French TV/video market set to grow

May 15, 2014 17.28 Europe/London By Chris Dziadul

CanalPlayInfinityOverall TV and video entertainment spend in France is expected to reach €7.9 billion by 2018, growing by an average of 1% a year, according to the latest research from Futuresource Consulting.

This contrasts with the trend seen in 2013 and expected this year. Indeed, according to Joanna Wright, senior market analyst at Futuresource Consulting, “In 2013 consumer spend on video in France – which includes subscription pay-TV, box office, packaged home video, pay-TV VOD and paid-for online video – declined 1%, to €7.6 billion, but is expected to remain flat in 2014.”

Wright added: “However, last year’s small decline hides some considerable downswings in key entertainment segments, triggered partly by France’s continuing weak economy and its effect on consumer confidence. This is in contrast to its European neighbours, with the UK and Germany witnessing 4% and 7% growth respectively.”

French pay-TV VOD, box office and packaged video all posted losses, with pay-TV VOD witnessing its first annual decline (-6% to €123 million), box office declining by 5% to €1.2 billion, and packaged video dropping by 17% to just under €1 billion.

However, despite a relatively sluggish economy and weak consumer confidence, France had a strong year of growth in pay-TV homes, rising a further 700,000 to reach 20.4 million at the close of the year, driven primarily by the continued battle for internet subscribers.

“France remains one of the largest pay-TV markets globally and it accounts for nearly 70% of overall video spend in France,” said Wright.
While overall home video struggled, digital video grew 8% in 2013 to reach €233 million, lower than anticipated but 2014 is expected to improve thanks to new service launches from Orange, Netflix and Carrefour.

“SVOD witnessed impressive growth (92% to €45 million in 2013) but it remains a relatively small segment, accounting for 19% of digital video spend.
“2014 could be a big year for SVOD, there has been much speculation regarding possible European Netflix launches but it seems clear Netflix will launch in France and Germany later this year,” says Wright. “So far SVOD has been slow to take off in France, partly due to the strength of existing pay-TV subscription services. Netflix could be the catalyst for change to help raise awareness and stimulate interest.”

On the transactional side, EST and iVoD combined grew 5% reaching €65 million in 2013. The sector is largely driven by iTunes, which dominates both categories, and while Google, Xbox and Sony are also present, they are yet to have a significant impact. A stronger performance is expected this year (11% growth to €72 million) as pricing initiatives, new EST services from Orange and possibly Carrefour and an improving economy is expected to help drive the market.

Total digital video spend is expected to increase by an average of 22% each year between 2014 and 2018 to reach €0.6 billion. Moving forward, pay-TV and SVOD services will be the key drivers, with transactional digital video showing healthy growth but from a low base.