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Slide1 l.jpg

“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 l.jpg
Introduction distribution and production of European works in audiovisual media services, including television programmes and non-linear services”

  • 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


Slide3 l.jpg

“Part 1: Modes of Implementation distribution and production of European works in audiovisual media services, including television programmes and non-linear services””

1.2


Objectives and approach l.jpg
Objectives and Approach distribution and production of European works in audiovisual media services, including television programmes and non-linear services”

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 l.jpg
Broadcasting (Linear Services) distribution and production of European works in audiovisual media services, including television programmes and non-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 implemented6 l.jpg
Broadcasting (Linear Services) distribution and production of European works in audiovisual media services, including television programmes and non-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 l.jpg
Broadcasting (Linear Services) distribution and production of European works in audiovisual media services, including television programmes and non-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 l.jpg
Broadcasting (Linear Services) distribution and production of European works in audiovisual media services, including television programmes and non-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 i mplementation modes l.jpg
Broadcasting (Linear Services) distribution and production of European works in audiovisual media services, including television programmes and non-linear services”Member State Implementation Modes

How Articles 4 and 5 are implemented

Flexible

Prescriptive

Stricter requirements

High

Spain

Sweden

Bulgaria Romania

Italy Poland

Finland Portugal

France United Kingdom

Netherlands

Low

Austria Iceland

Cyprus Ireland

Czech Rep. Lithuania

Denmark Luxembourg

Germany Malta

Belgium Estonia

Greece Norway

Hungary Slovakia

Latvia Slovenia

1.8


On demand non linear services pre existing national legislation l.jpg
On-demand (Non-Linear Services) distribution and production of European works in audiovisual media services, including television programmes and 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 l.jpg
On-demand (Non-Linear Services) distribution and production of European works in audiovisual media services, including television programmes and 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



Objectives of our research l.jpg
Objectives of Our Research Content Creation”

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 l.jpg
Methodology Content Creation”

MICRO DATA

MEMBER STATE

MACRO DATA

  • Programming spend

  • Pay TV ARPUs

  • Programming funds

  • Regulation

  • Compliance

  • Pay TV Penetration

Flow of Funds Model

  • Advertising

  • Pay TV

  • Licence Fee

  • Ancillary revenues

Top down

Bottom Up

x30 Member States

TOTAL EUROPEAN BROADCASTING VALUE CHAIN

2.3


Total industry income by segment l.jpg
Total Industry Income by Segment Content Creation”

€ BN

90

  • 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

78.1

80

5.3

72.4

OTHER BROADCAST REVENUE

0.4

4.9

6.5

70

VOD

0.4

5.4

19.8

CABLE RELAY

61.2

18.7

60

4.3

6.3

PAY TV

50

12.7

28.3

25.8

40

22.6

30

ADVERTISING

20

17.8

17.2

15.2

10

LICENCE FEES

2002 E17

2006 E17

2006 E30

2.4

SOURCE: OLIVER & OHLBAUM ANALYSIS


Tv revenue by member state l.jpg
TV Revenue by Member State Content Creation”

The five largest states represent over 71% of total TV revenue

REVENUE IS THE AGGREGATION OF LICENCE FEE PAYMENTS, CONSUMER PAYMENTS, ADVERTISING REVENUE AND OTHER ANCILLARY REVENUES

2.5

SOURCE: OLIVER & OHLBAUM ANALYSIS


Differences in tv revenue structure by member state l.jpg
Differences in TV Revenue Structure by Member State Content Creation”

  • 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%

OTHER BROADCAST REVENUE

VOD

CABLE RELAY

PAY TV

ADVERTISING

LICENCE FEES

2.6

SOURCE: OLIVER & OHLBAUM ANALYSIS


Tv household by reception method in eu l.jpg
TV Household by Reception Method in EU Content Creation”

TV HHS (M)

250

  • 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)

200

200

1 CHANNEL

2

5

20 TO 60 CHANNELS

174

60 TO 200 CHANNELS

25

PAY TERRESTRIAL

PAY TV = 62M

2

IPTV

5

156

PAY CABLE

25

5

29

100 TO 700 CHANNELS

150

16

PAY SATELLITE

29

19

29

50 TO 200 CHANNELS

17

100

23

FREE SATELLITE

39

10 TO 40 CHANNELS

31

FREE TV

= 138M

31

CABLE RELAY

28

20 TO 40 CHANNELS

50

28

FREE DTT

67

42

3 TO 7 CHANNELS

ANALOGUE

31

TERRESTRIAL

E17 '02

E17 '07

E30 '07

2.7

SOURCE: OLIVER & OHLBAUM ANALYSIS


Differences in tv reception method by member state l.jpg
Differences in TV Reception Method by Member State Content Creation”

2.8

SOURCE: OLIVER & OHLBAUM ANALYSIS


Digital switchover dso dates by member state l.jpg
Digital Switchover (DSO) dates by member state Content Creation”

1 DECEMBER 2012

UK

ITALY

ROMANIA

PORTUGAL

11 DECEMBER 2006

HUNGARY

NETHERLANDS

3 APRIL 2010

1 SEPTEMBER 2007

BULGARIA

FINLAND

SPAIN

SLOVAKIA

1 DECEMBER 2008

1 SEPTEMBER 2010

LITHUANIA

GERMANY

CZECH REPUBLIC

1 SEPTEMBER 2006

IRELAND

LUXEMBOURG

LATVIA

1 DECEMBER 2011

1 SEPTEMBER 2009

1 DECEMBER 2014

ESTONIA

DENMARK

FRANCE

POLAND

CYPRUS

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

GREECE

AUSTRIA

BELGIUM

31 DECEMBER 2008

5 MARCH 2007

MALTA

SWEDEN

NORWAY

SLOVENIA

15 OCTOBER 2007

1 DECEMBER 2009

1 DECEMBER 2010

-

LIECHTENSTEIN

ICELAND

NO DIGITAL SERVICES

2.9

SOURCE: OLIVER & OHLBAUM ANALYSIS


The comparable size of the estimated video on demand market l.jpg
The Comparable Size of the Estimated Video-on-Demand Market Content Creation”

BN

90

  • 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

78.1

80

70

60

50

40

30

20

10

0.4

TOTAL E30 TV MARKET

TOTAL EST. VOD MARKET

2.10

SOURCE: OLIVER & OHLBAUM ANALYSIS


Tv content creation and the independent sector l.jpg
TV Content Creation and the Independent Sector Content Creation”

  • 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*

16.6

FILM AND TV IMPORTS

SPORTS RIGHTS

18.4

IN HOUSE

NEWS

EXTERNAL

2.11

SOURCE: OLIVER & OHLBAUM ANALYSIS

*Refers to independent production and broadcaster affiliate production


The overall european tv value chain l.jpg
The Overall European TV Value Chain Content Creation”

PAY TV REVENUES

OTHER REVENUES

ADVERTISING

FILM AND TV IMPORTS

SPORTS RIGHTS

IN HOUSE

LICENCE FEE

NEWS

EXTERNAL

2.13

SOURCE: OLIVER & OHLBAUM ANALYSIS


The overall european tv value chain the key figures explained l.jpg
The Overall European TV Value Chain – the key figures explained

  • 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

2.12

SOURCE: OLIVER & OHLBAUM ANALYSIS



Objectives of the questionnaires l.jpg
Objectives of the Questionnaires Producers”

  • 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


Methodology27 l.jpg
Methodology Producers”

INTERVIEWS CONDUCTED /

ORGANISATION

QUESTIONNAIRES RETURNED

PUBLICLY FUNDED BROADCASTER

12

COMMERCIAL BROADCASTER

23

INDEPENDENT PRODUCER

6

REGULATOR

13

TRADE BODY

2

PURE VoD PLAYER

15

TOTAL

71

Questionnaire

Design

71 Completed Responses

230 Questionnaires distributed

3.3


Interview sample state representation in the survey l.jpg
Interview Sample – Producers”State Representation in the Survey

STATE REPRESENTATION IN SURVEY

PERCENTAGE

78.1m

29

100%

12%

17%

90%

80%

70%

60%

50%

88%

PROPORTION

83%

40%

REPRESENTED

30%

20%

10%

NUMBER OF STATES*

TOTAL REVENUE

*LIECHTENSTEIN EXCLUDED

  • 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

3.4

SOURCE: OLIVER & OHLBAUM ANALYSIS


Spend on genre and channel programme spend allocation l.jpg
Spend on Genre and Channel Producers”Programme Spend Allocation

PERCENTAGE OF PROGRAMMING SPEND (EXC. NEWS, SPORT & GAMES)

2007 SPEND ON PROGRAMMES BY GENRE

10

20

30

40

50

60

70

80

90

100

PUBLIC BROADCASTERS

58

25

16

IN

-

HOUSE

EXTERNAL COMMISSION

ACQUIRED

COMMERCIAL BROADCASTERS

18

31

51

ALL CHANNELS

32

29

39

3.5

SOURCE: OLIVER & OHLBAUM ANALYSIS


Commissioning new programmes l.jpg
Commissioning New Programmes Producers”

  • 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

3.6

SOURCE: OLIVER & OHLBAUM ANALYSIS


Programme acquisition decisions costs recency and sourcing l.jpg
Programme Acquisition Decisions Producers”– Costs, Recency and Sourcing

  • 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

3.7

SOURCE: OLIVER & OHLBAUM ANALYSIS


Financing new programmes l.jpg
Financing New Programmes Producers”

PRIMARY BROADCASTER

NEWS

99

0

1

FACTUAL

97

2

0

1

0

MAGAZINE

ADVANCES AGAINST

MERCHANDISING

SPORT

97

0

2

1

NEW MEDIA RIGHTS AND

ADVANCES FOR REVENUES

GAMES

94

5

0

0

1

0

ENTERTAINMENT

93

3

2

0

0

1

0

SECONDARY

PUBLIC FUNDING BODY

BROADCASTER*

R

DOCUMENTARY

89

2

2

0

7

DISTRIBUTOR

PRIVATE FUNDING

FORNON-DOMESTIC

CO

-

PRODUCTION

LINKED TO TAX BREAKS

RIGHTS

FICTION

87

6

1

0

3

3

80%

82%

84%

86%

88%

90%

92%

94%

96%

98%

100%

PROPORTION OF TOTAL PROGRAMME FUNDING

  • 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

SOURCE: OLIVER & OHLBAUM ANALYSIS

*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


Co productions l.jpg
Co-Productions Producers”

ENTERTAINMENT

56

FICTION

50

CINEMA FILM

44

DOCUMENTARIES

44

GAMES

22

FACTUAL

17

MAGAZINE

NEWS

0

SPORT

0

10%

20%

30%

40%

50%

60%

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

3.9

SOURCE: OLIVER & OHLBAUM ANALYSIS


Terms of trade and the balance of trade in programming l.jpg
Terms of trade and the balance of trade in programming Producers”

  • 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.

3.10

SOURCE: OLIVER & OHLBAUM ANALYSIS


Terms of trade between broadcasters and producers l.jpg
Terms of Trade Between Broadcasters Producers”and Producers

3.11

SOURCE: OLIVER & OHLBAUM ANALYSIS


Trade in programming fully produced programming l.jpg
Trade in Programming Producers”- Fully Produced Programming

NEWS

17

FACTUAL MAGAZINES

43

GAMES

54

SUCCESSFUL

SPORT

57

NON

-

EURO

ENTERTAINMENT

87

IMPORTS

DOCUMENTARIES

87

FEATURE FILMS

100

FICTION

100

NEWS

25

FACTUAL MAGAZINES

46

GAMES

45

SUCCESSFUL

SPORT

87

EURO

ENTERTAINMENT

60

IMPORTS

DOCUMENTARIES

73

FEATURE FILMS

71

FICTION

80

NEWS

20

FACTUAL MAGAZINES

17

GAMES

55

SPORT

SUCCESSFUL

40

EXPORTS

ENTERTAINMENT

42

DOCUMENTARIES

62

FEATURE FILMS

89

FICTION

83

20%

40%

60%

80%

100%

PERCENTAGE OF RESPONDENTS

3.12

SOURCE: OLIVER & OHLBAUM ANALYSIS


Trade in programming formats ideas l.jpg
Trade in Programming Producers”- Formats/Ideas

OTHER

43

FICTION

73

SUCESSFUL

FACTUAL MAGAZINES

73

NON

-

EURO

GAMES

80

IMPORTS

FACTUAL ENTERNAINMENT/REALITY

87

ENTERTAINMENT

93

63

OTHER

FICTION

63

SUCCESSFUL

67

FACTUAL MAGAZINES

EURO

GAMES

86

IMPORTS

FACTUAL ENTERNAINMENT/REALITY

81

ENTERTAINMENT

93

20

OTHER

FICTION

42

FACTUAL MAGAZINES

42

SUCCESSFUL

GAMES

EXPORTS

45

67

FACTUAL ENTERNAINMENT/REALITY

ENTERTAINMENT

62

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PERCENTAGE OF RESPONDENTS

3.13

SOURCE: OLIVER & OHLBAUM ANALYSIS



Methodology39 l.jpg

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

* 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.

4.2


Proportion of qualifying works l.jpg

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 l.jpg
Proportion of European Works all hours either transmitted

All Day

Peak Time

Ratio of

Ratio of

Ratio of

Ratio of

Qualifying

Qualifying

Grouping of Sample

Grouping of Sample

Qualifying

Qualifying

European to

European to

European to

European to

Total Qualifying

Total Qualifying

by:

by:

Total Qualifying

Total Qualifying

Viewer Hours

Viewer Hours

Hours (%)

Hours (%)

(%)

(%)

52,5%

59,7%

49,7%

59,5%

No

No

Leader?

Leader?

72,6%

79,6%

76,6%

81,9%

Yes

Yes

54,1%

66,4%

55,0%

69,0%

Private

Private

Channel

Channel

Ownership

Ownership

78,0%

84,5%

78,6%

84,9%

Public

Public

Type

Type

57,5%

66,7%

59,6%

69,4%

Ad

Ad

Revenue

Revenue

78,0%

84,5%

78,6%

84,9%

Gvt

Gvt

Model

Model

32,7%

53,5%

27,2%

50,9%

Subs

Subs

60,9%

77,8%

63,1%

78,1%

North

North

Geography

Geography

64,6%

70,2%

62,5%

72,5%

South

South

Country

Country

56,2%

66,1%

55,4%

63,7%

New

New

Recency

Recency

Type

Type

64,4%

75,5%

64,9%

77,6%

Old

Old

66,9%

74,6%

63,7%

75,8%

Large

Large

Size

Size

53,0%

67,4%

61,1%

72,6%

Small

Small

62,4%

74,0%

62,8%

75,5%

Result for Member States Sample

Result for Member States Sample

4.4


Proportion of european works42 l.jpg

European works make up all hours either transmittedan 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 domestic european works l.jpg
Proportion of Non-domestic all hours either transmittedEuropean Works

All Day

Peak Time

Ratio of Non-

Ratio of Non-

Ratio of Non-

Ratio of Non-

Domestic

Domestic

Domestic

Domestic

Grouping of Sample

Grouping of Sample

Qualifying

Qualifying

Qualifying

Qualifying

European to

European to

European to

European to

by:

by:

Total Qualifying

Total Qualifying

Total Qualifying

Total Qualifying

Viewer Hours

Viewer Hours

Hours (%)

Hours (%)

(%)

(%)

7,1%

4,4%

6,8%

3,0%

No

No

Leader?

Leader?

9,3%

4,3%

7,1%

2,9%

Yes

Yes

6,9%

3,6%

6,5%

2,7%

Private

Private

Channel

Channel

Ownership

Ownership

10,7%

5,3%

7,8%

3,3%

Public

Public

Type

Type

6,8%

3,6%

6,2%

2,6%

Ad

Ad

Revenue

Revenue

10,7%

5,3%

7,8%

3,3%

Gvt

Gvt

Model

Model

7,0%

5,7%

8,6%

6,2%

Subs

Subs

9,4%

4,1%

9,3%

3,9%

North

North

Geography

Geography

6,5%

4,5%

3,3%

1,7%

South

South

Country

Country

11,1%

6,9%

9,4%

5,6%

New

New

Recency

Recency

Type

Type

7,3%

3,8%

6,3%

2,4%

Old

Old

5,1%

4,0%

3,7%

2,4%

Large

Large

Size

Size

14,7%

9,1%

13,5%

8,3%

Small

Small

8,2%

4,3%

7,0%

2,9%

Result for Member States Sample

Result for Member States Sample

4.6


Proportion of non domestic european works44 l.jpg

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 independent european works l.jpg
Proportion of Independent qualifying transmission hours in 2007, compared to 4.3% of total qualifying viewer hoursEuropean Works

All Day

Peak Time

Ratio of

Ratio of

Ratio of

Ratio of

Qualifying

Qualifying

Qualifying

Qualifying

Independent

Independent

Independent

Independent

Grouping of Sample by:

Grouping of Sample by:

European to

European to

European to

European to

Total Qualifying

Total Qualifying

Total Qualifying

Total Qualifying

Viewer Hours

Viewer Hours

Hours (%)

Hours (%)

(%)

(%)

31,2%

33,7%

31,4%

36,4%

No

No

Leader?

Leader?

30,8%

33,3%

37,8%

37,1%

Yes

Yes

31,9%

34,2%

34,9%

36,9%

Private

Private

Channel

Channel

Ownership

Ownership

29,3%

32,2%

33,8%

36,9%

Public

Public

Type

Type

33,5%

34,7%

38,2%

37,7%

Ad

Ad

Revenue

Revenue

29,3%

32,2%

33,8%

36,9%

Gvt

Gvt

Model

Model

21,2%

11,6%

15,4%

7,9%

Subs

Subs

32,1%

33,2%

34,6%

33,4%

North

North

Geography

Geography

29,4%

33,6%

34,5%

41,1%

South

South

Country

Country

26,7%

23,0%

29,0%

25,1%

New

New

Recency

Recency

Type

Type

32,3%

35,4%

36,2%

38,9%

Old

Old

32,4%

33,5%

34,2%

36,5%

Large

Large

Size

Size

28,0%

32,6%

35,3%

40,8%

Small

Small

31,0%

33,4%

34,6%

36,9%

Result for Member States Sample

Result for Member States Sample

4.8


Proportion of independent european works46 l.jpg

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 smallacross 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 independent european works l.jpg
Proportion of Recent Independent qualifying transmission hours in 2007, compared to 33.4% of total qualifying viewer hoursEuropean Works

All Day

Peak Time

Ratio of Recent

Ratio of Recent

Ratio of Recent

Ratio of Recent

Qualifying

Qualifying

Qualifying

Qualifying

Independent

Independent

Independent

Independent

European to

European to

European to

European to

Grouping of Sample by:

Grouping of Sample by:

Total Qualifying

Total Qualifying

Total Qualifying

Total Qualifying

Independent

Independent

Independent

Independent

European

European Viewer

European

European Viewer

Hours(%)

Hours(%)

Hours(%)

Hours(%)

85,4%

92,3%

90,7%

96,6%

No

No

Leader?

Leader?

83,4%

91,4%

94,0%

95,0%

Yes

Yes

86,7%

93,1%

91,7%

95,5%

Private

Private

Channel

Channel

Ownership

Ownership

79,6%

89,5%

94,1%

95,5%

Public

Public

Type

Type

86,9%

93,1%

91,7%

95,5%

Ad

Ad

Revenue

Revenue

79,6%

89,5%

94,1%

95,5%

Gvt

Gvt

Model

Model

84,8%

96,1%

91,4%

99,3%

Subs

Subs

87,0%

92,9%

93,3%

95,5%

North

North

Geography

Geography

80,2%

90,4%

91,1%

95,5%

South

South

Country

Country

78,5%

83,4%

86,5%

88,1%

New

New

Recency

Recency

Type

Type

86,0%

92,7%

93,8%

96,3%

Old

Old

85,5%

91,9%

93,3%

95,8%

Large

Large

Size

Size

82,0%

88,8%

90,7%

92,7%

Small

Small

Result for Member States Sample

Result for Member States Sample

84,4%

91,7%

92,4%

95,5%

4.10


Proportion of recent independent european works48 l.jpg

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 l.jpg
Comparison with Past Data an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

4.12


Comparison with past data50 l.jpg
Comparison with Past Data an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

4.13


Comparison with past data51 l.jpg
Comparison with Past Data an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

4.14


Comparison with past data52 l.jpg
Comparison with Past Data an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

4.15


Linear services conclusions l.jpg

As a general rule, an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. 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


Slide54 l.jpg

“Part 5: Views from the Industry – On-demand Services an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. ”

5.1


Methodology55 l.jpg
Methodology an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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”.

*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).

5.2


Title level data l.jpg
Title-Level Data an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

  • 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 l.jpg
Hours-Level Data an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

  • 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 l.jpg
Proportion of Budget Spent an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.5


Proportion of budget spent59 l.jpg
Proportion of Budget Spent an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Proportion of Budget Spent by Genre an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.7


European programming l.jpg
European Programming an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.8


European programming62 l.jpg
European Programming an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Prominence on On-demand Services an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Prominence - Search by Country of Origin an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 origin65 l.jpg
Prominence – Search by Country of Origin an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.12


Prominence indication of the country of origin l.jpg
Prominence – Indication of the Country an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. of 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 country of origin67 l.jpg
Prominence – Indication of the Country an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. of Origin

5.14


Prominence indication of the country of origin68 l.jpg
Prominence – Indication of the Country an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. of Origin

5.15


Prominence indication of the country of origin69 l.jpg
Prominence – Indication of the Country an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. of Origin

5.16


Prominence european works promotion l.jpg
Prominence – European Works’ an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. 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 promotion71 l.jpg
Prominence – European Works’ an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. 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 l.jpg
Prominence – Share of Screen an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.19


Prominence share of screen73 l.jpg
Prominence – Share of Screen an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.20


Prominence share of screen74 l.jpg
Prominence – Share of Screen an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.21


Prominence share of screen selection l.jpg
Prominence – Share of Screen/Selection an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

5.22


Prominence l.jpg
Prominence an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

  • 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


Slide77 l.jpg

“Part 6: Possible an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. Monitoring Methods for Article 3i”

6.1


Aims and methodology l.jpg
Aims and Methodology an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Operational Procedures an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Self-Declarations vs Independent an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. 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

Independent evaluation of non-linear services

  • 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

Self-declarations for non-linear services

6.4


Performance indicators introduction l.jpg
Performance Indicators - Introduction an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Quantitative Indicators: Titles and Hours an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer 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 l.jpg
Quantitative Indicators: Consumption an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours. 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

  • 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

Consumption Data

6.7


Qualitative indicators l.jpg
Qualitative Indicators an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Chosen Indicators an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Application of Key Indicators an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
Example Declarations an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

Titles

Hours

Financial

Contribution

6.11


General conclusions 1 l.jpg
General Conclusions - 1 an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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 l.jpg
General Conclusions - 2 an average of 84.4% of the total independent European hours in 2007, compared to 91.7% of total independent European viewer hours.

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.


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