Is there a future for free-to-view television ? Trends and figures. Gilles Fontaine Head of Department for Information on Markets and Financing Yerevan - 44th EPRA Meeting Yerevan, 20 October 2016

Overview

1. What are free-to-air channels ?

2. The access to free-to-air channels

3. The audience market

4. Resources of free-to-air channels

5. The impact of on-demand

6. Financing original programming

1. What are “Free-to-air channels” ?

MAVISE – BASIS: 32 EUROPEAN COUNTRIES

FTA on satellite and on DTT

~ 870 European channels technically free

(unencrypted on satellite)

~ 600 TV channels available for free on

DTT

2. The access to free-to-air channels

Direct to consumer: 39%

IT: 81%

RO: 11%

AMPERE ANALYSIS

Access mode on the main TV set (2015)

Main TV set only

Less than 40% of EUR households access directly to FTA channels (Vs. 46% in 2011)

11%

28%

14%

27%

20%

Free satellite

Terrestrial

IPTV

Cable

Pay satellite

3. The audience market

• Both free-to-air and pay-television compete

for audience

• SVOD seems to significantly impact TV

viewing

TV audience USA: -3% (2015)

Netflix: 4,4% (2014) and 6% (2015) of total TV viewing

3. The audience market

MEDIAMETRIE EURODATA TV

The audience is relatively concentrated

The two main broadcasting groups have on average a 51% share of the audience, and the 3 main groups 64%.

But the concentration strongly varies between countries: the 3 main groups account for from 54% of the audience in Estonia, up to 82% in Czech Republic.

• Linear television has reached a plateau

TV audience is more fragmented

BG

CZ

FI

HR HU

IE IT

LT

LV

PL PT

SI

SK

EUR

-16

-14

-12

-10

-8

-6

-4

-2

0

%

The audience share of the top 4 TV channels decreased between 2011 and 2014

3. The audience market

00:00

00:28

00:57

01:26

01:55

02:24

02:52

03:21

03:50

04:19

2011 2012 2013 2014 2015

MEDIAMETRIE EURODATA TV

Average daily TV viewing in the EU

Stagnation and fragmentation

4. Resources of free-to-air channels

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

2010 2011 2012 2013 2014

Public funding Advertising TV Consumer expenses

Audiovisual revenues in the EU (2010-2014)

EBU/MIS WARC AMPERE ANALYSIS

Funding of free-to-air TV

Different market dynamics for free and pay-TV

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2006 2007 2008 2009 2010 2011 2012 2013 2014

M E

UR

EU TV advertising is recovering

WARC

4. Resources of free-to-air channels

Evolution of advertising in the EU 2010-2014

Public funding under pressure

All EU

All EU, excluding Germany

0

5 000

10 000

15 000

20 000

25 000

30 000

2010 2011 2012 2013 2014

m E

UR

OBS, EBU/MIS

4. Resources of free-to-air channels

Evolution of public funding in the EU 2010-2014

May include funding of public radio services

5. The impact of on-demand

Linear still represents the vast majority of time spent and revenues

On-demand is growing (fast)

US TV daily watching

US Digital video daily watching

0:00

1:12

2:24

3:36

4:48

6:00

2011 2012 2013 2014 2015

hh

:mm

EMARKETER

5. The impact of on-demand

But…

Linear euros and on-demand cents

Broadcasters only capture part of the on-demand video audience

No aggregated measure

6. Financing original programming

Fragmentation of audience may impact the level of

investment in original programming

France: France 2, France 3, TF1, M6 account for 62% of prime-time audience

… and for 76% of investments in original programmes (film+TV)

6. Financing original programming

More competition for sports rights

• A competition between FTA and Pay…

• … and/or a competition between TV and online players

Yahoo/US National Football League

Google/Spain Football Cup/Canadian football league the rights to broadcast

for free the championship online.

Twitter/US National Football League.

BT /YouTube/ Football Champions League

…and/or a competition between leagues and TV Clubs TV channels

US sports leagues on the Internet

EURO 2016

5. Key take-away

FTA channels cannot be defined by a delivery network

Distributors increasingly play a role in the access to free TV

Both free and pay-TV compete for advertising

The fragmentation and the migration to on-demand is a risk for advertising revenues

And hence for investments in programing