August 27, 2019
The French TV and video entertainment market has struggled in recent years as over-the-top video undermines traditional distribution.
Now, the French, along with every other home entertainment market, has embraced SVOD as home entertainment — if for no other reason than statistics.
Futuresource Consulting says total video entertainment consumer spend is expected to exceed €7 billion ($7.7 billion) this year, making France the third-largest video entertainment market in Europe.
“Despite the closure of CanalPlay, SVOD has started to take off in France driven by Netflix’s fantastic performance,” analyst Tristan Veale, said in a statement.
Veale attributed Netflix surge among French consumers due to part to the service spending freely for the rights to key local language TV shows, which have been well received and have created a buzz around the service.
“From 5 million subscribers at the end of 2018, representing half the market, we are expecting their sub base to grow further in 2019,” Veale said.
Indeed, SVOD revenue is expected to hit €827 million ($918 million) this year.
According to a Futuresource consumer survey, viewing Netflix on a TV is now the dominant way to watch the service in France.
“Over two-thirds of Netflix users now say viewing on any TV is their most preferred way, with Smart TV’s in particular a key driver, a trend we are seeing in many other markets we survey,” Veale said.
Notably, as myriad consumers worldwide subscribe to multiple SVOD serivces, the practice is still relatively uncommon in France, with less than 40% of SVOD households taking more than one service, with no significant challenger to Netflix since CanalPlay exited in mid-2018.
Futuresource contends the competitive landscape is expected to change as Amazon Prime Video ups its activity in the country and expected new SVOD entrants such as Disney+, Apple TV+, HBO Max and others target the French market over the next couple of years.
While these new services provide consumers more choice, Futuresource believes this trend will ultimately become frustrating for consumers, as programming choices become increasingly fragmented.
The research firm believes service providers that aggregate multiple services, provide pan-service search, navigation and provide a seamless user experience amongst the clutter of SVOD services will rise to the top.
Aggregation of other entertainment content, including video games and music, could also be a differentiator moving forward.
Companies like Apple with a broad range of TV/Video, music and games content could offer attractive “triple play” content bundles – Apple +, Apple Music and Apple Arcade, according to Futuresource.
“Gaming in particular is taking an increasing share of the consumer wallet, the French gaming software market will hit €3.5 billion ($3.88 billion) in revenue this year, with strong growth anticipated over the next few years,” Veale said.