A new distribution mode for films UNIVERSCINE A curator’s approach. LFE, march 4, 2013 Jean Luc Ormieres
Part I – Introduction, Definitions & figures Part II – The French Vo. D market Part III – UNIVERSCINE, a French Video on Demand Part III platform Part IV – Euro. Vo. D – the European federation Part IV Conclusion – Vo. D, a new opportunity for financing films?
A major change on the brink to happen in film exploitation. A serious question for the near future? Which template, which business model ? Two templates co-exist today: To make it simple, one is a supply/catalogue driven and the other one is a demand/community driven. As we come from cinema and not TV we strongly believe in a supply driven business. We think that
definitions & figures
Definitions : online distribution of audiovisual content and especially films = streaming or download. From a marketing viewpoint = Rental (streaming or Download to rent) vs Electronic Sell Through EST = transactional VOD (Rental + EST) = subscription VOD = Free VOD or Advert-supported VOD Broadband / high speed internet connections : the development of the VOD market is dependent on the broadband IPTV penetration : Internet Protocol television (IPTV) is a system through which television and VOD services are delivered using an IP based system, usually directly to the TV sets through a Set-Top-Box. IPTV makes it possible for ISPs to build Walled Garden services : they fully control the delivery of content to the Set Top Boxes through their networks and implement the billing system. Part I
Households with broadband internet connections in the EU 27 more than doubled between 2006 and 2011 reaching nearly 70% in 2011. Proportions of houselholds with BB connections - Sweden 86% (highest rate) Denmark 84%, UK & Netherlands 83 % have the highest rate - Romania 31%, Bulgaria 40% and Greece 45% have the lowest ones
PART II
Some figures Films represent about 75% of the total Vo. D consumption in European market is dominated by the UK and France Total Vo. D turnover of Europe to exceed 1, 65 billion € in 2011, in a worldwide market that is close to 11, 5 billions US € Over 600 Vo. D services available in Europe Vo. D expenses in France grew from 29 M€ in 2009 to 150 M€ in 2010, and above 310 M€ in 2012
in 2011 FRENCH VOD MARKET (in M€) 180 170 160 140 ü A figure between 85 and 100 Millions legal downloads has been reached ü 95 % of the transactions are rentals 135 120 ü TVOD (transactional VOD) accounts for 93% of the market value (vs SVOD & AVOD) 100 83 80 60 ü the average price for a film transaction = 53 4, 25 € (rather high) 40 29 20 ü 90/95 % of the market on IPTV & Itunes 15 0 2006 Part II 2007 2008 2009 2010 2011 ü Films account for 70% of all transactions
The French Media Chronology In France, the Media Chronology is a regulation. TVOD (EST only) TRANSACTIONAL VOD (first window) Theatrical release 4 MONTHS DVD and VOD release PAY TV (1 st and 2 nd windows) Close rental VOD 10 MONTHS Pay TV 22 Mo Free TV TVOD SVOD FREE TV No VOD TVOD SVOD PAY or FREE TV AVOD PAY or FREE TV 36 Mo SVOD 48 Mo AVOD The MEDIA CHRONOLOGY has always played a strong role in the financing of film production. SVOD starting only at 36 months has protected PAY TV channels from new competition and has allowed for the development of a strong TVOD market. Part II
Nb of films Films by origin 7000 6000 738 5000 1813 USA 4000 Europe (-FR) 3000 France 2000 2952 889 Other countries 1000 0 2007 2008 2009 2010 2011 The number of films available on VOD is growing rapidly but can still seem weak in comparison with DVD references. Part II A high diversity of films supported by a regulation (European directive translated in French law)
The power of ISPs & ITunes What can account for such a situation ? - Very competitive market for Triple Play offers (30€/mo with the Set-top. Box) and therefore a very high IPTV penetration rate (10 M households = 1/3 of all households) - VOD on IPTV/ITunes is favoured by consumers for 2 main reasons : the service is available directly on their TV sets they are invoiced on their internet bills (no credit card needed) or via their. Apple account Therefore, up to 2011, the French VOD market has been dominated by walled garden services. Although it gives much power to a few players and can be a threat to diversity, the ISPs have used their huge marketing means to develop VOD usage. Part II
Over The Top (OTT) Offers are services proposed by players that do not control the physical distribution network : they come « over the top » using the home internet connection to be available on some devices NEW DEVICES : Connected TVs Ipads Android tablets Game consoles 24 M 2011 Samsung / LG / Sony / Google TV Apple Open android Sony Microsoft market The Itunes Film store launched in France in 2010, its market share is growing rapidly. The marketshare of IPTV will be decreasing in 2012/2013 NEW PLAYERS : Google/Youtube, Facebook, Dailymotion ? The market is opening slowly to competition Part II
TVOD VOD/EST DVD sales THEATRICA L MARKET + PAY TV SVOD in 2015, TVOD + SVOD = 400 M€/year out of which 200 M€ should go to production and distribution Part II * Investment in film financing in France is slightly over 1000 M€
– founded in 2001 as a platform for legal distribution of films on Internet, Univers. Ciné has become one of the prominent actors in the Vo. D sector in France. – Univers. Ciné is a Vo. D Rights Aggregator, Publisher and Distributor, specialized in Independent cinema of high artistic quality and art-house films, with a current online catalogue of more than 2200 titles. – Univers. Ciné is committed to promote Vo. D as a new channel for distribution of films and to export its experience throughout Europe by helping the development of other Vo. D platforms and creating a network of partners. Univers. Ciné is supported by Part III
Currently there are 49 shareholders : ADR PRODUCTIONS – ARCHIPEL 35 – LAZENNEC – FIDÉLITÉ PRODUCTIONS – JBA PRODUCTION – LA MOUCHE DU COCHE FILMS – LES FILMS DE LA BOISSIÈRE – LES PRODUCTIONS BAGHEERA – MAGOURIC PRODUCTIONS – JLA/MERCURE DISTRIBUTION – LE PETIT BUREAU (QUO VADIS CINÉMA) – SUNDAY MORNING PRODUCTIONS – WHY NOT PRODUCTIONS – 3 B – AGAT FILMS – DIAPHANA FILMS – GLORIA FILMS PRODUCTION – MACT PRODUCTIONS – MAÏA FILMS – OGNON PICTURES – PIERRE GRISE PRODUCTIONS – REZO PRODUCTIONS – TS PRODUCTIONS – ADVA – CINE NOMINE – ELZEVIR FILMS – LES FILMS D’ICI – HAUT ET COURT – INTERSCOOP – OF 2 B – LES FILMS PÉLLÉAS – PROGRAM 33 – SEPIA PRODUCTION – PLAYTIME – CE QUI ME MEUT – ELIA FILMS – LES FILMS DE LA CROISADE – LES PRODUCTIONS DU TRESOR – LES FILMS DU KIOSQUE – LES FILMS DU POISSON – K’IEN PRODUCTIONS – NORD-OUEST PRODUCTION – SOMBRERO PRODUCTIONS – SOPHIE DULAC DISTRIBUTION – FORUM FILMS – MEMENTO FILMS DISTRIBUTION – SOCIETE PARISIENNE DE PRODUCTION – PYRAMIDE METROPOLITAN FILMEXPORT Part III
• The shareholders are independent producers, distributors and sales agents of feature films. • Collectively, they represent more than 40% of the French film production and more than 20% of all theatrical releases in France • At the 2010 Cannes Film Festival, the shareholders had not less than 30 films presented in the different selections • 6 among the main awards: Palme d’or, Grand Prix, Prix du Jury, Prix de la Mise en scène, Caméra d’Or and Prix CICAE de la Quinzaine des Réalisateurs, went to some of these films which eventually enriched Univers. Ciné’s catalogue • As rights-holders, the Univers. Ciné shareholders have been bringing since the beginning more than 1000 films to the catalogue Part III
The catalogue has over 2200 titles online; more than 1000 of them are under exclusive mandate for Vo. D distributio Univers. Ciné showcases some of the most recent hits of independent cinema, as well as patrimonial works A few titles: 4 months, 3 weeks and 2 days ; Il Caimano ; Soul Kitchen ; In the Loop; Louise Michel; Eldorado… And a few names: Bergman, Fellini, Godard, Polanski, Kaurismaki, Dardenne, Kusturica, Resnais, Saura, Szabo, Tarr… Part III
– currently the total number of films (signed and negotiated) is of more than 3000 – 96, 5% are feature films that have been released in theaters at least in their production countries; 1, 8% are short films; 1, 7% are TV films – there is both a high diversity of origins and a strong European dimension All of the Univers. Ciné films are proposed in original version with subtitles in French. The Univers. Ciné catalogue represents around 17% of the total legal Vo. D offer in France Part III Other 19% Europe Other 3% Southeastern Europe 3% USA 9% UK 7% Central Europe 3% Scandinavia & Baltic States 4% Benelux 3% IT ES 4% 2% FR 39% DE 3%
Univers. Ciné has a niche – it gives art-house films, some of them awarded in major festivals, a second life beyond their theatrical exposure Univers. Ciné provides in-house produced editorial content (articles, interviews, trailers) in order to highlight films and guide audiences Univers. Ciné develops exclusive crossmarketing operations with festivals and events in order to promote new talent and European cinema Univers. Ciné proposes original communitybased tools in order to promote films through social networks Part III
The offer is available on a multi-channel distribution basis On Univers. Ciné’s own web-based Vo. D platform www. universcine. com On partners’ web-based platforms and portals – ARTEVo. D, Virgin. Mega On ITunes On IPTV – Free, Neuf/SFR, Orange (selection in 24/24 Video), Numéricâble On Connected TVs – deals with Samsung, LG, ongoing discussions with Philips, Toshiba On social network platforms with a dedicated Vo. D application (facebook) On UC applications on Androïd tablets and smartphones (launch march 2013) Part III
The company structured itself around business-units, marketing, editorial, technical services, etc. Universcine has developped its own technical service, front and back-office The technical services b. u dedicates a substantial amount of its resources to R & D, paying attention to quality from content to exploitation. It has based its philosophy on a very high degree of security (DRM) that respects the content in all its aspects, whether artistic, technical or even legal). Special attention is currently paid to developping solutions for Continuum of services and devices and shared usages (Ultra-Violet) Together with a weekly newsletter (over 250, 000 subscribers) The Editorial b. u yearly provides an important amount of bonuses, interviews, special events audiovisual contents, in relationship not only with the Vo. D releases, but also with the news in the industry, the festivals, etc. Part III
Connected TV – the convergence between Internet navigation and TV ergonomy Part III
ANALYSIS OF REVENUES ACCORDING TO TYPE OF Vo. D EXPLOITATION WEB Conn. TV IPTV RENTAL EST RENTAL 4, 99 4, 17 4, 09 3, 84 1, 54 2, 31 14, 99 12, 53 12, 28 11, 55 4, 62 6, 93 4, 99 4, 17 4, 09 3, 84 1, 54 2, 31 4, 99 4, 17 4, 09 3, 84 2, 50 0, 50 2, 00 Bandwidth costs UC Payment costs UC Electronic Device Manuf. Fee 0, 28 0, 25 0, 35 Gross Margin 1, 01 4, 09 0, 66 ALL TAXES included VAT deducted Other Tax deductions - SGC/CMS operator's fee Net publisher UC (on average price) Fee UC net RIGHT HOLDER 0, 50
Evolution and Forecast of the Sales (direct, indirect, rentals and DTOs) 2500000 2000000 1500000 1000000 500000 0 1000000 450000 151000 22835 580 2007 2008 2009 2010 2011 2012 2013 The Univers. Ciné Market Share should progress from 1, 5% in 2010 to 3% in 2013 Part III
Network Univers. Ciné acts as a Vo. D platform editor/operator for TV 5 Monde, Institut Français, Metropolitan Film Export, Médiathèques Numériques. Univers. Ciné has shared its technological know-how and experience in operating a Vo. D platform with Belgium (Univers. Ciné Belgium), Ireland (Volta), and Switzerland (Le. Kino. ch) and will do so with Poland, Italy and the United Kingdom. Univers. Ciné has committed to the development of a European network with partners from 9 countries and is the leading force in the creation of the European Federation of Independent Cinema Vo. D Platforms, Euro. Vo. D Part I
Presentation – independent small and medium companies are confronted with the Vo. D offer of large integrated groups – ISPs and TV networks – Univers. Ciné has teamed up with similar companies throughout Europe– Vo. D platforms operated by groups of independent producers, distributors, Video editors – Euro. Vo. D (European Federation of Independent Cinema Vo. D Platforms), a non profit Association governed by the French Law of 1901, based in Paris Part IV
Members : – a Vo. D platform with more than 1600 titles on a bilingual interface (French & Flemish) (Spain) – a Vo. D platform with above 3200 titles online (Austria) – a Vo. D platform based in Austria, with 890 titles (Ireland) – a Vo. D platform with more than 300 titles online (Germany) – a Vo. D platform, with more than 200 titles – a Vo. D platform launched november 10, 2012, with more than 200 titles (Finland) – an independent production company (France) – a Vo. D platform with more than 2200 titles online (Poland) – Independent Film Foundation is in charge of the project Part IV
As of today, four technological models exist (Univers. Ciné, Filmin, Good!Movies and Flimmit), All possibilities for developing synergies and longterm technological and business convergence will be explored with the aim of eventually merging into one single model. Reinforcing collaboration and integration in order to increase stability and cost-efficiency
www. volta. ie
Network The ‘inner core’ network of Euro. Vo. D is of 9 countries; their total population is of more than 260 million people The extended network of Euro. Vo. D so far is of 13 countries We have now started partnerships in other major European countries – UK, Italy, the Netherlands Part IV
To Promote Video on Demand as a New Channel For Distribution of Films To Benchmark the Best Services of the Sector To Create a Collaborative Model Between the Members of the Association and Other Independent Cinema Vo. D Platform Operators Part IV
A Collaborative Management Between Vo. D Platforms to pool resources and ‘mutualize’ costs to negotiate better rates for storage, bandwidth, subtitling… to exchange know-how, technical expertise and business contacts Part IV
Strategy A Common Strategy to Clear Vo. D Rights to identify rights-holders and negotiate Vo. D rights in common to build a shared catalogue of European films, available on the platforms of the federation Part IV
Strategy to increase the transnational circulation of European films to support the diversity of European cinema to promote independent cinema of a highly artistic quality throughout Europe, to promote new talent Part IV
Targets To increase the number of members of the Federation up to 15 To develop a common back-office for 4/5 of the Vo. D platforms members of Euro. Vo. D To make Euro. Vo. D a real ‘central acquisitions service’ negotiating acquisition deals, subtitling services, storage, bandwidth, etc. , and achieving costefficiency with about 25% of economy for its members To enrich the catalogues of the Euro. Vo. D members with 100/150 European feature films per year, which will be subtitled and proposed online Part IV
Operating in a very structured context, having its origins in the concerns and desires expressed by content makers and providers regarding the destiny of their films, Universcine mirrors the fears and aspirations of the independent sector. Far from solely advocating for the protection of the existing system, Universcine acts as a think tank that elaborates and implements projects in France and in Europe. Universcine, conscious of what the digital revolution can bring to the future of film distribution in its various aspects, is also dedicated to contribute to the ongoing transitions, in an harmonious way that will maintain the sparkle of the independent sector, and the possibility for the audience to elaborate its relationship with this new media.
Thank you Contacts Jean-Yves BLOCH, CEO jybloch@universcine. com +33 (0)1 75 43 16 74 Dragoslav ZACHARIEV, International Relations & Euro. Vo. D Project Manager dzachariev@universcine. com +33 (0)1 75 43 85 81 Jean-Luc ORMIERES, International Development Consultant jlormieres@gmail. com LMC/Univers. Ciné: 47, rue de Paradis – 75010 Paris
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