Posts tagged ‘Guy Bisson IHS Screen Digest’

Guest Blog: Guy Bisson, Research Director, Television, IHS

Guy BissonBy Guy Bisson, Research Director, Television, IHS

As head of IHS Screen Digest’s television department Guy directs all TV-related research and statistical modelling activities. He has been researching and writing about the global television business for 15 years and was instrumental in building IHS Screen digest’s TV research department and the online statistical information service, Television Intelligence.

Guy will be speaking at the Cable Congress 2014 event taking place in Amsterdam on 12-14March 2014. For more information on how to register, please click here.

What were the most significant developments for the cable industry in 2013 and what are some of your predictions for the industry in 2014 and beyond?

If only I was a ‘glass half full’ type of person. If I was, I could claim to be 50 per cent right in foreseeing what I think were the two key developments for the cable industry in 2013. Trouble is, I’m not. Not only do I generally see every glass as half empty, but I believe that half a glass is already as good as gone. That means I have to admit to being half wrong last year in thinking that Vodafone would not push ahead with its acquisition of German cable operator KDG—one of the two key developments in 2013.

The other key development was the moves by Virgin Media and Sweden’s Com Hem to bring Netflix on board as a content partner within the TiVo platform. That one I did predict some years back, as any regular at the Cable Congress will know.

On the face of it, these two events seem unconnected. What links the acquisition of a German cable company by a telecoms operator eager to access a local fixed-line network, and the content and channel negotiations of two Northern European cable companies? Well, not only are these two events closely related, they set the scene for my five predictions for 2014 and beyond in terms of key industry developments.

1/ Mobile operators will increasingly seek alliances with cable infrastructure owners and other TV platform operators and content owners.

Here’s a true story: some years ago I got a call from a client in the telecoms business telling me my forecasts for European pay TV ARPU were “obviously wrong”. The reason, they argued, was that ARPU always goes down, not up as my forecasts showed. I politely explained that in the pay TV business, it was indeed possible for ARPU to increase over time, a concept that was completely alien to the client concerned.

In this anecdote lies an illustration of why the Vodafone/KDG deal may not be the only alliance we will see between mobile and cable. Mobile operators are sitting on increasingly fat distribution networks driving the industry more and more into the realm of video and entertainment distribution. For the mobile players, entertainment means an opportunity to get a bite of that mysterious upward ARPU flow.

At the same time, cable and pay TV operators not only see broadband as key to their offer, but are looking to provide entertainment services on the move to multiple devices. Suddenly, alliances that some years back looked like questionable partnerships to add quad-play to the cable service portfolio take on a whole new rationale. Mobile is one of the key planks in the future of multichannel entertainment, broadband provision and, of course, telephony: the cable Holy Trinity.

2/ The Content Distribution Network (CDN) will become the next area of focus for cable investment and acquisition.

Here’s another one that has been on my predictions list for some time, but I believe that another area not only of investment but of potential strategic merger activity will be cable operators and CDN infrastructure owners. Cable operators have always been in the business of investing in and owning infrastructure. Now the CDN is crucial to successfully scaling entertainment delivery in the OTT space. By investing in or acquiring CDN infrastructure, cable operators have the opportunity not only to maintain their central role as entertainment pipe providers, but also to establish a new business-to-business revenue segment offering channel and content partners CDN services. To me, a natural fit for the industry.

3/ ‘Quint-play’ by adding Wi-Fi and out-of-home access to entertainment content will be the norm.

By now you can hopefully see a pattern. If mobile alliances become common and CDN investment becomes the norm, then as cable operators look to move beyond triple and quad-play, the out-of-home entertainment network will become the fifth service in the cable arsenal. Wi-Fi access is already available from a number of cable providers, but this will evolve to embrace a full provision OTT service offering that reflects the best of the cable content offer and encompasses broadband and mobile services on the move. This will mean that…

4/ Super-fast broadband will no longer be enough to differentiate the cable proposition, and content will again be thrust to the fore: cable’s position as broadband pipe provider will make content investments and alliances important again.

All of this means that control of content, something the industry has backed away from in recent years with content division divestments, will again be pushed to the fore as a means of service differentiation. Fast broadband has been a major driver for growth in the cable industry over the last decade and an essential part of the triple-play proposition. To date, cable has been highly competitive, winning the price-to-speed battle hands down across Europe.

Now though, as broadband is seen as a way to access full-service entertainment content (indeed some of the first widely available 4K HD will be distributed over broadband rather than via traditional broadcast means), cable operators will differentiate their broadband offers on the content access and services that they bundle. That could mean that money that is no longer being spent on linear channel operations is diverted to OTT content propositions. But, of course, one source of content alliances and immediate differentiation are the existing OTT providers like Netflix, meaning….

5/ OTT providers will be seen as friend, not foe.

OK, so this can’t really be a prediction anymore as it’s already happening through the deals that Netflix is inking with the likes of Virgin Media and Com Hem, but it’s important to re-iterate because these deals unify all five of the predictions made here. Let’s summarise:

  • Cable is moving beyond triple-play…
  • Mobile operations that also embrace Wi-Fi are looking like attractive partners as data and entertainment on the go become core…
  • CDN investments will be needed to fully participate in both the future of entertainment delivery and the future of entertainment service provision…
  • To differentiate bundled services in the future, the content proposition will be key, and this content proposition will increasingly be about OTT…
  • Meaning, OTT content will be essential to the overall bundle. Of course, this doesn’t mean only third-party OTT providers like Netflix, but cable-curated services too. Today though, existing OTT propositions with a well-established name represent a quick win for cable operators.

So there you have it. My top predictions for 2014, and beyond… at least near-term ‘beyond’. But in the fast-moving entertainment industry, predicting any further out quickly enters the realms of Science Fiction: cable operators offering neural implants for entertainment and communication? Ask me again in a few years.

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The Expert View: Vodafone Interest Says Cable Got It Right

Technology is increasingly about mobility and choice, but there is a balance to be met

Guy BissonBy Guy Bisson, Research Director, Television at IHS Electronics & Media

Now there is a new word for people who break off from a social interaction to answer a mobile phone or browse social media: Phubber, meaning mobile snubber. Vodafone has built a £46bn a year business on the back of mobile telephony. With the rise of tablets, national Wi-Fi networks, Apps, 4G auctions and Cloud access, its services are at the cutting edge of the emerging media consumption trend. Why, then, is Vodafone bidding for a major cable operator in Germany where analogue TV still reigns and uptake of broadband and telephony among its customer base remains low? If the future is on-demand, on the go, what exactly does Vodafone see in this wired asset?

Much has been made of the cost savings Vodafone will make by using Kabel Deutschland’s fixed line infrastructure instead of leasing capacity from Deutsche Telekom, but do the touted savings of €200m a year justify on their own the €7.7bn deal, or is there something else to this transaction?

pie chart for guy bissons postOne thing is clear. Vodafone’s interest in cable is a vote of confidence in the cable business model. And more than that, it is a vote of confidence in the way that cable has positioned for the future of entertainment. A future at which television remains centre stage, but in which broadband (and increasingly mobile) take near equal billing.

Let’s take a step back. We all know people who seem to spend their lives glued to a mobile device. People who would rather walk into a lamp-post than lift their gaze from the mobile screen. But the average European spends nearly four hours of every day watching a much larger screen: the television. Video entertainment in the home is by far the biggest segment of consumer entertainment spend. IHS figures show that paid multichannel TV accounts for 64 per cent of Western Europe’s €52.5bn consumer-level spend on screen entertainment. Further, the average revenue generated by a TV customer in Europe has grown almost continually year-on-year, something that is astounding, indeed puzzling, to a pure-play telecoms company used to increasing commoditisation in fixed line.

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Dates Announced for Cable Congress 2014

Mark your calendars: 12 – 14th March 2014, RAI, Amsterdam

This year’s event saw over 850 senior-ranking attendees from 39 countries come together at the time of great activity within the sector and in a city where technology, media and entertainment are leading globally. Here’s a quick summary of this year’s key features.

Executives of Virgin Media and Liberty Global met at Cable Congress to give an inside edge on the latest acquisition news and discuss the bright future of cable and its customer

Both, Michael T. Fries, President and CEO of Liberty Global, and Neil Berkett, CEO of Virgin Media appeared at the event to talk about their views on the industry and the recently announced merger of the two businesses. Mike Fries, CEO of Liberty Global, told CNBC about plans to enter one of the most competitive and dynamic markets in Europe in an exclusive broadcast interview

Cable Europe announced fresh data from IHS Screen Digest that showed 5.5% top-line revenue growth across Europe, representing nearly €1bn in new revenues for 2012

The upward trend is explained by a shift towards digital for customers increasingly relying on the high speed fibre-rich broadband connections for which cable is known as well as the trend of increasingly accessing video content over cable’s high performance telecom networks. Guy Bisson, Research Director at IHS Screen Digest, broke down latest figures and leading trends in cable industry during a CNBC interview and explained why cable providers are extremely well-positioned to capitalize as the industry moves towards content provided over the internet.

For the Cable Congress TV’s executive speaker interviews conducted by Digital TV Europe, visit www.cablecongress.com/videos.

On the second day of the conference Cable Europe announced the Cable Europe Award 2013 winners

The Cable Europe Innovation Award, voted on by delegates at Cable Congress, was awarded to Belgian operator VOO and SeaChange for their multi-screen TV solution VOO Motion.

Jose Pascoal, Planning, Engineering & Services Architecture Director, ZON Multimedia was honoured with the Cable Europe Fellow Award in recognition of his individual dedication, talent, consistent excellence and contributions to the cable industry. Read the full coverage of the awards ceremony here.

Cable growing faster than satellite, says IHS Screen Digest #CC2013

Cable is growing revenue faster than satellite competiton, according to IHS Screen Digest.

Looking at the triple-play bundle taken together, cable’s success in marketing telecom and internet services, which now accounts for the majority of cable revenue in 10 EU markets, has led it to outpacing satellite TV companies in terms of overall revenue growth, IHS Screen Digest TV research director Guy Bisson told Cable Congress attendees this morning.

Growth over the last five years has come from eastern Europe and some western European markets such the Benelux countries, said Bisson. Over the next five years, Germany will continue to grow strongly and eastern European growth will accelerate. The Nordic countries are expected to grow strongly, with others including the Benelux turning in moderate growth.

Growth will come from digitisation, said Bisson. Digital penetration across the EU 27 countries is growing and will give cable ongoing growth even if it does nothing else, he said. However, this growth will be accelerated by converting more single-play customers into telecom and internet customers as well as TV subscribers.

Bisson said cable operators also had the opportunity to embrace new lines of business, including CDN services and delivery of services from the cloud to devices outside the home.

Record-Breaking Results for Cable Congress 2013

Record-Breaking Results in 2013

This year Cable Congress welcomed over 850 senior-ranking attendees from 39 countries.

The high quality of attendees reflected a broad cross section of the industry, with 29% of delegates representing cable operators and service providers, 27% equipment and set top box vendors, 13% content providers. View the full attendee breakdown here.

Cable Congress 2013 came at a time of great activity within the sector and in a city where technology, media and entertainment are leading globally.

Both, Michael T. Fries, President and CEO of Liberty Global, and Neil Berkett, CEO of Virgin Media appeared at the event to talk about their views on the industry and the recently announced merger of the two businesses. Mike Fries, CEO of Liberty Global, told CNBC about plans to enter one of the most competitive and dynamic markets in Europe in an exclusive broadcast interview.

Cable Europe announced fresh data from IHS Screen Digest that showed 5.5% top-line revenue growth across Europe, representing nearly €1bn in new revenues for 2012.

The upward trend is explained by a shift towards digital for customers increasingly relying on the high speed fibre-rich broadband connections for which cable is known as well as the trend of increasingly accessing video content over cable’s high performance telecom networks. Guy Bisson, Research Director at IHS Screen Digest, broke down latest figures and leading trends in cable industry during a CNBC interview and explained why cable providers are extremely well-positioned to capitalize as the industry moves towards content provided over the internet.

For the Cable Congress TV’s executive speaker interviews conducted by Digital TV Europe, visit the event website.

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Cable Congress Sessions Highlight Market-Winning Strategies

NEWS RELEASE

Cable Congress Sessions Highlight Market-Winning Strategies

(London 7 March 2013) Continuing to consolidate, harnessing the power of mobile, up-selling fibre-rich telecoms services, and taking the cable experience out of the home are among the market-winning strategies that will position cable to capitalize as the industry takes on new competitors and increasingly moves towards content provided over the internet, said members of cable‟s C-suite and other industry experts on the second day of Cable Congress in London.

Andrew Barron, COO of Virgin Media, said, “Only the paranoid survive. Innovation, being close to our customers and finding any advantage over the competition is key. The next decade of cable is about mobile, B2B and extending the relationship with the customer beyond the home.” He added: “We are a very innovative industry and we should be proud of this.”

According to Guy Bisson of IHS Screen Digest, “Telecoms services are becoming core because of the way cable has positioned itself through bundling.” However, he noted that cable is now moving beyond the mobile quad play and toward bundling of Wi-Fi services in and outside the home. Bisson‟s research shows that there are 1.4m fewer cable homes than five years ago, but 17.7m more RGUs – that is because for every analogue customer lost, 13 new RGUs are added.

A recurring theme has been the need for operators to keep the customer at the forefront – innovating to deliver products they want and at a competitive cost. Discussions on the pan-European C-Suite panel showed that these customer strategies can differ market-by-market. Manuel Cubero, COO, Kabel Deutschland Holding AG highlighted the importance of fibre, network capacity and speed: “In Germany the customer wants to download as much as possible through their network. We are investing 26% of our revenues in CapEx every year and most of it is on fibre.” This contrasts to the UK market where consumers give preference to selecting the package that best suits their needs. Luis Lopes, COO of Portugal’s ZON, added: “We are trying to sell an experience not products,” an approach that helped his company grow revenues 3 percent in 2012 despite an economic downturn in Portugal.

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