|
|
A new report shows that European Pay-Television revenues will triple in the next five years from Euro 22 billion to Euro 77 billion.
The revenue growth will be partly attributed to household subscriptions across the continent rising from 40 million to 68 million. A significant impact, however, will be a 850% increase in T-commerce levels from a current low of Euro 2.4 billion to more than Euro 30 billion by 2008 representing 40% of revenue per subscriber.
The report, European Pay-TV Forecasts by David Brown and published by International Marketing Reports, also shows that Britain will be the biggest Pay-TV market in Europe with a five-fold increase in revenues from Euro 4.1 billion to Euro 20 billion.
UK Pay-TV penetration will reach 58% of TV households from the current 38%, which is eclipsed only by Scandinavian countries Finland (63.6%), Denmark (74.1%) and Sweden (79.8%).
The report does, however, show that Europe's largest economy, Germany, will make rapid progress in Pay-TV with its current 6.3% of TV households having Pay-TV, set to grow to 36.2% in the next five years.
The report also analyses who will be the winners and losers in the Pay-TV market and the news for smaller, struggling channels is not good.
"The big winners will be the large, established channels," says author David Brown.
"They have both the economies of scale and strong branding to dominate. But even they must be careful. MTV for example, now faces a tough challenge from publisher Emap, which has launched several rival music channels."
The report also suggests that free-to-air TV will continue to lose share to Pay-Television, that the strongest growth will be in services provided by broadband and Video-on-Demand and that other big winners will be sports and film rights holders.
"Sport and movies are still the so-called 'Killer Content'", says Brown. "They are quite simply the only content that the majority of subscribers will pay for and therefore they are the lifeblood of many of the big subscription operations. Even where advertising and T-Commerce boost revenues, it is often on the back of having such sought after content."
|
|
|
Pay-TV channels are failing because they have not produced professional business plans, says a new report.
Pay-TV Business Planning, published by International Marketing Reports, says that dozens of Pay-TV channels have failed because the business models have not been properly researched and implemented.
The report, written by industry consultant David Brown, analyses the costs, revenue streams and business models of Pay-TV operations.
It shows that in the past six years there have been more than 150 failed channels in Europe that have cost investors more than £2 billion. Most of the lost money could have been saved had a proper business plan been formulated.
"The basic mistakes made in planning Pay-TV operations have been staggering," says Brown.
"Obviously economic conditions in this industry are tough at the moment, but in many cases, channel operators are not giving themselves a chance because their costs are too high for the business models that they are following."
The report analyses the different models available to Pay-TV operators and shows how to create business strategies for each model.
The key areas it analyses are:
Evaluating the model for success. TV channels create revenue through either advertising or subscriptions - start-up channels that aim for both are usually doomed to fail.
Content costs. The cost of content can actually be minimised at the outset through regular repeats. Most new channels fail to understand the basic viewing patterns that allow this significant opportunity to help cashflow.
Channels need to own content to create branding and generate cash through programme rights sales.
Note:
- 30 channel closures in the UK over the past six years.
- Approximately 150 closures in Europe over the same period
- Each channel closure represents at a conservative estimate, at loss of £10m to £15m
- Wasted investment in the UK over past 6 years approx £300m to £450m
- For Europe approx: £1.5bn to £2.25bn
- On an annual basis this is - UK: £50m to £75m - Europe: £250m to £375m
|
|
|
07.07.03
|
|
VOD IS THE FUTURE FOR TV MOVIES
|
|
|
|
|
The big trend in film and television in the next decade will be towards Video-On-Demand (VOD) via broadband cable and telephone Digital Subscriber Line (DSL). This is one of the conclusions from a new report Films and Pay-Television published by International Marketing Reports and written by David Brown, the author of European Cable and Satellite Economics.
VOD provides viewers with what they want to see when they want to see it. This form of televised entertainment will become increasingly popular at the expense of standard free-to-air television as broadband penetration develops. VOD will allow broadcasters to reach new audiences as specific segments of the market become much easier to target. Other conclusions from the report include:
- The Internet over broadband will become an important PPV platform for films;
- Film rights will continue to be sold on a territory-by-territory basis using the traditional window structure, even over the Internet;
- Premium pay-TV film channels will still be a key source of revenue as many viewers will prefer to wait and watch blockbuster movies in this way;
- Winners will be the major content suppliers including the studios, pay-TV operators, PPV services and movie channels with superior content. Good high-quality content will continue to be vital for the success of all new digital services;
- Losers will be video rental, distributors without good access to supply, and free-to-air television, which will suffer from a decline in traditional TV advertising.
Movies are big business and generate around $60 billion a year worldwide. Of this total, television accounts for more than 50%. Growing revenues from video, pay-TV and PPV mean that the box office accounts for less than half a film's overall revenues. No longer is television the icing on the cake - it provides a vital portion of total income.
Pay-television is taking a rapidly growing share of film revenues. There are over 150 film channels across the world and an increasing number of pay-per-view services, including video-on-demand. Films and Pay-Television provides an in-depth analysis of this important sector, covering the economics of film and television, the structure and pricing of rights deals, the key players, the main markets and the channels themselves.
The 140-page report includes case studies of channels, broadcasters and distributors as well as analysis of the economics of film and pay-TV and the structure of deals. In addition, there is a chapter on PPV and the future that examines the new technologies and the impact of the Internet on the film and television business.
Throughout the report are tables and charts with relevant data on film and television. These include breakdowns of film revenues geographically and for the key windows. Film and Pay-Television provides vital information for film producers and distributors interested in TV as well as for broadcasters and film channels.
The author of the report is David Brown, director of ems and a consultant in the pay-TV sector for over 10 years. He has previously written several management reports, including European Cable and Satellite Economics (Screen Digest/ ems 1999) and Focus on the BBC (FT Media 1999). european media strategies is a consultancy specialising in strategy, planning and regulatory issues in broadcasting, particularly in pay-television.
|
|
|
|
|
05.08.02
|
|
NEW REPORT GIVES LEGAL OPINION ON EPG PATENT PERILS
|
|
|
|
International Marketing Report's new report, Electronic Programme Guides; An Analysis of Best Practice, Commercial Opportunities and Viewer Behaviour includes an examination of the current legal activity concerning patent infringement in EPGs.
Produced in association with top international law firm, McDermott Will and Emery (MWE), the legal section of the report includes a survey of contentious activity and sets out the basic areas in which EPGs can be protected by patents.
MWE Patent Attorney Dr Justin Hill, who worked on the report, believes that EPG producers will increasingly question the supremacy of Gemstar's IP rights*, following recent hearings in the US.
“Gemstar has recently lost hearings atUS International Trade Commission (ITC) level and before a US District Court” says Hill. “Most damaging for the company was the case in which administrative judge Paul Luckern held that Echostar, Scientific Atlanta Inc., Pioneer Corp., and SCI Systems did not infringe a group of three Gemstar patents.”
The decision against Gemstar is an initial decision and a final determination is expected by October this year.
The report explains that cases heard at the ITC are not binding in Federal Courts. However, they are often used as test cases in the hope that they will have a persuasive effect on judges hearing infringement cases on the same patents in the Federal Courts.
The report also explains that Gemstar has more than 500 patents worldwide on its EPG developments, but that the company has suffered a significant fall in stock value in the past year. Coupled to its failure to win patent infringement cases, the circumstances mean that companies considering producing their own EPGs could well avoid legal proceedings or decisions against them if they take the correct advice.
*Gemstar is currently the major holder of patents relating to EPGs and a significant revenue stream for the company is derived from licensing its EPG designs to broadcasters and equipment manufacturers. Globally it has more than 500 patents registered and more than 1500 applications pending.
A new report on the digital television industry says that broadcasters are wasting billions of dollars as a result of poorly produced Electronic Programme Guides. The report, Electronic Programme Guides; An Analysis of Best Practice, Commercial Opportunities and Viewer Behaviour, says that most EPGs suffer from serious design flaws that can lead to increased subscriber churn, lower viewing ratings and lost commercial opportunities such as the sale of pay-per-view (PPV) events.
Given that the global digital TV audience exceeds 72million, and that at least one operator estimates that it costs more than $300 to acquire a subscriber, the cost in wasted investment and lost revenue alone runs into hundreds of millions of dollars.
When the cost of lost advertising revenue and PPV sales are added the losses must run to billions of dollars and are set to climb even higher as the digital revolution takes off in the next few years.
The 163-page management report, the first ever on EPGs, includes previously unpublished research on viewer behaviour, plus a series of in-depth case studies. It has been compiled by leading industry expert Roger Randall of specialist consultancy Channelbay. He explains how to avoid waste by focussing on viewer behaviour and on design principles that make navigation easy.
"The Electronic Programme Guide is the gateway to digital television services," says Randall. "To the viewer, the EPG is the key difference between digital and analogue services, but because digital television is so new, there is little knowledge of how viewers use it, and consequently of how it should be designed and managed."
The report is designed to help a wide range of TV industry operators to produce more efficient, viewer-friendly EPGs. It analyses examples of best practice worldwide in the areas of design, commercial leverage, future proofing and EPG project management.
The report also examines other key factors in the production of EPGs, including the perils of patent infringement, and there is a major section devoted to the analysis of viewer behaviour, including exclusive research results.
The case studies in the report are the most in-depth ever published and feature leading industry players such as Sky and Gemstar.
The end of tobacco sponsorship of sport in Europe in 2006 will have little effect on most sports. Even Formula One racing, which is still heavily dependent on tobacco, should easily survive the ban. There could, however, be problems for snooker and golf, according to research revealed in a new report, Driving Business Through Sport, published by International Marketing Reports.
The report, An Analysis of the European Sponsorship Industry, reveals that a massive £4.03 billion a year is accounted for by sports-related endorsements, but only £200 million (5%) of this comes from the tobacco industry. This will go when Formula One's governing body, Federation Internationale de L'Automobile, imposes a voluntary ban in 2006. Other sports are likely to be affected by then as a result of either EU or national bans.
By far the biggest recipient of tobacco sponsorship is Formula One motor racing, which accounts for £177 million of tobacco sponsorship. However, IMR's Simon Rines, who wrote the report, says 'This looks set to be replaced by the technology/communications sector, which is already pumping in around £80 million. This will grow, because technology companies can use Formula One to develop systems and to demonstrate them to buyers, as well as to project a relevant image.'
Although tobacco is still the biggest backer in terms of sponsorship, the motor industry itself invests more, at £295 million a season, in the sport. Many teams are either owned or part owned by motor manufacturers, who are keen to remove their association with tobacco.
Rines concludes: 'With Formula One's global presence growing, and television exposure and live attendance at an all time high, potential sponsors are queuing up to sign rights for the major teams. Finding a replacement for tobacco should not be a problem. At worst, only two or three teams will suffer.'
Golf and snooker are the only other sports that rely heavily on tobacco funding. Although snooker's standing is currently at a low, with several events looking for sponsors, the Embassy World Championship and Benson & Hedges Masters both have high viewing figures and media interest. Sponsorship rights costs for these are a bargain, in view of the high level of exposure produced. Lesser events may struggle even harder for sponsors, and any return to the mismanagement that has plagued the sport in recent years could put even the two high profile events under threat.
Only two major golf events are sponsored by tobacco companies, the Alfred Dunhill Cup and the Benson & Hedges International Open. It might not be easy to find new sponsors for these events, given that the Loch Lomond event has failed to find a sponsor, and that there is an increasing reluctance by major US golfers to participate in European events.
Note:
- The Formula One teams that receive the main tobacco input are:
- British American Racing - BAT £50 million p.a
- McLaren - West £29 million p.a
- Ferrari - Marlboro £42 million p.a
- Prost - Gauloises £16 million p.a
- Benetton - Mild Seven £20 million p.a
- Jordan -Benson & Hedges £20 million p.a
- Figures are estimates based on various industry reports
Sponsors spend $6 billion on European sports sponsorship, but a new report suggests that they are wasting at least an estimated $5 billion in potential benefits every year, through their failure to understand and exploit the medium. The report tells how to avoid this waste.
Of the $6 billion spent on acquiring the rights to events, the report calculates that $1.8 billion is spent on inappropriate events. But what is much more serious is that because sponsors do not exploit their events to the full they lose potential benefits conservatively estimated at more than $4 billion.
The 470-page report, Driving Business Through Sport - An analysis of Europe's Sports Sponsorship Industry, business opportunities and best practice, published by International Marketing Reports Ltd, has been prepared by marketing journalist Simon Rines and is the product of two years' research.
According to Rines, "Virtually every major sponsorship consultancy and specialist research agency reports that the majority of sponsors fail to formulate considered objectives for their initiatives, and few go on to exploit their investment to anywhere near its potential. This is particularly true in the Mediterranean countries, where sponsorship is often seen as little more than getting a logo on screen. My main concern in the report is to show how sponsors, agencies and sports bodies can deliver a much greater return on investment."
Well run sponsorships can deliver staggering results - MasterCard, for example, received an estimated $98 million worth of media value for its $30 million 1998 FIFA World Cup sponsorship. This result doesn't take into account the value of the platform for running promotions, advertising, incentives, hospitality, special events, the 125,000 affinity cards issued or the image transfer value of being associated with the event.
But it's not just global mega-brands that can benefit. Schweppes, for example achieved a (discounted) equivalent media value of £12 million for its £1 million McLaren Formula One branding opportunity. It also used the opportunity for a wide range of trade and consumer incentives, joint promotions with other McLaren sponsors and demonstrated a significant shift in brand attributes among those aware of the sponsorship.
The report features 40 UK and European case studies where sponsorship has been run successfully. These studies include an examination of previously unpublished techniques in sports marketing, such as the use of profile reports, which allow brands to target sports fans individually, as well as new methods for using the Internet to support sponsorship. The report examines the implications for sponsorship of the coming major changes in television and the new media, which will become important to those wishing to target both mass and niche audiences.
More important revelations:
A tobacco ban will have little impact on sports funding The nature of sponsorship is changing - it is no longer the sole preserve of brand marketing. Business-to-business and internal communications objectives are becoming increasingly common.
Companies are increasingly creating their own events when suitable properties are not available; in one case this helped to add £250 million to the value of the company's stock.
Changes in technology mean sponsorship is set to grow faster than traditional advertising - sponsorship spend quadrupled in the 1990s, and the growth rate is increasing.
Commercialisation of sport could damage sponsorship opportunities
Television's protected lists might not protect sponsors
| |
Read reviews
Fan Attitudes Survey