PAY-TV & OTT OUTLOOK 2019 IN EUROPE10/10/2019

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AGENDA

Regional specificities

Forecasts and key trends

Market structure and competition

TV and OTT markets evolutions and connections

PAY-TV & OTT OUTLOOK 2019 IN EUROPE

COUNTRIES SPECIFICITIES

0 50 100 150

BulgariaSwitzerland

AustriaBelarus

HungarySwedenPortugal

Czech RepublicGreece

BelgiumNetherlands

RomaniaPoland

UkraineSpain

ItalyUK

FranceGermany

Russia

millions

POPULATIONTop 20 Europe - 2018

Source : Dataxis

GDP PER CAPITA IN EUROPEUSD - 2018

Source : Dataxis

> 40,000 $

20,000 $ - 40,000 $

10,000 $ - 20,000 $

< 10,000 $

Total Europe ≈ 750 M

COUNTRIES SPECIFICITIES

POPULATION DENSITYNumber of people per km² - 2018

Source : United Nations Department of Economic and Social Affairs

> 200

100 - 200

50 - 100

< 50

Source : Agence France-Presse, April 2019

EUROPEAN UNION / EUROZONE2019

TV HOUSEHOLDS STRUCTURE

HOUSEHOLDSEurope – 2018Number of households

TV PENETRATIONEurope – 2018Number of households, % of total households

Source : Dataxis Source : Dataxis

312 300

188

0

50

100

150

200

250

300

350

HOUSEHOLDS TV HOUSEHOLDS DIRECT PAY TV HOUSEHOLDS

milli

ons

90%

91%

92%

93%

94%

95%

96%

97%

98%

99%

100%

275

280

285

290

295

300

305

310

315

320

325

2010 2012 2014 2016 2018 2020 2022 2024

milli

ons

Total Households Total TV Households TV Penetration

TV HOUSEHOLDS STRUCTURE – PAY TV & FTA MARKETS

PAY-TV & FTA HOUSEHOLDSEurope – 2016-2024Number of households

Source : Dataxis

0

50

100

150

200

250

2016 2017 2018 2019 2020 2021 2022 2023 2024

milli

ons

Direct pay TV households FTA households

66% 34%

Direct pay TV households FTA households

PAY-TV & FTA HOUSEHOLDSEurope – 2019% of Total households

Source : Dataxis

OVERVIEW OF COMPETITION

TOP 10 PAY-TV GROUPSEurope – Q2 2019Number of subscribers

Source : Dataxis Source : Dataxis

0 5 10 15

Digi Romania

Telefonica Espana

Sky Italy

SFR France

Canal Plus (France)

Sky Deutschland

Orange France

Sky UK

Rostelecom (Russia)

Tricolor (Russia)

millions0 10 20

Polsat

Vodafone

Deutsche Telekom

Cable Communications Systems …

Altice

Vivendi

Orange

Rostelecom

Liberty Global

Comcast

millions

TOP 10 PAY-TV OPERATORSEurope – Q2 2019Number of subscribers

INCREASE IN INTERNATIONAL ACQUISITIONS

2018 - 2019

Vodafone acquired Liberty Global’s activities in:GermanyCzech RepublicHungaryRomania

2019

Canal+ (Vivendi) acquired M7 group

2018 - 2019

MTS Srbija acquired multiple cable operators

PAY-TV SUBSCRIBERS OUTLOOK

Source : Dataxis

0

5

10

15

20

25

30

35

40

45

Direct cable TV

DTH IPTV DTT MMDS OTT Direct cable TV

DTH IPTV DTT MMDS OTT Direct cable TV

DTH IPTV DTT MMDS OTT

Central and Eastern Europe CIS Western Europe

milli

ons

H1 2014

H1 2019

PAY-TV ACCESSESTotal subscribers by access in CEE, CIS & Western Europe – 2014 v 2019

PAY-TV SUBSCRIBERS OUTLOOK

Source : Dataxis

§ Cable

§ DTH

§ IPTV

MAIN PAY-TV ACCESSTotal subscribers Europe - 2018

Source : Dataxis

HD PAY-TV SUBSCRIBERS IN CEE2016 v 2019

0

5

10

15

20

25

30

35

40

45

50

H12016 H12019

milli

ons

+ 57 %

PAY-TV REVENUES MOSTLY CAPTURED BY DTH AND IPTV

Source : Dataxis

52% 48%

Western Europe CEE & CIS

85%

15%

Western Europe CEE & CIS

0

5

10

15

20

25

30

35

40

45

2016 2017 2018 2019 2020 2021 2022

billio

n eu

ros

Cable revenues DTH pay TV revenues DTT pay TV revenues IPTV revenues OTT Pay TV revenues

PAY-TV REVENUES BY ACCESSEurope – 2016-2022EUR Billion

Source : Dataxis

PAY-TV SUBSCRIBERSEurope – 2018% of total Pay-TV subscribers

PAY-TV REVENUESEurope – 2018% of total Pay-TV revenues

PAY-TV ARPU: VAST DISPARITIES BETWEEN COUNTRIES

0

20

40

60

80

100

120

0.00 10.00 20.00 30.00 40.00 50.00

GD

P pc

Thou

sand

s

ARPU

Sources : Dataxis

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pay-TV ARPU >10 Pay-TV ARPU <10 FTA

PAY-TV & FTA MARKET SHARES Europe - 2018% of total TV households

ARPU / GDP PER CAPITAEurope - 2018EUR

STRONG GROWTH IN OTT RECEPTION

11%

89%

PTV OTT SVOD

0

10

20

30

40

50

60

70

80

90

100

2017 2018 2019 (forecast)

Milli

ons

PTV OTT SVOD

Source : Dataxis Source : Dataxis

OTT ACCOUNTS BY SERVICEEurope – 2017-2019Total number of accounts

OTT REVENUES BY SERVICEEurope – 2018% of revenues

STEADY ADOPTION OF STREAMING SERVICES

0

10

20

30

40

50

60

70

80

90

2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019

Milli

ons

Netflix Amazon HBO Sky/Now TV SFR Others

5% 8%

87%

Local player Pan-european International

15%

22% 63%

Local player Pan-european International

Source : Dataxis Source : Dataxis

SVOD SUBSCRIBERS BY ACTOR TYPEEurope – 2019% of total SVOD subscribers

NUMBER OF SVOD PLATFORMS BY ACTOR TYPEEurope – 2019% of total number of platforms

SVOD SUBSCRIBERS BY PLATFORMEurope – 2015-2019Total subscribers

Source : Dataxis

CORD-CUTTING NOT PREVALENT IN EUROPE

• Diversity of situations depending on local competition and OTT situations

• “Cord-never”, a trend beginning in countries with low premium Pay-TV penetration and strong OTT presence

• OTT subscription not necessarily in direct competition with Pay-TV

0

50

100

150

200

2016 2017 2018

Milli

ons

Total direct pay TV subscribers SVOD and streaming service subscribers

05

10152025303540

2016 2017 2018

Billio

n eu

ros

Direct pay-TV revenues SVOD and streaming service revenues

Sources : Dataxis

PAY-TV v SVOD SUBSCRIBERSEurope – 2016-2018Total subscribers

PAY-TV v SVOD REVENUESEurope – 2016-2018EUR Billion

MARKET EVOLUTIONS: BROADCASTERS GOING OTT

Negociating affiliate fees

Going Pay D2C

Reviewing linear portfolio

Making their offer more valuable

Investing in exclusive online content

0

5

10

15

20

25

30

2013 2014 2015 2016 2017 2018 2019

Billio

n eu

ros

Tv networks advertising revenues TV public funding

TV NETWORKS ADVERTISING REVENUES & PUBLIC FUNDINGEurope – 2013-2019EUR Billion

Source : Dataxis

BROADCASTERS POTENTIAL SCENARIOS

MARKET EVOLUTIONS: OPERATORS’ OPTIONS

INVESTMENT IN CONTENT FOCUS ON AGGREGATION

MARKET EVOLUTIONS: MEDIA CONVERGENCE

0

10

20

30

40

50

60

70

80

90

1 play 2 play 3 play 4 play

Milli

ons

2013 2016 2019

Convergence with content:

PAY-TV SUBSCRIBERS BY NUMBER OF SERVICES OFFEREDEurope – 2013, 2016 & 2019Total subscribers

Source : Dataxis

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