31/12/2015 - Cineuropa caught up with Bruno Zambardino, professor of Economics and Organisation of the Media and Entertainment at the Sapienza University of Rome

The transmedial revolution currently underway is leading to a use of audiovisual products that is reshaping consumption models. We talked about it with Bruno Zambardino, who has taught Economics and Organisation of the Media and Entertainment at the Sapienza University in Rome for 10, and published his book Dal possesso all’accesso - L’industria audiovisiva ai tempi dello streaming (lit. From possession to access – the audiovisual industry in the age of streaming) a few months ago.

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Cineuropa: Right now everyone’s talking about Netflix. Who are the main players in the European market for the production and distribution of audiovisual content and what are they fighting for?
Bruno Zambardino: The OTTs, which are active in every sector of the audiovisual industry, from production to distribution, force traditional operators to reposition themselves on the market, especially telecommunications operators and broadcasters who, seeing the positions they have built up over years of dominating the market threatened, are forced to rebuild their own business models – in particular with regard to their pay offering – using a multimedia-based and flexible approach.

In particular, it’s Netflix that’s leading the way. The expansion of Netflix in Europe is unnerving more than a few broadcasters who, anticipating the next moves, are hurrying to catch up. This is how services like NowTV by Bskyb in the United Kingdom (also launched in Italy in March 2014 under the name Sky Online), or OTT Infinity by Mediaset in Italy came about. The strength of these services is their extreme flexibility, low cost and the fact that they don’t come with any contractual obligations.

At European level, the European Audiovisual Observatory has estimated that there are approximately 2,500 active on-demand services on the market, the majority of which are catch-up TV services, with more than 500 dedicated to just films and fewer than 100 to TV on-demand, for an overall turnover that topped €1 billion in 2012, thanks above all to the vitality and dynamism of the United Kingdom, France and Germany.

The United Kingdom has a strong subscription segment, with 4.4 million people signed up to Netflix and 1.2 million to Amazon Prime. The main satellite operator, Sky, set up its own standalone service, Now TV, in 2012. This area, however, has also seen a boom in the convergent online offer, with British Telecom and Sky in increasing competition over rights to key content such as sport. As well as triple and quad play, well-established British IPTV services also offer a variety of on-demand content. Although its currently experiencing a period of crisis, the premature launch of transactional platforms such as Blinkbox has certainly contributed to making Europe a leader in the on-demand sector. Just like it is in “label-less” set-top boxes such as FilmFlex, which combine the digital offering of a number of operators such as HMV, Virgin Media and mobile phone company EE.

France, for its part, saw the online version of its biggest pay TV operator, CanalPlay, launched back in 2011, much to everyone’s anticipation. In Germany, before the arrival of Netflix, the on-demand market was already being driven forward by local media giants, in particular by ProSiebeSat.1 and its service SVOD Maxdome. Vivendi is also present on the German market with its platform Watchever.

Spain’s OTT market is estimated as being worth €56 million, and is dominated by long-standing services such as Wuaki TV, controlled by Japanese giant Rakuten, and Spanish Canal+ spin-off on-demand service Yomvi.

In Italy, Netflix aside, where subscription services are concerned, the biggest players are the standalone services operated by pay TV incumbents Mediaset and Sky, active since the end of 2013 and the beginning of 2014 respectively, which have competitive costs and conditions of use compared to those offered by the Californian giant. Infinity by Mediaset is currently being offered at less than €5 per month (half of the launch price) and free for Premium clients and new clients of Vodafone and Tiscali telephone and Internet services.

Sky Online has simplified its offering, proposing a flat rate price of €10 for all its film and TV packages, and for the most popular individual sporting events. That’s without forgetting the platform Timvision (formerly Cubovision), one of the very first SVOD offerings in Italy, which Telecom Italia is still offering alongside its new partnerships with Netflix and pay TV services.

For broadcasters that have gone online, they are faced with a challenge that comes with risks: they must compete in a market that goes beyond national borders, to conquer a new slice of the digital market without losing ground when it comes to pay package subscribers, who could be attracted to the cheaper and less binding offers of the online sector.

Read the third part of the interview here.

(Translated from Italian)