Overall TV and video entertainment spend in France is expected to reach €7.9 billion by 2018, averaging 1 per cent annual growth between 2014 and 2018, according to research from 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 per cent, to €7.6 billion, but is expected to remain flat in 2014,” says Joanna Wright, Senior Market Analyst at Futuresource Consulting.
“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 per cent and 7 per cent growth respectively,” says Wright.
French pay-TV VoD, box office and packaged video all posted losses, with pay-TV VoD witnessing its first annual decline (-6 per cent to €123 million), box office declining by 5 per cent to €1.2 billion, and packaged video dropping by 17 per cent to just under €1 billion.
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 per cent of overall video spend in France,” says Wright.
While overall home video struggled, digital video grew 8 per cent 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 per cent to €45 million in 2013) but it remains a relatively small segment, accounting for 19 per cent 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 per cent 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 in 2014 (11 per cent 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 per cent each year between 2014 and 2018 to reach €0.6 billion. Moving forward, pay-TV and subscription VoD services will be the key drivers, with transactional digital video showing healthy growth but from a low base.