The current state and future of SVoD in France
by Giampietro Balia
- CANNES 2018: The CNC and the CSA have published a study on SVoD, outlining its growth, its current state of health and the expected future developments in the French market
In a global context of dynamic digital change, marked by the exponential growth of platforms offering subscription-video-on-demand (SVoD) services, the Centre National du Cinéma et de l'image animée (CNC) and the Conseil Supérieur de l'Audiovisuel (CSA) have conducted a joint study to analyse the SVoD market in France and outline the type of players and offers available, the actual share of the SVoD market and the dynamics of the sector since the first services appeared in France in 2005. The study compares the state of the market in France to that of other countries, and on the other hand, it seeks to identify the economic stakes of the different services on the French market, as it is only by understanding the actual strategies adopted by the players that it will be possible to regulate them and support them during their short- and long-term development. Moderated by Pascal Rogard, general director of the SACD, the panellists were Frédérique Bredin, president of the CNC; Émilie Cariou, vice-president of the Commission des Finances de l'Assemblée Nationale; Evelyne Gebhardt, vice-president of the European Parliament; Justine Ryst, content partnership director for YouTube Southern Europe; Céline Sciamma, filmmaker and co-president of the Société des Réalisateurs de Films - SRF; and Nathalie Sonnac, member of the CSA.
The first SVoD service launched in France was Vodeo.TV back in 2005. In 2017, 65 SVoD services were active in France, which is three times more than in 2010. The active services in France are very varied in terms of their editorial positioning, size and shareholding. Nearly one out of five services are not based in France for tax purposes, the largest of which are Netflix (Netherlands), Amazon Prime Video (UK) and SFR Play (Luxembourg). Four out of five services have a specifically positioned offering (manga, youth, music and so on), in contrast with more general services such as Canalplay or Netflix. Nearly half of the services are dependent on a group involved in publishing or television distribution.
The SVoD market reached €249 million in 2017, an increase of 91% over the previous year. It has increased ninefold since 2012, with a very marked growth in 2015, and now accounts for more than half of the total VoD market (51%). However, the value of the SVoD market is still much lower than that of the pay-TV market – €249 million for SVoD in 2017, as against €3.3 billion for pay TV. The United Kingdom is, in terms of value and the number of subscribers, the leading European market, with more than €800 million of revenue coming from SVoD platforms in 2016, ahead of Finland, Germany and Sweden. France ranks seventh in terms of revenues and third in terms of the number of subscribers.
At the global level, the North American market (the United States and Canada) is the most mature, with 112 million subscribers to SVoD services in 2017, reaching $9.5 billion the same year. France is one of the European countries where penetration is relatively low (10%), compared to Denmark, Norway (where Netflix has been present since 2012) and the UK, which is in the lead with a penetration rate of over 40%. Several peculiarities of the French audiovisual market explain the relatively slow development in the country, including the abundance of free audiovisual content, the role of pay TV and the success of triple-play offers.
Netflix is the biggest player: as of 31 December 2017, it has nearly 118 million subscriptions, and despite the fact that the data relating to outside of the USA are not official, Reed Hastings, president of Netflix, said in June 2017 in an interview with Le Monde that the number of subscribers in France exceeded 1.5 million and was projected to reach 2 million by the end of 2017. SFR Play claimed to have nearly 2 million subscribers in July 2017 and Canalplay boasted 600,000 subscribers in September 2016, while the number of Amazon Prime Video subscribers in the French market is unknown, but according to figures published by Futursource, it is estimated at 1.4 million.
Series are the category of content most viewed by users of SVoD services. 48% of the programmes consumed in France are series, 28% fiction films and 16% programmes for young audiences. In 2017, one in four internet users reported using a video-on-demand service subscription, and they are usually subscribed to more than one service at a time. The rolling out of high-speed connectivity makes it possible to consume SVoD on a variety of devices. Nevertheless, the TV remains the preferred option for users, closely followed by the computer.
In June 2017, with 2,756 titles, Netflix was the player offering the most titles from among the four services studied, far outpacing SFR Play (1,667 titles), Canalplay (1,466) and Amazon Prime Video (326). Initially, the SVoD market developed based on the model of non-exclusivity: the same programmes were available on multiple platforms, and pre-financing practices were rare. Exclusivity and pre-purchase mechanisms developed with the arrival of Netflix, Amazon Prime Video and, later, Altice, which introduced practices in France that had already been implemented in other countries.
The audiovisual sector is witnessing the arrival of more and more hybrid audiovisual services, making it hard for legislators to regulate them, especially when they are based outside of the French territory and thus France’s jurisdiction. Services with non-specialised programming established abroad capture most of the SVoD market in France. The real challenge now is to use the data compiled by this joint study and work together with other European countries and institutions to rebalance the weight of national versus international SVoD platforms, but also to try to build a comprehensive form of legislation which does not only regulate the system, but which also controls it, and ensure that SVoD services based in other countries are still bound by the individual legislations of the countries where they generate profit.
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