the changing landscape of european tv - itu · 6/7/2019 · the changing landscape of european tv...
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Confidential. © 2019 IHS MarkitTM. All Rights Reserved.
The Changing Landscape of European TV
Tom Morrod
Chief of Research, Consumer Techologies
ITU Workshop
The Future of TV for Europe
7 June 2019
Geneva, Switzerland
Confidential. © 2019 IHS MarkitTM. All Rights Reserved.
I’d like to discuss 3 big trends… very briefly
1.The rise of online video platforms
2.Consolidation of telecoms and media
3.The economics of platform companies
2
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The world 5 years ago…
3
Online video was 3% of
viewing and 3% of
entertainment spend
200
250
2005 2006 2007 2008 2009 2010 2011 2012
0
2000
Non-connectable TVs Connectable devices TV spend Other spend Online spend
Linear viewing
was growing
Connected devices were
just reaching parity with
‘dumb’ TVs
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What about the world today…
4
OTT is 20% of
viewing, growing
2% per year, and
accelerating
Online is capturing all
viewing growth and
almost all subscriber and
revenue growth
Most consumer
devices are
connected and
media-capable
Linear viewing
was growing
Online and VOD was
around 3% of viewing and
3% of entertainment
spend
There were slightly
more connected
devices than ‘dumb’
TVs
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Online subscription services added just under 17 million new paid accounts
in Europe in 2018
-283
41
-25
40918
1,720
161771
16,969
3,928
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
WE CEE WE CEE WE CEE WE CEE WE CEE
Cable DTT IPTV Satellite Online
Europe: Pay TV and Online Subscriptions Net Additions in 2018 (000)
5
Next 5 years:
+11% CAGR
Online Subscription:
2018:
+32% growthNetflix & Amazon:
Responsible for 2/3 of
the growth
Source: IHS Markit
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The result is Netflix is the biggest video subscription platform in Europe
0 5 10 15 20 25 30
Netflix
Sky
Liberty Global
Tricolor
Vodafone
Rostelecom
Amazon
Orange
Altice
Deutsche Telekom
Subscriptions (m)
Europe: Video subscriptions by provider and platform (2017)
Cable Satellite IPTV Online
6
Source: IHS MarkitNote: Video subscriptions and revenues for VodafoneZiggo are allocated equally to Liberty Global and Vodafone
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The reaction has been a series of merger mega-deals, positioning fewer,
larger players to better compete on a regional/global scale
7
AT&TTime
Warner
VodafoneLiberty Global
Disney Fox
Comcast Sky
Marriage of distribution and content Scale: Content, production, channels
Convergence Geographic diversification
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And operators have tried implementing a range of strategies to keep pace
Bundling Unbundling Mobile video
Premium content provision
Aggregating new content owners and
outlets
TV UX and multiscreen innovation
8
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But this kind of misses the elephant(s) in the room… to mix clichés
9
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These companies diversified to offer a whole range of consumer services
Alibaba Alphabet Amazon Apple Baidu Facebook Tencent
Retail Advertising Retail Devices Advertising AdvertisingCommunications &
Content
1999 1998 1994 1976 2000 2004 1998
Ads Various Various Amazon ads App store search ads Baidu ads Facebook ads Tencent social ads
AI / Digital Assistant Fashion AI Google Assistant Alexa Siri Raven H Messenger bots Dingdang
Cloud Alibaba Cloud Drive, Photos Amazon Drive iCloud Baidu Cloud Workplace Tencent Cloud
Commerce & Payment Tmall, Taobao, Alipay Android Pay Amazon.com Apple Pay Baidu Wallet VariousWeChat Pay, QQ
wallet, Tenpay
Communications Ding Talk Hangouts, Allo, Duo Alexa messaging iMessage, FaceTime Baidu Hi WhatsApp, Messenger WeChat, QQ
Content Youku TudouMovies & TV on Google
Play, YouTubeAmazon Prime Video
Apple Music, Apple TV,
Podcast, Airplay 2iQiyi, PPStream Watch
Tencent Video, Tencent
Sports
Devices/ Software Yun OSNexus, Chrome,
Android Fire TV, Kindle, Echo iPhone, iPad, Mac, iOS Raven H, Duer OS Oculus -
Health Ali Health Google Fit - Apple Health - Moves WeDoctor
Home TmallGenieX1 Google Home Echo, Ring HomeKit Raven H - -
Location & Transport Various Google Maps, Waze - AppleMaps, CarPlay Baidu Maps Check-In Tencent Maps, iSpace
VR & ARAR in commerce,
gamesAR Core Amazon AR View AR Kit DuSee Oculus QAR
10
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But their history and core business is a long way from the video industry
11
Alibaba Alphabet Amazon Apple Baidu Facebook Tencent
Retail Advertising Retail Devices Advertising AdvertisingCommunications &
Content
1999 1998 1994 1976 2000 2004 1998
Ads
AI
Cloud
Commerce & Pay
Communications
Content
Devices/OS
Health
Home
Location & Transport
VR & AR
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Asymmetric business models are critical to platform disruption
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
AmazonOtherAWSSubscription servicesThird-party seller servicesPhysical storesOnline stores
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Other Bets Revenues
Google Other
Google Network Members
Google Properties
Retail
business
Other
Advertising
business
Other
Share of 2017 revenue (%)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Apple
iPhoneiPadMacServicesOther products
Hardware
business
Other
Source: IHS Markit, Consumer Platforms & Ecosystems Intelligence – 01/19
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World: Smart speaker installed base by assistant
Alexa
Google Assistant
Siri
Cortana
Platform companies dominate new markets
USA: Online video advertising revenue
YouTube
Legacy TV
Other
World: Smartphone installed base by OS
iOS
Google - Android
Other - Android
Others
World: Mobile App Store revenues
Apple App Store
Google Play
Other app stores
13
Source: IHS Markit, Consumer Platforms & Ecosystems Intelligence – 01/19
Confidential. © 2019 IHS MarkitTM. All Rights Reserved.
And it’s starting to head that way in total video advertising…
2017
Legacy TV YouTube Facebook Others
2023
Legacy TV YouTube Facebook Others
2014
Legacy TV YouTube Facebook Others
Share of ‘total video’ advertising over time
Confidential. © 2019 IHS MarkitTM. All Rights Reserved.
And in content production
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
Walt Disney Co NBC Universal Sky Discovery Comms. Viacom Inc. HBO Netflix Amazon
Original & Acquired Program spend ($m)
15Note: Excludes Sport
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And it’s worth considering what we want this pie to look like in another 5 years
Netflix44%
Amazon18%
HBO4%
Sky3%
Turkcell2%
Türk Telekom2%
Discovery2%
MTG2%
Sky1%
Others22%
16
Europe: Online video subscriptions by provider and type (2018)
Source: IHS Markit
Confidential. © 2019 IHS MarkitTM. All Rights Reserved.
What are the key takeaways from this?
• The TV industry isn’t driven by traditional economics anymore
• There is a more fundamental and philosophical discussion about public access,
local culture and privacy
• National broadcasters and broadcast itself actually answer a lot of those concerns
• And perhaps what is missing is shared platforms and technology strategy
• Smaller broadcast channels should move to online distribution
• Major channels at higher quality across more broadcast spectrum
17
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Thank youTom Morrod
@tommorrod