LFE, march 4, 2013Jean Luc Ormieres

Households with broadband internet connections in the EU27 more than doubled between 2006 and 2011 reaching nearly 70% in 2011.

Proportions of houselholds with BB connections- Sweden 86% (highest rate) Denmark 84%, UK & Netherlands 83 % have the highest rate- Romania 31%, Bulgaria 40% and Greece 45% have the lowest ones

Films represent about 75% of the total VoD consumption in Europe

European market is dominated by the UK and France

Total VoD turnover of Europe to exceed 1,65 billion € in 2011, in a worldwide market that is close to 11,5 billions US €

Over 600 VoD services available in Europe

VoD expenses in France grew from 29 M€ in 2009 to 150 M€ in 2010, and above 310 M€ in 2012

in 2011

A figure between 85 and 100 Millions legal downloads has been reached

95 % of the transactions are rentals

TVOD (transactional VOD) accounts for 93% of the market value (vs SVOD & AVOD)

the average price for a film transaction = 4,25 € (rather high)

90/95 % of the market on IPTV & Itunes

Films account for 70% of all transactions

In France, the Media Chronology is a regulation.

Theatricalrelease

TRANSACTIONAL VOD

(first window)

PAY TV (1st and 2nd windows)

Close rental VOD

SVOD

4 MONTHSDVD and VOD release

TVOD (EST only) TVOD

10 MONTHSPay TV

FREE TV No VOD PAY or FREE

TV

22 MoFree TV

36 MoSVOD

The MEDIA CHRONOLOGY has always played a strong role in the financing of film production. SVOD starting only at 36 months has protected PAY TV channels from new competition and has allowed for the development of a strong TVOD market.

48 MoAVOD

SVOD

TVOD

PAY or FREE TV

AVOD

A high diversity of films supported by a regulation (European directive translated

in French law)

The number of films available on VOD is growing rapidly but can still seem weak in

comparison with DVD references.

What can account for such a situation ?

- Very competitive market for Triple Play offers (30€/mo with the Set-top-Box) and therefore a very high IPTV penetration rate (10M households = 1/3 of all households)

- VOD on IPTV/ITunes is favoured by consumers for 2 main reasons : the service is available directly on their TV sets they are invoiced on their internet bills (no credit card needed) or via theirApple accountTherefore, up to 2011, the French VOD market has been dominated bywalled garden services. Although it gives much power to a few players and can be a threat to diversity, the ISPs have used their huge marketing means to develop VOD usage.

Over The Top (OTT) Offers are services proposed by players that do not control the physical distribution network : they come « over the top » using the home internet connection to be available on some devices

NEW DEVICES : Connected TVs Ipads Android tablets Game consoles

Samsung / LG / Sony / Google TV Apple Open android Sony Microsoft

marketThe Itunes Film store launched in France in 2010, its market share is growing rapidly. The marketshare of IPTV will be decreasing in 2012/2013

NEW PLAYERS : Google/Youtube, Facebook, Dailymotion ?

The market is opening slowly to competition

24M 2011

in 2015, TVOD + SVOD = 400 M€/year

out of which

200 M€ should go to production and

distribution

TVODVOD/EST

DVD salesTHEATRIC

ALMARKET

SVOD

+

PAY TV

* Investment in film financing in France is slightly over 1000 M€

Currently there are 49 shareholders :

ADR PRODUCTIONS – ARCHIPEL 35 – LAZENNEC – FIDÉLITÉ PRODUCTIONS – JBA PRODUCTION – LA MOUCHE DU COCHE FILMS – LES FILMS DE LA BOISSIÈRE – LES PRODUCTIONS BAGHEERA – MAGOURIC PRODUCTIONS – JLA/MERCURE DISTRIBUTION – LE PETIT BUREAU (QUO VADIS CINÉMA) – SUNDAY MORNING PRODUCTIONS – WHY NOT PRODUCTIONS – 3B – AGAT FILMS – DIAPHANA FILMS – GLORIA FILMS PRODUCTION – MACT PRODUCTIONS – MAÏA FILMS – OGNON PICTURES – PIERRE GRISE PRODUCTIONS – REZO PRODUCTIONS – TS PRODUCTIONS – ADVA – CINE NOMINE – ELZEVIR FILMS – LES FILMS D’ICI – HAUT ET COURT – INTERSCOOP – OF2B – LES FILMS PÉLLÉAS – PROGRAM 33 – SEPIA PRODUCTION – PLAYTIME – CE QUI ME MEUT – ELIA FILMS – LES FILMS DE LA CROISADE – LES PRODUCTIONS DU TRESOR – LES FILMS DU KIOSQUE – LES FILMS DU POISSON – K’IEN PRODUCTIONS – NORD-OUEST PRODUCTION – SOMBRERO PRODUCTIONS – SOPHIE DULAC DISTRIBUTION – FORUM FILMS – MEMENTO FILMS DISTRIBUTION – SOCIETE PARISIENNE DE PRODUCTION – PYRAMIDE - METROPOLITAN FILMEXPORT

The catalogue has over 2200 titles online; more than 1000 of them are under exclusive mandate for VoD distributio

UniversCiné showcases some of the most recent hits of independent cinema, as well as patrimonial works

A few titles: 4 months, 3 weeks and 2 days ; Il Caimano ; Soul Kitchen ; In the Loop; Louise Michel; Eldorado…

And a few names: Bergman, Fellini, Godard, Polanski, Kaurismaki, Dardenne, Kusturica, Resnais, Saura, Szabo,Tarr…

UniversCiné has a niche – it gives art-house films, some of them awarded in major festivals, a second life beyond their theatrical exposure

UniversCiné provides in-house produced editorial content (articles, interviews, trailers) in order to highlight films and guide audiences

UniversCiné develops exclusive cross-marketing operations with festivals and events in order to promote new talent and European cinema

UniversCiné proposes original community-based tools in order to promote films through social networks

The company structured itself around business-units, marketing, editorial, technical services, etc.

Universcine has developped its own technical service, front and back-office

The technical services b.u dedicates a substantial amount of its resources to R & D, paying attention to quality from content to exploitation. It has based its philosophy on a very high degree of security (DRM) that respects the content in all its aspects, whether artistic, technical or even legal). Special attention is currently paid to developping solutions for Continuum of services and devices and shared usages (Ultra-Violet)

Together with a weekly newsletter (over 250,000 subscribers) The Editorial b.u yearly provides an important amount of bonuses, interviews, special events audiovisual contents, in relationship not only with the VoD releases, but also with the news in the industry, the festivals, etc.

ANALYSIS OF REVENUES ACCORDING TO TYPE OF VoD EXPLOITATION

WEB Conn. TV IPTV

RENTAL EST RENTAL RENTAL

ALL TAXES included 4,99 14,99 4,99 4,99

VAT deducted 4,17 12,53 4,17 4,17

Other Tax deductions 4,09 12,28 4,09 4,09

- SGC/CMS 3,84 11,55 3,84 3,84

operator's fee        

Net publisher UC (on average price) 3,84 11,55 3,84 2,50

       

Fee UC 1,54 4,62 1,54 0,50

net RIGHT HOLDER 2,31 6,93 2,31 2,00

Bandwidth costs UC 0,28 0,28 0,28

Payment costs UC 0,25 0,25 0,25

Electronic Device Manuf. Fee 0,35

Gross Margin 1,01 4,09 0,66 0,50

Evolution and Forecast of the Sales (direct, indirect,

rentals and DTOs)

The UniversCiné Market Share should progress from 1,5% in 2010 to 3% in 2013

As of today, four technological models exist (UniversCiné, Filmin, Good!Movies and Flimmit),

All possibilities for developing synergies and longterm technological and business convergence will be explored with the aim of eventually merging into one single model.

Reinforcing collaboration and integration in order to increase stability and cost-efficiency

The ‘inner core’ network of EuroVoD is of 9 countries; their total population is of more than 260 million people

The extended network of EuroVoD so far is of 13 countries

We have now started partnerships in other major European countries – UK, Italy, the Netherlands

To Promote Video on Demand as a New Channel For Distribution of Films

To Benchmark the Best Services of the Sector

To Create a Collaborative Model Between the Members of the Association and Other Independent Cinema VoD Platform Operators

Operating in a very structured context, having its origins in the concerns and desires expressed by content makers and providers regarding the destiny of their films, Universcine mirrors the fears and aspirations of the independent sector.

Far from solely advocating for the protection of the existing system, Universcine acts as a think tank that elaborates and implements projects in France and in Europe.

Universcine, conscious of what the digital revolution can bring to the future of film distribution in its various aspects, is also dedicated to contribute to the ongoing transitions, in an harmonious way that will maintain the sparkle of the independent sector, and the possibility for the audience to elaborate its relationship with this new media.