A new distribution mode for films
LFE, march 4, 2013
Jean Luc Ormieres
– Introduction, Definitions & figures
– The French VoD market
– UNIVERSCINE, a French Video on Demand
platform
– EuroVoD – the European federation
Conclusion – VoD, a new opportunity for financing films?
A major change on the brink to happen in film
exploitation.
A serious question for the near future?
 Which template, which business model ?
 Two templates co-exist today:
To make it simple, one is a supply/catalogue driven and the
other one is a demand/community driven. As we come from
cinema and not TV we strongly believe in a supply driven
business.
We think that
: online distribution of audiovisual content and especially films
= streaming or download . From a marketing viewpoint = Rental
(streaming or Download to rent) vs Electronic Sell Through EST
= transactional VOD (Rental + EST)
= subscription VOD
= Free VOD or Advert-supported VOD
 Broadband / high speed internet connections :
 the development of the VOD market is dependent on the broadband and IPTV
penetration
: Internet Protocol television (IPTV) is a system through which television and
VOD services are delivered using an IP based system, usually directly to the TV sets
through a Set-Top-Box. IPTV makes it possible for ISPs to build Walled Garden
services : they fully control the delivery of content to the Set Top Boxes through
their networks and implement the billing system.
 Households with broadband internet connections in
the EU27 more than doubled between 2006 and
2011 reaching nearly 70% in 2011.
 Proportions of houselholds with BB connections
- Sweden 86% (highest rate) Denmark 84%, UK &
Netherlands 83 % have the highest rate
- Romania 31%, Bulgaria 40% and Greece 45%
have the lowest ones
 Films represent about 75% of the total VoD consumption
in Europe
 European market is dominated by the UK and France
 Total VoD turnover of Europe to exceed 1,65 billion € in
2011, in a worldwide market that is close to 11,5 billions
US €
 Over 600 VoD services available in Europe
 VoD expenses in France grew from 29 M€ in 2009 to 150
M€ in 2010, and above 310 M€ in 2012
in 2011
FRENCH VOD MARKET (in M€)
180
170
160
140
 A figure between 85 and 100 Millions
legal downloads has been reached
 95 % of the transactions are rentals
135
120
 TVOD (transactional VOD) accounts for
100
93% of the market value (vs SVOD &
AVOD)
83
80
 the average price for a film transaction =
60
53
4,25 € (rather high)
40
29
20
 90/95 % of the market on IPTV & Itunes
15
0
2006
2007
2008
2009
2010
2011
 Films account for 70% of all transactions
In France, the Media Chronology is a regulation.
TVOD (EST only)
TRANSACTIONAL
VOD
(first window)
Theatrical
release
4 MONTHS
DVD and VOD
release
PAY TV
(1st and 2nd windows)
Close rental VOD
10 MONTHS
Pay TV
FREE TV
No VOD
22 Mo
Free TV
TVOD
TVOD
SVOD
SVOD
PAY or FREE
TV
AVOD
PAY or FREE
TV
36 Mo
SVOD
48 Mo
AVOD
The MEDIA CHRONOLOGY has always played a strong role in the financing of film
production. SVOD starting only at 36 months has protected PAY TV channels from new
competition and has allowed for the development of a strong TVOD market.
Nb of films
Films by origin
7000
6000
738
5000
1813
USA
4000
Europe (-FR)
3000
France
2000
2952
Other countries
889
1000
0
2007
2008
2009
2010
2011
The number of films available on VOD is
growing rapidly but can still seem weak in
comparison with DVD references.
A high diversity of films supported by a
regulation (European directive translated
in French law)
What can account for such a situation ?
- Very competitive market for Triple Play offers (30€/mo with the Set-top-Box)
and therefore a very high IPTV penetration rate (10M households = 1/3 of all
households)
- VOD on IPTV/ITunes is favoured by consumers for 2 main reasons :
the service is available directly on their TV sets
they are invoiced on their internet bills (no credit card needed) or via
theirApple account
Therefore, up to 2011, the French VOD market has been dominated by
walled garden services.
Although it gives much power to a few players and can be a threat to
diversity, the ISPs have used their huge marketing means to develop VOD
usage.
Over The Top (OTT) Offers are services proposed by players that do not control
the physical distribution network : they come « over the top » using the home
internet connection to be available on some devices
NEW DEVICES : Connected TVs
Ipads
Android tablets
Game consoles
24M
2011
Samsung / LG / Sony / Google TV
Apple
Open android Sony
Microsoft
market
The Itunes Film store launched in France in 2010, its market share is growing rapidly. The
marketshare of IPTV will be decreasing in 2012/2013
NEW PLAYERS : Google/Youtube, Facebook, Dailymotion ?
The market is opening slowly to competition
TVOD
VOD/EST
DVD sales
THEATRICA
L
MARKET
+
PAY TV
SVOD
in 2015,
TVOD + SVOD = 400 M€/year
out of which
200 M€ should go to
production and
distribution
* Investment in film
financing in France is
slightly over 1000 M€
– founded in 2001 as a platform for legal distribution of films
on Internet, UniversCiné has become one of the prominent actors in the
VoD sector in France.
–
UniversCiné is a VoD Rights Aggregator, Publisher and Distributor,
specialized in Independent cinema of high artistic quality and art-house
films, with a current online catalogue of more than 2200 titles.
– UniversCiné is committed to promote VoD as a new
channel for distribution of films and to export its experience throughout
Europe by helping the development of other VoD platforms and creating a
network of partners.
UniversCiné is supported by
Currently there are 49 shareholders :
ADR PRODUCTIONS – ARCHIPEL 35 – LAZENNEC – FIDÉLITÉ PRODUCTIONS –
JBA PRODUCTION – LA MOUCHE DU COCHE FILMS – LES FILMS DE LA
BOISSIÈRE – LES PRODUCTIONS BAGHEERA – MAGOURIC PRODUCTIONS –
JLA/MERCURE DISTRIBUTION – LE PETIT BUREAU (QUO VADIS CINÉMA) –
SUNDAY MORNING PRODUCTIONS – WHY NOT PRODUCTIONS – 3B – AGAT
FILMS – DIAPHANA FILMS – GLORIA FILMS PRODUCTION – MACT
PRODUCTIONS – MAÏA FILMS – OGNON PICTURES – PIERRE GRISE
PRODUCTIONS – REZO PRODUCTIONS – TS PRODUCTIONS – ADVA – CINE
NOMINE – ELZEVIR FILMS – LES FILMS D ’ ICI – HAUT ET COURT –
INTERSCOOP – OF2B – LES FILMS PÉLLÉAS – PROGRAM 33 – SEPIA
PRODUCTION – PLAYTIME – CE QUI ME MEUT – ELIA FILMS – LES FILMS DE LA
CROISADE – LES PRODUCTIONS DU TRESOR – LES FILMS DU KIOSQUE – LES
FILMS DU POISSON – K’IEN PRODUCTIONS – NORD-OUEST PRODUCTION –
SOMBRERO PRODUCTIONS – SOPHIE DULAC DISTRIBUTION – FORUM FILMS –
MEMENTO FILMS DISTRIBUTION – SOCIETE PARISIENNE DE PRODUCTION –
PYRAMIDE - METROPOLITAN FILMEXPORT
•
The shareholders are independent producers, distributors and sales
agents of feature films.
•
Collectively, they represent more than 40% of the French film
production and more than 20% of all theatrical releases in France
•
At the 2010 Cannes Film Festival, the shareholders had not less
than 30 films presented in the different selections
•
6 among the main awards: Palme d’or, Grand Prix, Prix du Jury,
Prix de la Mise en scène, Caméra d’Or and Prix CICAE de la
Quinzaine des Réalisateurs, went to some of these films which
eventually enriched UniversCiné’s catalogue
•
As rights-holders, the UniversCiné shareholders have been bringing
since the beginning more than 1000 films to the catalogue
The catalogue has over 2200 titles online; more than 1000 of them are under exclusive
mandate for VoD distributio
UniversCiné showcases some of the most recent hits of independent cinema, as well
as patrimonial works
A few titles: 4 months, 3 weeks and 2 days ; Il Caimano ; Soul Kitchen ; In the Loop;
Louise Michel; Eldorado…
And a few names: Bergman, Fellini, Godard, Polanski, Kaurismaki, Dardenne,
Kusturica, Resnais, Saura, Szabo,Tarr…
– currently the total
number of films (signed and negotiated)
is of more than3000
– 96,5% are feature films
that have been released in theaters at
least in their production countries; 1,8%
are short films; 1,7% are TV films
– there is both a high diversity
of origins and a strong European
dimension
All of the UniversCiné films are
proposed in original version with
subtitles in French.
The UniversCiné catalogue represents
around 17% of the total legal VoD offer
in France
Europe Other
3%
Other
Southeastern
19%
Europe
UK
USA
3%
7%
9%
Central Europe
3%
Scandinavia &
Baltic States
4%
Benelux
3%
ES
2% IT
4%
FR
39%
DE
4%
UniversCiné has a niche – it gives art-house
films, some of them awarded in major festivals,
a second life beyond their theatrical
exposure
UniversCiné provides in-house produced
editorial content (articles, interviews, trailers)
in order to highlight films and guide audiences
UniversCiné develops exclusive crossmarketing operations with festivals and
events in order to promote new talent and
European cinema
UniversCiné proposes original communitybased tools in order to promote films through
social networks
On UniversCiné’s own web-based VoD platform www.universcine.com
On partners’ web-based platforms and portals – ARTEVoD, VirginMega
On ITunes
On IPTV – Free, Neuf/SFR,Orange (selection in 24/24 Video), Numéricâble
On Connected TVs – deals with Samsung, LG, ongoing discussions with Philips, Toshiba
On social network platforms with a dedicated VoD application (facebook)
On UC applications on Androïd tablets and smartphones (launch march 2013)

The company structured itself around business-units, marketing, editorial, technical
services, etc.

Universcine has developped its own technical service, front and back-office

The technical services b.u dedicates a substantial amount of its resources to R &
D, paying attention to quality from content to exploitation. It has based its
philosophy on a very high degree of security (DRM) that respects the content
in all its aspects, whether artistic, technical or even legal). Special attention is
currently paid to developping solutions for Continuum of services and devices and
shared usages (Ultra-Violet)

Together with a weekly newsletter (over 250,000 subscribers) The Editorial b.u
yearly provides an important amount of bonuses, interviews, special events
audiovisual contents, in relationship not only with the VoD releases, but also with
the news in the industry, the festivals, etc.
ANALYSIS OF REVENUES ACCORDING TO TYPE OF VoD EXPLOITATION
WEB
Conn. TV
IPTV
RENTAL
EST
RENTAL
RENTAL
ALL TAXES included
VAT deducted
Other Tax deductions
- SGC/CMS
operator's fee
Net publisher UC (on average price)
4,99
4,17
4,09
3,84
14,99
12,53
12,28
11,55
4,99
4,17
4,09
3,84
4,99
4,17
4,09
3,84
3,84
11,55
3,84
2,50
Fee UC
net RIGHT HOLDER
1,54
2,31
4,62
6,93
1,54
2,31
0,50
2,00
Bandwidth costs UC
Payment costs UC
Electronic Device Manuf. Fee
0,28
0,25
0,28
0,25
0,28
0,25
0,35
Gross Margin
1,01
4,09
0,66
0,50
Evolution and Forecast of the Sales (direct, indirect, rentals
and DTOs)
2500000
2000000
2000000
1500000
1500000
1000000
1000000
500000
0
450000
580
2007
22835
2008
151000
2009
2010
2011
2012
2013
The UniversCiné Market Share should progress from 1,5% in
2010 to 3% in 2013
UniversCiné acts as a VoD platform editor/operator for TV5 Monde, Institut
Français, Metropolitan Film Export, Médiathèques Numériques.
UniversCiné has shared its technological know-how and experience in
operating a VoD platform with Belgium (UniversCiné Belgium), Ireland (Volta),
and Switzerland (LeKino.ch) and will do so with Poland, Italy and the United
Kingdom.
UniversCiné has committed to the development of a European network with
partners from 9 countries and is the leading force in the creation of the
European Federation of Independent Cinema VoD Platforms, EuroVoD
– independent small and medium companies are
confronted with the VoD offer of large integrated groups – ISPs and TV
networks
– UniversCiné has teamed up with similar companies
throughout Europe– VoD platforms operated by groups of independent
producers, distributors, Video editors
– EuroVoD (European
Federation of Independent Cinema VoD Platforms), a non profit Association
governed by the French Law of 1901, based in Paris
– a VoD platform with more than 1600 titles on a bilingual interface (French &
Flemish)
(Spain) – a VoD platform with above 3200 titles online
(Austria) – a VoD platform based in Austria, with 890 titles
(Ireland) – a VoD platform with more than 300 titles online
(Germany) – a VoD platform, with more than 200 titles
– a VoD platform launched november 10, 2012, with more than 200 titles
(Finland) – an independent production company
(France) – a VoD platform with more than 2200 titles online
(Poland) – Independent Film Foundation is in charge of the project
 As of today, four technological models exist
(UniversCiné, Filmin, Good!Movies and Flimmit),
 All possibilities for developing synergies and longterm

technological and business convergence will be explored
with the aim of eventually merging into one single model.
Reinforcing collaboration and integration in order to
increase stability and cost-efficiency
Network
The ‘inner core’ network of EuroVoD
is of 9 countries; their total population
is of more than 260 million people
The extended network of EuroVoD so
far is of 13 countries
We have now started partnerships in
other major European countries – UK,
Italy, the Netherlands
To Promote Video on Demand as a New Channel For Distribution
of Films
To Benchmark the Best Services of the Sector
To Create a Collaborative Model Between the Members of the
Association and Other Independent Cinema VoD Platform
Operators
to pool resources and ‘mutualize’ costs
to negotiate better rates for storage,
bandwidth, subtitling…
to exchange know-how, technical expertise
and business contacts
Strategy
to identify rights-holders and negotiate
VoD rights in common
to build a shared catalogue of European
films, available on the platforms of the
federation
to increase the transnational circulation of European films
to support the diversity of European cinema
to promote independent cinema of a highly artistic quality throughout Europe,
to promote new talent
Targets
 To increase the number of members of the Federation up to 15
 To develop a common back-office for 4/5 of the VoD platforms members of
EuroVoD
 To make EuroVoD a real ‘central acquisitions service’ negotiating acquisition
deals, subtitling services, storage, bandwidth, etc., and achieving costefficiency with about 25% of economy for its members
 To enrich the catalogues of the EuroVoD members with 100/150 European
feature films per year, which will be subtitled and proposed online
 Operating in a very structured context, having its origins in the
concerns and desires expressed by content makers and providers
regarding the destiny of their films, Universcine mirrors the fears and
aspirations of the independent sector.
 Far from solely advocating for the protection of the existing system,
Universcine acts as a think tank that elaborates and implements
projects in France and in Europe.
 Universcine, conscious of what the digital revolution can bring to the
future of film distribution in its various aspects, is also dedicated to
contribute to the ongoing transitions, in an harmonious way that will
maintain the sparkle of the independent sector, and the possibility for
the audience to elaborate its relationship with this new media.
Jean-Yves BLOCH, CEO
jybloch@universcine.com
+33 (0)1 75 43 16 74
Dragoslav ZACHARIEV, International Relations & EuroVoD Project Manager
dzachariev@universcine.com
+33 (0)1 75 43 85 81
Jean-Luc ORMIERES, International Development Consultant
jlormieres@gmail.com
LMC/UniversCiné: 47, rue de Paradis – 75010 Paris