What do the European Commission's plans to create a single digital market mean for the cable industry? That will be the key question in the presentation and panel The Future of Cable in the Context of the Single Digital Market at next week's Polish Chamber of Electronic Communication (PIKE) conference in Krakow. Within the EC's plans to create and facilitate Europe’s single digital market, a few key initiatives stand out. These can broadly be classified in three areas: Access to and investment in content; infrastructure investment; and business processes.
Content will get a lot of attention. A review of the Satellite & Cable Directive will look at its application to broadcaster’s online services while a harmonisation of copyright law will look at greater online access to digital content throughout the EU. Further, a review of the Audiovisual Media Framework will look at its adaptation to new (content) business models. While the EC is examining geo-blocking with regard to e-commerce as part of its digital market review, it is at the same time reviewing Geographic content licensing by Hollywood majors, broadcasters and pay TV operators as part of a separate investigation. And as part of the digital single market, it wants to facilitate cross-border portability of purchased digital content (including movies and TV shows).
Infrastructure and broadband investment is essential to the EC’s ambitions of broadband for all and as part of its Single Digital Market initiative it will look at incentivising broadband investment and encouraging new market entrants. Business processes will potentially be impacted by reviews of VAT application, personal data and the e-privacy directive.
The cable industry sits firmly in between the rapidly changing customer base, living in increasingly connected, multiscreen homes with access to video not only from new infrastructure competitors but platforms new to the video market altogether, and the key reviews and initiatives that the EC wants to implement to encourage new business models and entrants. Demand for bundled multiservice contracts across entertainment and communications has thrown the industry a significant bone, allowing it to draw on its strengths and long-term investment in fast broadband and telecoms and participate fully in multiscreen and multiservice provision. And while much of the cable industry has chosen to focus heavily on infrastructure rather than content investment, that is beginning to change with SVOD and OTT investment becoming a focus for the industry.
Content licensing models effect everyone. Our research shows that while SVOD services like Netflix are clearly global in reach, their content licensing is far from global, with the majority of titles available in only single markets. Compare and contrast this to HBO Go which has a much wider market spread of content and the benefit of own-production over content acquisition becomes clear. Direct investment in production alongside SVOD services starts to make perfect sense.
But will EC initiatives to increase access to content may also be a double-edged sword for the cable industry and the wider content production and channel market? Join me in Poland to find out.