PANORAMA OF THE VOD SERVICES IN THE EUROPEAN UNION André LANGE, Head of Department for Information on Markets and Financing with the collaboration of Boris Chaleur, Florence Hartmann and Deirdre Kevin

2 CHALLENGES IN MONITORING THE DEVELOPPMENT OF ON-DEMAND AUDIOVISUAL SERVICES IN EUROPE Complexity of the technological possibilities Complexity of the business models Diversity of professional definitions Extreme fragmentation of the markets Extreme fluidity of the offers Absence sofar of national monitoring

3 MODALITIES FOR ON-DEMAND SERVICES 1. PURE WEB SOLUTIONS 1.1. Online VoD services VOD service provider Catalogues providers

4 PURE ONLINE VoD SERVICES IN THE EU 159 in December 2009 – 165 in June 2010 (not included : adults, catch-up TV, channels on video sharing platforms) Source : OBS

5 MARKET SHARE OF WEB VoD IN FRANCE IN 2009 (% of the total transactions) – Source : Gfk/CNC 8,7 %

6 30 PURE WEB VOD SERVICES CLOSED SINCE DECEMBER 2008

7 SOME OF THE NEWCOMERS ON THE ONLINE VOD MARKET

8 MODALITIES FOR ON-DEMAND SERVICES : 1. PURE WEB SOLUTIONS 1.2. Channels in Video Sharing platforms CATALOGUES PROVIDERS UGC

9 INDUSTRY ON-DEMAND SERVICES IN THE FRAMEWORK OF VIDEO SHARING PLATFOMS NUMBER OF SERVICES : Not available

10 MODALITIES FOR ON-DEMAND SERVICES : 2. HYBRID SOLUTIONS : CAB-SAT TV + ONLINE CATCH UP TV TV CATCH UP TV

11 NUMBERS OF ONLINE SERVICES IN THE HYBRID CATCH UP TV OFFERS June Source : OBS

12 MODALITIES FOR ON-DEMAND SERVICES : 2. OVER THE TOP SOLUTIONS (OTT) 2.1. iTunes Stores iTunes Stores catalogues Studios and networks catalogues

13 NUMBER OF FILM AND TV TITLES IN iTUNES STORES CATALOGUES (June 2010) – Source : OBS

14 NUMBER OF « NETWORKS AND STUDIOS » CHANNELS ON iTUNES STORES – June 2010 Source : OBS

15 MODALITIES FOR ON-DEMAND SERVICES : 2. OVER THE TOP SOLUTIONS (OTT) 2.2. VideoGame consoles STUDIOS XBOX360 PSP3 WII ZUNE MARKETPLACE PSP VIDEOSTORE

16 ONLINE MOVIE STORES IN OPERATION IN EUROPE - June 2010 Apple iTunes Store : GB, DE, FR, IE Microsoft Zune Marketplace : AT, BE, CH, DE, DK, ES, FR, FI, GB, IE, IT, NL, NO, SE Sony PlayStation Store : DE, ES, FR, GB

17 MODALITIES FOR ON-DEMAND SERVICES : 2. OVER THE TOP SOLUTIONS (OTT) Stand-alone Set-Top-Box 23 CATCH UP TV SERVICES

18 MODALITIES FOR ON-DEMAND SERVICES : 2. OVER THE TOP SOLUTIONS (OTT) Web-enabled devices (Blu Ray player, Home cinema, connected TV set)

19 FIRST ALLIANCES BETWEEN VOD SERVICES PROVIDERS AND MANUFACTURERS

20 CONNECTED DEVICES IN FRANCE, GERMANY AND UK ( ) Source : Screen Digest

21 CONNECTED TV SET SHIPMENTS IN THE WORLD - FORECAST Source : Display Search – January 2010

22 FILM ON-LINE MARKET IN EUROPE (EUR MILLION) - GROWTH IN 2009 : + 89 % Source : Screen Digest

23 NEXT GENERATION OF OVER THE TOP SOLUTIONS : DIRECT ACCESS ON THE WEB TV SERVICES ON THE TV SCREEN

24 3. ON-DEMAND SERVICES ON TV DISTRIBUTION PLATFORMS 3.1. IPTV 55 OF THE 88 IPTV OPERATORS IN THE EU PROVIDE AT LEAST ONE ON-DEMAND SERVICE (December 2009) – Source : OBS IPTV OPERATOR OWN VOD SERVICE THIRD PARTIES VOD SERVICES CATCH-UP TV SERVICES UGC RADIO & TV CHANNELS

25 NUMBER OF IPTV OPERATORS IN THE EU PROVIDING n ON DEMAND SERVICES (Dec. 2009) – Source : OBS

26 EXEMPLES OF MULTI-SERVICES OFFERS ON IPTV PLATFORMS 17 VOD AND 2 CATCH UP TV SERVICES 2 OWN VOD SERVICES AND 24 CATCH UP TV SERVICES

VOD ON DIGITAL CABLE TV PLATFORM CABLE OPERATOR OWN VOD SERVICE THIRD PARTIES VOD SERVICES CATCH-UP TV SERVICES RADIO & TV CHANNELS

28 NUMBER OF ON-DEMAND SERVICES PROVIDED BY MAIN CABLE OPERATORS IN EU – June 2010 Source : OBS

PUSH ON DEMAND SERVICES BY SATELLITE OPERATORS : 6 PROPOSALS IN THE EUROPEAN UNION

PUSH ON DEMAND SERVICES THROUGH DIGITAL TERRESTRIAL TELEVISION TOP UP TV 2008 : 23 catch up TV and 2 SVOD services 2009 : 1 catch up TV services and 2 SVoD service MEDIASET PREMIUM 2010 : Premium on Demand

MOBILE PHONE OPERATORS IN EU PROVIDE TV SERVICES BUT ONLY 21 PROVIDE ON-DEMAND SERVICES (December 2009) - Source : OBS

32 ON-DEMAND SERVICES ON MOBILE INTERNET FREE VOD : TRAILERS, NEWS, FREE CATCH-UP TV, PROMO OF PAY-VOD SERVICES,…

33 ON-DEMAND SERVICES ON MOBILE INTERNET : FREE VOD SUBSCRIPTION VOD OR CATCH-UP TV SERVICES THROUGH iPHONE APPS

34 ON-DEMAND SERVICES ON MOBILE INTERNET : PAY VOD SERVICES OUTSIDE OF THE APP STORE

35 ON DEMAND AND NVOD REVENUES (INCLUDING SPORTS) OF PROVIDERS IN EUROPE ( ) - EUR million - Source : Screen Digest / OBS

36 ON DEMAND AND NVOD REVENUES (INCLUDING SPORTS) BY COUNTRY IN EUROPE ( ) - EUR thousand – Source : Screen Digest / OBS

37 8 services provide monthly data - Orange (avril 2006) - Canal Play (mai 2006) - TF1 Vision (juillet 2006) - France Télévisions VOD (septembre 2006) - Virgin Mega (septembre 2006) - Arte VOD (octobre 2006) - Univers Ciné (janvier 2008) - Club Vidéo - SFR (janvier 2009) Supply : monthly lists of film catalogues Consumption : Breakdown according 2 criteria - origin of films - age of films A MODEL OF MONITORING : THE CNC OBSERVATORY OF FILM VoD SERVICES IN FRANCE

38 FRANCE : SUPPLY OF FILMS BY 8 VoD PROVIDERS (2009) Source : CNC From January to December 2009 : 748 films added Growth of the offer : 18,2 % Hors double compte

39 FRANCE – ORIGIN OF FILMS IN THE CATALOGUE OF 8 VoD SUPPLIERS (2009) – Source : CNC December 2009 : French (+ 23,7 %) US films (+7,9 % en un an) January 2009 December 2009

40 Feature films: 64,9 % Adult films : 30,4 % TV programmes : 4,7 % FRANCE : BREAKDOWN OF THE TURNOVER OF 8 VoD PROVIDERS (2009) - Source : GfK / NPA /CNC 40 Source : GfK/NPA

: French films : 30,9 % US films : 58,6 % Others: 10,5 % FRANCE : MARKET SHARE OF FILMS IN THE TURNOVER OF 8 VoD PROVIDERS ( ) – Source : GfK / NPA /CNC 41 Source : GfK/NPA

42 CONSUMPTION ON THE TV SET IS THE KEY OF THE PAY-VoD MARKET Online market is relatively marginal In France 93 % of the film VoD turnover is realised on IPTV services In other countries, growing interest for the VoD set-top box (US exemples, Maxdome, Video Futur, Canvas project,…) Growing importance of the « Over the top » services Web-enabled TV sets : alliances between TV manufactures and VoD providers Hypothesis of an European equivalent of Google TV ? Regulatory question : monitoring the catalogues of services or monitoring the access to the distribution platforms for services promoting European works ?

43 NO AUTOMATIC LONG TAIL EFFECT IN FAVOUR OF THE EUROPEAN FILMS The « Long Tail » theory is reviewed by academic researchers Some pofessionnals argue that it was valid only in the first years of the Internet The French case does not demonstrate a proportion between offer and consumption of European/others films Almost no promotion policy by the operators sofar

44 TRANSPARENCY ISSUES FOR THE MARKET ANALYSIS Identification of the services and of the providers Catalogue analysis Potential audience of services : number of subscribers to distribution platform Households expenditures Companies revenues for on-demand services Analysis of revenues flows between distributors, providers of services and content providers Success of individual titles > Report Attentional on the implementation of article 3 and 4 of the TWSF Directive includes analysis on the difficulties of monitoring the VoD market > Need for an European regulation ?

45 THANK YOU !