Culture is future » Financing and economic models

08.08.2012

Article - The use of the broadband network in France

A new estimation model of the traffic enables to evaluate the traffic of the broadband network of electronic communications. The main lesson: video constitutes the main flow and it will continue like this.

 90% is the proportion of videos in the total traffic on broadband networks, whatever they are ‘open’ networks (like Youtube, Dailymotion) or ‘closed’ networks, than only subscribers can access (like Canal+). In terms of financial flows, only 10% are monetized, that is 20% of the total traffic. The study lead by the IDATE and sponsored by the CNC that was made public in June 2012 delivers a complete panorama of the techniques and flows and tests prospective scenarios.

The video will remain the main traffic: +30% by 2015

On the open internet (47% of the total broadband traffic). Through streaming, exchange of files on a “peer to peer” mode, the video flow is free (99%) and predominantly illegal (70%). The legal offer only concerns very short videos or rebroadcast services. On closed networks, video services represent almost all the bandwidth (the volumetry of the mobile traffic is insignificant). The linear services (i.e. TV channels) are predominant. Video on demand and recording services represent less than 1% of the traffic. By 2015, the total traffic should increase by 30% until 30 Go per month / per subscriber and the proportion of videos should also increase and reach 60% of the total traffic on the open internet and become the first communication item on the French broadband internet.

Towards a potential decrease of the illegal consumption

According to the modeling of the IDATE study, several factors should feed a decrease of the illegal flows ; the closing of illegal sites – in particular since the closing at the beginning of 2011 of Mega Upload, with its 70% of P2P market share, that is 4.1 million monthly users-, the implementation of the punishing law, like HADOPI, which limits the access to illegal downloading and streaming websites, and finally, the small amount of available illegal videos which encourages the consumers to redirect to legal websites or better quality closed networks.  Thus, legal consumption should increase by 2015. The challenge is to get and to secure the loyalty of the users towards closed networks, thanks to multiservice subscriptions. The content and particularly the audiovisual rights could become a major asset.

The rise of the video on demand should also allow encourage legal consumption. Even if it is still marginal today (0.1% of the bandwidth), the VoD is today predominantly ordered on computers (70%). This access mode should lose ground by 2015, in favor of offers included in TV subscriptions. we notice similar tendencies for offers of rebroadcasting.

This optimistic scenario can be weakened by the emergence of new technologies, and particularly the mobile phone (and the emergence of the broadband 4G), which could boost the illegal (low quality) demand, even if the proportion of videos on mobile phones remains small in 2010 (23%). Its distribution on a large scale could cloud the issue.

The emergence of a new demand

This study gives a quick outline of the emergence of a new demand, more targeted and more demanding, for audiovisual products:

-          Strong demand of non linear services, which can be consumed at any time and from every device (TV, PC, mobile phone),

-          Importance of the comfort of consumption : quality of the videos, accessibility of offers, which is one of the driving forces of the movement from the illegal consumption to closed networks,

-          Increasing demand of long formats (movies, series), which enable the broadband to challenge the DVD in terms of fastness and movies’ dematerialization.

This predictable evolution confirms the necessary renewing of the offer, impacting both broadband internet service provider (which content to keep one’s clients?) and audiovisual producers (who replaces the financing of the video industry?)

Today, the tablets are experiencing an exponential growth and the growth of smartphones already outcomes the one of computers, the video consumption bets on the return of the most user-friendly device: the collective consumption of television. If families will not gather at 8 pm for the news, they will to watch a movie or a series that they will have downloaded.

 

Glossary:

Broadband includes the cable, fiber optics and ADSL and the corresponding mobile network is the 3G (3rd generation), 4G is the “very broadband” on mobile phones.

Key figures:

There were 20 million broadband subscribers in France at the end of 2009, i.e. 30% of penetration rate, +5 points in 2 years (source: OECD), 29.8% for ADSL, 0.1% for fiber optics, which makes France to rank 9th in Europe behind the Nordic countries, but ahead of Germany and the United Kingdom.