IPTV: IPTV:

global media intelligencewww.screendigest.com

IPTV:IPTV:European Market OverviewEuropean Market Overview

Dan Cryan Dan Cryan –– Research AnalystResearch Analyst

1919thth October 2005October 2005


Screen DigestScreen Digest

Market research firm covering the global entertainment sector

• The research journal– Research, intelligence, analysis

– Since 1971

– The international media business’s leading news and market research journal covering:

• Free & Pay TV Broadband

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• Market reports

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• Online Intelligence services


The market todayThe market today

38.7m broadband subscribers in Western Europe

Over 85.6m pay TV households

657,000 IPTV subscribers

0.42% of European TV households have IPTV

8.8m IPTV subscribers at the end of 2009


IPTV service launches per yearIPTV service launches per year

0

1

2

3

4

5

6

7

8

9

1999 2000 2001 2002 2003 2004 1H2005


Live IPTV servicesLive IPTV services

Kingston Interactive TV, HomechoiceUK

Canal Digital, Telia Digital TV, ViasatSweden

Telefonica ImagenioSpain

VersatelNetherlands

FastwebItaly

T-Online Vision, Alice MovieGermany

France Telecom Maligne TV, Free Telecom, Neuf Telecom , Canal Plus, TPS

France


As broadband market grows, so will As broadband market grows, so will annual broadband access revenuesannual broadband access revenues

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2002 2003 2004 2005 2006 2007 2008 2009

Belgium

France

Germany

Italy

Netherlands

Spain

UK

€Billions


Connection Speeds Connection Speeds vsvs Subscription CostSubscription Cost

Average downstream connection speed (Mb/s)

Average subscription cost (€ / month)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2000 2001 2002 2003 2004

25

30

35

40

45

50

2000 2001 2002 2003 2004


Annual broadband access ARPU on the decline Annual broadband access ARPU on the decline ––service providers need valueservice providers need value--added services to added services to make up shortfallmake up shortfall

0

100

200

300

400

500

600

2003 2004 2005 2006 2007 2008 2009

Belgium

France

Germany

Italy

Netherlands

Spain

UK

Annual ARPU €


Broadband penetration Broadband penetration vsvs Pay TV penetration 2004Pay TV penetration 2004

0

20

40

60

80

100

120

France

Germ

any

Italy

Neth

erlands

Norw

ay

Spain

Sweden

UK

Broadband

Pay TV

Household penetration (%)


Broadband penetration Broadband penetration vsvs Pay TV penetration 2009Pay TV penetration 2009

0

20

40

60

80

100

120

France

Germ

any

Italy

Neth

erlands

Norw

ay

Spain

Sweden

UK

Broadband

Pay TV



IPTV: the space for growthIPTV: the space for growth

Cable TV services offer the closest product to IPTV

Countries with low cable TV penetration (Italy, France, Spain and UK)

Low digital cable penetration (Belgium, Germany)


Access technology market share 1H 2005Access technology market share 1H 2005

0

5

10

15

20

25

30

35

40

France

Germ

any

Italy

Neth

erlands

Norw

ay

Spain

Sweden

UK

DSL

Cable

Other



Access TechnologyAccess Technology

DSL dominates the market - Europe-wide over 90% of ‘homes passed’

Good quality, (i.e. reliably greater than 4Mb/s), connection is required

Standard ADSL not enough for HDTV which requires FTTH or 2nd

generation xDSL (ADSL 2+, VDSL, VDSL 2)


The European IPTV market 1H 2005The European IPTV market 1H 2005

0

50

100

150

200

250

300

France

Germ

any

Italy

Netherlan

ds

Norw

ay

Spain

Sweden

UK

IPTV subscribers (000s)


The European IPTV market 1H 2005 and 2009The European IPTV market 1H 2005 and 2009

0

500

1000

1500

2000

2500

France

Germ

any

Italy

Netherlan

dsNorw

ay

Spain

Sweden

UK

IPTV subscribers (000s)


IPTV share of pay TV market (2004)IPTV share of pay TV market (2004)

0

1

2

3

4

5

6

Italy

France

SloveniaNorw

ayIreland

Spain

UK

Denm

arkGerm

anyFinlandAustriaBelgiumNetherlandsSwitzerland

% of pay TV homes using IPTV


IPTV share of pay TV market (2009)IPTV share of pay TV market (2009)

0

5

10

15

20

25

Italy

France

Spain

SloveniaDenm

arkNorw

ayAustria

NetherlandsIreland

UK

BelgiumFinlandSwitzerland

Germ

any% of pay TV homes using IPTV


FranceFrance

• The largest IPTV market in Europe (281,000 subscribers)

• Very competitive telecoms market– Roughly 2.3m unbundled lines at the end of

1H 2005– 3 telcos have launched IPTV

• Competitive DTH Market – 16.8% of TV HH– Canal Satellite and TPS have both launched

IPTV services

• Small but dynamic cable market– 14.6% of TV HH

• Low pay TV penetration should give space for growth

Pay TV market share

Analogue

terrestrial,

21.0

IPTV, 4.5

Satellite,

40.2

Cable,

34.2

Pay DTT,

0.2


The European IPTV market 1H 2005The European IPTV market 1H 2005

0

20

40

60

80

100

120

140

160

180

200

Fastweb

Free TelecomMalign

e TV

Canal P

lus

TPS

Telefonica

Neuf Telecom

T-Onlin

e

Hom

echoiceLyse

subscribers (000s)


GermanyGermany

• Consumers traditionally unwilling to pay much for TV– High free satellite penetration (37% of TV HH)

– High analogue cable penetration (58% of TV HH), available for a small monthly fee

• IPTV services from T-Online and Hansenet offer VoD only

• T-Online– Service available to both the TV and PC

– Sold 36,000 titles in Febuary 2005 rising to 72,000 in June

– Running trials for HDTV to the PC over ADSL 2+ and VDSL in Hamburg and Stuttgart

• Hansenet– Hansenet only offer Alice Movie in Hamburg

– Encoded at 1.5Mb/s in MPEG 1

– Signed up 1,100 subscribers since launch in mid-2003

– Buy rate of 0.45


European IPTV services by service offering European IPTV services by service offering

1510

3

Pay TV + VoDPay TV onlyVoD only


NetherlandsNetherlands

• High cable penetration (94.3% of TV HH)

• Digital cable and DTH satellite take up slow due to the high quality of the analogue cable offer

• Versatel entered the IPTV market in January 2005

– Bought the rights to Dutch football until 2008 for €30.5m per year

– At the end of July 20,000 had signed up

– The service launched in at the start of the football season in August


Content optionsContent options

• Team up with established pay TV operators– French model: France Telecom, Free Telecom and Neuf Telecom IPTV subscribers can

access Canal Plus/CanalSat and TPS packages

– Sweden: Canal Digital and Viasat partner various network operators to offer their packages over IP

• Aggregate the content yourself– Versatel (NL) and Belgacom (BE) have bought exclusive football rights

– T-Online signed its own deal with the film studios

• Hybrid solution– Neuf Telecom (F) uses the national digital terrestrial television network for delivering

content not available over IP


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