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TV 2010
Table of Contents
1. World television markets.................................................................................................. 7
1.1.
1.2.
1.3.
TV reception mode.................................................................................................... 9
1.4.
1.5.
2.2.
2.3.
2.4.
2.5.
3.2.
Key innovations....................................................................................................... 19
3.2.1. Convergence of broadcast and Internet services....................................................................19
3.2.2. New interactive usage.............................................................................................................20
3.2.3. The digital video household.....................................................................................................20
3.3.
3.4.
3.5.
4.2.
Fiber and IPTV markets in seven industrialized countries parallel trends ........... 25
4.3.
5.2.
5.3.
5.4.
5.5.
6.2.
6.3.
Digital network coverage levels: the decisive factor in household eligibility for
HDTV services ........................................................................................................ 33
6.4.
2010 IDATE
TV 2010
7.2.
Native 3D ................................................................................................................ 36
7.3.
7.4.
7.5.
3D does not offer the same opportunities for every player in the sector ................ 39
7.6.
2010 IDATE
TV 2010
Figure 1:
Figure 2:
Figure 3:
Figure 4:
Figure 5:
Figure 6:
Figure 7:
Figure 8:
Figure 9:
Figure 10:
Figure 11:
Figure 12:
Figure 13:
Figure 14:
Figure 15:
Figure 16:
Figure 17:
Figure 18:
Figure 19:
Figure 20:
Figure 21:
Figure 22:
Figure 23:
Figure 24:
Figure 25:
Figure 26:
2010 IDATE
TV 2010
Internet Video
Pay TV
Next Gen TV
Television 2020
2010 IDATE
TV 2010
1.
1.1.
Europe, 31%
e
estimates
2010 IDATE
TV 2010
Table 1:
2006
2007
2008
e2009
f2013
92.9
101.1
106.1
104.1
120.4
89.3
97.4
102.2
100.2
115.9
75.5
80.8
84.1
82.0
97.5
United Kingdom
12.3
12.9
13.0
12.8
14.4
Germany
12.6
12.7
12.7
12.5
14.1
North America
USA
Europe
France
9.4
10.2
10.7
10.9
12.8
51.2
53.5
55.8
56.0
68.0
Japan
25.3
25.5
25.2
23.9
26.5
China
6.9
7.7
8.7
9.2
11.3
India
3.6
4.0
4.7
5.2
6.9
Asia-Pacific
Latin America
14.3
16.7
20.2
21.1
28.2
Brazil
6.1
7.0
8.8
9.6
14.1
MEA
4.4
5.6
6.0
5.7
8.8
238.3
257.9
272.1
268.9
322.9
Total
e
estimates, forecasts
Figure 2:
(billion EUR)
350
300
250
200
152.5
103.6
113.1
121.2
119.0
129.4
134.1
121.9
141.7
24.4
24.8
24.9
25.7
28.6
2006
2007
2008
2009(e)
2013(f)
94.9
150
100
50
0
Public funding
e
Advertising
Subscription fees
estimates, forecasts
The worldwide television market was, in 2009, primarily affected by the decline in advertising revenue
of 9.2%, which could not be compensated for by paid television or public funding; these two sources of
revenue increased 7.2% and 3.5% respectively.
Up until 2008, advertising was by far the primary means of funding for the industry, generating about
50% of the sector's revenue, compared to 40% for paid television and 10% for public funding. In 2009,
the weight of advertising and subscriptions each accounted for about 45% of the sectors revenue. By
2010, revenue from paid television should exceed overall advertising revenue worldwide, reaching a
ratio of approximately 47%/44% by 2013.
2010 IDATE
TV 2010
1.2.
TV advertising
2006
2007
2008
e2009
f2013
119.0
129.4
134.1
121.9
141.7
Radio advertising
25.2
26.2
25.1
21.7
22.6
Press advertising
127.4
130.5
124.2
106.8
110.2
22.9
30.1
35.1
38.3
68.2
TV advertising/total advertising
40.4%
40.9%
42.1%
42.2%
41.4%
Total
294.5
316.2
318.5
288.7
342.7
Internet advertising
estimates, forecasts
As a result of the global economic crisis, advertising investment for all media combined declined by
9.4% in 2009. Television, the primary media invested in, showed a decline in advertising revenue of
9.1%. Despite this, the importance of television in the advertising market (all media combined)
remained stable at 42.2%.
Newspapers and radio recorded the deepest declines in advertising investment on a worldwide basis,
with declines of 14.1% and 13.6% respectively. During the period of 2006-2009, the importance of
newspapers in the worldwide advertising market went from 43.3% to 37% while that of radio went from
8.6% to 7.5%.
In contrast, the Internet continued to attract increasing amounts of advertising investment, with an
increase in spending greater than 9% for a market share in the worldwide advertising market of more
than 13% compared to 11% in 2008.
1.3.
TV reception mode
Figure 3:
Latin America
9.7%
MEA
North America
5.0%
10.3%
Europe
22.6%
Asia Pacific
52.4%
e
estimates
In 2009, the worldwide television market included 1,217.2 million households with at least one
television, an annual increase of 1%.
Asia/Pacific remains by far the region with the largest number of TV households. With 637.3 million
equipped households, of which 63% are located in China, the region constituted more than 52% of all
TV households in 2009. It was followed by Europe (22.6% of TV households), North American
(10.3%), Latin America (9.7%) and MEA (5%).
2010 IDATE
TV 2010
Table 3:
1 400
1 200
1 000
800
600
400
200
19.3
11.8
5.4
28.8
60.6
404.4
416.9
426.7
440.1
489.2
231.6
241.7
253.3
270.2
339.2
504.4
497.7
491.5
478.0
438.5
2006
2007
2008
2009 (e)
2013(f)
Terrestrial
e
Satellite
Cable
IPTV
estimates, forecasts
Historically, terrestrial television has been the most widely used reception mode around the world. In
2009, 478 million household worldwide had access, on their primary TV, to television from the
terrestrial network, or more than 39% of all TV households. Nevertheless, this reception mode is in the
process of chronic decline, in both absolute value as well as relative value. Actually, the terrestrial
network lost 5.2% of TV households between 2006 and 2009, while its relative share went from 44%
in 2006 to 39.3% in 2009. Terrestrial television could be dethroned by cable by 2011. Note, however,
that terrestrial television currently remains the preferred access mode on secondary household
television sets.
Cable is the second place television reception mode worldwide with more than 440 million TV
households, an increase of 3.3%, resulting in market share of more than 36% in 2009,. In mature TV
markets, cable has achieved high penetration rates but is nearly at saturation. In Europe in 2009,
cable included 31% of TV households but only grew 0.9% this year. In North America, cable is still by
far the primary TV reception mode (55.5% of connected households) but it has already started a
phase of decline, by 1.4% compared to 2008.
The third place television reception mode worldwide, satellite was the solution selected in 2008 by
22.2% of TV households. Unlike cable, expansion of satellite is not endangered by saturation, and
actually has helped launch new bouquets in some regions (Poland, Russia, Nigeria). In addition, the
expansion of prepaid digital offers also resulted in growth from households that have access to
satellite as primary TV reception mode.
In 2009, IPTV had only been adopted as a primary television reception mode by 2.4% of TV
households worldwide. However, this reception mode logically experienced the highest growth, with
an annual increase of 48% and a five-fold increase between 2006 and 2009. Even in 2009, the
strongest penetration of IPTV was in Europe (4.7%), followed by North America (4.3%), which is
expected to become the primary market worldwide for IPTV in 2010. As for penetration rate, France is
the leading national market worldwide with a penetration rate of 14.4% for 2009.
2010 IDATE
10
TV 2010
1.4.
800
60.6
600
28.8
19.3
11.8
5.4
400
489.2
404.4
416.9
426.7
440.1
84.7
3.7
95.8
4.0
107.3
4.4
122.3
4.6
174.9
5.9
2006
2007
2008
2009 (e)
2013(f)
200
0
Terrestrial
e
Satellite
Cable
IPTV
estimates, forecasts
In 2009, the worldwide market for paid television included 596 million subscriber households, an
annual increase of 6.8%. With more than 440 million households, cable accounted for most of the
subscriptions. Nevertheless, its importance in the Pay TV market is trending downward. Actually,
cable represented more than 81.2% of subscribers in 2006 compared to 74% in 2009.
In contrast, satellite has increased its relative share as this mode of reception went from 17% of all
subscriptions in 2006 to 20.5% in 2009. During the same period, IPTV gained 23.5 million households
and its relative share grew from 3.7 point to 4.8%.
Finally, terrestrial television grew from 3.7 million subscriber households in 2006 to 4.6 million in 2009,
or less than 1% of all subscriptions. The growth in absolute value for paid terrestrial television can be
explained by the expansion of DTT offers in Europe, such as in the United Kingdom, France and Italy
and even in Scandinavia.
Table 5:
2006
2007
2008
e2009
f2013
North America
USA
105.3
95.2
107.4
96.9
108.6
97.9
111.4
100.5
117.9
106.2
Europe
120.3
25.5
11.6
12.6
129.6
24.5
12.2
13.2
139.2
24.3
12.7
13.9
150.8
24.7
13.1
14.9
177.3
27.5
14.6
16.3
Asia-Pacific
Japan
China
India
244.2
24.4
140.6
72.4
259.8
25.9
151.8
81.8
274.5
27.1
162.8
94.3
293.9
28.0
173.1
105.3
380.6
31.9
206.3
136.0
Latin America
Brazil
21.8
4.6
24.5
5.3
27.2
6.3
30.3
7.7
40.3
12.2
6.4
7.2
8.1
9.3
14.5
498.1
528.5
557.7
595.7
730.7
Germany
United Kingdom
France
MEA
Total
e
estimates, forecasts
2010 IDATE
11
TV 2010
In 2009, 294 million households (or more than 49% of TV households) subscribed to a paid television
offer worldwide were located in Asia/Pacific. Europe was the second largest region accounting for the
largest number of subscriber households (25.3%) followed by North America (18.7%), Latin America
(5.1%) and the MEA region (1.6%).
During the period of 2006-2009. the MEA and Latin America recorded the strongest growth, with an
increase of 44.4% and 38.7% of subscriber households respectively. In the more mature markets of
Europe and North America, subscriber households grew at an average annual growth rate of 7.8%
and 1.9% respectively.
In Asia/Pacific, subscriber households increased by more than 20% between 2006 and 2009.
1.5.
Digital television
Table 6:
2006
2007
2008
e2009
f2013
North America
73.2
84.1
96.2
105.0
119.4
USA
68.4
78.3
89.6
97.4
107.5
Europe
83.5
109.1
131.7
157.5
224.8
Germany
8.9
12.1
13.9
16.4
28.1
United Kingdom
19.8
21.8
22.7
23.6
26.2
France
13.0
15.8
18.4
21.4
24.7
Asia-Pacific
103.9
134.3
168.5
209.5
398.7
Japan
24.0
28.2
31.2
34.3
45.4
China
13.4
32.5
55.6
97.9
242.7
India
6.8
11.4
20.8
29.4
70.3
Latin America
21.7
26.0
30.4
36.8
63.5
Brazil
13.2
14.9
17.0
20.0
34.2
MEA
20.1
21.4
23.0
24.7
33.0
302.4
374.9
449.8
533.4
839.4
Total
e
estimates, forecasts
Figure 4:
15.3%
Latin America
31.1%
Asia Pacific
32.9%
World
43.8%
Europe
57.2%
North America
83.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
estimates
2010 IDATE
12
TV 2010
The number of digital TV households increased, in 2009, to 533.4 million, an annual increase of
18.6%. In all, nearly 44% of all TV households on the planet received digital quality television,
compared to 43.5% in 2006.
North America, where terrestrial analogue broadcasting ended in 2009, is the leading region for digital
TV with 83.5% of TV households. Europe is the second largest region in terms of digital TV
penetration with a rate of 57.2%, and the United Kingdom has the highest penetration rate in the world
(91.4%).
On a global level, the TV household digitization rate has increased to 43.8%; Asia/Pacific (32.9%),
Latin America (31.1%) and MEA (15.3%) remain below this level.
The digitization of TV households is growing based on several factors:
the end of analogue signal broadcasting in some countries such as the United States, Denmark,
and even Norway;
the increase in terrestrial digital network coverage rates in various national regions;
the success of multiplay offers provided by television over ADSL, essentially in digital quality;
the launch of new satellite bouquets and new prepaid offers, both allowing reception of digital
programmes.
Finally, the rate of satellites digitization in 2009 reached 94% compared to 38% for cable and 18% for
terrestrial. The networks' digitization is an essential element in the cable operators strategy, especially
in markets where cable penetration is nearing saturation. As a result, in Japan, the price of an
analogue quality cable subscription could prove to be higher than a digital subscription with an
expanded list of channels. The objective is to motivate subscribers to migrate to digital service,
opening the way to other value added services, such as HD reception or digital hard drives.
2010 IDATE
13
TV 2010
2.
Table 7 :
Total TV households
Digital free-to-air terrestrial HH
2008
2009
2010
2011
2012
2013
CAGR 08-13
1 113.533
1 134.141
1 154.717
1 176.731
1 198.875
1 206.892
1.7%
64.904
81.705
90.601
102.158
110.771
121.617
17.5%
3.366
4.007
4.524
4.772
5.004
5.304
11.5%
34.860
42.236
47.424
49.573
54.314
56.494
12.4%
94.836
102.213
109.340
115.999
122.629
127.901
7.0%
Analog cable HH
275.317
267.291
259.414
248.973
239.628
230.776
-3.2%
Digital cable HH
142.976
158.884
175.935
194.714
213.000
232.246
12.5%
19.930
25.865
33.322
35.867
37.858
55.976
36.2%
IPTV HH
2010 IDATE
14
TV 2010
2.1.
120.000
100.000
80.000
60.000
40.000
20.000
0.000
2005 2006 2007 2008
Europe
North America
of which subscription
Latin America
Asia-Pacific
of which advertising
2.2.
15
TV 2010
Table 8:
Europe Total TV HH
2008
2009
2010
2011
2012
2013
CAGR
08-13
254.534
255.992
257.185
258.427
259.724
260.900
0.5%
Free-to-air households
121.226
114.817
109.006
105.602
102.990
101.657
-3.2%
Pay-TV households
133.308
141.175
148.179
152.825
156.734
159.243
3.9%
125.119
125.782
126.222
126.630
127.057
127.500
0.4%
15.640
15.490
15.189
15.083
14.994
14.847
-1.0%
109.479
110.292
111.033
111.547
112.064
112.442
0.5%
115.190
118.209
121.299
125.413
129.176
132.792
3.1%
Free-to-air households
94.359
96.144
97.474
100.146
102.282
104.251
2.1%
Pay-TV households
20.831
22.066
23.824
25.267
26.893
28.542
7.4%
Asia-Pacific Total TV HH
618.690
634.157
650.011
666.261
682.918
685.700
2.2%
Free-to-air households
344.889
348.934
350.474
355.554
360.480
333.722
-0.6%
Pay-TV households
273.801
285.223
299.537
310.707
322.438
351.978
5.7%
Worldwide Total TV HH
1 113.533
1 134.141
1 154.717
1 176.731
1 198.875
1 206.892
1.7%
Free-to-air households
576.114
575.386
572.143
576.384
580.746
554.476
-0.8%
Pay-TV households
537.419
558.755
582.574
600.347
618.129
652.416
4.3%
2.3.
2010 IDATE
16
TV 2010
2.4.
2.5.
Distribution
Broadcasting/
Telecom
BSkyB
Chellomedia
9
9
Free
Ad network
9
Cyfrowy Polsat
Canal+ Group
Production
2010 IDATE
17
TV 2010
Channel
programming
Distribution
Broadcasting/
Telecom
Orange
Premiere/
Sky Deutschland
Sogecable
Telefnica
Telenor Broadcast
UPC Broadband
Viasat
Virgin Media
Zon TV Cabo
Production
Ad network
2010 IDATE
18
TV 2010
3.
Next Gen TV
3.1.
3.2.
Key innovations
The case studies presented in this report demonstrate six major areas of innovation.
3.2.1.
2010 IDATE
19
TV 2010
3.2.2.
3.2.3.
2010 IDATE
20
TV 2010
Aggregating content from such varied sources requires a new user interface. There are two competing
approaches:
Overlaying services on top of traditional television programs. The services can be drawn from
Web content or user-owned content Yahoo! Connected TV.
Integrating new services and TV channels in an entirely new interface Archos, Slingbox, TiVo,
Xbox, BBC iPlayer, Joost, Sky Player.
Innovations in TV services
Interactive usage
Digital household
DVD
sites
Amazon
Dailymotion, Hulu
Yahoo! Connected TV
Dailymotion
Internet
Hulu
- Qualify TV viewers
cable offerings
Amazon, Fancast
TiVo, ZillionTV
Dailymotion
Hulu
devices
Boxee, Yahoo! Connected TV
3.3.
to future TV services
Enhanced TV vision
Store vision
Vision: Software or service tools that
offer access to Web services,
personalized viewing options and
program distribution
Key services: Pay VOD, practical
information, social video
Distribution: Transparent Web
access
Netflix, Amazon, Blockbuster, BLOBbox,
Boxee, Slingbox, TiVo, Yahoo!, Orb
Portal vision
Vision: New aggregators that bundle
broadcast programming, personal
content and Internet services
Key services: Premium services and
the best of the Web
Distribution: Access paired with
services
2010 IDATE
21
TV 2010
3.4.
Positioning of innovators
New technical aggregators
managing transparent Web access
Yahoo! Connected TV, Boxee
Media
groups trying to
control how their content is
consumed on the open Internet
Store
Enhanced TV
vision
vision
Next-Gen TV
Portal
vision
Media Center
vision
3.5.
Content
Services
Interface
A unique interface where all content can be accessed on the TV, PC, mobile phone and storage device.
Content can be managed and personalized from the PC, mobile phone or TV remote.
TV viewers are identified by their mobile phones.
Mobile phones can be used as remote controls.
Social networking
sites
Recommendations system for TV and open Internet programs that is automatic and/or based on Web users
ratings.
Users can use the TV to tell other community members what programs they are watching, in real time.
Users can update social network profiles from their TVs.
Users can send a personal video page or a channel to members of their network.
Users can post videos viewed on demand on the TV to social networking sites.
2010 IDATE
22
TV 2010
Feature
Devices
Advertising /
E-commerce
User-controlled advertising.
Programs paired with related products (ticket sales, etc.)
2010 IDATE
23
TV 2010
4.
4.1.
2010 IDATE
24
TV 2010
4.2.
4.3.
2010 IDATE
25
TV 2010
Figure 9:
IPTV-fibre:
the virtuous circle
for operators
Increased speeds
Source: IDATE
Fiber has not changed the television services market nor will it change it because, as a technology, it
is unable by itself to alter usage or player share in the value chain.
Continue to deploy fiber networks to support innovation and capture the value
inherent in IPTV
In the new competitive environment, operators need to innovate and launch new IPTV services to
gain better control over the value available from IPTV. To do that, it is essential that they continue
to deploy fiber networks. Value is captured mainly through targeted interactive advertising,
interactive applications such as T-commerce, and strengthening the role of telecom operators
in content provision.
Telecom operators may not be innovating very quickly or opening up their set-top boxes to available
content, but Web players and OTT service providers are gaining strength in the television market.
Figure 10:
Contents
Advertising
Telecom operators
Software
Broadband
access
Telecom operators
Services
Hardware
(STB)
Sales
Telecom operators
Note: Strictly speaking, the position certain operators hold despite the fact that their core business is in providing service
access.
Source: IDATE
Although FTTx technologies themselves are not changing the IPTV market, they are indispensable to
telecom operators in confronting changes in the television market because they provide the basis for
creating value and for maintaining and even strengthening the operators position in the IPTV value
chain.
2010 IDATE
26
TV 2010
5.
5.1.
5.2.
5.3.
2010 IDATE
27
TV 2010
The cost of a CDN is the same as for hybrid P2P solutions when very high volumes are involved (from
100 Gbps upwards), for which operators accepting peering exchanges are increasingly rare which, for
the hybrid P2P solution, means increasing the number of points of peering and so the underlying
hardware costs.
For very large volumes (above 50 Gbps), economic gains shrink quickly with unicasting and P2P
solutions as unit costs hit an absolute minimum, and only the unit costs of a CDN continue to drop,
albeit rather slowly.
Except in cases where massive discounts are had via negotiations (e.g. taking advantage of a very
unstable and so very competitive CDN ecosystem), Internet video solutions do not make it possible to
generate substantial economies of scale. Per-video costs continue to decrease, but are reaching their
minimum.
5.4.
5.5.
2010 IDATE
28
TV 2010
Figure 11:
20
15
10
5
0
10
-5
20
30
40
50
60
70
80
Gross profit
90
Operating profit
Figure 12:
5
4
3
2
1
0
-1
0.01
0.025
0.05
0.075
0.1
0.125
0.15
0.175
0.2
-2
VOD premium Net rev enues
Gross profit
Operating profit
Figure 13:
12
10
8
6
4
2
0
-2
346
496
646
796
946
1 096
1 246
1 396
1 546
-4
Platform net rev enues
Gross profit
Operating profit
2010 IDATE
29
TV 2010
6.
Satellite
High occupancy rates in premium positions covering the six major European markets being
examined in this report, and even saturation in some positions, which will drive operators to
increase their available capacity in the short term. We maintain that operators will undertake this
adjustment, and some have already begun to do so. From a more general perspective, satellite
still leads the way in terms of available capacity for HDTV and coverage (but will eventually be
rivalled by DTT).
DTT
The advantage of virtually nationwide coverage that this network has is unfortunately marred by
a limited capacity to deliver HDTV before the switchover to digital, and by broadcasting costs
that are much higher than for other networks. DTT nevertheless still has the advantage of
singularity: it is the free HDTV network for all, offering the easiest way to switch from HD-ready
household to active household. In addition, for the channels, DTT remains a protected market
with an unequalled audience-to-competition ratio.
Cable
Currently nearing saturation, cable networks capacity to offer a broad selection of HD channels
is limited, particularly as operators need to anticipate a growing load on their networks as IPbased content and services continue to expand. This means that they need to take better
account of TV broadcasting requirements. If they do perform the needed upgrades, in most of
the markets being examined cable should be able to provide enough bandwidth to distribute all
of the HD channels available in their markets.
IPTV
ADSL2+ provides high enough HD coverage for operators target markets, namely urban
centres. This network nonetheless has the lowest rate of HD eligibility and does not allow for
several parallel HDTV services, added to which increasing coverage could have a negative
impact on the quality of the TV service.
In its FTTH (to the home) incarnation, optical fibre is still lacking in terms of coverage, with
pioneer rollouts only just underway. Requiring the largest investments for greenfield
installations, this technology nevertheless offers IPTV over xDSL operators solutions for their
bottlenecks, and can support future generations of HDTV and 3D TV, as well as a multistream TV offering.
Internet: If, given the rate of broadband penetration, the networks eligibility to offer HD viewing
is high in the countries being examined here, it is nonetheless hampered by best effort
bandwidth delivery, which is below what is needed for high quality streaming. Although more
time consuming, downloading offers a solution to this issue.
2010 IDATE
30
TV 2010
By country
-
Germany
The digital switchover, which has already taken place on the terrestrial network, is key to
resolving capacity issues in this market.
Spain
Spain has the advantage of a relatively homogeneous HD-compatible network, comparable to
the one in France, although HDTV is still only nascent. The markets long-term capacity to
absorb additional HDTV channels (comparable to Europes leading markets) seems good, with
extra capacity available on DTT and satellite.
France
France has taken a lead in the HD segment on the terrestrial front. Other networks are in good
shape too with a relatively rich and homogeneous HD offer on satellite, cable and IPTV.
Compared to the five other markets begin examined, the country has the best developed IPTV
market in terms of its HD selection.
Italy
The complexity of Italys terrestrial frequency market and the delays in the analogue switch-off
are creating doubts over the possibility of a broad HDTV rollout on the terrestrial network. The
lack of cable networks and a downturn in the IPTV market are leaving the field open for satellitebased HDT delivery.
Poland
Although below average compared to the six major European markets in terms of cable network
capacity and the HD compatibility of IPTV, the high-definition offer on these networks is still
high. But they need to increase their capacity to be able to expand their coverage.
The UK
Wireline networks currently trail behind, with a virtually non-existent HD offer on cable and
almost no IPTV market at all. With Sky Digital leading the way, the satellite network will continue
to dominate the HDTV landscape if transponder capacity can satisfy demand, given that the
British orbital slot is relatively exclusive. On the terrestrial network, meanwhile, broadcasting
costs are high and there is very little room for HD on the already very crowded DTT network. In
addition, within the timeframe being looked at here, i.e. up to 2013, the catalyst of new
frequencies becoming available is relative, with the analogue switch-off planned for 2012.
2010 IDATE
31
TV 2010
6.1.
300
250
200
150
100
50
0
2008
2009
France
2010
Germany
Italy
2011
Poland
Spain
2012
UK
2013
Paneuropean
Source: IDATE, according to "Which Network to deliver HDTV?" report, May 2009
6.2.
2010 IDATE
32
TV 2010
Cable: currently reporting occupancy rates that are nearing saturation, cable networks ability to
offer a broad selection of HD channels is limited. This is especially true as operators need to
anticipate a growing load on their networks with, on the one hand, the increasing volume of IPbased content and services (including P2P and over-the-top video) and, on the other, the
development of TV on-demand offers, including VOD. Cable may, however, be the network that will
make greatest technological strides in the near future: as it switches over to IP it could take on all
these categories of service. At the same time, the introduction of the DVB-C2 standard and the
digital transition will help, respectively, to improve capacities and free up frequencies. Achieving
either one of these should allow cable to provide a high enough level of availability to distribute all
of the HD channels available in their markets.
IPTV: HDTV is compatible with ADSL2+, but it is FTTH that offers IPTV over xDSL operators
solutions for their bottlenecks, making it possible to support future generations of HDTV and 3D
TV, as well as a multi-stream TV offering.
Internet: HD consumption is limited by best effort bandwidth delivery, which is below what is
needed to deliver good quality streaming (13.5 Mbps by our estimates). This quality remains
relative, however, as HD is best streamed at 2 Mbps, which is well below TV standards. Although
more time consuming, downloading offers a solution to this issue.
6.3.
2010 IDATE
33
TV 2010
Figure 15:
Cable
100%
75%
50%
Satellite
Terrestrial
25%
0%
IPTV
Internet
HD Tech coverage
Source: IDATE, according to "Which Network to deliver HDTV?" report, May 2009
6.4.
2.0
1.5
1.0
0.5
0.0
2008
2009
Digital Satellite
2010
2011
Digital Cable
DTT
2012
IPTV
2013
Internet
Source: IDATE, according to "Which Network to deliver HDTV?" report, May 2009
2010 IDATE
34
TV 2010
Germany
France
60%
60%
40%
40%
20%
20%
0%
0%
Cable
IPTV
Internet
Terrestrial
Cable
IPTV
Internet
Terrestrial
Source: IDATE, according to "Which Network to deliver HDTV?" report, May 2009
2010 IDATE
35
TV 2010
7.
7.1.
Principal findings
Stereoscopy, which is the current 3D standard, is considered to be the first generation technology
of native 3D video. Autostereoscopy, which will make 3D glasses obsolete, is being touted as the
next 3D format.
The technical audiovisual chain will have to adapt to the arrival of 3D. The main point that is still up
in the air is which image format will be chosen, given the lack of an industry standard. Finally, in
order to enjoy 3D video, the end user will have to get a compatible screen (TV or monitor).
One positive factor for development is that the industry should benefit from the work accomplished
during the HD transition, since 3D will use HD post-production as well as distribution infrastructure.
3D cinema seems to be growing strong. The entire technical chain appears to be stepping up to
solve the problems posed by 3D, from producing more movies in the format to outfitting theaters
appropriately. Whats more, the business model already seems solid, with higher revenue per title
for 3D releases.
The future of 3D television appears less clear. There is little content; business models have yet to
be established; and another factor exogenous to the industry remains problematicthe extents to
which homes are equipped with 3D-compatible TVs or monitors. It seems crucial that a common
standard be put in place as soon as possible. It would also be beneficial if 3D/HD synergies could
be maximized to ensure the development of 3D.
The gaming market will benefit from its ability to easily convert video games to 3D, initially for PC
applications. Later it will become a key driver in equipping households with 3D TVs, which in turn
would facilitate the rollout of television services in the format. Another chicken-and-egg dilemma is
rearing its head, however, with uncertainties about whether console makers Nintendo, Sony and
Microsoft will launch next-generation consoles before a 3D TV market is in place.
7.2.
Native 3D
The term stereoscopy covers all of the techniques used to create the illusion of relief from two 2D
images. This relief is achieved by adding a third dimensiondepth.
Stereoscopy, which is the current 3D standard and will remain as such for the coming years, is
considered the first generation of native 3D video technology. Autostereoscopy, which will make 3D
glasses obsolete, is being touted as the next 3D format.
With the wide variety of existing image formats pushing for the adoption of a standard, another
challenge has emerged: all image formats are not compatible with all screen types (DLP, plasma and
LCD).
Figure 18:
Number of views
Image format
Adapted display
Glasses
Anaglyph
2D display
Red/blue
2D + Metadata
Stereoscopic
Passive
Spatial
Stereoscopic
Passive or active
Time
Stereoscopic
Active
Autostereoscopic
No
2010 IDATE
36
TV 2010
7.3.
Disney*
11
DreamWorks Animation
Fox
Warner
Dream
Lionsgate
Sony
Paramount
Theaters are also expected to see an increase in alternative 3D content. More and more screenings
are dedicated to content other than full-length feature films. Since this content is usually event-based
in nature (operas, concerts, sporting events, etc.), it is broadcast live.
Early 3D TV initiatives
Although it will take several years for the dominant 3D television technologies and some type of
standardization to emerge, some broadcasters have already announced commercial product trials and
launches.
Japanese operator BS11 Digital was the first channel in the world to offer 3D TV programming,
currently broadcasting 30 minutes to an hour per day.
British pay-TV operator Sky Digital conducted its first 3D TV broadcast trial last December.
In April 2009, French operator Orange successfully produced and broadcast its first 3D program
during a soccer match. The company has since duplicated the experiment during the French Open
tennis tournament.
Telefnica has partnered with Philips to launch a VOD platform in autostereoscopic 3D.
2010 IDATE
37
TV 2010
Digital signage
This form of display can be used in diverse applications: out-of-home advertising, information intended
for travelers in an airport or customers in a store, edutainment software in a museum, corporate
communication in the lobby of a company, etc. This market is developing rapidly and represents a
significant opportunity for 3D technology.
7.4.
Production
SD
HD
- New camera
requirement
- Shooting
condition
modifications
Adapted scenario,
new storyboard
HD
3D
- Shooting condition
modifications
- New cameras
required
Serious impact
Limited impact
Postproduction
- New hardware
equipment
requirement
Distribution
100%
bandwidth
growth
requirement
- New picture
formats
- Lots of visual
effects incrustation
- More pictures to
process
From 30% to
100% bandwidth
growth
requirement
Consumption
-New TV set
requirement
-Standardization
issues
New TV set
requirement
Standardization
issues
Positive impact
As with the shift to HD, production teams will first have to acquire new cameras with two lenses (for
left and right views). Furthermore, since 3D is more immersive, it could also change the way movie
scripts are written and how they are filmed, using more shots for example.
Because 3D is based on at least two image streams (in stereoscopic 3D), post-production teams will
have to process twice as many images 3D is also expected to call for more extensive special effects.
The main point that is still up in the air is which image format will be chosen, given the lack of an
industry standard. Even so, the industry should benefit from the work accomplished during the HD
transition, since 3D will use HD post-production as well as distribution infrastructure.
The most important impact on distribution will be a renewed increase in the bandwidth required to
accommodate 3Ds higher level of encoding. The industry will have to work together to find new
capacity resources.
Finally, in order to enjoy 3D video, the end user will have to get a compatible screen (TV or monitor).
Fortunately, prices are not expected to jump as sharply during the shift to 3D as they did when HD
TVs began to be released, in comparison to a TV with similar features from the previous generation
(HD and SD, respectively). However, image and display standard compatibility issues still remain.
2010 IDATE
38
TV 2010
7.5.
2010 IDATE
39
TV 2010
Cinema operators
The interest 3D represents for movie theater operators is threefold:
It can bring in more revenue by increasing the price of movie tickets.
It can recoup the massive investments made to digitize theaters.
It can expand programming by offering live event-based content (concerts, sporting events, etc.),
which have higher ticket prices than 2D or even 3D movies.
Yet, 3D does not guarantee return on investment (ROI) for operators:
The higher 3D ticket price may deter a large number of spectators from attending 3D screenings.
A stable commission model has yet to be devised on how to split the additional 3D fee between
rights holders and theater operators. For the time being, negotiations are on a case-by-case basis.
7.6.
2010 IDATE
40
TV 2010
Figure 21:
30%
Multi
platform 3D
3D LCD
monitors
15%
15%
3D TV
3D TV sets
10%
10%
3D
Cinema
Niche market
Mass market
2010 IDATE
41
TV 2010
8.
2010 IDATE
42
TV 2010
Figure 22:
10%
35 000
30 000
5%
25 000
20 000
0%
15 000
-5%
10 000
-10%
5 000
0
-15%
2008
2009
2010
2011
2012
2013
Advertising
2014
2015
Pay
2016
2017
2018
2019
2020
8.1.
8.1.1.
Economic growth
Acceptance of
Competition
security features
Individuals as creators
Global village
Legitimacy of ICT
Withdrawal
Nomadism
Connected individuals
Tribes
Key trend
2010 IDATE
43
TV 2010
8.1.2.
3. Services
3.1 Picture quality
3.3. Enhanced TV
The trend
Difficult to measure visual consumption overall.
Consumers inclination to pay for new television services is weak.
Time-shifted visual consumption is a strong trend because it falls within consumers comfort zone.
Illegal content downloading is becoming more common and more professional.
Sites where people can download user-posted content have identified a viable business model.
Piracy is a trans-generational activity that has a long-term effect on consumers inclination to pay.
Social networks are becoming the primary Web destination.
They are gradually incorporating video content into their service offering.
Social networks development depends on their ability to precisely identify Web users.
The primary use of community-based video networks is not content creation, but content exchange.
A new generation of semi-professional content creators is emerging.
The trend
Emergence of free rider services, but IPTV and cable operators still have the advantage because they
control their networks and can integrate broadcast and Internet services.
Costly alternative solutions (CDNs) that must compete with operators increasing control over the Internet
backbone.
Videos are consumed on every terminal in the home.
The TV sets role as the hub for visual consumption is reinforced by new functionality and access to Web
content.
Yet it is a terminal that pulls together images from various sources, which could potentially undermine its
primary strength: its simple, ergonomic design.
With set-top boxes, ISPs control an essential technical component.
The integration of access, services and devices proves how important it is for content providers to be
referenced on devices in the digital household.
The trend
HDTV is now gradually becoming widespread in developed markets.
From a technological standpoint, 3D is available, but it is suffering from a lack of standardization.
Video games are the primary vehicle for launching this service.
But there is a shortage of 3D audiovisual programs, especially in TV programming. It will be a long time
before the audiovisual supply chain integrates 3D.
Pay Video On Demand (VOD) competes directly with piracy, and growth in this service does not make up
for dwindling DVD sales.
Catch-up TV gives television channels greater influence over the timeline in which they exploit their
audiovisual rights.
The ability to connect television sets to the Internet opens up new possibilities in the Web services access
market.
Internet access allows for the hybridization of entertainment services and community-based Web 2.0
services.
At a minimum, adapting Internet content to the TV set requires a technical aggregator. Because they pull
together various services, portals are going up against traditional aggregators to gain a market position.
A distinction must be made between the mobile video and nomadic video markets.
Aside from long trips, mobile consumption is still limited by viewing time.
The boom in connected nomadic devices benefits growth in personal video consumption.
After text and photos, the Web is migrating toward video.
Web services that provide premium content tend to be hosted on traditional broadcast networks.
The other services (amateur content, catalog content) round out this premium offering.
Social networks are no longer merely communication platforms, but are also becoming content exchange
and distribution platforms.
2010 IDATE
44
TV 2010
4. Funding
4.1 Advertising market
4.2 Pay TV
5. Player strategies
5.1. Content providers
5.2. Telcos
5.4. Consumer
electronics
manufacturers
5.5. Regulators
The trend
Multichannel television (whether free or pay) expands advertisers offering, causing a drop in rates.
The leading channels maintain a premium, as do certain targeted channels.
More than anything, online advertising is based on direct marketing.
Only premium content generates significant additional revenue from television programming.
For the other types of content, the business model is based on traffic.
Media conglomerates are facing a choice: either integrate their traditional and online ad networks, or launch
an autonomous Web strategy through which they attempt to represent the broadest array of Web services,
including competing ones.
Increased automation in ad placement poses a threat to middlemen in the value chain.
The development of free multichannel offerings strengthens premium channels market position, based on
exclusive content.
Theme channels with no premium content are being threatened in the short-term. The services offered by
catch-up TV tend to aggravate that threat.
The value chain activity of distributing pay services is becoming more competitive now that telcos have
entered the market.
Public service broadcasters are seeing their ad levies drop.
Their resources are also limited as a result of budgetary constraints.
It is foreseeable that public broadcasters will restrict the scope of their activities by refocusing on public
service missions.
The trend
Unlike other segments of the content industry, the television industry boasts exclusive content with wellestablished brands. Thus the industry can adopt a destination site strategy when this content is totally new.
On the other hand, using old programming requires a program circulation strategy.
The rapid increase in the size of the Web audience and the drop in costs force most content providers to
circulate content while also maintaining control over the associated advertising.
Because integrating content on partner sites is a challenge, traditional syndication models are not very
effective.
Direct investment by telcos into content publishing remains limited and seems to be motivated by their desire
to hold exclusive rights, which would reinforce their vertical integration strategy of moving into service
distribution.
The integration of traditional broadcast television into a broader video offering (combining channels, personal
content, online videos) allows them to expand their role from basic Internet access management to digital
household management.
The major Web players have not invested in publishing professional content.
Strategies based on amateur content have run their course.
Now their strategy is focused on professional content aggregation by partnering with the major media players.
The integration of new features into consumer electronics allows manufacturers to offer new devices and
encourage consumers to access the Internet.
Some prioritize an approach based on the digital household, while others focus on integrating content.
Regulating the uneasy relationship between service and content providers on the one hand and network
operators on the other becomes increasingly important as online video consumption becomes more common.
In order to avoid the free rider strategies adopted by content providers, regulators (and anti-trust authorities)
could opt to strengthen network operators distribution role by granting them access to all audiovisual
programming.
For their part, content providers would gain access to all distribution platforms.
But this goal clashes with rapid technological development, which creates new perpetual walled gardens.
In particular, network and content regulators will have no authority over device manufacturers portals, which
will make intervention from anti-trust authorities all the more pressing.
2010 IDATE
45
TV 2010
8.1.3.
Broadcast as Usual
Community TV
Usage
Access
Services
Funding
Integration of advertising/direct
marketing/e-commerce.
Fewer non-premium pay
channels.
Marginalization of public service
broadcasting.
Player strategies
Consolidation of national
channels, weakening of theme
channels.
Vertical integration of
telcos/content providers.
Web players absent from the
content market.
Network operators control
consumer electronics.
Regulation does not stand in the
way of vertical integration of
networks/content.
2010 IDATE
46
TV 2010
8.1.4.
60 000
50 000
40 000
30 000
20 000
10 000
0
2008
2009
2010
2011
2012
2013
2014
2015
Advertising
Pay
2016
2017
2018
2019
2020
2017
2018
2019
2020
Figure 25:
200 000
150 000
100 000
50 000
0
2008
2009
2010
2011
2012
2013
2014
2015
Advertising
Pay
2016
2010 IDATE
47
TV 2010
140
130
120
110
100
90
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Scenario 3: Fragmentation
2010 IDATE
48
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Operators
Strategies
Florence Le Borgne, Director of Studies, joined IDATE in July 1998. She is now head of TV & Digital
Content Business Unit. Florences prime area of focus is the development of digital technologies (terrestrial, cable, satellite and IPTV, mobile TV, digital cinema, video and TV on the web) dealing with both the
economic and strategic aspects of those sectors. More generally, her work involves analysis of media
groups strategies, chiefly in Europe and Japan. Before coming to IDATE, Florence Le Borgne worked
as the Head of Research in the Nord-Pas-de-Calais Regional Development Agency's Economic
Observation department, where she devoted herself primarily to issues relating to the Information
Society, the development of telework and the mastery of key technologies. Florence Le Borgne is a graduate of the Lille school of management EDHEC (Ecole des Hautes Etudes Commerciales).
Sophie
GIRIEUD
Innovative
Video Services
Laurent
MICHAUD
Head of
Consumer
Electronics
Practice
Marc
LEIBA
Digital Content
& Media Players
Strategies
About IDATE
Founded in 1977, IDATE is one of Europes foremost market analysis and consulting
firms, whose mission is to provide assistance in strategic decision-making for its
clients in the Telecom, Internet and Media industries.
Florence
LE BORGNE
Head of TV & Digital
Content Business Unit
f.leborgne@idate.org
+33(0)4 67 14 44 43
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