Online Content Model in Europe: Film and Video go Broadband

Online Content Market in Europe: Film and Video go Broadband IIC Telecommunications and Media Forum Madrid, 25 June 2008 Augusto Preta ITMedia Consulting

TV vs Internet? ,[object Object],Internet distribution acts as free advertising Web video may reach consumers who wouldn't otherwise watch TV Web video could gain viewers without causing losses for content creators

Online content Electronic sell through ,[object Object],[object Object],[object Object],[object Object]

Business models ,[object Object],[object Object],SUBSCRIPTION Users subscribe to a rental service “all included”, offering temporary downloads or streams, charging a monthly fee [Subscription VOD, SVOD] i.e. CinemaNow, Movieflix AD-SUPPORTED Consumers download free content, or watch streaming content for free but they have to accept commercials inserted in the downloaded content [Free VOD, FVOD] i.e. Lovefilm, BBC iPlayer

TV, too… ,[object Object],[object Object],[object Object],[object Object],[object Object]

Case History: 4oD ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Launch: November 2006 4oD allows some internet, Virgin Media, Tiscali and BT Vision users to view programming recently shown on Channel 4, E4 or More4, or from their archives. 4oD also includes a selection of films and content from the National Geographic Channel and FX

Broadcaster online ,[object Object],[object Object],[object Object],[object Object]

Internet distribution vs TV ,[object Object],Advertising insertion probably is the biggest key to monetizing this part of the business TV players should not be afraid of the internet as a distribution platform Internet doesn’t replace broadcasters There's still a market for high-quality content. To create programming at a high level of quality is an expensive proposition. TV players have professional skills and resources that others don't have.

The market ,[object Object],[object Object],2007 € 116 million total revenue € 91 million DTR services € 10 million DTO services Online video revenue breakdown Source: ITMedia Consulting 80% 8% 12% 68% 8% 24% 64% 9% 27% 60% 8% 31% 54% 8% 38% 0% 20% 40% 60% 80% 100% 2007 2008 2009 2010 2011 DTR DTO FVOD The take rate for DTO services is still lower than that for DTR services, because of higher prices 2011 € 1300 million total revenue € 700 million DTR services € 100 million DTO services

Critical issues for online services ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Online video revenues forecast – million € Source: ITMedia Consulting 100 67 45 19 10 DTO 1 298 800 471 229 117 Tot. On demand 497 251 127 55 15 Free VOD 701 482 299 155 92 DTR 2011 2010 2009 2008 2007 Mln €

IPTV in Europe ,[object Object],However, the IPTV does not represent a threaten or a competitive pressure onto cable and satellite yet France: biggest market, 2.6 million subscribers. In other countries results are lower than expected

IPTV VoD revenue ,[object Object],[object Object],Source: ITMedia Consulting ,[object Object],1450 1050 768 480 250 Tot. On demand 267 198 124 72 25 Free VOD 1193 852 644 408 225 VOD+SVOD 2011 2010 2009 2008 2007 Mln €

Online content and IPTV ,[object Object],[object Object],[object Object],Source: ITMedia Consulting

Conclusion Evolving new business models are gradually redefining the value of content in the digital age . We see convergence to reshape business models, industry returns, expenses and profits for content companies willing to follow this trend. Exploiting innovation, they will increase revenue across a spectrum of broadband devices in a highly competitive and open multiplatform environment

Thank you for your attention www.itmedia-consulting.com

Online Content Model in Europe: Film and Video go Broadband

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Online Content Model in Europe: Film and Video go Broadband