Digital Content Lead Analyst
f.leborgne@idate.org
+33 6 74 59 36 31
THANK YOU!