Fragmentation of the Single Market for On-Line Video-On-Demand Services: Point of View of Content Providers
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FRAGMENTATION OF THE SINGLE MARKET FOR ON-LINE VIDEO-ON-DEMAND SERVICES: POINT OF VIEW OF CONTENT PROVIDERS FINAL REPORT A study prepared for the European Commission DG Communications Networks, Content & Technology by Digital Agenda for Europe This study was carried out for the European Commission by iMinds (SMIT), Gaston Crommenlaan 8, 9050 GENT, Belgium Authors: Dr. Sophie De Vinck Dr. Heritiana Ranaivoson Dr. Ben Van Rompuy with the collaboration of Anca Birsan and Katharina Hölck Internal identification Contract number: 30-CE-0540861/00-45 SMART number: 2012/0027 DISCLAIMER By the European Commission, Directorate-General of Communications Networks, Content & Technology. The information and views set out in this publication are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein. ISBN 978-92-79-38400-4 DOI 10.2759/49194 © European Union, 2014. All rights reserved. Certain parts are licensed under conditions to the EU. Reproduction is authorised provided the source is acknowledged. Table of Contents Executive Summary ................................................................................................................................. 1 1.1 Purpose, scope and method .................................................................................................... 1 1.2 Overview of the EU VoD markets ............................................................................................ 1 1.3 Overview of the studied services ............................................................................................. 2 1.4 The obstacles faced by VoD services in the EU ........................................................................ 3 1.5 Policy avenues .......................................................................................................................... 4 2 Introduction ..................................................................................................................................... 6 3 The EU VoD landscape ..................................................................................................................... 9 3.1 Introduction ............................................................................................................................. 9 3.2 The type of VoD service providers .........................................................................................13 3.3 The business and revenue model features ............................................................................14 3.4 Audience reach of VoD service platforms..............................................................................16 3.5 VoD content catalogue characteristics ..................................................................................18 4 The characteristics of the studied services....................................................................................20 4.1 The selection process .............................................................................................................20 4.2 Type of VoD players selected .................................................................................................24 4.3 (Cross-border) audience reach ..............................................................................................25 4.4 The variety of VoD content offers .........................................................................................29 4.5 Selected business model features of the selected providers ................................................30 5 The VoD players' opinion on obstacles towards VoD in the EU ....................................................32 5.1 Audience uptake of VoD ........................................................................................................32 5.2 An insufficient – or ill-known – level of cross-border demand ..............................................33 5.3 Infrastructure .........................................................................................................................34 5.4 Legislative harmonisation ......................................................................................................34 5.5 Competition issues .................................................................................................................35 5.6 Release windows....................................................................................................................36 5.7 Licensing .................................................................................................................................37 5.8 Technical issues: costs, standards and portability .................................................................37 5.9 Marketing issues: localised marketing, pricing and branding ...............................................38 6 Fostering VoD: policy avenues and critical reflections ..................................................................40 6.1 Interventions to provide a better environment for VoD services .........................................40 6.2 Interventions in terms of the EU's competitive environment for VoD ..................................41 6.3 Interventions to promote cross-border VoD activities ..........................................................43 6.4 Conclusion ..............................................................................................................................45 7 Bibliography and sources...............................................................................................................46 7.1 Sources referred to in the report ...........................................................................................46 7.2 Sources used for the selection and analysis of VoD service providers ..................................47 8 Annexes .........................................................................................................................................52 8.1 Glossary ..................................................................................................................................52 8.2 Interviews: overview and topic/question list ........................................................................53 8.3 VoD players' Information Sheets ...........................................................................................57 Executive Summary 1.1 Purpose, scope and method The aim of this study is to, through in-depth interviews with a set of 20 key Video on Demand service providers, clarify the importance of different legal, political, cultural, economic and other factors for the development a European VoD market and for cross-border VoD offers in particular. The study confronts the current characteristics of the VoD market and of the selected services the opportunities and challenges identified by these players; and examines what are the factors of success and the factors of fragmentation. In doing so, the study aims at reflecting the interviewees’ perspectives, in particular in Section 3 and 4. Section 5 critically evaluates some of their statements. To build the sample of service providers, we first identified 116 VoD services, on which we conducted a multi-criteria qualitative evaluation of services, with respect to the following factors: - Business and revenue models; - Geographic origin; - Type of player (telecom player, broadcaster, etc.); - Their (cross-border) audience potential; - Characteristics of their content catalogue. By selecting 20 players that are sufficiently diverse with respect to these criteria, we aimed to include equally diverse points of view in the subsequent interviews. We restricted the analysis to services available in at least one EU country. The final selection of services includes Acetrax, Global BBC iPlayer, Canal Play, Cinecliq, Curzon on Demand, DAFilms, Filmin, Filmotech, Heimseh TV, medici.tv, Moviepeak, Mubi, Realeyz, Seenow, Universciné, Voddler, Volta, RTL Interactive’s 6 on-demand services (RTL Now, Vox Now, RTL II Now, RTL Nitro Now, Super RTL Now, n-TV Now), Voyo and Youzee (see their Information Sheets in the Annex). 1.2 Overview of the EU VoD markets The introduction of VoD is accompanied by a struggle between incumbents and new entrants, centred on the positioning of the new content outlet within the value network, the business model options and offer modalities. While the market for VoD services in Europe is growing, it has not taken its final shape yet, nor is it very clear how large it is. Several old and new stakeholders have taken on a role in offering Video on Demand. As a result, the audiovisual value network is becoming increasingly complex, with additional business actors and roles added to it. Service providers and content owners are looking for ways to render new revenue streams sustainable within the broader audiovisual value network. The online context allows for more complexity in terms of revenue models, including the emergence of hybrid revenue models (e.g. freemium). Page 1 of 57 VoD services also greatly differ with respect to their catalogues, in terms of number of titles, diversity of genres and the geographical origin of the content. 1.3 Overview of the studied services To get a fullest possible picture of VoD in the