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“The application of measures concerning the promotion of distribution and production of European works in audiovisual media services,
including television programmes and non-linear services”
Public Presentation File for the Final Study Report for The European Commission (DG Information Society and Media)
Study completed by: Attentional Limited, Oliver & Ohlbaum Associates, Rambøll Management and Headway International
20th March 2009
Introduction
Overall goal• Provide the European Commission with the elements
required to continue monitoring Articles 4 and 5, and with the elements required to commence monitoring of Article 3i
Key objectives
• Description and analysis of the implementing measures taken by Member States pursuant to Articles 3i, 4 and 5 of the Directive as of the end 2007
• Description and analysis of the production industry and market for audiovisual works
• Independent evaluation of the application of Articles 4 and 5 to specific linear broadcast channels
• Review of non-linear audiovisual services in Europe in 2007• Suggestions for operational procedures and performance indicators for
monitoring the application of Article 3i to non-linear services
“Part 1: Modes of Implementation”
1.2
Objectives and Approach
• Analysis of Member State rules at the beginning of 2008 regarding:
– Broadcasting (linear services)• How Articles 4 and 5 are implemented • Stricter measures• Implementation modes
– On-demand (non-linear services)• Pre-existing national legislation• Implementation of Article 3i
• Data collected via questionnaires to Member State regulatory authorities in early 2008
1.3
Broadcasting (Linear Services) How Articles 4 and 5 Are Implemented
• Significant variations in how Member States apply Articles 4 and 5 to broadcasters:
– Some Member States set fixed targets that must always be met, while others set targets to be met ”where practicable”, (exceptionally) lower targets for new broadcasters, etc.
– Some Member States rely solely on broadcasters’ transmission returns, while others take steps to verify data
– Some Member States authorities cannot really sanction non-compliance, while others may use warnings and fines, or even revoke the broadcasting licence
1.4
Broadcasting (Linear Services) How Articles 4 and 5 Are Implemented
• Particularly large differences between Member States regarding independent productions:
– Definition of ”independent producer”
• In some Member States, the term is not defined in the legislation at all
• In other Member States, specific legal definitions have been adopted:
– Criteria used in definitions: ownership, programme supply, secondary rights and autonomy
– Target for independent productions
• In most Member States, set as a proportion of transmission time
• In a few Member States, set as a proportion of programming budget, or even of total turnover
1.5
Broadcasting (Linear Services) Stricter Measures
• Nearly all Member States apply stricter measures to broadcasters, but the requirements differ greatly:
– A few Member States require higher proportions of European works/independent productions than the Directive(particularly from public service broadcasters)
– Most Member States have some specific requirements on content type, language and/or regional issues
– About half the Member States require a proportion of programming to be originally produced in a specific language
– Some Member States require contributions to indigenous film production, either directly or as contributions/taxes to central film funds.
1.6
Broadcasting (Linear Services) Scoring - Implementation Modes
• Each Member State have been assigned scores for
– How Articles 4 and 5 are implemented
– Stricter measures
• The higher the score, the stricter the regulatory regime
• Member States have then been grouped in four “implementation modes”:
– Flexible: low score for how Articles 4 and 5 are implemented
– Prescriptive: high score for how Articles 4 and 5 are implemented
– High: high score for stricter measures
– Low: low score for stricter measures
1.7
Broadcasting (Linear Services) Member State Implementation Modes
Belgium Estonia
Greece Norway
Hungary Slovakia
Latvia Slovenia
Austria Iceland
Cyprus Ireland
Czech Rep. Lithuania
Denmark Luxembourg
Germany Malta
Low
Bulgaria Romania
Italy Poland
Finland Portugal
France United Kingdom
Netherlands
Spain
Sweden
High
Stricter req
uirem
ents
PrescriptiveFlexible
How Articles 4 and 5 are implemented
1.8
On-demand (Non-Linear Services) Pre-Existing National Legislation
• Prior to implementing Article 3i, only very few Member States have adopted legislation that is in line with Article 3i :
• Belgium (French Community)– Technology-neutral legislation
– Non-linear services are subject to the same requirements as linear services
• France– Taxes on on-demand service providers, with the proceeds
going to (cinema) film production
– A voluntary cinema-on-demand agreement with investment quotas existed for 2006, but it expired without being renewed
1.9
On-demand (Non-Linear Services) Implementation of Article 3i
• Deadline for implementation of the new Directive: 19 December 2009
• The majority of Member States expect implementation to take place in 2009
• Some Member States have held public consultations and working groups in 2008
1.10
“Part 2: The European TV Supply Chain and Audiovisual Content Creation”
2.1
Objectives of Our Research
• To develop an informed analysis of the market for audiovisual works in the EU and EEA
• Explore the structure of the broadcasting industry on a country by country basis
• Quantify sources of turnover: advertising, consumer payments (pay TV), licence fees and ancillary revenues
• Understand in detail the role of on-demand services and their operators
• Explore developments in independent production in each Member State
2.2
Methodology
Flow of Funds Model
-Programming spend
-Pay TV ARPUs-Programming funds
-Regulation -Compliance-Pay TV Penetration
-Advertising -Pay TV -Licence Fee-Ancillary revenues
TOTAL EUROPEAN BROADCASTING VALUE CHAIN
MICRO DATA MACRO DATAMEMBER STATE
Bottom Up
Top down
x30 Member States
2.3
Total Industry Income by Segment
15.2 17.2 17.8
22.6
25.828.3
12.7
18.7
19.86.3
5.4
6.50.4
0.4
4.3
4.9
5.3
10
20
30
40
50
60
70
80
90
2002 E17 2006 E17 2006 E30
€ BN
LICENCE FEES
ADVERTISING
PAY TV
CABLE RELAY
VOD
OTHER BROADCAST REVENUE
61.2
72.4
78.1
• Pay TV continues to be the main driver of growth in the overall market
• Advertising has
grown at just over 3% for E17, faster for new Member States
• Decline in revenue generated from cable relay as customers migrate to digital
2.4SOURCE: OLIVER & OHLBAUM ANALYSIS
TV Revenue by Member State
The five largest states represent over 71% of total
TV revenue
2.5SOURCE: OLIVER & OHLBAUM ANALYSIS
REVENUE IS THE AGGREGATION OF LICENCE FEE PAYMENTS, CONSUMER PAYMENTS, ADVERTISING REVENUE AND OTHER ANCILLARY REVENUES
Differences in TV Revenue Structure by Member State
LICENCE FEES
ADVERTISING
PAY TV
CABLE RELAY
VOD
OTHER BROADCAST REVENUE
• Market structure differs significantly by Member State
• Over 40% revenue from pay TV in France and Ireland
• Almost 60% of revenue from advertising in Lithuania and Greece
• Licence fee in Germany accounts for 41% while in Poland accounts for just 5%
2.6SOURCE: OLIVER & OHLBAUM ANALYSIS
TV Household by Reception Method in EU
FREE TV = 138M
67
3142
3131
39
1723
29
28
28
19 29
29
16
25
25
5
5
5
2
2
50
100
150
200
250
E17 '02 E17 '07 E30 '07
TV HHS (M)
3 TO 7 CHANNELS
10 TO 40 CHANNELS
50 TO 200 CHANNELS
20 TO 40 CHANNELS
100 TO 700 CHANNELS
60 TO 200 CHANNELS
20 TO 60 CHANNELS
1 CHANNEL
PAY TV = 62M156
174IPTV
PAY TERRESTRIAL
PAY SATELLITE
PAY CABLE
FREE SATELLITE
FREE DTT
CABLE RELAY
ANALOGUE TERRESTRIAL
200
• Significant fall in the number of analogue terrestrial homes
• Free DTT now reaching over 28m homes
• Number of premium subscription TV (pay cable, satellite and IPTV) homes has increased
• IPTV starting to gain traction in certain markets (France and Spain)
2.7SOURCE: OLIVER & OHLBAUM ANALYSIS
Differences in TV Reception Method by Member State
2.8SOURCE: OLIVER & OHLBAUM ANALYSIS
Digital Switchover (DSO) dates by member state
LUXEMBOURG
NETHERLANDS
AUSTRIA
FINLAND
SWEDEN
GERMANY
BELGIUM
DENMARK
NORWAY
SPAIN
CZECH REPUBLIC
GREECE
SLOVENIA
MALTA
UK
ITALY
ROMANIA
PORTUGAL
FRANCE
HUNGARY
BULGARIA
SLOVAKIA
LITHUANIA
IRELAND
LATVIA
ESTONIA
CYPRUS
POLAND
LIECHTENSTEIN
ICELAND
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
1 SEPTEMBER 2006
11 DECEMBER 2006
1 SEPTEMBER 2007
5 MARCH 2007
15 OCTOBER 2007
31 DECEMBER 2008
1 DECEMBER 2008
1 SEPTEMBER 2009
3 APRIL 2010
1 SEPTEMBER 2010
1 DECEMBER 2011
1 DECEMBER 20101 DECEMBER 2009
1 DECEMBER 2012
1 DECEMBER 2014
-
NO DIGITAL SERVICES
2.9SOURCE: OLIVER & OHLBAUM ANALYSIS
The Comparable Size of the Estimated Video-on-Demand Market
0.4
78.1
10
20
30
40
50
60
70
80
90
TOTAL E30 TV MARKET TOTAL EST. VOD MARKET
€BN
• Still a nascent market
• By end of 2006, generating little revenue
• Majority of offerings are catch-up services with no access charge
• Commercial services still struggling to monetise services other than pay-per-view
2.10SOURCE: OLIVER & OHLBAUM ANALYSIS
TV Content Creation and the Independent Sector
IN HOUSE
NEWS
EXTERNAL
FILM AND TV IMPORTS
SPORTS RIGHTS
16.6
18.4
• 47% on rights acquisitions• 17% on sports• 30% on film and
TV imports
• 53% on commissions • 25% in house• ~7% on news
• €6.9bn external production market*
*Refers to independent production and broadcaster affiliate production 2.11SOURCE: OLIVER & OHLBAUM ANALYSIS
The Overall European TV Value Chain
2.13SOURCE: OLIVER & OHLBAUM ANALYSIS
PAY TV REVENUES
LICENCE FEE
ADVERTISING
OTHER REVENUES
SPORTS RIGHTS
FILM AND TV IMPORTS
EXTERNAL
NEWS
IN HOUSE
The Overall European TV Value Chain – the key figures explained
2.12SOURCE: OLIVER & OHLBAUM ANALYSIS
• Of the €78.1 billion in total TV revenue:• Delivery platforms retain €13.6 billion• The remainder of €64.5 billion flowed to broadcasters of which:
• €5.0 billion is spent on transmission • €35.0 billion is invested in programming• And the remaining €24.5 billion covers all profits,
administration and management costs
• Of the €35.0 billion programme spend • €16.6 billion was spent on acquiring rights of various kinds
• €6.2 billion on sports rights • €10.4 billion on film and TV acquisitions
• The remaining €18.4 billion was invested in original programming • €8.9 billion on in house production • €2.6 billion on the production of news programming • And €6.9 billion invested in the external production market
“Part 3: Views from the Industry: Broadcasters and Producers”
3.1
Objectives of the Questionnaires
Overall goal• Understand the key implications of Articles 4 and 5 from
the TVWF Directive
Key objectives• Identify the determinants of programme spending decisions
• Understand the dynamics of co-productions and trade in programming
• Develop a more detailed understanding of the economic performance of the audiovisual sector and content producers (inc. terms of trade)
3.2
Methodology
Questionnaire Design
ORGANISATIONINTERVIEWS CONDUCTED /
QUESTIONNAIRES RETURNED
PUBLICLY FUNDED BROADCASTER 12
COMMERCIAL BROADCASTER 23
INDEPENDENT PRODUCER 6
REGULATOR 13
TRADE BODY 2
PURE VoD PLAYER 15
TOTAL 71
230 Questionnaires
distributed
71 Completed Responses
3.3
Interview Sample – State Representation in the Survey
STATE REPRESENTATION IN SURVEY
29
83%88%
17%12%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
NUMBER OF STATES* TOTAL REVENUE
PERCENTAGE
PROPORTION REPRESENTED
*LIECHTENSTEIN EXCLUDED
€78.1m
• 83% (24 states) of all states included in the study have been represented in the findings
• These 24 states represent over 88% of total European TV revenue
3.4SOURCE: OLIVER & OHLBAUM ANALYSIS
Spend on Genre and Channel Programme Spend Allocation
58
18
32
25
31
29
16
51
39
10 20 30 40 50 60 70 80 90 100
PUBLIC BROADCASTE
RS
COMMERCIAL BROADCASTE
RS
ALL CHANNELS
PERCENTAGE OF PROGRAMMING SPEND (EXC. NEWS, SPORT & GAMES)
IN-HOUSEEXTERNAL COMMISSION ACQUIRED
GENRE PROPORTION OF TOTAL SPEND
FICTION 32%
ENTERTAINMENT 16%
NEWS 13%
SPORT 10%
CINEMA FILM 8%
FACTUAL MAGAZINES 8%
DOCUMENTARIES 8%
GAMES 4%
2007 SPEND ON PROGRAMMES BY GENRE
3.5SOURCE: OLIVER & OHLBAUM ANALYSIS
Commissioning New Programmes
83
52
45
38
36
26
17
17
9
17
20
10
8
4
40
38
42
53
66
79
100
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NEWS
FACTUAL MAGAZINE
SPORT
GAMES
ENTERTAINMENT
FICTION
DOCUMENTARIES
CINEMA FILM
PERCENTAGE OF TOTAL COMMISSIONING SPEND
IN-HOUSE
EXTERNAL NON-INDEPENDENT PRODUCER
INDEPENDENT PRODUCER
• Majority of news programming produced in house
• Cinema film and documentaries tend to be produced externally
• In news, sport and games over 15% of programming is made by other broadcasters
3.6SOURCE: OLIVER & OHLBAUM ANALYSIS
Programme Acquisition Decisions – Costs, Recency and Sourcing
98
97
97
96
96
91
90
84
69
2
3
3
4
4
9
10
16
31
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ENTERTAINMENT
SPORT
FACTUAL MAGAZINES
GAMES
NEWS
DOCUMENTARIES
AVERAGE
FICTION
CINEMA FILM
PROPORTION OF TOTAL ACQUISTION SPEND
LESS THAN 5 YRS MORE THAN 5 YRS
• Fiction, film and documentaries found to be the only genres where proportion of acquisition spend > 5%
• Relative to commissioning costs, the acquisition of sport and fiction was reported be high
• 56% of all acquisitions are from the US
3.7SOURCE: OLIVER & OHLBAUM ANALYSIS
Financing New Programmes
DOCUMENTARY
ENTERTAINMENT
FACTUAL MAGAZINE
87
89
93
94
97
97
99
6
2
3
5
0
2
0
1
2
2
0
0
0
0
0
0
0
2
3
7
1
1
1
1
1
3
0
0
0
80% 82% 84% 86% 88% 90% 92% 94% 96% 98% 100%
FICTION
GAMES
SPORT
NEWS
PROPORTION OF TOTAL PROGRAMME FUNDING
PRIMARY BROADCASTER
CO-PRODUCTION
SECONDARY BROADCASTER*
R
DISTRIBUTOR FOR NON-DOMESTIC
RIGHTS
ADVANCES AGAINST MERCHANDISING
PUBLIC FUNDING BODY
PRIVATE FUNDING LINKED TO TAX BREAKS
NEW MEDIA RIGHTS AND ADVANCES FOR REVENUES
• Majority of funding (>85%) still comes from the primary broadcaster
• Fiction/ Documentaries can have the most complex funding structures
• In sport some funding flows from merchandising
3.8*Secondary broadcaster in this instance refers to any funding from a broadcaster other than the primary broadcaster e.g. Other broadcaster invests in production in exchange for first look in a particular territory
SOURCE: OLIVER & OHLBAUM ANALYSIS
Co-Productions
0
0
17
22
44
44
50
56
10% 20% 30% 40% 50% 60%
SPORT
NEWS
FACTUAL MAGAZINE
GAMES
DOCUMENTARIES
CINEMA FILM
FICTION
ENTERTAINMENT
PERCENTAGE OF RESPONDENTS
GENRES MOST COMMONLY CO-PRODUCED BY EUROPEAN BROADCASTERS • Approximately 86%
of broadcasters co-produce programming
• Entertainment is most commonly co-produced
• News and sport are rarely co-produced
• Domestic and intra-European co-productions are most popular
3.9SOURCE: OLIVER & OHLBAUM ANALYSIS
Terms of trade and the balance of trade in programming
3.10SOURCE: OLIVER & OHLBAUM ANALYSIS
Terms of trade between broadcasters and producers (slide 3.11)• The large majority of broadcasters across Europe expect to retain all domestic rights
for programming they commission• In some of the larger markets, producers have some leverage around ancillary rights• Exploitation in the overseas market tends to be the responsibility of producers - under
22% of broadcasters stated they expect to retain overseas rights for programming. • With the introduction of a number of on-demand services across Europe, all
broadcasters surveyed expect to retain internet and new media rights
Trade in programming – Fully produced programming* (slide 3.12) • European fiction and feature films were assessed by broadcasters as being the most
successful in the international export market while non-European fiction and film was deemed the most attractive in terms of successful non-European imports
• News and factual magazines were seen as inherently local and therefore unlikely to sell well abroad or be imported
Trade in programming – Formats/Ideas (slide 3.13)• Only entertainment and factual entertainment/reality formats were rated above 50%
as potentially exportable formats• Relatively high level of European intra-trade of formats evidenced by high rating of
European reality, entertainment and games formats
* ‘Fully produced’: a programme that is traded with the same cast/crew/script/set e.g. a direct acquisition such as a drama from the US that is aired in a European country without any changes to the original programme.
Terms of Trade Between Broadcastersand Producers
100 100
81 81
24 24 2420
95
10
20
30
40
50
60
70
80
90
100
FIRSTSHOWING –TERRESTRIAL
REPEATSHOWING(S) –TERRESTRIAL
REPEATSHOWINGS –SECONDARY
ANCILLARYRIGHTS
INTERNET AND/OR
OTHER NEW MEDIA RIGHTS
DOMESTIC OVERSEAS
% OF BROADCASTERS
ANCILLARYRIGHTS
REPEATSHOWINGS –SECONDARY
FIRSTSHOWING –TERRESTRIAL
REPEATSHOWING(S) –TERRESTRIAL
3.11SOURCE: OLIVER & OHLBAUM ANALYSIS
Trade in Programming - Fully Produced Programming
83
80
100
89
71
100
62
73
87
42
60
87
40
87
57
55
45
54
17
46
43
20
25
17
20% 40% 60% 80% 100%
SUCCESSFULEXPORTS
SUCCESSFULEURO
IMPORTS
SUCCESSFULNON-EUROIMPORTS
PERCENTAGE OF RESPONDENTS
FICTIONFEATURE FILMS
DOCUMENTARIES
ENTERTAINMENTSPORT
GAMESFACTUAL MAGAZINES
NEWS
FICTIONFEATURE FILMSDOCUMENTARIES
ENTERTAINMENTSPORT
GAMESFACTUAL MAGAZINES
NEWS
FICTIONFEATURE FILMS
DOCUMENTARIESENTERTAINMENT
SPORT GAMES
FACTUAL MAGAZINESNEWS
3.12SOURCE: OLIVER & OHLBAUM ANALYSIS
Trade in Programming - Formats/Ideas
62
93
93
67
81
87
45
86
80
42
67
73
42
63
73
20
63
43
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
SUCCESSFULEXPORTS
SUCCESSFULEURO
IMPORTS
SUCESSFULNON-EUROIMPORTS
PERCENTAGE OF RESPONDENTS
ENTERTAINMENT
FACTUAL ENTERNAINMENT/REALITY
GAMES
FACTUAL MAGAZINES
FICTION
OTHER
ENTERTAINMENT
FACTUAL ENTERNAINMENT/REALITY
GAMES
FACTUAL MAGAZINES
FICTION
OTHER
ENTERTAINMENT
FACTUAL ENTERNAINMENT/REALITY
GAMES
FACTUAL MAGAZINES
FICTION
OTHER
3.13SOURCE: OLIVER & OHLBAUM ANALYSIS
“Part 4: EU-wide Analysis of Linear Services”
4.1
• Produce a consistent measure of Articles 4 and 5 across Member States, and apply this to linear broadcast channels in Europe.
• A representative sample of 11 European Member States covering the main types of European markets was selected.
• A sample of 54 channels* representative of the diversity of European broadcasters in terms of audience size, ownership and revenue model was selected.
• A set of data based on two non-consecutive sample weeks selected in the Spring and Fall periods in 2007 was acquired.
• This data was coded for the following criteria: Qualifying works/European works/Independent works/Recent works.
Methodology
4.2
* In some markets, we have included broadcasters that are regulated by authorities from another Member State than the Member State in which it finds its audience. This is due to our methodological choice to favour channel choice in terms of viewing.
• Qualifying programmes’ cover approximately two thirds of all hours either transmitted over television channels or watched by television viewers.
• Qualifying programmes are less prominent on the television schedules of leading channels compared with non-leaders.
• Qualifying programmes are more prominent on the television schedules of subscription channels compared with both publicly funded and privately funded channels.
Proportion of Qualifying Works
4.3
Proportion of European Works
4.4
Ratio of Qualifying
European to Total Qualifying
Hours (%)
Ratio of Qualifying
European to Total Qualifying
Viewer Hours (%)
Ratio of Qualifying
European to Total Qualifying
Hours (%)
Ratio of Qualifying
European to Total Qualifying
Viewer Hours (%)
No 52,5% 59,7% No 49,7% 59,5%
Yes 72,6% 79,6% Yes 76,6% 81,9%
Private 54,1% 66,4% Private 55,0% 69,0%
Public 78,0% 84,5% Public 78,6% 84,9%
Ad 57,5% 66,7% Ad 59,6% 69,4%
Gvt 78,0% 84,5% Gvt 78,6% 84,9%
Subs 32,7% 53,5% Subs 27,2% 50,9%
North 60,9% 77,8% North 63,1% 78,1%
South 64,6% 70,2% South 62,5% 72,5%
New 56,2% 66,1% New 55,4% 63,7%
Old 64,4% 75,5% Old 64,9% 77,6%
Large 66,9% 74,6% Large 63,7% 75,8%
Small 53,0% 67,4% Small 61,1% 72,6%
62,4% 74,0% 62,8% 75,5%
Recency
Size
Result for Member States Sample Result for Member States Sample
GeographyGeography
Grouping of Sample by:
Grouping of Sample by:
Channel Type
Leader?
Ownership
Revenue Model
Country Type
Country Type
Recency
Size
All Day Peak Time
Channel Type
Leader?
Ownership
Revenue Model
• European works make up an average of 62.4% of the total qualifying transmission hours (62.8% in peak-time).
• Most European broadcasters are significantly above the 50% requirement for European works.
• They also make up an average of 74% of the total viewer hours (75.5 % in peak-time), which indicated the strong appeal of European works to European audiences and the broadcasters’ reliance on European content to build their ratings.
• Channels with the highest proportions of European works are leading, public channels from Southern, old and large European countries*.
• Subscription channels typically feature less European works in their schedule than privately funded or by publicly funded channels.
• As we will see in the next section, European works in practice mean a vast majority of domestic works…
Proportion of European Works
*For this Study, we have classified Member States as followed: 7 Member States are located in the Northern part of Europe (Belgium, Estonia, Germany, Ireland, Poland, Sweden and the United Kingdom); 4 Member States are located in the Southern part of Europe (France, Italy, Romania and Spain).Moreover, as regards the recency criterion: 8 Member States joined the EU before 2004 (Belgium, France, Germany, Italy, Ireland, Spain, Sweden and the United Kingdom) and thus are counted as ‘old’ Member States; 3 Member States have joined the EU after 2004 (Estonia, Poland and Romania) and thus are counted as ‘new’ Member States.
4.5
Proportion of Non-domesticEuropean Works
4.6
Ratio of Non-Domestic Qualifying
European to Total Qualifying
Hours (%)
Ratio of Non-Domestic Qualifying
European to Total Qualifying
Viewer Hours (%)
Ratio of Non-Domestic Qualifying
European to Total Qualifying
Hours (%)
Ratio of Non-Domestic Qualifying
European to Total Qualifying
Viewer Hours (%)
No 7,1% 4,4% No 6,8% 3,0%
Yes 9,3% 4,3% Yes 7,1% 2,9%
Private 6,9% 3,6% Private 6,5% 2,7%
Public 10,7% 5,3% Public 7,8% 3,3%
Ad 6,8% 3,6% Ad 6,2% 2,6%
Gvt 10,7% 5,3% Gvt 7,8% 3,3%
Subs 7,0% 5,7% Subs 8,6% 6,2%
North 9,4% 4,1% North 9,3% 3,9%
South 6,5% 4,5% South 3,3% 1,7%
New 11,1% 6,9% New 9,4% 5,6%
Old 7,3% 3,8% Old 6,3% 2,4%
Large 5,1% 4,0% Large 3,7% 2,4%
Small 14,7% 9,1% Small 13,5% 8,3%
8,2% 4,3% 7,0% 2,9%
Geography Geography
Recency Recency
Channel Type
Leader?
Channel Type
Leader?
Ownership Ownership
Country Type
Country Type
Revenue Model
Revenue Model
All Day Peak Time
Size Size
Grouping of Sample by:
Grouping of Sample by:
Result for Member States Sample Result for Member States Sample
• Non-domestic European works make up 8.2% of the total qualifying transmission hours in 2007, compared to 4.3% of total qualifying viewer hours.
• Public channels offer, on average, higher proportions of non-domestic European qualifying hours than private channels, a gap that is reduced in peak-time
• Subscription channels show, on average, the highest proportion of non-domestic European qualifying hours in peak-time. Interestingly, that strategy is paying off when we look at proportions in viewer hours
• Channels from southern, old and large European countries show average proportions between 5.1% and 7.3% of non-domestic European works, whereas channels from Northern, new and small European countries show proportions between 9.4% and 14.7%.
Proportion of Non-domesticEuropean Works
4.7
Proportion of IndependentEuropean Works
4.8
Ratio of Qualifying
Independent European to
Total Qualifying Hours (%)
Ratio of Qualifying
Independent European to
Total Qualifying Viewer Hours
(%)
Ratio of Qualifying
Independent European to
Total Qualifying Hours (%)
Ratio of Qualifying
Independent European to
Total Qualifying Viewer Hours
(%)No 31,2% 33,7% No 31,4% 36,4%
Yes 30,8% 33,3% Yes 37,8% 37,1%
Private 31,9% 34,2% Private 34,9% 36,9%
Public 29,3% 32,2% Public 33,8% 36,9%
Ad 33,5% 34,7% Ad 38,2% 37,7%
Gvt 29,3% 32,2% Gvt 33,8% 36,9%
Subs 21,2% 11,6% Subs 15,4% 7,9%
North 32,1% 33,2% North 34,6% 33,4%
South 29,4% 33,6% South 34,5% 41,1%
New 26,7% 23,0% New 29,0% 25,1%
Old 32,3% 35,4% Old 36,2% 38,9%
Large 32,4% 33,5% Large 34,2% 36,5%
Small 28,0% 32,6% Small 35,3% 40,8%
31,0% 33,4% 34,6% 36,9%
Geography Geography
Recency Recency
Channel Type
Leader?
Ownership Ownership
Country Type
Country Type
Revenue Model
Revenue Model
All Day Peak Time
Size Size
Grouping of Sample by: Grouping of Sample by:
Channel Type
Leader?
Result for Member States Sample Result for Member States Sample
• Independent European works make up 31% of the total qualifying transmission hours in 2007, compared to 33.4% of total qualifying viewer hours. Proportions are higher when looking specifically at peak-time.
• Most European broadcasters are significantly above the 10% requirement for independent works.
• Differences between channel types are rather small across all-day, both when looking at transmission and viewer hours.
• Subscription channels show a somewhat different situation than other channels in our sample: their qualifying schedules are made of 21.2% of independent productions vs. 31% for the entire sample.
• There are important differences when we look specifically at the peak-time situation. Leading, public channels from small and old Member States offer significantly more independent productions than during all-day.
Proportion of IndependentEuropean Works
4.9
Proportion of Recent IndependentEuropean Works
4.10
Ratio of Recent Qualifying
Independent European to
Total Qualifying Independent
European Hours(%)
Ratio of Recent Qualifying
Independent European to
Total Qualifying Independent
European Viewer Hours(%)
Ratio of Recent Qualifying
Independent European to
Total Qualifying Independent
European Hours(%)
Ratio of Recent Qualifying
Independent European to
Total Qualifying Independent
European Viewer Hours(%)
No 85,4% 92,3% No 90,7% 96,6%
Yes 83,4% 91,4% Yes 94,0% 95,0%
Private 86,7% 93,1% Private 91,7% 95,5%
Public 79,6% 89,5% Public 94,1% 95,5%
Ad 86,9% 93,1% Ad 91,7% 95,5%
Gvt 79,6% 89,5% Gvt 94,1% 95,5%
Subs 84,8% 96,1% Subs 91,4% 99,3%
North 87,0% 92,9% North 93,3% 95,5%
South 80,2% 90,4% South 91,1% 95,5%
New 78,5% 83,4% New 86,5% 88,1%
Old 86,0% 92,7% Old 93,8% 96,3%
Large 85,5% 91,9% Large 93,3% 95,8%
Small 82,0% 88,8% Small 90,7% 92,7%
84,4% 91,7% 92,4% 95,5%
Geography Geography
Recency Recency
Channel Type
Leader?
Ownership Ownership
Country Type
Country Type
Revenue Model
Revenue Model
All Day Peak Time
Size Size
Grouping of Sample by: Grouping of Sample by:
Channel Type
Leader?
Result for Member States Sample Result for Member States Sample
• Across our sample, recent independent European works make up an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. Proportions are higher in peak-time.
• Non-leading channels show more recent independent productions than leading channels during all-day but fewer of them in peak-time.
• Private channels show more recent independent productions than public channels during all-day but fewer of them in peak-time.
• Proportions of recent independent productions are higher on channels from Northern, old and large Member States.
Proportion of Recent IndependentEuropean Works
4.11
Comparison with Past Data
4.12
Comparison with Past Data
4.13
Comparison with Past Data
30,0%
40,0%
50,0%
60,0%
70,0%
80,0%
90,0%
1993 1996 1999 2002 2006/2007
European works
Germany Flemish Community of BelgiumFrance ItalySpain UKFrench Community of Belgium IrelandSweden Total
4.14
Comparison with Past Data
4.15
• As a general rule, European broadcasters are significantly above the 50% requirement for European works and the 10% requirement for independent works. Also, a vast majority of independent works are less than five years old.
• Proportions of European works and independent works have increased by an average of +15 percentage points between 1993 and 2007.
• Whereas European channels from our sample offered on average around 50% of European works and 17% of independent works in 1993, they offered an average of 66.5% of European works and of 32.8% of independent works in 2007.
• Public, leading channels, which are offering the highest proportions of European works, have also showed the largest increase for this requirement over the past 15 years.
• Private, leading channels, which are offering the highest proportions of independent works, have also showed the largest increase for this requirement over the past 15 years.
• The situations of individual channels depend heavily on their market environment and cultural dynamics.
Linear Services’ Conclusions
4.16
“Part 5: Views from the Industry – On-demand Services”
5.1
Methodology
• Methodology was designed to identify key non-linear services and analyse their contents. Work is based on questionnaires and interviews with stakeholders and desk research.
• Questionnaires were designed to collect declarations from 50 non-linear services (35 broadcasters and 15 pure VoD players*) covering 22 Member States with regards to the contents of their non-linear services by genre and origin of production, as well as views on the importance of European works in their programming strategies.
• In addition, the offerings of 29 non-linear services were analysed independently in order to provide background information on the concept of “prominence”.
5.2
*Pure VoD player: a provider of a VoD service not linked to a service run by traditional linear broadcasters offering catch-up (and sometimes broadcaster-specific library content), generally operated by cable companies, telecommunications companies, film industries or independent internet players).
Title-Level Data
Type Group Proportion of EU Titles Average for GroupPure VoD Player Independent 10%Pure VoD Player Independent 70%Pure VoD Player Independent 43%Pure VoD Player Independent 99%Pure VoD Player Independent 25%Pure VoD Player Independent 81%
Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 85%Broadcaster Private 7%Broadcaster Private 92%Broadcaster Public 85%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 14%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 100%
54.7%
85.4%
88.8%
• Asked to provide proportion of titles in their catalogue that are European
• Majority of broadcaster’s services are 100% European content
• Greater variety among pure VoD player services
5.3
Hours-Level Data
Type Group Proportion of EU Hours Average for GroupPure VoD Player Independent 10%Pure VoD Player Independent 67%Pure VoD Player Independent 68%Pure VoD Player Independent 80%
Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 100%Broadcaster Private 90%Broadcaster Public 85%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 3%Broadcaster Public 100%Broadcaster Public 100%Broadcaster Public 100%
56.2%
98.3%
87.5%
• Asked to provide proportion of total hours of content in catalogue that are European.
• Again high proportion of broadcasters have 100% of their hours being EU content.
5.4
Proportion of Budget Spent
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
National commissions
European, non-national
commissions
Non-European commissions
National acquisitions
European non-National
acquisitions
Non-European acquisitions
Broadcaster Pure VoD Player
5.5
Proportion of Budget Spent
• Pure VoD players allocate 100% of their programme budget to acquisitions, with non-European imports representing almost half of the total, meaning that the pure VoD players from this survey have spent no money at all to commission new programmes.
• By contrast, on-demand services operated by broadcasters say they spend around 75% of their on-demand budgets on national commissions, although this figure is a proportion of an extremely limited budget.
• Reminder: in 2006, on-demand services generated approximately €400m of revenue in the E30, representing just 0.5% of the TV industry.
5.6
Proportion of Budget Spent by Genre
0%
10%
20%
30%
40%
50%
60%
70%
80%
Broadcaster Pure VoD Player
Entertainment Fiction Cinema film
Documentaries Factual magazines News
Sport Games Other
5.7
European Programming
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
Don
’t kn
ow
Fully
agr
ee
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ree
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ngly
dis
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e
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ow
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ee
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ree
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ngly
dis
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e
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ow
Fully
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ee
Rath
er a
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Rath
er d
isag
ree
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ngly
dis
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e
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’t kn
ow
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ee
Rath
er a
gree
Rath
er d
isag
ree
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ngly
dis
agre
e
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’t kn
ow
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ee
Rath
er a
gree
Rath
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ree
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ngly
dis
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e
European programming ensures compliance with national
obligations (and thus will help me to comply with the AVMS in
the future).
European programming is all-in-all a very good option for my
service.
European programming is easier to acquire because we are
European.
European programming is more affordable and thus enables a
higher profit.
European programming is the best way to attract European
audiences.
European Programming Decisions
Broadcasters Pure VoD Players
5.8
European Programming
• The majority of respondents think that, all-in-all, European programming is a very good option for their services.
• European programmes are seen as expensive.
• When asked whether European programmes are easier to acquire, a majority of respondents rather disagree.
• The idea that European programmes are the best way to attract European consumers is not clearly supported by the
providers we talked to.
• No clear link is established between European programmes and regulatory obligations, reflecting the fact that the debate
over the AVMS directive has in most cases not started yet at Member State level.
5.9
Prominence on On-demand Services
• Prominence is a key concept in addressing how European works are being promoted by on-demand services, and one that cannot necessarily be approached in a similar fashion to the promotion of European content on linear services.
• Active prominence: does the service offer the possibility of searching titles by origin of production and does it provide information on the origin of production together with the description of the titles ?
• Passive prominence: what is the proportion of European works among the titles that are pushed to the consumers when they access the service via its homepage and browse its main sections?
5.10
Prominence - Search by Country of Origin
• On-demand services rarely enable consumers to select titles by origin of production (nor by language). Among the 30 on-demand services included in this analysis, only 2 allow users to select titles by country of origin.
• Most non-linear services we spoke to say “origin” of work is not a criteria that users are willing to have.
5.11
Prominence – Search by Country of Origin
5.12
Prominence – Indication of the Countryof Origin
• Half of the services from our sample indicate the country of origin in the description of the titles, mostly pure VoD players (13), with this happening only very rarely among the services operated by broadcasters (2).
5.13
Prominence – Indication of the Countryof Origin
5.14
Prominence – Indication of the Countryof Origin
5.15
Prominence – Indication of the Countryof Origin
5.16
Prominence – European Works’Promotion
• When considering the origin of the titles that appeared “by default” on the screen, the proportion of titles of European origin that were ‘pushed’ by the 29 on-demand services from our sample was 54%, on average. There were large differences from one service to another though, as this proportion, for our sample, ranged from 0% to 100%.
• Pure VoD players pushed significantly fewer European titles, as their proportion was 39% on average compared with 75% for the services operated by broadcasters.
• Proportions were different depending on genres, with entertainment, animation and news typically comprising more European works than cinema and TV fiction.
• Differences could also be seen within specific genres. For example, in the cinema category, subgenres such as comedies and dramas typically contained more European works than action or horror movies.
5.17
Prominence – European Works’Promotion
• Not all titles were given the same level of importance, with US content being generally given a primary position both in terms of share of the screen and rank of appearance.
• However, some on-demand services were making significant efforts to promote European works.
5.18
Prominence – Share of Screen
5.19
Prominence – Share of Screen
5.20
Prominence – Share of Screen
5.21
Prominence – Share of Screen/Selection
5.22
Prominence
Type Group
Functionalities ("Can we search by country of origin?")
Averages for Group
Is the country of origin indicated
somewhere?Averages for
Group
Evaluation of the proportion of EW
on HomepageAverages for Group
Pure VoD Player Independent Yes Yes 40%Pure VoD Player Independent Yes Yes 80%Pure VoD Player Independent No Yes 25%Pure VoD Player Independent No Yes 25%Pure VoD Player Independent No Yes 50%Pure VoD Player Independent No Yes 10%Pure VoD Player Independent No Yes 75%Pure VoD Player Independent No Yes 80%Pure VoD Player Independent No Yes 0%Pure VoD Player Independent No Yes 60%Pure VoD Player Independent No Yes 20%Pure VoD Player Independent No Yes 45%Pure VoD Player Independent No No 40%Pure VoD Player Independent No No 5%Pure VoD Player Independent No No 45%Pure VoD Player Independent No No 20%
Broadcaster Private No Yes 30%Broadcaster Private No Yes 40%Broadcaster Private No No 80%Broadcaster Private No No 90%Broadcaster Private No No 85%Broadcaster Private No No 70%Broadcaster Private No No 25%Broadcaster Private No No 90%Broadcaster Private No No 50%Broadcaster Private No No 90%
Broadcaster Public No No 100%Broadcaster Public No No 100%Broadcaster Public No No 100%
39%
65%
100%
12.5% YES
0% YES
0% YES
75% YES
20% YES
0% YES
• Search by country-of-origin is used very rarely.
• Pure VoD players often indicate country-of-origin somewhere on their service. Broadcasters do this less (but often have 100% domestic, or European content).
• The concept of prominence is particularly interesting in comparison with figures for share of catalogue, where figures for prominence of European content are often lower than the proportion of the catalogue that is European.
5.23
“Part 6: Possible Monitoring Methods for Article 3i”
6.1
Aims and Methodology
• Evaluate possible performance indicators and operational procedures for monitoring Article 3i of the AVMS Directive.
• Provide a view as to the best procedures and indicators to apply to non-linear services.
• Conclusions derived here are based on:– A detailed survey on non-linear services – Interviews– Desk research– Extensive internal discussion within the consortium.
6.2
Operational Procedures
• Two distinct legal scenarios within which operational procedures can exist:– 1) Self-declarations from service providers– 2) Independent evaluation
• For linear channels:• Self-declarations are supplied by broadcasters, and are then
verified by internal evaluation (as seen in the work on linear programming in this study)
• For non-linear services:• Independent evaluation is not currently appropriate, and
instead we have used self-declarations
6.3
Self-Declarations vs Independent Evaluation
+ Verifies data acquired from self-declarations
+ More directly comparable with independent evaluation of linear programming
+ Data via self-declarations is currently available
+ Precedent: linear broadcasters currently provide self-declarations
+ With legislation, data could be received from all non-linear service providers in a Member State
– No Television Audience Measurement (TAM) style data available
– Alternatives to TAM style data (‘web-harvesting’; direct evaluation of services) are inappropriate
– Data is unverified– Data can be compiled differently
by different providers
Independent evaluation of non-linear services
Self-declarations for non-linear services
6.4
Performance Indicators - Introduction
• After careful review of Article 3i, six possible indicators were proposed in our questionnaires:– Title-level data for entire catalogue– Hour-level data for entire catalogue– Consumption data at titles level– Consumption data at hours level– Prominence of European content– Financial contribution to European content
• We asked respondents to rank these indicators in terms of their appropriateness for measuring adherence to Article 3i
6.5
Quantitative Indicators: Titles and Hours
+ Most popular indicator for most respondents
+ In line with ‘lighter-touch’ approach
+ Easy to include metadata for country-of-origin
– No indication of consumption of content
– Possible for a provider to fill a catalogue with cheap/short EU content
– No indication of consumption of content
Titles in a catalogue that are European works
Hours in a catalogue that are European works
+ Generally popular with respondents
+ Duration data typically already in service provider databases
+ Would solve problem of catalogues being filled with lots of European titles with short durations.
6.6
Quantitative Indicators: Consumption and Financial Data
+ Important component of Article 3i+ Suggest a simple indicator: total
spent on content in a year, and an approximate proportion of this that is European content.
+ Shows what is actually being watched
+ At this time, general figures could be requested of providers, to be included in aggregate form in Member State country reports (as noted in Recital 48)
Financial Contribution
Consumption Data
– Split opinion: producers approve; service providers strongly oppose
– Highly confidential information – Very little money is actually spent – Difficult to ascertain exactly how
much is spent on European content
– Generally unpopular with respondents, except with producers
– Highly commercially sensitive – No TAM-style data – Not done for linear services – Provider cannot dictate what the
viewer watches
6.7
Qualitative Indicators
Prominence
• An important new addition to monitoring European content, with special relevance in the digital world
• A very open-term, with a wide variety of possible indicators • Prescriptive prominence indicators could limit creativity of new
services• At this time we think that co- and self-regulation may be best way
forward (‘guidelines’), but regardless of regulation method indicators will be required.
• We have chosen 3 initial indicators to test:– does the service offer search by country-of-origin?– is information on the origin of production provided by the
service?– what is the approximate proportion of European works among
the titles that are pushed to the consumer when they access the service via its homepage and browse its main sections?
6.8
Chosen Indicators
At this time we think that the following are suitable performance indicators:
• Title-level data for catalogue• Hour-level data for catalogue• Top-level figure on proportion of budget spent on European
programming• Non-prescriptive prominence indicators
Consumption-level data is not considered appropriate at this time. However, if a robust data source (similar to that currently available for linear services) for consumption data is successfully developed in the future, then consumption data for non-linear services should be strongly considered as an indicator.
6.9
Application of Key Indicators
• We have also, where possible applied key indicators to specific services
• This is based on data acquired via self-declarations
• Designed to show what the results could look like when indicators are applied in the future
• Several results at this level have been seen in earlier presentation on non-linear services
• Here we will show some examples of what declarations could look like
6.10
Example Declarations
Country Service Name Service Type Service Business
Model
Proportion Titles that are
European
Austria Example VoD Pure VoD Player Independent of Broadcaster; Advertising
Funded
70%
Country Service Name Service Type Service Business
Model
Proportion Hours that are
European
France Example Catch-Up
Broadcaster owned
Private funded (advertising
revenue)
70%
Country Service Name
Service Type
Service Business Model
Amount Spent on
Programming (€)
Proportion Spent on European
Programming (%)
UK Example PPV VoD
Pure VoD Player
Independent of broadcaster; Subscription
Revenue funded
10,000 60%
Titles
Hours
Financial
Contribution
6.11
General Conclusions - 1
• Transposition of Articles 4 and 5 varies from Member State to Member State based on the strictness of the application of the legislation, and the number of additional requirements.
• On-demand services and increased fragmentation are making the €78.1bn television industry in Europe more complex. But on-demand remains a relatively small component of this revenue, at €400m.
• Broadcaster-run non-linear services typically have near or exactly 100% European content in their catalogues, whereas pure VoD players have a much greater reliance on non-European content.
• We found that with the deadline for implementation of the AVMS Directive set for 19 December 2009 few Member States have implemented Article 3i or measures to its effect, and much discussion on the application of Article 3i is still to take place during 2009. The workshop indicated that there are still a wide variety of opinions on this topic, which require further discussions within Member States.
General Conclusions - 2
• At this time, we believe that self-declarations are the only suitable operational procedure for acquiring data to monitor adherence to Article 3i.
• At this time we believe the performance indicators that will provide the most robust data on European content on non-linear services are: proportion of catalogue titles that are European, proportion of catalogue hours that are European, total amount spent on content and proportion of this spent on European content.
• Consumption data is not appropriate at this time, largely because of its confidential nature and the lack of a robust data source. However, if a robust data source for consumption data is successfully developed in the future, then consumption data for non-linear services should be strongly considered as an indicator.
• ‘Prominence’ has been found to be the most contentious performance indicator we looked at, and was widely discussed at the workshop. The term is loosely defined, meaning that multiple interpretations are possible, and there are concerns from stakeholders that strict rules here could limit creative freedom for new services.