VOD HAS FAILED – INSTEAD OF THE WORLD,JUST MORE OF THE SAMEANDERS SJÖMAN, VODDLERANDERS.SJOMAN@VODDLER.COM

AUGUST 2014

The Internet’s global promise

If you’re European, I think you recognize these…

…but probably just one or two of these.

Although Europe produced 3x more than US in 2013

1 546 movies (2013) 455 movies (2013)

Source: The European Audiovisual Observatory (EAO) Statistical Yearbook 2014

Online, we still only get get domestic and US

The one multinational SVOD shows 80%-90% US

Source: http://www.broadbandtvnews.com/2014/07/22/netflix-the-international-picture/

It’s a story we know from European cinema…

France Spain Germany Austria Netherlands Sweden Poland Czech Republic Bulgaria0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

34%

13%

24%19% 22% 22% 19%

12%

1%

62%

80%

69%75% 70% 71%

71%

75%91%

4% 7% 7% 6% 8% 7% 10% 13%8%

Top 100 movies at the cinema (2013)

OtherUSDomestic

Graph by Anders Sjöman, Voddler, anders.sjoman@voddler.com - Data: http://www.boxofficemojo.com/intl/

Rest of EU

…and from TV (where domestic trumps US though)

Yes, EU does have +3000 VOD-services…

Number of VOD services in the EU by country in 20013

(Adult not included)

Source: The European Audiovisual Observatory (EAO), https://ec.europa.eu/digital-agenda/en/news/demand-audiovisual-markets-european-union-smart-20120028

…but most we recognize from our TV couch.

Pay-TV brands… …went online as ”PLAY"

And (!) they license from the same content owners as before…

+

Granted, to find and license content isn’t easy..

Recreated and modified from chart by Nicola Allieta, slide 11 in presentation available here: http://ec.europa.eu/digital-agenda/en/news/hearing-promotion-european-films-and-tv-series-line-read-presentations

Rights DistributionDistribution Distribution Exploitation

Sales Agents

Local Distributors

VOD Aggregators

VOD Platforms

Producers/Content Owners

And to complicate: Each movie = multiple rights

Rights are sliced by Time and distribution mode (”window”) Territory Exclusivity

Often rights are sliced before the movie is even made: rights are given in exchange for pre-production financing.

• The rights slices are then grouped and some are: Kept by original rights owner Sold to sales agents (differ by territories) Sold directly to local distributors/aggregators/

platforms in selected territories Sold onwards by sales agent (in new slices

often!) to other actors in the distribution chain

• So a typical film may have All rights for country 1 with producer, but for

country 2 with sales agent A Except for TVOD rights for country 3 which

were sold directly to a local VOD platform And except for second pay-TV rights which are

handled in Europe by sales agent B but in Aisa by local distributor C.

Co

un

try by co

un

try

Rights

Cinematic

Physical- DVD rental- DVD sales

Broadcast- PayTV first- PayTV- FreeToAir TV

Online- TVOD- EST- SVOD- AVOD/FVOD

Cinema Pay per view Syndication/”free”Subscription

3 - 4 years

So the release windows just moved online…

DVD (rent and buy)

Pay-TV (monthly fee)

Free-to-air/broadcast

Rental (TVOD)

Purchase (EST)

Ad-funded (AVOD)

“Plus” (SVOD)

Subscription

(SVOD)

Offline

Online

(CC) BY - Source: Anders Sjöman, Voddler, anders.sjoman@voddler.com

… and so did territoriality too.

Some services do offer a glimpse of the world…

MUBI: Global arthouse classics

VIKI: South East Asian (with crowdsourced subtitles)

IMVbox: Iranian movies BOLLYVOD: Bollywood movies (Disclaimer: Voddler is a partner in this project)

Common traits for global services (no geo-blocking):• Niche audience in each market – but global potential if aggregated• Global rights more easily available – no geo-blocks needed• Localization available (or built-in to business strategy in case of Viki)

Unlocking global VOD…

But at the same time:

• Consumers want global content.

• Industry would grow with more choice

• Content owners want global distribution

Our industry is run by:

• Territoriality

• Windowing

• Exclusivity

Facilitate easy global licensing and make it financially attractivefor content owners and services

To accelerate digital transition and create more diversity:

Unlocking VOD: Simplified, profitable global licensing

Create a more active, more transparent content marketplace:• B2B marketplace for rights holders and services• Should include easier handling of orphan works or titles with unclear

rights holders (extended collective rights management) (Hey collecting societies, why not become real market makers!)

Further public activities to promote global licensing:• Make public subsidy systems window- and technology neutral• Public funds for multi-territory licensing and non-exclusive rights• Limit the use of holdbacks (remove legal; encourage flexible use)• Ban certain practices, such as ”minimum gross price”-clauses.• Public support mandates public distribution: If you receive public

support, demands follow, such as no exclusivity, no geo-blocking, etc (applies to new productions as well as old works being digitized)

I can see the world from the palm of my hand!

ANDERS SJÖMAN, VP PRODUCT AND COMMUNICATION

ANDERS.SJOMAN@VODDLER.COM

WWW.VODDLER.COM

This is Voddler

• Stockholm-based tech venture, founded 2007• Vnet, Voddler’s proprietary streaming technology, delivers device-

neutral viewing experience with global Quality of Service (QoS) in HD and with offline mode, over the top (OTT) on the public Internet

• Flexible Video Content Management System (CMS) supports all VOD-revenue models, with complete rights control for windowing and territories.

• Voddler’s own consumer facing VOD-service, launched in 2010, served 1.2 million registered users in 5 markets. Over 18 million movies served since 2011, licensed from leading film studios, including Hollywood majors.

• Runs Bollyvod for Indian partner: A white-label global Bollywood entertainment site, powered by Vnet and managed by Voddler

• Total invested: €24 million, from leading investors incl. Cipio Partners and Nokia Growth Partners

• More at www.voddlergroup.com