November 20th 2013, Montpellier

DigiWorld Summit 2013

Video Cord-Cutting

Jean-Philippe HAAG

Senior Industry AdvisorTelecoms / Media

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Europe : Diverse Video landscapes

Fragmented markets

Diverse TV and telecoms markets• Cable / Telecoms / Satellite, Pay TV / Free TV

Digital Video still in infancy• Development : 31 M Netflix subscribers in the USA, 5 M in Europe

• Market structure : 75 VOD (would be) providers in France

Nov. 20th, 2013 P.2Idate 2013 – Video Cord Cutting

SG estimates

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Cable cord-cutting

Nov. 20th, 2013 P.3Idate 2013 – Video Cord Cutting

Not new : e.g. Netherlands, Sweden.

Essentially Basic TV cord-cutting. Pay TV still growing so far

Little impact yet. What matters currently is Cable vs. Telecoms competition

Broadband and Telephony contribute more to revenues and free cash flow than TV

Possible mitigations for Cable / Telecom operators : Co-marketing of OTT offers, QoS / CDN, Broadband volume tiers…

UPC WesternEurope

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OTT : No silver bullet

+ Reach

? Streaming / CDN costs : material

= Content costs

= Marketing / subscribers acquisition costs

+ RD costs – unlike traditionnal Media, digital Media are RD intensive

Low price Low Costs Need for operations excellence

Nov. 20th, 2013 P.4Idate 2013 – Video Cord Cutting