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July 2019 Part 4 Subscription services Multiscreen & OTT Series 2019 Multiscreen & OTT 2019 > Subscription services Digital TV Europe July 2019 Confluence of streams Subscription video-on-demand services are proliferating, but questions are arising about the affordability and convenience of stacking multiple offerings. Stuart Thomson reports. video- with Joyn, and France Televisions, TF1 Subscription on- and M6 with Salto are making late moves The regional player demand has transformed the video to find a place. distribution landscape, with global players In such an increasingly crowded The fortunes of local players have varied such as Netflix and Amazon effectively landscape, questions have been raised hugely between markets. While Canal+’s disrupting traditional pay TV with a low-cost about how much growth remains possible Canalplay service in France clearly lost its subscription model. in SVOD. Netflix’s latest quarterly figures battle with Netflix – something that the Disney+, Apple TV+ and WarnerMedia’s alarmed market-watchers, as the clear service’s owner blamed on local regulatory HBO Max will soon join an already crowded leader in the field signed up half as many shackles – Nordic Entertainment’s Viaplay market, while other content companies new subscribers as expected, leading to a in the Nordic market appears to have gone such as Viacom and NBCUniversal sharp drop in its share price. from strength to strength, adding 65,000 adopt advertising or hybrid strategies, If Netflix is stumbling, what hope is customers in the normally quiet second supplemented by SVOD services targeted at there for smaller premium streaming quarter of this year. specific niche audiences. outfits? That depends on where you look. “Viaplay is doing very well and we are The SVOD field of play is also occupied While French pay TV operator Canal+ signing up new subscribers all the time,” by slightly less high-profile services such saw subscriptions to its Canalplay SVOD says Alexander Bastin, SVP and head of as Lionsgate-owned Starzplay – now offering collapse thanks to competition Viaplay and Viafree at Nordic Entertainment. building a strong international base – from Netflix and restrictive local windowing Bastin says that he believes there is or MGM’s Epix. At the same time, local rules, there are plenty of examples of other broadcasters such as the BBC and ITV with streaming offerings – whether regional, Above: Starzplay’s The Rook: the streamer Britbox, ProSiebenSat.1 (and Discovery) international or highly niche. has received support from owner Lionsgate. Visit us at www.digitaltveurope.com 2 Digital TV Europe Multiscreen & OTT 2019 > Subscription services July 2019 still room for growth, even in the highly player. “Maintaining a position in local In Germany, commercial broadcaster penetrated Nordic market, where streaming content is our second differentiator. Nordic ProSiebenSat.1 has taken a slightly different services are taken by around half of the Entertainment has been active in producing tack, teaming up with Discovery to launch region’s 12 million or so households. The and delivering local content since 1987, with a joint service, Joyn, that will initially focus market itself is particularly conducive to 20 original productions per year. We also on advertising-supported VOD with plans take-up of streaming services because of benefit from local content coming from the to build a subscription play as the service the high-level of broadband penetration and local free TV ecosystem,” he says. evolves. the high quality of connectivity. The market is traditionally home to a large proportion of early adopters of new technology and “Rights tend to be exclusive to platforms and adoption of streaming offerings is helped by widespread proficiency in English among there are reasons for people to sign up to the general population. multiple services, unlike with music.” “Streaming is not a niche service. It is becoming mainstream,” says Bastin, adding that he expects a significant proportion of the Alexander Bastin, Viaplay remaining 50% of non-streaming homes to sign up for a service. He also expects further With regards to sports, Bastin says that Talking with Digital TV Europe at the growth through service stacking. Currently the more sophisticated user experience of recent Variety TV Summit Europe in streaming households take an average of the streaming service gives it an edge over London, Nicolas Eglau, ProSiebenSat.1’s around 1.4 services per household in this broadcast TV, the traditional home of mass- executive vice-president, international, said market. market live television. “Using the Olympics that “there is a space in the market” for “a “We don’t see this as a winner-takes- as an example, we were able to stream local champion”. However, he cautioned that all market. Rights tend to be exclusive to far more events than on pay TV. We have “the consumer doesn’t want three different platforms and there are reasons for people technology features that enable people to outlets” to sign up to. For this reason, he to sign up to multiple services, unlike choose camera angles and so on,” he says. says, an open approach that welcomes other with music,” says Bastin. “At some point Nordic Entertainment is also active in broadcasters on board makes sense. streaming will be the norm and vast majority pay TV, and subscribers have access to the “This is a one-stop shop. If you want to of people will be taking something. There are streaming offering, but Bastin says that the watch something in German you know not many households that would not venture company is actively “pushing streaming on where to go. There is no other destination into streaming at all. It is then up to us to its own as a market strategy” with Viaplay as that can deliver all these channels ad-free, maintain our edge through differentiation to a standalone service. and we want to make it very easy for people capitalise on that growth. We are quite well The strategy includes developing with one price point,” he said. positioned. Viaplay costs about €10 or €11 on distribution partnerships so that the average which is tremendous value.” streaming offering is available via Nordic Bastin says that increasing competition broadband service providers. For Bastin, Service stacking is a sign that “streaming is a very attractive service providers can play a role in making market”. New entrants mean more access to multiple services easy for While local players have their unique competition for subscribers but also more consumers and he expects the importance of strengths, Netflix and Amazon have made competition for rights, and more of a the aggregator of multiple services to grow as the running in popularising SVOD in premium placed on exclusive content as a the market becomes more fragmented. most international markets. Despite the differentiator. “There will be consolidation. Some players challenges facing Netflix, evidence of which Unlike some global rivals that have set up will not find a space and may merger, and was provided by highly disappointing shop in the Nordic market, Viaplay provides there will also be new types of service that quarterly subscriber growth in the second live sports as part of its offering alongside aim to aggregate different offerings,” he says. quarter, the streaming outfit remains by far movies, series and kids programming. Pay and free-to-air broadcast players the market leader globally. However other Bastin says that Viaplay is not a niche service, rooted in specific regional or national US-based streaming offerings are available but it is complementary to other offerings in markets are increasingly following Nordic and are trying to develop their presence the market rather than a direct substitute. Entertainment’s example. French national in international markets. One of these is He says that two things in particular make broadcasters France Télévisions, TF1 and Lionsgate-owned Starzplay, a streaming Viaplay stand out. One is that it combines M6 have teamed up to create Salto, plans offshoot of the US premium television films and series with live sports, unlike for which are now being examined by the network Starz. rivals. “We have the best sports portfolio in country’s regulator, while in the UK, the Superna Kalle, executive vice-president the market and that is a clear differentiator,” BBC and ITV have joined forces to launch of international digital networks for Starz, he says. a version of their existing US joint venture believes that the overall market still has The second is that Viaplay is a local BritBox for the domestic market. plenty of room for growth internationally, Visit us at www.digitaltveurope.com 3 Multiscreen & OTT 2019 > Subscription services Digital TV Europe July 2019 given that penetration outside the US overall this is where marketing dollars are allocated. aggregators such as Amazon or Roku, both is only about 5%. In this context, Kalle acknowledges that of which have developed ‘channels’ platforms “There is a lot of opportunity for more a strong supply of original content is key to specifically as a vehicle for third-party partner service to come into play,” she says. selling SVOD as a proposition. The pipeline services. Like Bastin, she views her service as of content from the US domestic Starz pay BFI Player, the digital service from the a complement to Netflix rather than a TV network to the streaming service is UK’s British Film Institute, recently launched substitute for it. “We are not competing with seen as crucial to the US offering, and Kalle on Roku Channels in the US with an SVOD Netflix. We are a companion to them and to says this will be extended to the European proposition focused on classic British movies pay TV. We are a fabulous add-on.” services. She says that Lionsgate too has been – a shift from its UK proposition that includes Kalle believes that many subscribers will “incredibly supportive of the international a free archive offering, transactional and typically be able to stack between four to rollout of Starzplay, citing the example of rental VOD, an SVOD service and a focus on six services before affordability becomes an paranormal thriller The Rook.