A look back at convergence strategies Philippe Coste Director of International Development, IDATE Europe Is moving on… Content issues: doubt over convergence strategies and the difficulties facing Europe’s broadcasting industries

2 Convergence: a tentative définition… A double dynamic  Communication, telecommunication, Information Technologies industries: fusion…or confusion?  A key world: digitalisation  Basically, a technological dynamic: Digitalisation of contents and services Multi-functionality of digitalised communications networks  …which drives a dynamic in the “value chain”: New products and services based on interactivity New distribution processes New revenue streams

3 Convergence strategies : The search for business models…  Digitalisation of communications networks is the “core“ of the convergence dynamics: TV: generalisation of digital diffusion (DTTV, satellite, digital cable) Fixed telephony: the rise of broadband (DSL, FTTH,…) Mobile networks: “ wireless multimedia” (“2,5G”/”3G”) Consumer electronics: set top box, Digital TV set, PVR, handheld devices,… At which pace will this digitalisation progress and how will it be funded?  Digitalisation defines a new “ecosystem” for the content industry: New products and markets: video games, ITV,… New production processes: digital video, multi-platforms contents,… New distribution processes: multi-channels TV, VOD, contents on line,… But is there really a momentum on the demand side and are viable economic models emerging for them?

4 Key Questions Vertical integration in the content industry: The first attempts of “convergence strategies” have been largely based on vertical integration: which are the lessons to be drawn from these experiences? Where do lie the effective “synergies” between production and distribution? Does the “Digitalisation”dramatically modify the terms of the question? The impediments to “convergence”: Is the present state of regulation adequate, both at the EU and national levels ? What is the real user’s response to new interactive services? Content protection in the digital distribution age: what is really at stake? The impact of the development of broadband on telecoms networks: Will telecommunications networks operators (DSL, wireless) be conducted to play an increasing role in content production? If so which scheme will prevail: integration, partnerships,…? The specifics of the European cable industry crisis: How to assess today the “multiple play strategy”? What are the conditions for a rebound of cable industry in Europe? Is there any room for new investments?