1
How important are VOD platforms for the distribution of European films ?
Europa Distribution Workshop, 23 September 2019
Martin Kanzler European Audiovisual Observatory I don’t know! lack of transparency European VOD market three very different forms of VOD TVOD
Title based transaction fees (retail or rental)
Revenue sharing (+MG)
Film oriented
-
competes with DVD TVOD SVOD
Title based transaction Monthly fees (retail or rental) subscription fee
Revenue sharing (+MG) Rights sale
Film oriented TV content oriented
- Finance production
competes with competes with DVD Pay-TV TVOD SVOD AVOD
Title based transaction Monthly Free fees (retail or rental) subscription fee
Revenue sharing (+MG) Rights sale Advertising rev. sharing
Film oriented TV content oriented User generated content
- Finances productions -
competes with competes with competes with DVD Pay-TV Free-TV very fragmented market in terms of players & business models no standard distribution model for films Pay-VOD is EU AV market - annual growth rates 2016/2017 driving growth 34% in the EU audiovisual market
Public GBO Physical funding video 2% 2% 1%
0% 0%
Pay-VOD Pay-TV Adv. Adv. rev. rev. radio TVvideo
-17%
Source: IHS, Warc, EBU/MIS, OBS, Ampere Analysis Pay-VOD revenues in the EU 2014-2018 Pay-VOD is in EUR billion
driving growth SVOD in the EU audiovisual market 5.5
0.9 TVOD 1.4 0.9
2014 2015 2016 2017 2018
Source: Ampere Analysis EU audiovisual market 2017
EUR 11.5 billion … but it still represents a small part of the overall AV market Source: IHS, Warc, EBU/MIS, OBS, Ampere Analysis SVOD vs. Pay-TV revenues 2014-2018 in EUR billion
35.0 Pay-TV
32.4
… but it still represents 0.9 5.5 SVOD a small part of the 2014 2015 2016 2017 2018 overall AV market Source: Ampere Analysis (SVOD includes only OTT SVOD) TVOD vs. DVD revenues 2014-2018 in EUR billion
4.5
2.3 Physical video
… but 1.4 TVOD it still represents 0.9 a small part of the 2014 2015 2016 2017 2018 overall AV market Source: Ampere Analysis Do not forget the traditional platforms! VOD supplemental exploitation channel for many films What is also crucial
to keep in mind VOD markets have an inherently high market concentration economies of scale SVOD market concentration in the EU (2017) in % of subscribers
20% Dominated by 20% 46% large US 46% 80%
35% (tech) players 35%
Netflix Amazon Prime Other Netflix Amazon Prime Other
Source: Ampere Analysis of course, differences between countries with some strong national players but, difficult for national players to compete with global tech giants because of economies of scale Availability of European films Large sample analysis
based on 45 SVOD and 77 TVOD services in the EU Nr. of EU films available on VOD 27 000 > 24 000 titles available on TVOD Nr. of EU films available on VOD 27 000 > 13 000 titles available on SVOD from a pan-European perspective, large number of European films available on VOD significant differences between countries Average number of EU films in VOD catalogues by market cluster
18 877
6 781
1 798
Small markets Medium-sized markets Large markets
Source: OBS Share of non-theatrical films among recent EU films in VOD catalogues
VOD makes available a significant amount of 43% 6 000 EU films non-theatrical films (2015-2018)
Theatrical Non-theatrical
Source: OBS (catalogue sample as of June 2019) When it comes to quotas European WORKS (generally no sub-quotas for film) TVOD SVOD
Share EU FILMS
30% quota
30% 25% TVOD SVOD
Share EU TV content (1 SERIES = 1 title)
38% 30% quota
27% TVOD SVOD
Share EU TV content (1 EPISODE = 1 title)
30% quota
24% 19% generally speaking, the quotas are mostly met (but not by some of the largest players) availability not the main challenge for European films Visibility a word of caution limited insights due to lack of data limited data sample • only TVOD services • 42 «mainstream» services • in 5 EU member states
• checks only the presence of films on homepage the bulk of 5% promotion is dedicated to films
95%
Films TV content
Source: OBS (2018 sample) the bulk of 9% promotion is dedicated to recent films
91%
Recent films Other films
Source: OBS (2018 sample) Promotional spots 27% for European films 34% proportional to share in catalogue
66%
European films US films Other
Source: OBS (2018 sample) Only a very limited 10% number of films benefits from promotion
Films promoted Other
Source: OBS (2018 sample) 30% to 45% of Avg share of top 10 European films promotional spots for European film on TVOD go to 45% only 10 films 0.2% Catalogue Promotional titles spots
Source: OBS (2018 sample) Few and only very recent films get promoted
in TVOD! Who is buying European films?
. Avg nr. of EU What are the Active EU films acquired top SVOD services Rank Company territories per prod. year 1 Amazon Prime (US) 18 328 in terms of acquiring EU films? 2 Netflix (US) 17 172 (produced 2015 to 2018) 3 Viaplay (SE) 3 92
4 HBO GO / Nordic (US) 8 74
5 TIMvision (IT) 1 72
Source: OBS (sample as of June 2019) «yes but, globals only interested in blockbusters.»
. Portfolio comparison: share of recent EU films by admission brackets in % of total recent EU films (2015 to 2018) in respective catalogue
45%
38% 33% 33% 34% 32% 32% 32% 31%
25% 21% 22%
12%
5% 3% 1%
less than 1' 1' to 100' 100' to 500' more than 500' Netflix Amazon Viaplay TIMvision
Source: OBS (sample as of June 2019) Trends? no reliable data, but some observations
. Netflix buying EU films by production year less EU films ? 234 211
150
123
96 9499
74 7074 63 55
2015 2016 2017 2018 Netflix Viaplay TIMvision
Source: OBS (sample as of June 2019) … while producing Netflix originals by production year more EU original content? 25
18
11 10 10
6 4
1 2015 2016 2017 2018 … increasingly Films TV series focusing on series
Source: Ampere Analysis … increasingly Netflix share of EU films requiring exclusive by number of market multi-territory rights? 61%
47%
35%
25% 22% 20% 13% 7%
2015 2016 2017 2018 1 market 10 to 17 markets
Source: OBS (sample as of June 2019) Concluding remarks • Lack of data limits analysis insights
… unclear to which extent VOD stimulates consumption of European content
… also, unclear to which extent TVOD and SVOD offer significant revenue potentials for film right holders • TVOD and SVOD are two very different markets
… TVOD film focused, SVOD TV content focused (exclusive premium content)
… Revenue sharing vs rights sale
… SVOD produces / finances content, TVOD does not • Availability does not seem to be the main challenge • The question is rather how to reach audiences amidst abundance of content, particularly on TVOD
... Only very few recent blockbusters benefit from intensive promotion • Ownership of customer relations & discovery = power over supplier