Egta Insight Over-The-Top Television Services: a European Perspective March 2015
Total Page：16
File Type：pdf, Size：1020Kb
egta insight over-the-top television services: a european perspective March 2015 Celebrating www.egta.com / / Defining OTT services figure 01: In the field of audiovisual services, egta has cho- Overview of linear & non-linear services in europe sen to work with the following definition for OTT: services accessible over the Internet via specific applications (on PCs, mobile apps, Smart TVs, games consoles or through hybrid boxes). services developed services developed services developed by newer entrants by telecoms This report considers OTT platforms and services by broadcasters that exclusively offer premium television pro- to the market providers gramming and/or movies. Services such as You- Tube, Dailymotion and other video sharing sites Netflix BBC iPlayer Telenet VOD do not form part of this report, although it should Zattoo Sky Go Numéricable VOD be noted that YouTube in particular has taken on Amazon Prime Instant Video 4oD Vodafone Videothek Voddler HBO Go Ziggo On Demand some of the characteristics of a premium OTT Apple TV apps MYTF1 Entertain service in the past couple of years, developing Google Play CanalPlay Proximus TV a presence in set-top boxes and other devices, executive summary Viaplay offering some original, professionally produced, Maxdome content and live streaming of sports and music Stievie events. RTL à l’infini This report addresses the landscape of over- NLziet the-top (OTT) television services, with an em- / / Overview of linear and non- phasis on the most digitally advanced Euro- linear services in Europe pean markets. The evolution of OTT subscribers figure 02: and revenues is also placed into a wider global OTT services exist in a variety of forms context. egta’s objective is to allow readers to throughout Europe, with different funding and business models better understand the strategies of different business models in place. Broadly speaking they stakeholders in the delivery of OTT, including the can be classified as seen on the opposite page, response of broadcasters to evolving viewing with examples of each type listed in figure 01. patterns. Revenue Model OTT services may be linear or on-demand (video- Intended as an overview of existing services, the on-demand, VOD), and many offer a combination business and revenue models behind them and of both. The former allow live access to existing their actual and anticipated impact on the linear or online-only channels offered by broadcasters television industry, this report focuses primarily and in some cases telecoms providers or inde- on the French, Dutch, German, Belgian, United pendent companies. On-demand OTT services direct indirect Kingdom and Nordic markets. In that respect, it allow viewers to choose from a library of movies is not an exhaustive examination of the rich and and TV shows. varied OTT offer currently available throughout Europe. / / Business models in place The report draws on multiple data sources, in- The business models behind OTT VOD services cluding published reports, forecasts and esti- can be broadly classified as direct and indirect; S-VOD T-VOD A-VOD direct funding, in which the user pays for access, subsidies mates, surveys of egta television members and Subscription Pay-per-view Advertising interviews with experts in the field. may be by subscription (as a standalone service Page 2 © Copyright egta 2015. All rights reserved. Page 3 or as part of a telecoms bundle) or pay-per-view. • The volume and quality of the content on offer The streams for NLziet subscribers have a higher Indirect funding takes the form of advertising (size of library, how recently the content was quality than the A-VOD streams. The list of avail- or subsidies, such as taxation or licence fees. In produced) able content on RTL, SBS and NPO’s own plat- some cases, the business model may involve a forms mainly depend on programme rights. • The availability or otherwise of HD and Ultra HD combination of direct and indirect funding, and On the NLziet platform, most of the programmes in the case of services provided by some public • The number of screens on which content can be are available for a whole year after they have been service broadcasters, their OTT platforms may be viewed simultaneously broadcast on their respective channels. On RTL, free to access and free of any advertising (figure SBS and NPO’s platform, they are usually only 02). Customer response to OTT service pricing can be very sensitive, as evidenced by the experience of available for 7 days. NLziet also offers some pro- The funding of OTT VOD may take the following Netflix in the US in 2011. Following a period of very NLziet (Netherlands) grammes in preview, and this service is part of the forms: strong expansion and growth in revenues, Netflix subscription fee. Niels Baas, Managing Director of NLziet, talked to altered its business model in the territory, splitting • Transactional VOD (T-VOD) – pay-per-view, or egta about a new service in the Netherlands, which egta: Which devices and viewing platforms can be its physical DVD rentals and streaming services “rental” of an episode/movie for a limited time was launched in July 2014. used to watch NLziet? and introducing a sharp price increase. In the third • Subscription VOD (S-VOD) – monthly (or other) quarter of the year, the company shed 800,000 Niels: Currently, NLziet is available through PC payment for unlimited access to a library of TV subscribers amid widespread discontent, and browsers, mobile apps and Chromecast, allowing series, movies, etc. the New York Times reported that its share price egta: What is the strategy behind the subscription- viewing on two concurrent streams, in and out of slumped to $53 from just under $3001. based business model of NLziet? Why did you select home. The objective is to make the service avail- • Advertising-supported VOD (A-VOD) – access this route instead of an ad-funded model, for exam- able across as many devices as possible over time, to VOD content is free at the point of consump- The company has since turned its fortunes around, ple? and discussions are underway with set-top box tion, funded only by advertising notably by investing in original content and ex- providers, Smart TV manufacturers and others. panding into new territories, including Europe. Niels: NLziet is a Dutch service that resembles • Subsidised VOD – access to VOD content is Integration with Samsung SmartTV is planned by More recent price increases of $1 (US), £1 (UK) and Hulu in the US. As the platform involves all of the free at the point of consumption, funded only the second quarter of 2015, with other television €1 (NL) in 2014 have not resulted in noticeable de- main broadcasters in the Netherlands, bundling by subsidies such as television licence fees or manufacturers to follow. Apple AirPlay support is creases in subscription levels. this power together on the advertising market expected in Q3. other taxation could have led to competition issues. Therefore, In a further indication that direct-funding from the the parties involved chose a subscription-based – In some cases, content is made available in catch- egta: Can you explain how the broadcast partners are consumer’s pocket remains a difficult market to ex- and therefore advertising free – service. up free of charge for a set period, such as seven remunerated? ploit, the consultancy firm Kurt Salmon2 found that days, after which it can only be accessed by pay- the price of VOD and pay-TV packages in France The service is priced at €7.95 per month, with a Niels: The duration of all streams is measured, per-view or rental as part of the channel’s VOD has brought viewers back to the country’s free-to- free month’s trial, and the subscription can be can- and NLziet divides the revenue to the broadcaster offer. air DTT channels. As a result, French households celled without a notice period. partners based on market share in viewing time. The pricing and subsequent positioning of European cut their average annual video budget from €95.8 egta: How does NLziet fit in into the context of the NLziet is an open cooperation, meaning that other subscription OTT services varies considerably, for in 2011 to €60.20 in 2013. The strength of terres- Dutch television market? linear broadcasters active on the Dutch market are example from €49 per year for Amazon Prime trial television in France, comparatively high costs welcome to join the service. (including Instant Video) in Germany to roughly €15 for paid video content and the long period of time Niels: Besides NLziet, each of the broadcasters per month for HBO GO in the Netherlands. Some that must pass before new cinema releases can be involved has its own platform, and these are oper- operators, such as Netflix, offer a range of prices, made available on S-VOD – 36 months as opposed ated independently. They could therefore be con- with its French pricing of €7.99/€8.99/€11.99 per to just 6 months in the US or UK – mean that the sidered “competitors to themselves” on the NLziet month being a typical example of the company’s French market is seeing something of an opposite service. The broadcasters’ own standalone plat- European offer. Broadly speaking, the pricing of trend to other countries. forms offer viewers A-VOD content sometimes OTT services is dependent on: combined with T-VOD. This difficulty in developing scale in paid services is further supported by data from Russia, where ad- Page 4 © Copyright egta 2015. All rights reserved. Page 5 vertising-funded VOD outstrips paid VOD by 73% for OTT services delivered to a television screen – to 23% in revenue terms3, and Poland, where 99% are present in a smaller percentage of European figure 04: of VOD is supported by advertising4.