Report: Television 2015 - The future of TV financing in Europe TOC

1 Introduction

1.1 Objectives
1.2 Methodology
- General approach
- Preparing the scenarios

2 Diagnosis

2.1 Financing the TV sector
- Different business relations depending on the TV distribution network
- Pay TV drives the market revenues
- Mixed financial situations among players
- Sector's financing structure should see changes
2.2 Characteristics of "media" consumption
- "New replaces old"
- Usage and consumption of communication products and services increases
- A new way of watching television
- The Internet, still not entirely entertainment...
- Is the mobile telephone turning into a hobby?
- Spending tradeoffs which point to change
2.3 Strategies adopted by advertisers in the face of TV audience fragmentation
- "TV + ad", a virtuous model for advertisers to date
- TV, Europe's main advertising medium
- Television advertising threatened
- What are the options for advertisers?
2.4 Enriched TV offer
- Greater diversity with digital
- TV on ADSL broadband, first promising steps
- Personal TV, the next stage?
- Mobile TV becomes a reality
- Towards greater quality with HDTV

3 What are the mid-term stakes?

3.1 Internet: facing up to the threat...
- A explosion in the population of high-speed subscribers
- Illegal downloading of films and TV programmes
- Blogging, Vlogging and Podcasting
- The inevitable rise TV via the Internet
3.2 Future consumption habits of today's youth
- Younger generation sets new trends...
- A certain appreciation of ICTs...
- Younger generation's electronic entertainment equipment
- Media practices of the "Internet generation"
3.3 Telecom operators: threats or opportunities?
- Finding new avenues for growth
- TV offer on DSL
- Mobile video and TV services
3.4 Preparing strategies for pertinent offerings
- Innovating in TV programme and brand marketing
- Defining a strategy for an adapted multi-play offering
- Mobile TV, finding the best development model
3.5 Audiovisual policy, regulatory and legal framework:
- The revision of the TWF directive
- What transition to digital?
- Rethink or keep the media chronology
- Towards a system of free licences ensuring

4 Scenarios for the future

4.1 Against a backdrop...
- A few "certainties"
- Regulations - Audiovisual policy
- Exogenous factors with an impact
4.2 Presentation of key scenarios
- The key variables
- Scenario composition
- Fundamental hypotheses
4.2.1 Scenario 1: "TV in complete freedom"
- The situation of the TV market in 2015
- Review of the main events in the 2005-2015
- An update on the economic models in place
4.2.2 Scenario 2: "Welcome to the world of
- The situation of the TV market in 2015
- Review of the main events during the 2005-
- Review of the economic models in place
4.2.3 Scenario 3: "The reign of media brands"
- The situation of the TV market in 2015
- Review of the main events in the 2005-2015
- Review of the economic models in place
4.3 What impacts?
- France
- Germany
- Italy
- Spain
- United Kingdom

5 Conclusions

Towards a new paradigm for television...
Breakthrough elements
Irreversible developments
But a promising future
A few levers of action, giving food for thought
IDATE presentation
DigiWorld Catalogue 2005

List of boxes

Box 1: Finland - The first results of the FinPilot commercial test
Box 2: Economic growth as the main determining factor in advertising investments
Box 3: The alternatives to television advertising
Box 4: The development of the European advertising market in the medium/long term
Box 5: IPTV differs from TV on ADSL
Box 6: Would the TiVo model be successful in Europe?
Box 7: Could an S-DMB solution be envisaged for Europe?
Box 8: HDTV = MPEG4
Box 9: The BitTorrent file distribution system
Box 10: Music and the Internet
Box 11: What is a RSS feed?
Box 12: TV on the Internet differs from IPTV
Box 13: Creative Commons Licences

List of figures

Figure 1: General diagram showing financial flows in the TV value-added chain
Figure 2: Financial flows in the value-added chain: ADSL broadband (1st system)
Figure 3: Financial flows in the value-added chain: ADSL broadband (2nd system)
Figure 4: 2000-2004 trends in revenues in the European Union TV sector (UE-15)
Figure 5: Changes in the financing structure of the TV sector in Germany, Spain, France, Italy and the UK
Figure 6: 2003 turnover for T-commerce services in Europe (in millions of EUR)
Figure 7: 2003 turnover for pay-per-view services in Europe (in millions of EUR)
Figure 8: Sources of alternative TV income in the U-K - 2004 (£ million)
Figure 9: Increases in the annual number of text messages sent in Great Britain
Figure 10: Simultaneous use of different media in the United-States
Figure 11: Media consumption in the five main European countries in 2003
Figure 12: Europeans' media consumption
Figure 13: Average time of media consumption each week by British home(in hours)
Figure 14: Changes in audience shares of British TV channels - 1994-2004
Figure 15: Distribution of iTV homes by media and geographic area - end 2003
Figure 16: Usage of pay-per-view services by British homes with cable or satellite TV in 2004
Figure 17: Structure of the PVR base in the United-States (n= 611)
Figure 18: Types of real-time programmes watched in American homes with a DVR
Figure 19: Interest of the French in the different types of television on demand
Figure 20: Usages of the Internet by the French
Figure 21: The market for mobile phone
ents in Western Europe - 2004
Figure 22: Contemplated usages of mobile TV
Figure 23: Trends in entertainment expenditure by sector - 1998-2003
Figure 24: 1999-2005 Trends in the annual media expenditure of homes in the United-States
Figure 25: 2000-2005 Trends in Expenditure on Communication
Figure 26: Weekly coverage of the various media in Europe* - end 2004
Figure 27: Changes in the relative share of TV in advertising investment in Europe
Figure 28: Comparison between annual growth of GPD and advertising investments - United-States
Figure 29: United-States - Comparison between trends in prime time advertising investments and TV audience
Figure 30: United-States - Advertising and homes equipped with a PVR
Figure 31: Changes in net advertising investments in the U-K (in millions of £)
Figure 32: Illustration of the Brand Entertainment strategy
Figure 33: Illustration of the Media Hub strategy
Figure 34: 2003-2007 Changes in advertising investments in Europe and the United-States
Figure 35: Penetration of digital technologies in the U-K (2005)
Figure 36: Types of TV reception in the 5 main EU countries - end 2004
Figure 37: Proportion of TV multi-channel homes in Europe in 2004
Figure 38: Relative share of pay TV in the 5 main EU countries - (in millions of TV homes)
Figure 39: Development of high-speed services
Figure 40: Penetration of high-speed Internet in homes (in%)
Figure 41: Thomson's jukebox video
Figure 42: The Media Centre PC by Sony Vaio
Figure 43: Windows XP Media Center software by Microsoft
Figure 44: The Home Vita solution by Samsung
Figure 45: Chronology of the introduction of video services on mobiles
Figure 46: Timeframe for the main technical advances at terminal level
Figure 47: The mobile multimedia added value chain
Figure 48: Development of the high-speed base since 2001
Figure 49: Geographic origin of the illegal downloadings of TV broadcasts
Figure 50: FireANT, video RSS aggregator dedicated to vlogging
Figure 51: iPodder X, an RSS reader dedicated to podcasting
Figure 52: EPG proposed by OMN
Figure 53: Evolution of generations in France
Figure 54: The values conveyed by the NTICs and youth's aspirations
Figure 55: Perception of the medias by French youth aged 15 to 24 years
Figure 56: Media time budget of Europeans aged 15-24 years
Figure 57: Time spent each day watching the TV by the French
Figure 58: Fluctuation in TV audience of 18 to 22 year olds
Figure 59: Proportion of the French population quite or very interested in new TV equipment and services
Figure 60: Positioning of bundles in operators' strategies
Figure 61: Positioning of the main types of players on the added-value chains for the distribution of audiovisual
contents on mobiles
Figure 62: Organisation of the timeframes for broadcasting films on the different audiovisual mediums France
Figure 63: Scenario 1 - Structure of media consumption in 2015
Figure 64: Scenario 1 - Usages of the different medias in 2015
Figure 65: Scenario 1 - Penetration of digital technologies in 2015
Figure 66: Scenario 2 - Structure of Media consumption in 2015
Figure 67: Scenario 2 - Usages of the medias in 2015
Figure 68: Average TV ratings in 2015 (in%)
Figure 69: Scenario 2 - Penetration of digital technologies in 2015
Figure 70: Scenario 3 - Structure if media consumption in 2015
Figure 71: Scenario 3 - Usages of the various medias in 2015
Figure 72: Scenario 3 - Penetration of digital technologies in 2015
Figure 73: Type of screen proposed by the television portals
Figure 74: TV financing structure in France - 2004
Figure 75: Changes in advertising investments by media in France (million EUR)
Figure 76: Structure of advertising investments by media in France in 2004
Figure 77: Changes in advertising investments in the Internet in France (million EUR)
Figure 78: TV reception modes up to 2015 in France, Scenario 1
Figure 79: Changes in turnover for the TV sector in France, Scenario 1
Figure 80: Changes in the structure of revenues for the TV sector up to 2015 in France, Scenario 1
Figure 81: TV reception modes up to 2015 in France, Scenario 2
Figure 82: Changes in turnover for the TV sector in France, Scenario 2
Figure 83: Changes in the structure of revenues for the TV sector up to 2015 in France, Scenario 2
Figure 84: TV reception modes up to 2015 in France, Scenario 3
Figure 85: Changes in turnover for the TV sector in France, Scenario 3
Figure 86: Changes in the structure of revenues for the TV sector up to 2015 in France, Scenario 3
Figure 87: Structure of TV financing in Germany in 2004
Figure 88: Changes in advertising investments by media in Germany (million EUR)
Figure 89: Structure of advertising investments by media in Germany in 2004
Figure 90: Changes in advertising investments in the Internet in Germany
Figure 91: TV reception mediums up to the year 2015 in Germany, scenario 1
Figure 92: Changes in turnover for the TV sector in Germany, scenario 1
Figure 93: Changes in the structure of revenues in the TV sector in Germany up to the year 2015, scenario 1
Figure 94: TV reception modes up to 2015 in Germany, scenario 2
Figure 95: Changes in turnover for the TV sector in Germany, scenario 2
Figure 96: Changes in the structure of revenues for the TV sector up to 2015 in Germany, scenario 2
Figure 97: TV reception modes up to 2015 in Germany, scenario 3
Figure 98: Changes in turnover for the TV sector in Germany, scenario 3
Figure 99: Changes in the structure of revenues for the TV sector up to 2015 in Germany, scenario 3
Figure 100: TV financing structure in Italy in 2004
Figure 101: Changes in advertising investments by media in Italy
Figure 102: Structure of advertising investments by media in Italy in 2004
Figure 103: Changes in advertising investments on the Internet in Italy
Figure 104: TV reception modes up to the year 2015 in Italy, scenario 1
Figure 105: Changes in turnover for the TV sector in Italy, scenario 1
Figure 106: Changes in the structure of revenues for the TV sector up to 2015 in Italy, Scenario 1
Figure 107: TV reception modes up to 2015 in Italy, Scenario 2
Figure 108: Changes in turnover for the TV sector in Italy, Scenario 2
Figure 109: Changes in the structure of revenues for the TV sector up to 2015 in Italy, Scenario 2
Figure 110: TV reception modes up to 2015 in Italy, Scenario 3
Figure 111: Changes in turnover for the TV sector in Italy, Scenario 3
Figure 112: Changes in the structure of revenues for the TV sector up to 2015 in Italy, Scenario 3
Figure 113: TV financing structure in Spain in 2004
Figure 114: Changes in advertising investments by media in Spain
Figure 115: Structure of advertising investments by media in Spain in 2004
Figure 116: Changes in advertising investments on the Internet in Spain
Figure 117: TV reception modes up to 2015 in Spain, scenario1
Figure 118: Changes in turnover for the TV sector in Spain, scenario1
Figure 119: Changes in the structure of revenues for the TV sector up to 2015 in Spain, scenario1
Figure 120: TV reception modes up to 2015 in Spain, scenario 2
Figure 121: Changes in turnover for the TV sector in Spain, scenario 2
Figure 122: Changes in the structure of revenues for the TV sector up to 2015 in Spain, scenario 2
Figure 123: TV reception modes up to 2015 in Spain, scenario 3
Figure 124: Changes in turnover for the TV sector in Spain, scenario 3
Figure 125: Changes in the structure of revenues for the TV sector up to 2015 in Spain, scenario 3
Figure 126: Structure of TV financing in the U-K in 2004
Figure 127: Changes in TV financing in the U-K by type of players (2000-2004)
Figure 128: Changes in advertising investments by media in the U-K
Figure 129: Structure of advertising investments by media in the U-K in 2004
Figure 130: Changes in advertising investments on the Internet in the U-K
Figure 131: TV reception modes up to 2015 in the U-K, Scenario 1
Figure 132: Changes in turnover for the TV sector in the U-K, Scenario 1
Figure 133: Changes in the structure of revenues for the TV sector up to 2015 in the UK, Scenario 1
Figure 134: TV reception modes up to 2015 in the U-K, Scenario 2
Figure 135: Changes in turnover for the TV sector in the U-K, Scenario 2
Figure 136: Changes in the structure of revenues for the TV sector up to 2015 in the UK, Scenario 2
Figure 137: TV reception modes up to 2015 in the U-K, Scenario 3
Figure 138: Changes in turnover for the TV sector in the U-K, Scenario 3
Figure 139: Changes in the structure of revenues for the TV sector up to 2015 in the UK, Scenario 3
Figure 140: Stages in the television industry in Europe

List of tables

Table 1: Monthly ARPU for pay TV in 2003 (in EUR)
Table 2: Operating revenues of European Union television firms (EU-25)
Table 3: Profit margin of European Union television firms (in %)
Table 4: Proportion of European homes with electronic communication products and services in 2004
Table 5: Structure of media consumption in the United-States
Table 6: Time spent each week watching the television in France
Table 7: "Cost" of the increasing usage of the Internet in Europe
Table 8: Comparison between time allocated to entertainment between Web surfers and non Web surfers-US
Table 9: Gross cost of French medias for 1000 memorised contacts (in EUR)
Table 10: Changes in Networks' audience share in the United-States
Table 11: Comparison between the advantages of the different medias as regards advertising
Table 12: Changes in the relative share of theme TV channels in total advertising investments in France
Table 13: Annual growth rate for the advertising market (in%)
Table 14: Changes in the different medias' share of total advertising investments - Europe
Table 15: Digital TV homes in Europe, by country
Table 16: Plans for the deployment of digital terrestrial television in Europe
Table 17: Level of development of IPTV services in the main European countries (at end June 2005)
Table 18: Main IP television services in Europe (June 2005)
Table 19: Example of IPTV services announced in Europe
Table 20: Availability of IP video and television services among the main European TV operators on DSL networks
Table 21: Overview of the personal TV offering in the United-States - 2005
Table 22: Main VOD offerings in Europe
Table 23: VOD offerings in the United-States (2005)
Table 24: VOD services available in Europe
Table 25: Installed PVR base around the world (in thousand of homes)
Table 26: Comparison between the different ways of accessing mobile TV and video services
Table 27: Strengths and weaknesses of the main technologies for mobile TV broadcasting
Table 28: Examples of video streaming or downloading to mobiles in 2005
Table 29: Charges for mobile services on 25G networks
Table 30: Examples of revenue sharing between mobile operators and content providers (all contents)
Table 31: Main projects and tests of TV broadcasting on mobiles in 2005
Table 32: Main projects and test of TV broadcasting on mobiles in 2005 (cont/ d)
Table 33: Overview of HDTV services around the world
Table 34: Presentation of the networks enabling the broadcasting of HD services in Europe
Table 35: Prospects for the deployment of high definition TV in Europe
Table 36: Downloading of films over the Internet
Table 37: The development of the medias according to Intel
Table 38: French youth's electronic entertainment equipment
Table 39: Proportion of Web surfers among French youth aged 15-24 years
Table 40: Trends in the use of the Internet by French youth aged 15-24 years
Table 41: Proportion of North Americans regularly or occasionally using "new medias" in 2004
Table 42: Proportion of the French population regularly using "new medias" - 2004
Table 43: Interest of the French in mobile video - 2004
Table 44: Changes in the positioning of the various players in respect to service offerings
Table 45: Range of services offered by land-line telecommunications operators (bundles or otherwise)
Table 46: Bundle strategy typology
Table 47: TV and video offerings of the main telecommunications operators in Europe - end 2005
Table 48: Trends for the main macro-economic indicators for the Euro zone up to the year 2030
Table 49: Trends in GDP up to 2021 in the countries covered by the study
Table 50: Medium to long-term objectives and challenges of the main players in the television added-value chain
Table 51: Key variables in the development of the financing of the TV sector and factors influencing their development
Table 52: Summary presentation of the three scenarios established by IDATE
Table 53: Trends in equipment and TV reception mediums in France
Table 54: Presentation of the main TV channels in France
Table 55: Audience share of the main TV channel in France (%)
Table 56: Main subscription TV operators in France
Table 57: Changes in audiovisual revenues in France
Table 58: Changes in revenues for the TV sector up to 2015 in France by source of revenues, scenario1
Table 59: Changes in revenues for the TV sector up to 2015 in France by TV broadcasting medium, scenario1180
Table 60: Changes in revenues for the TV sector up to 2015 in France by type of players, scenario1
Table 61: Changes in revenues for the TV sector up to 2015 in France by source of revenues, scenario2
Table 62: Changes in revenues for the TV sector up to 2015 in France by TV broadcasting medium, scenario2183
Table 63: Changes in revenues for the TV sector up to 2015 in France by type of players, scenario2
Table 64: Changes in revenues for the TV sector up to 2015 in France by source of revenues, scenario3
Table 65: Changes in revenues for the TV sector up to 2015 in France by TV broadcasting medium, scenario3186
Table 66: Changes in revenues for the TV sector up to 2015 in France by type of players, scenario3
Table 67: Trends in TV equipment and reception mediums in Germany
Table 68: Presentation of the main TV channels in Germany
Table 69: Audience share of the main TV channels in Germany (%)
Table 70: Main TV operators by subscription in Germany
Table 71: Changes in TV revenues in Germany
Table 72: Changes in revenues in the TV sector up to the year 2015 in Germany by source of revenues scenario1
Table 73: Changes in revenues in the TV sector in Germany up to the year 2015 according to TV broadcasting medium, scenario1
Table 74: Changes in revenues in the TV sector up in Germany up to the year 2015 according to type of player, scenario1 Table 75: Changes in revenues of the TV sector in Germany up to 2015 by source of revenues, scenario2
Table 76: Changes in revenues of the TV sector in Germany up to 2015 by TV broadcasting medium, scenario2
Table 77: Changes in revenues of the TV sector in Germany up to 2015 by type of players, scenario2
Table 78: Changes in revenues of the TV sector in Germany up to 2015 by source of revenues, scenario3
Table 79: Changes in revenues of the TV sector in Germany up to 2015 by TV broadcasting medium, scenario3
Table 80: Changes in revenues of the TV sector in Germany up to 2015 by type of players, scenario3
Table 81: Trends in equipment and TV reception mediums in Italy
Table 82: Presentation of the main TV channels in Italy
Table 83: Audience share of the main TV channel in Italy (%)
Table 84: Main subscription TV operators in Italy
Table 85: Changes in TV revenues in Italy
Table 86: Changes in revenues of the TV sector up to 2015 in Italy by source of revenues, scenario1
Table 87: Changes in revenues for the TV sector up to 2015 in Italy
Table 88: Changes in revenues for the TV sector up to 2015 In Italy by type of players, scenario1
Table 89: Changes in revenues for the TV sector up to 2015 in Italy by source of revenues, scenario2
Table 90: Changes in revenues for the TV sector up to 2015 in Italy by TV broadcasting medium, scenario2
Table 91: Changes in revenues for the TV sector up to 2015 in Italy by type of players, scenario2
Table 92: Changes in revenues for the TV sector up to 2015 in Italy by source of revenues, scenario3
Table 93: Changes in revenues for the TV sector up to 2015 in Italy by TV broadcasting medium, scenario3
Table 94: Changes in revenues for the TV sector up to 2015 in Italy
Table 95: Trends in equipment and TV reception modes in Spain
Table 96: Presentation of the main TV channels in Spain
Table 97: Audience share of the main TV channel in Spain (%)
Table 98: Main subscription TV operators in Spain
Table 99: Changes in TV revenues in Spain
Table 100: Changes in revenues for the TV sector up to 2015 in Spain by source of revenues, scenario1
Table 101: Changes in revenues for the TV sector up to 2015 in Spain by TV broadcasting medium, scenario1224
Table 102: Changes in revenues for the TV sector up to 2015 in Spain by type of players, scenario1
Table 103: Changes in revenues for the TV sector up to 2015 in Spain by source of revenues, scenario2
Table 104: Changes in revenues for the TV sector up to 2015 in Spain by TV broadcasting medium, scenario2227
Table 105: Changes in revenues for the TV sector up to 2015 in Spain by type of players, scenario2
Table 106: Changes in revenues for the TV sector up to 2015 in Spain by source of revenues, scenario3
Table 107: Changes in revenues for the TV sector up to 2015in Spain by TV broadcasting medium, scenario3
Table 108: Changes in revenues for the TV sector up to 2015 in Spain by type of players, scenario3
Table 109: Trends in TV equipment and reception mediums in the United Kingdom
Table 110: Presentation of the main TV channels in the United Kingdom
Table 111: Audience share of the main TV channels in the United Kingdom (%)
Table 112: Main TV operators by subscription in the United Kingdom
Table 113: Changes in audiovisual revenues in the United Kingdom
Table 114: Changes in revenues for the TV sector up to 2015 in the United Kingdom by source of revenues, scenario1
Table 115: Changes in revenues for the TV sector up to 2015 in the United Kingdom by TV broadcasting medium, scenario1
Table 116: Changes in revenues for the TV sector up to 2015 in the United Kingdom by type of players, scenario1
Table 117: Changes in revenues for the TV sector up to 2015 in the United Kingdom by source of revenues, scenario2
Table 118: Changes in revenues for the TV sector up to 2015 in the United Kingdom by TV broadcasting medium, scenario2
Table 119: Changes in revenues for the TV sector up to 2015 in the United Kingdom by type of players, scenario2
Table 120: Changes in revenues for the TV sector up to 2015 in the United Kingdom by source of revenues, scenario3
Table 121: Changes in revenues for the TV sector up to 2015 in the United Kingdom by TV broadcasting medium, scenario3
Table 122: Changes in revenues for the TV sector up to 2015 in the United Kingdom by type of players, scenario3

Television 2015 - The future of TV financing in Europe

Table of Contents

1 Introduction

2 Diagnosis

3 What are the mid-term stakes?

4 Scenarios for the future

5 Conclusions

List of boxes

List of figures

List of tables