Facts and figures on the TVoD and SVoD markets, the availability and visibility of European films on VoD, the links between cinema and TVoD releases, the V o D distribution value chain.

1. The access of film to VOD
April 2017
Gilles Fontaine
Head of Department for Market Information

2. A. PUTTING THE VOD MARKET IN CONTEXT
B. AVAILABILITY AND VISIBILITY OF FILMS
C. EXPLORING THE RELATIONSHIP BETWEEN
THEATRICAL AND TVOD RELEASES
D. CHANGES IN THE VOD FILM DISTRIBUTION VALUE
CHAIN
AGENDA

3. A. PUTTING THE VOD MARKET IN CONTEXT

4. 3%
Public funding
Advertising TV
Pay-TV revenues
TVOD+SVOD
Cinema gross box-office
Physical video
VOD is growing fast but is still small
Other windows still drive the exploitation chain
OBS – Audiovisual market in the EU - 2015

5. TVOD ≠ SVOD
Early window
Revenue sharing
Mostly films
Average number of films in catalogue: 3500
Average growth 2011-2015: 19%
Late window
Flat fee
Films and TV fiction
Average number of films in catalogue: 1300
Average growth 2011-2015: 161%
Transactional VOD Subscription VOD
TVOD is a substitute to DVD
SVOD competes with(pay)-TV
OBS – Analysis of TVOD catalogues – October 2016

6. 9%
Cinema gross box-office
Physical video
TVOD
For the exploitation of individual films, theatres and DVD still
prevail
TVOD amounts to less than 10% of individual exploitation of
content
OBS – Audiovisual market in the EU - 2015

7. TVOD services in the EU
• About 375 significant services
• A combination of
• Pan-European services
• And national services
• Pan-European services catalogues tend to be larger
• Really pan-European ?
• iTunes: one European film is available in average in 3,9 national services
• Microsoft Movies: one European film is available in average in 3,8 countries
• Wuaki: one European film is available in average in 2 countries
OBS – Analysis of TVOD catalogues – October 2016

8. 5%
Pay-TV
SVOD revenues
SVOD amounts to 5% of subscription revenues
For a sale to a pay service, pay-TV still prevails
OBS – Audiovisual market in the EU - 2015

9. SVOD services in the EU
• About 330 significant services
• A combination of
• Pan-European services
• And national services
• Pan-European services catalogues tend to be larger
• Really pan-European ?
• Netflix: one European film is available in average in 4,3 national services
• Viaplay: one European film is available in average in 2,3 countries
OBS – Analysis of SVOD catalogues – October 2016

10. B.AVAILABILITY AND VISIBILITY OF FILMS

11. Films available in TVOD
• 45 500 different films available in the EU in at least one service
• 3 500 films available in an average TVOD service
• Not all TVOD services have the same strategy. iTunes or Google Play tend to be non-selective;
all complying films can be referenced (the « e-commerce » model)
• Other national or multi-national services are more selective and pick-up films according to
their editorial line (the «curation » model)
OBS – Analysis of TVOD catalogues – October 2016

12. European films available on TVOD
The catalogues of the pan-European services are usually larger, but have a smaller share of
European films
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
OBS – Analysis of TVOD catalogues – October 2016

13. European films available on TVOD
Pan-European services have even sometimes a smaller number of European films
0
500
1000
1500
2000
2500
OBS – Analysis of TVOD catalogues – October 2016

14. Prominence: having the highest number of films on
TVOD may be useless is they are not promoted
Key facts about visibility on TVOD services
1. Only 10% of films are promoted
2. The top 10 promoted films get 38% of promotional spots
3. Recent films (2 yers or less) get 96% of promotional spots.
A « Paretto law »: 80% of revenues for 20% of films ?
OBS – Visibility of films in TVOD catalogues – October 2016

15. Films available in SVOD
• 8 900 different films available in the EU in at least one service
• 1 300 films available in an average TVOD service
• SVOD more on the curated model than on the e-commerce model
OBS – Analysis of SVOD catalogues – October 2016

16. European films available on SVOD
The catalogues of the pan-European services are usually larger, but have a smaller share of
European films
0%
10%
20%
30%
40%
50%
60%
OBS – Analysis of SVOD catalogues – October 2016

17. European films available on SVOD
Pan-European services have even sometimes a smaller number of European films
0
100
200
300
400
500
600
700
OBS – Analysis of SVOD catalogues – October 2016

18. C. EXPLORING THE RELATIONSHIP BETWEEN
THEATRICAL AND TVOD RELEASES

19. 47% of European films produced and released between
2005 and 2014 were available in TVOD in October 2015
How are theatrical and VOD releases related ?
OBS – Analysis of TVOD catalogues – October 2015

20. Focus on recent films which circulated in cinemas
Sample:
On release between 2011 and 2015
• at least 10 000 admissions across the EU
markets
• films theatrically released in at least 1
EU non-national market;
• EU non-national markets = at least 20%
of national admissions.
• 807 European films
• 80% available in at least one TVOD
services
• Average theatre release per film: 10
countries
• Average TVOD release per film: 6
countries
OBS – VOD distribution – March 2017

21. 49%
37%
14%
Cinemas and no TVOD Cinemas and TVOD TVOD only
Film is released in the country. No
subsequent TVOD release (yet)
Not all theatre released are followed by a TVOD release
Was a film released on VOD previously released in theatres in the same country ?
Is a film released in theatres available in VOD in the same country ?
Analysis of 8 000 releases
OBS – VOD distribution – March 2017

22. 49%
37%
14%
Cinemas and no TVOD Cinemas and TVOD TVOD only
When a film is released in TVOD, it is often after a
theatre release.
Film is released in
theatres in the
country and then in
TVOD
Analysis of 8 000 releases
Straight to VOD:
Film is released in TVOD in
the country without a
previous theatre release
When a film is
released in
TVOD, in 73% of
cases, it is after a
theatre release
OBS – VOD distribution – March 2017

23. So…why films do not make it to TVOD ?
1. Low perceived potential revenues: 2000 - 3000 EUR per European
« independent » film in larger countries non-national countries (?). Less than 500
EUR in smaller non-national countries (?).
2. No theatre release or lack of success in theatres makes the film harder to « sell »
to TVOD services and harder to sell both to TVOD services and to consumers
3. Costs (including transactional costs) are seen as too high.
4. VOD exposure may jeopardize a TV sale.
OBS – Interviews - VOD distribution – March 2017

24. Figures suggest, to an extent, an “unexploited”VOD market. It covers two different
case:
• Markets with a theatrical release, i.e. with a national distributor but where the
film does not make it from theatres to VOD
• Markets without a theatrical release, i.e. without a national distributor
The theoretical « untapped » potential

25. D.THE VOD FILM DISTRIBUTION VALUE CHAIN

26. Producer/
Film agent
National
distributor
VOD service
Aggregator
Producer/
Film agent
Aggregator
VOD service
CASE A: NATIONAL DISTRIBUTOR
CASE B: NO NATIONAL DISTRIBUTOR

27. Producer/
Film agent
National
distributor
VOD service
Aggregator
CASE A: NATIONAL DISTRIBUTOR
VOD finds its place within the traditional distribution model, where a
national cinema distributor player with an in-depth knowledge of the market,
will directly negotiate with the VOD services.
The aggregator may act as a subcontractor on the national market

28. Film agent
Aggregator
VOD service
CASE B: NO NATIONAL DISTRIBUTOR
When there is no national distributor, the aggregator may partner directly with
sales agent to distribute to VOD services

29. • Activity of origin:
• Technical services
• Distributors
• Agents
• Consultants
• On-demand services
• Home entertainment
• Etc.
• Business models:
• Flat fee, Revenue sharing or Combination of both
• Generally no MG
Many different profiles of « aggregators »

30. • From a technical service provider
• Streamlines contractual aspects of the administrative pipeline
• Ensures the technical compliance
• Provides marketing material
• To content & marketing service provider
• Digital distribution strategies
• Content packaging and curation
• Marketing
Evolution of the role of aggregators