DEGE EUROPEAN MARKET REPORT

Transcription

1 DEGE EUROPEAN MARKET REPORT

2 CONTENTS EXECUTIVE SUMMARY... Page 03 EUROPEAN SUMMARY... Page 04 BELGIUM... Page 06 DENMARK... Page 08 FRANCE... Page 10 GERMANY... Page 12 ITALY... Page 14 NETHERLANDS... Page 16 SPAIN... Page 18 SWEDEN... Page 20 UNITED KINGDOM... Page 22 GLOSSARY... Page 24 APPENDIX... Page 25 THANK YOU... Page 46

3 EXECUTIVE SUMMARY IVF MEMBER COUNTRIES ALL VIDEO CONSUMER SPEND CHANGE TO 2016 EURO ( MS) 9,000 8,500 8,000 7,500 7,000 6,500 6, , , UK DE FR IT SW DK NL ES BE 2016 INCREASE DECREASE TOTAL This market report has been prepared for the Digital Entertainment Group Europe and covers 23 countries within the European home entertainment sector, with particular focus on territories included in the International Video Federation (IVF) membership. The trend period runs from 2010 to The European market for home entertainment stood at 9.7 billion in 2016, half the size of the US market ( 18.5 billion) in terms of consumer expenditure, but as with the US market, the compound annual growth rate took the total Euro value six years to overtake the 2010 level. This was also the case for the IVF nine, as shown in the chart above. There are several features that characterise areas of growth and potential for future video distribution: Northern European territories, whose consumers have embraced digital video services most enthusiastically, are those where the market has benefited from high household penetration of broadband. These markets also tend to show higher average household expenditure on home entertainment than other areas of Europe. Denmark, Sweden, the Netherlands and the UK have the highest shares of digital expenditure on home entertainment, at 85.3 per cent, 77.3 per cent, 75.1 per cent and 59.6 per cent respectively, all having higher than average broadband penetration. Where retail support for physical disc sales and the growth of Blu-ray Disc have helped to maintain consumer interest in the physical market (notably Germany) technological developments have had a relatively smaller effect on overall consumer expenditure. The rental habit has been transformed, as consumers move from physical disc to internet VoD and subscription services. Disc rental combined value has fallen by a greater percentage than physical sales over the trend period a decline of 42.8 per cent compared with per cent for disc sales between 2010 and Open internet services, provided by set-top boxes, on Smart TVs and mobile devices, are proving to be extremely popular with video viewers, having overtaken the value of physical disc sales and rentals with consumer spend on transactional and subscription services for the first time in European growth has been led by the UK, which saw spend roughly double each year between 2011 and 2015, while recent growth elsewhere accelerated above 2016 s average European increase of 32.5 per cent in Italy (108 per cent), Spain (89 per cent) and Belgium (78.6 per cent). Although great change has taken place over the six years between 2010 and 2016 in European home entertainment, the transition from physical to digital consumption has worked through in most of the key markets and is providing new opportunities for video distributors in territories large and small, as infrastructure continues to improve and stimulate consumer demand for high quality local and international film, television and independent video content.

4 EUROPEAN SUMMARY 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m 9, % % Average spend per TV Household Spend on physical video software m 4, % Spend on digital video & TV VoD m 5, % Penetration DVD Player % 71.5% -6.5% Penetration Blu-ray Disc Player % 23.2% 21.6% The effect of behaviour change due to higher penetration of broadband services spreading to all territories is having an impact to a greater or lesser extent right across the European home entertainment sector. Consumer expenditure on home entertainment exceeded 2010 levels for the first time in 2016, following a low of 8.42bn in 2013, now standing at 9.7bn, a 2.4 per cent increase on The modest increase of 0.2 per cent in compound average growth rate since 2010 can be attributed to the very recent improvement in broadband speeds, which have encouraged the launch and up-take of more open internet VoD and subscription (OTT) services across the region, but greater use of these tends to be more prevalent in northern Europe than Mediterranean countries. The nine territories currently in the IVF membership (see index) represent 83 per cent of all consumer home entertainment spend within Europe (for the purposes of this report Europe covers 23 countries see index), which has dropped slightly compared to 84.5 per cent over the last few years, as growth is starting to come through from smaller European markets. Some of this must also be due to the fluctuations in exchange rates, particularly in the British pound since the Brexit vote. In 2016 there were 255.3m TV homes across Europe. The IVF member countries, generally the stronger markets, accounted for 62 per cent of these. On average each TV household contributed to the home entertainment market, up from in the low of Aggregated consumer expenditure on digital services overtook that on physical discs for the first time in 2016, with physical s share tracking at 44 per cent, a drop of 11 percentage points since The value of physical sales and rentals stands at 4.25bn, now half that in 2010, when consumers had nowhere near the access to TV VoD, internet VoD and subscription services that they do today. VALUE OF EUROPE SHARE OF EUROPE 3.6% BE DK FR % % % DE IT % 2, NL ES SE UK* OTHER % 2,149 * Decline based on YoY sterling to Euro 4.4 %.3 % 2.4 % % 1, conversion. When viewed in Sterling UK market showed a 3.3% growth.

5 EUROPEAN SUMMARY Growing consumer up-take of OTT services has not only been stimulated by the spread of fixed broadband infrastructure and improved speeds, but also encouraged by easy accessibility on a variety of platforms via mobile devices, driven by the spread of 4G and Wi-Fi. The overall deterioration in the compound annual growth rate (CAGR) of discs over the 2010 to 2016 trend period of 13.7 per cent within Europe is slightly above the fall among the IVF member countries decline of 12.8 per cent, which could be a result of the more active retail support for physical and premium formats where generic marketing campaigns are created through cooperation in trade associations. The rest of Europe, ie the smaller, less affluent home entertainment territories, has seen an 18.3 per cent drop to 551m. Not only was physical value overtaken by digital spend, 2016 was also the first year that consumer expenditure on OTT services alone was larger than on discs. At 4.45bn, compared to 4.25bn, year-on-year growth of 32.5 per cent was generated by the purchase and rental of home entertainment on open internet VoD transactions and subscription services. The IVF country share of spend represented just over 80 per cent, as the expansion of digital platforms in this sector was more keenly felt in territories where there is higher average TV household expenditure and broadband penetration. 10,000 8,000 15% 10% EURO M ( ) 6,000 4,000 5% -0% 2,000-5% % PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) Growth slowed in the European Pay TV TVoD sector, rising by 7 per cent in 2016, following two years of double digit growth, averaging 15.6 per cent. Here also the falling value of the British pound against the Euro will have influenced this weaker performance, as its Sterling value of the UK Pay TV TVoD market actually increased over 11 per cent, compared with a 1.6 per cent decline in Euro value. IVF countries together represented a lower, 76 per cent share of this digital sector. While TV household broadband penetration is twice that of the USA s, European expenditure on home entertainment is roughly half the size of the USA s in 2016, which could be said to be a function of differing economic and cultural conditions across European territories and between Europe and the USA. Over time, the differences in viewing habits of both continents have become less pronounced as global companies roll out their home entertainment propositions in export markets and European consumers benefit from increasing availability of audiovisual content across digital platforms. The introduction of portable VoD and subscription services in early 2018, as part of the European Commission s ambition for a Digital Single Market, could also stimulate growth and new opportunities for the home entertainment sector within Europe in the longer term, as consumers enjoy the benefits of mobile roaming throughout the EU. In conclusion, the transition from disc to digital appears to be most successful in territories where an appealing retail offer is maintained for consumers of Blu-ray Disc, DVD and the launch of premium physical formats. There is still an appetite for physical discs, as video viewers appreciate the availability of new release content, whether for personal, family viewing or gifting purposes, ahead of many digital services through active in-store promotional display. Although currently only a feature of the UK market, the launch of a Buy & Keep proposition, to provide video audiences with a digital copy of a title they have bought on disc, is soon expected to be rolled out in other territories, such as Germany and Italy. At the start of the growth trend period in this report, digital piracy had overtaken the sales of pirate DVDs and national governments were starting to ramp up online enforcement by implementing EU regulation and legislating for notice-sending. Digital video services are now supported in many territories by a variety of online enforcement campaigns targeting infringing websites and redirecting consumers to legal services. Digital video up-take is seen to be strongest in countries with more developed broadband infrastructure, predominantly in Northern Europe, and the drive to improve broadband penetration in weaker digital markets will certainly provide new opportunities for digital video distribution.

6 BELGIUM 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m % Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 54% -11.5% Penetration Blu-ray Disc Player % 27% 5.3% With a home entertainment market valued in terms of consumer spend at 182.7m in 2016, Belgium is the smallest market within the IVF membership. It has the third lowest per capita spend and the fourth lowest average TV household expenditure, although its population is twice that of Denmark. This can be explained in part by a combination of the lowest number of TV households and the second lowest household penetration of DVD players and broadband. In 2016, nevertheless, Belgium experienced its first year-on-year increase of 5.4 per cent since The value of the physical disc market dipped below 100m for the first time in 2016, down 16.2 per cent, following the trend over the previous 10 years, making Belgium the smallest physical market. This could be linked to the 11.5 per cent fall in DVD player penetration to 53.9 per cent, the largest drop amongst IVF member countries. However, Belgium s Blu-ray penetration rate is second highest in Europe after Denmark, at 27.4 per cent of households, and has the fourth largest average per household spend at SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT PAY TV TVOD 1.4% 3.5% % EURO M ( ) % 0% -5% -10% % PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) Although digital video s share of Belgian s consumer spend on all home entertainment is tracking below the European average, Belgium is one of the countries experiencing strongly rising expenditure on internet VoD and subscription services (OTT) over the last two years. While it is the smallest OTT sector in the IVF membership, this is well ahead of the European average growth rate, at 78.6 per cent versus 32.5 per cent year-on-year. Between 2010 and 2014 Belgian average digital spend per broadband household remained 2-3 behind that of France, but after drawing level in 2015 ( 0.10 behind) in 2016, spend shifted 3.49 ahead. Only Denmark and the Netherlands recorded higher growth rates in DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND 53% VS BROADBAND DOWNLOAD SPEED RANK (RANKED ACROSS THE 9 IVF COUNTRIES) #5

7 BELGIUM AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% BE YoY CHANGE 4.5% BE YoY CHANGE 29.9% BE 80.1% This shift has been generated by a higher share of its digital spend being generated from OTT services, which grew in 2016 by 79 per cent on the previous year. Back in 2010 Belgium had a minimal OTT market at just 1 per cent share of digital spend on home entertainment, compared with 33 per cent in France, but fast forward to 2016 and it reached 64 per cent, just 9 percentage points behind France (73%). Pay TV operators like Proximus branched out into OTT services and were joined by global companies to broaden the range of open internet propositions in digital video viewing. By contrast, Belgium s TV TVoD market value ranks sixth, at 35.2m in consumer spend, and experienced a second consecutive year of decline, with a 4.3 per cent year-on-year fall, one of only two countries not to see continuing growth in this area of expenditure in Europe. The Belgian Entertainment Association reports that all major online video platforms, such as Netflix and itunes, are established brands in Belgium and local ISPs are investing in their own video platforms offering local content. Piracy rates in Belgium are high compared to the EU average. In response, 2018 will see blocking measures being requested before the court for over 1,500 infringing sites in order to redirect consumers to the legal services. 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % % 47% 183M 11.4M 4.6M ITALY -IT Overall the prospects for digital video distribution look encouraging. In 2017 Amazon Prime launched in Belgium, taking advantage of consumers habits moving towards home entertainment viewing on internet VoD and subscription services and away from their traditional TV providers, while the potential for growth will be enhanced with greater up-take of broadband in Belgian households.

8 DENMARK 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m % Total Consumer Spend - Krone m kr 25.9% Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 72% -2.8% Penetration Blu-ray Disc Player % 31% 3.4% Exchange rate EUR/Dmk -> 1 = Dmk % With a year-on-year increase in Denmark s consumer expenditure of 26 per cent, the smallest IVF member in terms of population topped the table in terms of home entertainment value growth rates, repeating its 2015 success. the installed base to 96.8 per cent of households, a staggering 10 percentage points ahead of the UK, which has the second highest percentage of TV households with broadband among the nine IVF member countries. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT 6.2% The rapid up-take and growth of broadband and digital services lies at the heart of Denmark s strong performance and 2016 saw a further 1 per cent growth in broadband penetration, taking This has translated into a 106 per cent increase in CAGR since 2010, the highest consumer expenditure on digital video services in Europe. PAY TV TVOD 1.8% % EURO M ( ) % 10% -0% -10% 0-20% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) With a large array of digital operators within the market, including several global brands, Denmark experienced a near 50 per cent growth in consumer spend on internet VoD and subscription (OTT) offerings in Compared with the European average TV household spend, Denmark s expenditure is almost double the average of the next highest country, resulting in Danish TV households spending more on total home entertainment at 149 per annum. This is almost 30 more than in 2015 and nearly three times the growth seen in Sweden, which enjoyed the second highest growth in TV household expenditure - 45 more than the UK, which holds second place. DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 85% VS SPEED RANK #2 (RANKED ACROSS THE 9 IVF COUNTRIES)

9 DENMARK AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION DK 96.8% 100% DK YoY CHANGE 24.8% DK YoY CHANGE 41.1% By contrast, Pay TV VoD represents only 5 per cent of all spending on home entertainment in Denmark, the lowest proportion of all nine IVF member countries, with Germany a very close second lowest at 6 per cent. However, the Pay TV VoD sector still recorded a 12 per cent growth on This picture is not repeated in Denmark s physical market, which has seen the closure of several specialised retail chains such as Stereo Studio, TP Music and Fona, whose bankruptcy resulted in 50 stores closing in It remained the smallest country for value driven by disc sales and witnessed the largest percentage decline for the second year running, which was also the largest decline among IVF member countries. Nevertheless, Denmark has one of the highest Blu-ray player penetration rates across Europe at 31.6 per cent, the only IVF member country above 30 per cent of the household base. The DVA reports that in the first three quarters of 2017 Blu-ray Disc sales have recovered to 2015 levels, up 12 per cent, despite many fewer retail outlets. This is being stimulated by industry in-store campaigns to support new release sales. DVA figures indicate that consumers have become more aware that new releases are not available on subscription platforms. Comparing sales of new release titles on DVD and Blu-ray in Q with Q shows a 10% increase, while catalogue titles have declined by 14% over the same period. 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % % 15% 344M 5.7M 2.3M ITALY -IT Danish consumers of home entertainment have wholeheartedly embraced digital services and the strenuous anti-piracy activities in this territory have helped secure a strong paid-for sector. Denmark s cultural environment has encouraged the launch of a strong mix of local and global digital platforms and, with healthy growth in consumer expenditure and active marketing support for new releases at retail level, looks promising for distributors in a vibrant home entertainment market.

10 FRANCE 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m 1, % Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 69% -1.5% Penetration Blu-ray Disc Player % 23% 6.1% With a population almost equivalent to the UK s and slightly more TV households, France is the third largest home entertainment market in Europe, valued at 1,094.5m. This represents a 3.3 per cent decline on 2015 and the sixth consecutive fall in overall consumer expenditure, resulting in the overall CAGR declining by 7.5 per cent since Aside from the UK s value expressed in Euros, France was the only IVF member country to witness a decline in average TV household spend, falling by 1.66 to compared with 2015, a 4.1 per cent fall year-on-year. Blu-ray Disc player, TV and broadband households are all increasing, with the second highest rise in broadband penetration of TV households, up 39 per cent since 2010 to 73 per cent coverage. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT PAY TV TVOD 7.8% 12.9% 2,000 0% EURO M ( ) 1,500 1, % -10% 0-15% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) DVD player penetration has generally declined throughout Europe, in many cases to be replaced by Blu-ray Disc players, and France, like Germany, ran ahead of average growth. But this slowed down in 2016, with a 6.2 per cent increase to 22.6 per cent BD player penetration, falling behind the European average of 23.2 per cent. Despite this, French consumer spend on physical discs has not yet been surpassed by that on digital platforms, having seen the smallest decline of 7.5 per cent in its share of physical discs out of all nine IVF member countries. This is seen against an average fall across Europe of 11 percentage points and represents 56.3 per cent of all France s video expenditure in The French association, SEVN, indicates that the physical market showed some signs of stabilisation in 2017, in particular the new release segment which has benefited from local retail campaigns and is level versus the first three quarters of DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 44% VS SPEED RANK #8 (RANKED ACROSS THE 9 IVF COUNTRIES)

11 FRANCE AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% FR YoY CHANGE -4.1% FR YoY CHANGE 12.2% FR 73.1% Retail sales is a strength of the French market and is reflected in the share it represents of their disc spend in 2016, at 98 per cent versus 97 per cent back in This has been a stable performance versus that of the IVF membership, where retail share of the disc market has grown from 87 per cent to 93 per cent. Even with a reasonably strong consumer up-take of digital video services, which have doubled in value since 2011 to 478m, these grew at a lower rate in France, at 16.9 per cent in 2016, compared to the European year-on-year average of 27 per cent. This is in part due to lower than average growth in the open internet offerings provided by OTT services, up 26 per cent versus the European average of 32 per cent. It could be argued that France s strict media chronology laws, strong home-grown film and TV industry and powerful local players, such as Canal Plus, have combined to make it more difficult for global digital platforms to launch in this market, with a knock-on effect on consumer spend. 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % 1,095M 64.9M 28.4M ITALY -IT Film and TV content paid for on VoD, NVoD and PPV services experienced a fall in value for the second year in France, as in Belgium, declining by 3 per cent between 2015 and Nevertheless, Pay TV VoD is still an important part of the French home entertainment market, representing 12 per cent of consumer spend, which is a larger proportion than in Germany or the UK % % Since France has the third lowest digital share of home entertainment expenditure within the IVF membership, and without the strength of Germany s physical retail market, future growth and potential for video distributors is most likely to come from further stimulating the up-take of broadband packages and investment in digital services.

12 GERMANY 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m 2, % Average spend per TV Household % Spend on physical video software m 1, % Spend on digital video & TV VoD m % Penetration DVD Player % 56% -5.3% Penetration Blu-ray Disc Player % 26% 5.2% As well as having the biggest and growing population of 84m (up 1.2 per cent on 2015) in Europe, Germany has the greatest number of TV households, at 39.1m and generates an average of per household to the home entertainment industry. This is the second largest consumer market within the European home entertainment category after the UK was the second year running in which expenditure exceeded 2bn up 3 per cent since Affirming its position as a key player in Europe, 2016 marked an eleventh year of growth within the German home entertainment category. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT 17.1% PAY TV TVOD 13.2% 2,500 2,000 10% 8% EURO M ( ) 1,500 1,000 6% 4% % 0% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) Year on year Germany has continued to showcase a robust physical market, driven by consumers continued attachment to high quality physical products, such as Blu-ray and 4K offerings. These have been promoted by a 15 month campaign run by the German Video Federation (BVV) with support from video distributors and the German Federal Film Board (FFA), primarily through the use of social media. In 2016, physical content in Germany represented 58 per cent of spend and surpassed the UK for the first time, cementing its position as the largest European market for physical product, including the largest physical rental sector, near twice the UK s disc rental market. The strength of this spend has yet to be directly replicated across into the digital market, in which OTT / Pay-TV VOD spend currently makes up 892.4m (growth of 32.7 per cent since 2015) of the total 2.15bn home entertainment value within the territory. DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 42% VS SPEED RANK #7 (RANKED ACROSS THE 9 IVF COUNTRIES)

13 GERMANY AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% DE YoY CHANGE 2.4% DE YoY CHANGE 25.1% DE 74.7% While Germany continues to champion the physical market, with a CAGR falling just 3.6 per cent since the trending period of 2010, it has amongst the lowest transitional growth rates into the digital market of all of the IVF territories within this report. It could be said that the steady CAGR is representative of the quality offering (Blu-ray and 4K) the physical market provides when compared to OTT, whose total share across Europe represents just 17.1 per cent, with growth of 0.1 per cent each year since The strength of the physical market, whose 2016 share of the European total rose almost 30 per cent above its 26 per cent share in 2014, could also be attributed to the consistent support provided instore by grocers to keep physical in the forefront of consumers mind and thus enhance disc sales. The gentle growth rate of digital could be explained by the quantity of TV households with broadband, currently at 75 per cent, which slots Germany into fourth position out of the nine IVF member countries. A research study is being carried out on behalf of the BVV to explore the reasons for the comparatively slow development of the digital market in Germany. The results will form the basis of a consumer communication campaign set up to eliminate the barriers and to boost the up-take of digital services. 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % % 58% 2,149M 83.9M 39.1M ITALY -IT Though the Pay-TV VoD share of spend is lower than that of internet VoD and subscription (OTT) at 13 per cent versus 17 per cent, 2016 saw the largest year-on-year growth of all nine territories at 30 per cent (average across IVF members was 5 per cent). Though small, this presents an opportunity for content providers looking to develop their Pay-TV VoD propositions within Europe, as Germany offers a reliable market share. To conclude, Germany continues to display year-on-year growth within the home entertainment category, therefore cementing itself as a desirable territory with great potential for further investment in digital video services.

14 ITALY 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m % Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 87% 0.9% Penetration Blu-ray Disc Player % 22% 4.6% The fourth largest home entertainment market within the IVF membership, Italy has reported a stable population since 2010 but, after several years of decline, has seen three years of increasing overall consumer expenditure, with the second highest year-on-year growth in consumer expenditure after Denmark, of almost 19 per cent over 2015, standing at per TV household by the end of Growth in Italy s entertainment spend is not driven by digital services to the same extent as seen in other IVF territories because it has the smallest household penetration of broadband, at just 52 per cent. It was also boosted by Italy being the only IVF country to see average household expenditure on physical retail discs increase by 1.9 per cent. This translated into value growth in physical retail sales, up 2.6 per cent and its highest level since The variance with other territories can be explained by the highest installed base of DVD players in Italy, representing 87 per cent household penetration. In 2016 Italy took the largest share of retail spend they have so far enjoyed in Europe for physical retail within the trend period, at 5.9 per cent. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT PAY TV TVOD 2.9% 5.6% 2,500 2,000 10% 8% EURO M ( ) 1,500 1,000 6% 4% 500 2% 0 0% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) A particular characteristic of the Italian retail market is the strength of kiosks, which contribute a significant proportion of disc sales, although the downturn in the publishing press business has reduced the number of active kiosks from 35,000 to about 20,000 in the last two years, according to Univideo, the Italian trade association. Online retailers take a relatively smaller share than elsewhere, due to Italy s low broadband penetration. This may also go some way to explain the comparatively robust level of disc rentals the third largest in the IVF membership, which, nevertheless, declined by over one fifth on DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 41% VS SPEED RANK #9 (RANKED ACROSS THE 9 IVF COUNTRIES)

15 ITALY AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% IT YoY CHANGE 17.9% IT YoY CHANGE 58.8% When it comes to viewer expenditure on internet and TV VoD services, digital s share of Italy s overall consumer spend on home entertainment is on a par with that of Germany, albeit in a smaller market. Italy was the only IVF territory to show over 100 per cent year-on-year growth in spend on open internet purchasing and rental transactions in 2016, when Telecom Italia launched its EST service, although this was from a low base. With an average broadband household expenditure of 10.01, making Italy the lowest in the IVF membership, the impact of slow broadband speeds must also contribute to the decline in paid-for TV VoD transactions, down 2.3 percent since Trade body Univideo expects high levels of illicit content to be reduced by a strong programme of notice and take down activity being run by Communication Authority, AGICOM, targeting infringing websites which will boost enforcement in the next couple of years. IT 51.6% 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL % % PHYSICAL DISC 87% 79% 446M 59.8M 25.0M ITALY -IT With consumer spend on digital channels yet to replicate the performance in many other territories, the Italian home entertainment industry will benefit from recent efforts to promote digital services and the Italian government s new development plan to increase household broadband penetration to 80 per cent by % %

16 NETHERLANDS 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m % Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 46% -6.9% Penetration Blu-ray Disc Player % 20% 4.7% Consumer expenditure on home entertainment has been experiencing growth for the last three years and in 2016 reached the highest point since 2010, at 324m. For the first time since 2011 average spend per TV household in the Netherlands again exceeded 40. After its Scandi neighbours Denmark and Sweden, the Netherlands digital consumption has the third highest share of overall video spend of 75.1 per cent, driven by its 85 per cent household penetration of broadband TV households, also third highest of the IVF countries. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT 4.8% PAY TV TVOD 2.9% % % EURO M ( ) % -10% 0-20% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) Viewers spent 200m more in 2016 on open internet VoD and subscription services than they did just three years before, when the popularity of OTT took off with the arrival of Netflix in Its launch resulted in this market segment value increasing more than five-fold, from 15m to 79.5m by the end of CAGR of spend on OTT services since 2010 was a healthy 191 per cent, the second highest of all IVF member countries after Denmark over the trend period. Within the Pay TV TVoD market segment, following a dip in 2015, consumer spend went back up in 2016, experiencing an uplift of 18 per cent year-on-year, also the second highest percentage increase across the nine IVF member countries. DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 75% VS SPEED RANK #3 (RANKED ACROSS THE 9 IVF COUNTRIES)

17 NETHERLANDS AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% NL 84.9% NL YoY CHANGE 13.8% NL YoY CHANGE 34.1% By contrast, expenditure on physical video formats slipped under the 100m level for the first time within the trend period, with the largest decline in the CAGR amongst IVF member countries of 25 per cent. This was driven by the greatest reduction in DVD player penetration rates of 40 per cent since 2010, compared with the next biggest fall of 23 per cent seen in Belgium. The Netherlands has been hardest hit by the decline in the rental market, which now only represents 2.3 per cent of total physical disc retail revenues (versus nine per cent in 2010) and experienced the largest decline in CAGR among the IVF member countries of 42.8 per cent. 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % % 25% 324M 17.0M 7.7M ITALY -IT However, against this backdrop of falling popularity of physical formats, as Europe s average consumer expenditure on discs dropped as a share of total spend from 3.2 per cent in 2012 to 1.9 per cent in 2016, in the Netherlands total consumer spend has been increasing its share of the European market since 2012, from 3 per cent to 3.3 per cent, driven by digital video services attracting more viewers to internet and Pay TV propositions. These increases in digital consumption provide an opportunity for content distributors as services grow within the territory while also sustaining their share of the European market.

18 SPAIN 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m % Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 72% -2.5% Penetration Blu-ray Disc Player % 15% 1.8% Spain s economic recovery, illustrated by the highest growth in GDP amongst the nine IVF member countries for a second year running, has been mirrored by the return to growth in the home entertainment market of 11.2 per cent in This compares to 3.9 per cent year-on-year growth in 2015 and represents its best performance since It can be viewed against a background of stable population (46.1m) and a 41 per cent increase in broadband households since However, it comes from a low base and represents the second lowest TV household broadband penetration rate in Europe, after Italy. So despite having a population eight times greater than Denmark, Spanish consumers spent less on home entertainment, which, at 229m, makes it eighth out of nine IVF member countries. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT PAY TV TVOD 2.2% 3.1% % EURO M ( ) % 0% -10% -20% 0-30% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) Spain has always had the lowest average spend per TV household but in the last two years it has seen the gap increase over the next lowest IVF member country, Italy, with a 2016 difference of 5.48, compared with the 2.83 variance in This gap increase has come from both a larger drop in average TV household expenditure on physical disc and a slower growth rate in the value of digital internet services spend of 90 per cent, whilst Italy experienced over 100 per cent increase in average spend on the same digital video rental and sales services. Spain s physical rental and retail markets were beset by severe piracy problems in the early to mid-2000s, forcing major retailers to close in the face of inadequate regulation and copyright enforcement. DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 56% VS SPEED RANK #6 (RANKED ACROSS THE 9 IVF COUNTRIES)

19 SPAIN AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% ES YoY CHANGE 10.0% ES YoY CHANGE 50.0% ES 64.5% The combined consumer expenditure on disc sales and rentals stood at 101m in 2016, giving Spain sixth place among the nine IVF member countries. The development of Spain s digital video market has also been hampered by significant levels of infringing online audiovisual content. However, assisted by a more robust approach to enforcement by the Spanish government in the last few years and the recent arrival of global digital platforms, such as Amazon, Netflix, itunes and HBO to add to the Spanish owned Ratuken TV VoD service, consumer expenditure is picking up on OTT services. They reached 97m in 2016, to join the UK in overtaking consumer spend (in Euros) on physical sales (of 96m) for the first time and the three other IVF member countries that now have stronger spends on OTT than physical video retail, namely Denmark, Sweden and the Netherlands. 0% Pay TV/TV TVoD services are also on the rise and expenditure grew to 31m, a year-on-year increase of 10 per cent, 3 percentage points above the European average growth in this market segment. TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE % 0011 DIGITAL % % PHYSICAL DISC 92% 78% 44% 229M 46.1M 18.6M ITALY -IT Spain s low broadband base (65% of TV households) has led to one of the slowest growth rates in consumer expenditure on digital services. However, its 56% share of digital spend over 2016 was a 17 percentage rise on the 39 per cent share in This was the biggest percentage point growth seen of all the nine IVF member countries an encouraging sign for the potential of digital video distribution in Spain.

20 SWEDEN 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m % Total Consumer Spend - Krona m 4,008.7 kr 15.7% Average spend per TV Household % Spend on physical video software m % Spend on digital video & TV VoD m % Penetration DVD Player % 77% -3.3% Penetration Blu-ray Disc Player % 22% 4.0% Exchange rate EUR/Skr -> 1 = Skr % 2016 saw a fourth consecutive year of strong growth in Sweden s home entertainment market, which has risen to a value of 423.1m, making it one of only three territories to experience this pattern of annual up-lift and the fifth largest in Europe. The overall growth in consumer spend of 14.2% in Euros is slightly less than the 15.7% growth reported in the local currency, Krona. Like its Scandi neighbour, Denmark, Sweden experienced a consumer switch from physical to digital at a quicker rate than other IVF member countries, in just four years going from 4 per cent of sales in 2010 on digital to 52 per cent in 2014 and 77 per cent in SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT PAY TV TVOD 6.6% 3.4% % EURO M ( ) % 0% -10% 0-20% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) GROWTH (KRONA) But unlike Denmark, Sweden s broadband penetration of TV households ranks fifth at 76 per cent; its digital growth has been driven by the high average spend per broadband household, at 92, on digital video content. This is three times the spend in the Belgian market, which has a similar TV household base and a greater percentage with broadband. Consumers spent almost 293m on internet VoD and subscription (OTT) services in 2016, helping it to fourth place out of nine IVF member countries and, while its European share of this digital segment had amounted to 2.6 per cent in 2012 compared to Italy with 2.9 per cent and Spain with 2 per cent, Sweden jumped ahead of them to take 6.6 per cent in DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 77% VS SPEED RANK #1 (RANKED ACROSS THE 9 IVF COUNTRIES)

21 SWEDEN AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% SE YoY CHANGE 13.4% SE YoY CHANGE 24.0% SE 76.9% Only two IVF member countries experienced an increase in average spend per TV household on digital of more than 10. Denmark came top with an increase of and Sweden generated the second highest year-on-year rise at 17.24, which was double the value growth of the next highest, the Netherlands at When local currencies are translated into Euros, this increase in consumer digital spend to for the first time meant that average TV household expenditure was greater in Sweden than in the UK ( 62.04) in Similarly with Pay TV TVoD, where Sweden s market share was tracking behind Europe s growth rate in , in 2016 its year-on-year growth reached 14.5 per cent against the European average of 7 per cent, with a value of 33.7m. Meanwhile in its physical market, Swedish disc sales dipped below 100m in value for the first time in 2016, to 96.2m, representing a 23 per cent drop year-on-year. Despite this decline, consumers still sustained the third highest average spend per capita at 9.77 and the third highest DVD player penetration rate. 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % % 23% 423M 9.9M 4.6M ITALY -IT The value of Sweden s disc rentals market, on the other hand, was the only one among the IVF membership to increase its share of consumer spend on physical discs, from 24 per cent in 2010 to 28 per cent in However, during that same period its rental market fell by two thirds. It appears that Sweden s appetite for renting provides an opportunity for internet and Pay TV VoD propositions and the high per capita spend on digital services offers video distributors continued growth in this market.

22 UNITED KINGDOM 2016 Vs 2015 Population m TV Households m Total Consumer Spend - Euro m 2, % Total Consumer Spend - Sterling m 2, % Average spend per TV Household % Spend on physical video software m 1, % Spend on digital video & TV VoD m 1, % Penetration DVD Player % 80% -2.7% Penetration Blu-ray Disc Player % 25% 4.0% Exchange rate EUR/GBP -> 1 = % Historically the largest home entertainment market in Europe, the UK retained this position in 2016 as it recorded another year of growth in British pounds, even though its population of 65.6m is in line with that of France, which ranks third. However, since the Brexit vote, the strengthening : exchange rate (up 12.9 per cent since 2015, when the GBP was valued at its highest rate against the Euro since 2007 due to uncertainty over Greece s financial crisis) converted the 3.3 per cent value increase in local currency into an 8.5 per cent decline in Euros, to 2.8bn, illustrated below as a rather sharp drop in the Euro growth rate compared with the rise in Sterling value. Improving broadband speeds, household penetration and digital services helped secure a 24.2 percentage increase in consumer spend on digital services, which more than offset the 17 per cent decline in physical sales, sharper than in Germany s 11 per cent decline, but whose digital growth made less of a difference. SHARE OF EUROPEAN MARKET - % PHYSICAL RETAIL PHYSICAL RENTAL OTT PAY TV TVOD 31.3% 30.0% EURO M ( ) 3,500 3,000 2,500 2,000 1,500 1, % 15% 10% 5% 0% -5% -10% PHYSICAL VIDEO DISC OTT PAY TV VoD GROWTH (EURO) GROWTH (STERLING) Although the UK s physical market has lost 1.3bn in value according to IHS data (over 1.175bn) since 2010, with its CAGR declining by 14.2 per cent (-15 per cent in GBP), only Italy and Germany tracked better on percentage change in disc sales. Expenditure on physical discs represents just over 40 per cent of the total UK home entertainment business and is predominantly on sales, rather than rentals, which are rapidly being replaced with Pay Per View and digital subscription services. There has been considerable retail consolidation since the financial crash, with grocers becoming the UK consumer s preferred channel back in 2007, whilst Amazon retains its position as the most popular disc retailer. DIGITAL SHARE OF SPEND VS. BROADBAND SPEED SHARE DIGITAL SPEND BROADBAND DOWNLOAD 60% VS SPEED RANK #4 (RANKED ACROSS THE 9 IVF COUNTRIES)

23 UNITED KINGDOM AVERAGE TV HOUSEHOLD TOTAL HOME ENTERTAINMENT SPEND AVERAGE TV HOUSEHOLD WITH BROADBAND TOTAL DIGITAL SPEND TV HOUSEHOLD WITH BROADBAND PENETRATION 100% UK 86.6% UK* YoY CHANGE -9.2% UK* YoY CHANGE 6.1% * When viewed in Sterling, avergae spend for 2016 was 58.73, showing a 19.8% (or 9.72) growth YoY A further development in the retailing of home entertainment in the UK has been the introduction of the Buy & Keep proposition from Pay TV operators. Sky and Virgin customers can buy film and TV titles to watch on a variety of devices and the physical copy is sent by post, whereas BT, TalkTalk and all other digital suppliers offer EST as well as TVoD services. An early adopter of digital video services, the UK lost some of its European market share as digital services rolled out in other territories, from a high of 39 per cent in 2012 to 31 per cent in Digital s share of total UK consumer expenditure on home entertainment rose to 59.6 per cent in 2016, slightly ahead of the European average. The value of the UK s internet VoD and subscription (OTT) services is the only national digital segment within Europe to have exceeded the 1bn mark, in 2015 ( 1bn in 2016). The remaining PayTV/TVoD segment also sees the UK with a 30 per cent share of European spend, at 299m ( 245.1) in 2016, contributing to the largest digital video market in Europe, worth 1.693bn ( 1.388bn). 0% TREND OVER TIME ON THE GROWTH OF DIGITAL SPEND HOME ENTERTAINMENT VS. POPULATION VS. TV HOUSEHOLD SIZE DIGITAL PHYSICAL DISC % % % % % 40% 2,842M 65.6M 27.3M ITALY -IT Economic uncertainty resulting from the UK s exit from the EU, including fluctuating exchange rates, can be expected to have some impact on overall Euro values of consumer expenditure. However, the UK home entertainment market is noted for its resilience and popularity with British consumers and is expected to continue to evolve with distributors developing innovative digital and premium 4K UHD consumer propositions.

24 GLOSSARY IVF Countries Country members of the International Video Federation in 2017 include: Belgium, Denmark, France, Germany, Italy, Netherlands, Spain, Sweden and the UK. Total Europe Based on IHS Markit forecasts covering 23 countries across Europe, including: Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Slovakia, Spain, Sweden, Switzerland, UK. Physical Video This includes both retail and rental driven mainly by DVD and Blu-ray Disc. Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Consumer Level Digital Video/OTT (Over The Top) The purchase or rental of films and TV series delivered over the open internet through transactional models, also known as EST (Electronic Sell- Thru), DTO (Download to Own), internet VoD, or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Consumer Level Pay TV Transactional VoD/TV VoD The rental of film and TV content on a transactional (Video on Demand, Near Video on Demand/Pay per View) basis via cable/satellite/iptv services (on internet-connected or smart TVs). These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider Pay-TV package. Exchange Rate The rate at which one currency will be exchanged for another. Specifically applicable to the UK market, IHS Markit comment; The euro lost ground against the major currencies during 2015 as a result of the European Central Bank increasingly dovish monetary policy stance in the face of notably below target inflation and languid growth developments. The central bank announced a new non-standard monetary policy measure called the asset purchase programme, or Quantitative Easing in January 2015, which commenced in March 2015, with its governor promising monetary stimulus could be available to inflate the Eurozone economy. All IVF Countries referenced within the report where currency isn t in Euros have had spend converted to allow for comparative analysis. Countries where this has occurred are Denmark, Sweden and the United Kingdom. % Penetration The percentage of the relevant population who have purchased or have access to a product or service. TV Household Any household with at least one TV set, where a household is defined as being composed of a person or group of people who co-reside in or occupy a housing unit. TV HH with Broadband Any household with a broadband connection above 150Kbit/s. Broadband connections are fixed connections to the home and do not include mobile phones, or WiFi hotspots. Technologies used include DSL, cable, FTTH and satellite. GDP Gross domestic product (GDP) is a monetary measure of a country s market value of all final goods and services produced across the calendar year. Average spend Referenced through this report, average spend is based on annual consumer spend calculated across key metrics such as TV Households, Broadband Households or per capita. CAGR The compound annual growth rate (CAGR) is a useful measure of growth over a trend period, in this report giving an average annual change of market performance from 2010 to 2016 (unless stated otherwise). Trend Period This report is based on IHS Markit data covering annual performance data from 2010 to 2016, known throughout the report as the trend period (unless a different time period is stated). Notes Note 1: Consumer level digital video (OTT) and pay TV transactional VoD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Sources All data with exception to the points below has been sourced from the IVF Country Profiles as published on an annual basis provided by IHS Markit. This data can be subject to amendments from IHS Markit based on more detailed source information and/or changes to forecast models. Whilst local country input from companies is always considered by IHS Markit, definitions and market sizing may not always be fully aligned with views of all distributors/retailers. Other Source Data Akamai s State of the Internet report for 2017 Q1 Average Broadband Rankings. Any reference to Infringement/Piracy within the report is based on the DEGE or local trade association s perspective and is not determined by any external sourced information.

25 APPENDIX ALL VIDEO CONSUMER SPEND CHANGE TO 2016 EURO ( MS) 9,000 8,500 8,000 7,500 7,000 6,500 6, , , UK DE FR IT SW DK NL ES BE 2016 INCREASE DECREASE TOTAL The graph shown outlines the 2010 total consumer spend across all categories through to 2016, with each country value shown being the difference in spend between this trend period. Countries are in order of largest to smallest consumer spend seen across the nine IVF members as reported in Performance across this trend period has seen overall spend increase by 40 million, with the drivers of this rise coming from Germany, the UK, Denmark and Sweden CONSUMER SPEND FOR ALL VIDEO BY IVF COUNTRY IN 2016 EURO ( MS) 3,000 2,500 2,000 1,500 1, ,842 2,149 1, UK DE FR IT SW DK NL ES BE Countries are in order of largest to smallest consumer spend seen across the nine IVF members as reported in 2016.

26 APPENDIX PHYSICAL DISC CONSUMER SPEND CHANGE TO 2016 EURO ( MS) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 7, , , DE UK FR IT ES SE BE NL DK 2016 INCREASE DECREASE TOTAL The graph shown outlines the 2010 total consumer spend across physical disc (retail and rental) categories through to 2016, with each country value shown being the difference in spend between this trend period. Countries are in order of largest to smallest consumer spend seen across the nine IVF members as reported in Germany leads the way as the largest physical disc country in Europe having seen the smallest CAGR decline over the trend period. CONSUMER SPEND FOR PHYSICAL DISC BY IVF COUNTRY IN 2016 EURO ( MS) 1,400 1,200 1, ,257 1, DE UK FR IT ES SE BE NL DK Countries are in order of largest to smallest consumer spend seen across the nine IVF members as reported in 2016.

27 APPENDIX TOTAL DIGITAL CONSUMER SPEND CHANGE TO 2016 EURO ( MS) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, , , UK DE FR SE DK NL IT ES BE 2016 INCREASE DECREASE TOTAL The graph shown outlines the 2010 total consumer spend across digital (OTT and Pay TV TVoD categories through to 2016, with each country value shown being the difference in spend between this trend period. Countries are in order of largest to smallest consumer spend seen across the nine IVF members as reported in The UK over the trend period has seen the largest growth in consumer spend having been one of the first European markets to see the launch of global providers. CONSUMER SPEND FOR TOTAL DIGITAL BY IVF COUNTRY IN 2016 EURO ( MS) 1,800 1,600 1,400 1,200 1, , UK DE FR SE DK NL IT ES BE Countries are in order of largest to smallest consumer spend seen across the nine IVF members as reported in 2016.

28 APPENDIX Belgium Belgium key data Population 11.4m TV households 4.6m Consumer spending on physical video software 85.2m Comparison with % Consumer spending on digital video and TV VoD 97.5m Comparison with % Consumer spending by segment % Key players in the market Physical Digital % Carrefour Cora BETV / VOO Google Play % -20.0% Fnac Mediamarkt Standaard Boekhandel (in alphabetical order) itunes Proximus Telenet TV VoD Digital Video Physical Video retail and rental Growth Comparison Physical vs Digital Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

29 APPENDIX Video market: Belgium General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m % Consumer price index (100 in 2010) % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Euro m % Growth % -7.8% -4.2% -10.5% -11.9% -1.6% 5.4% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Euro m % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Euro m % Total spending on physical video retail Euro m % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

30 APPENDIX Denmark Denmark key data Population 5.7m TV households 2.3m Consumer spending on physical video software 50.6m Comparison with % Consumer spending on digital video and TV VoD 293.9m Comparison with % Consumer spending by segment Key players in the market % Physical Digital % 0.0% -20.0% Bilka (Danish Supermarket) CDON.dk Coolshop.dk dvdcity.dk Dvdoo.dk Elgiganten Føtex (Danish Supermarket) Amazon Prime Blockbuster Canal Digital C-more Danishdox.com Dansk Filmskat Dplay TV VoD Digital Video Physical Video retail and rental Growth Gucca.dk imusic.dk Kvickly (Coop) Læsehesten DR TV Filmstriben Google Play HBO Løvbjerg itunes Rema1000 Netflix SuperBrugsen (Coop) Plejmo.dk SF Anytime TV2 Play Viaplay Waoo (in alphabetical order) Comparison Physical vs Digital Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

31 APPENDIX Video market: Denmark General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m % Consumer price index (100 in 2010) % Exchange rate EUR/Dmk 1 = Dmk % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Dmk m 1, , , , , , , % Total spending on video Euro m % Growth % -9.5% -5.9% 3.8% 12.8% 26.4% 26.1% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Dmk m 1, , , % Total spending on physical video software Euro m % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Dmk m % Total spending on physical video rental Euro m % Total spending on physical video retail Dmk m 1, , % Total spending on physical video retail Euro m % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Dmk m , , % Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Dmk m % Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

32 France APPENDIX France key data Population 64.9m TV households 28.4m Consumer spending on physical video software 616.3m Comparison with % Consumer spending on digital video and TV VoD 478.2m Comparison with % Consumer spending by segment 2,000 1,000 0 TV VoD Digital Video Physical Video retail and rental Growth 0.0% -10.0% -20.0% Key players in the market Physical Auchan Carrefour Cultura DS Fnac Leclerc (in alphabetical order) Digital Canal VOD Google itunes Orange SFR TF1 VOD Comparison Physical vs Digital 1, , , , Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental 1, , , , Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

33 APPENDIX Video market: France General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m 1, , , , , , , % Consumer price index (100 in 2010) % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Euro m 1, , , , , , , % Growth % -6.1% -6.6% -13.1% -5.4% -2.8% -3.3% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Euro m 1, , , % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Euro m % Total spending on physical video retail Euro m 1, , , % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

34 APPENDIX Germany Germany key data Population 83.9m TV households 39.1m Consumer spending on physical video software m Comparison with % Consumer spending on digital video and TV VoD 892.4m Comparison with % Consumer spending by segment 3,000 2,000 1,000 0 TV VoD Digital Video Physical Video retail and rental Growth 10.0% 5.0% 0.0% Key players in the market Physical Digital 1. Amazon 1. Amazon EST 2. Media Markt 2. itunes EST 3. Saturn 3. Google Play EST 4. Müller 1. Amazon TVoD 5. Thalia 2. itunes TVoD 6. Real 3. Maxdome TVoD 7. Expert 4. Videoload TVoD 5. Sky TVoD 1. Amazon SVod 2. Netflix SVod 3. Maxdome SVod 4. Sky SVod (in alphabetical order) Comparison Physical vs Digital 2, Comparison Retail vs Rental 2, , , , , , Physical (Rental & Retail) Digital (Rental & Retail) Retail (Physical & Digital) Rental (Physical & Digital) See next page for detailed description of Digital Video Estimates for the entire digital market including SVoD International Video Federation 2017

35 APPENDIX Video market: Germany General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m 2, , , , , , , % Consumer price index (100 in 2010) % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Euro m 1, , , , , , , % Growth % 1.9% 1.6% 6.2% 2.7% 8.2% 3.0% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Euro m 1, , , , , , , % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Euro m % Total spending on physical video retail Euro m 1, , , , , , , % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

36 APPENDIX Italy Italy key data Population 59.8m TV households 25m Consumer spending on physical video software 261.3m Comparison with % Consumer spending on digital video and TV VoD 184.4m Comparison with % Consumer spending by segment Key players in the market % Physical Digital % 0% Amazon Deltavideo Euronics Feltrinelli IBS ( Internet Book Shop) Chili Google Play itunes Mediaset Sky Italia 0-20% Mediamarket Mondadori Sony Playstation store Telecom Italia TV VoD Digital Video Physical Video retail and rental Growth Unieuro (in alphabetical order) Waki Comparison Physical vs Digital Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

37 APPENDIX Video market: Italy General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m 1, , , , , , , % Consumer price index (100 in 2010) % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Euro m % Growth % -13.4% -13.3% -9.9% 3.4% 9.9% 18.8% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Euro m % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Euro m % Total spending on physical video retail Euro m % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Note 5: Consumer level physical video might slightly differ from locally published data due to different research panels Source: IHS Markit International Video Federation 2017

38 Netherlands APPENDIX Netherlands key data Population 17m TV households 7.7m Consumer spending on physical video software 80.8m Comparison with % Consumer spending on digital video and TV VoD 243.4m Comparison with % Consumer spending by segment TV VoD Digital Video Physical Video retail and rental Growth 20.0% 0.0% -20.0% Key players in the market Physical Bol.com Media Markt (in alphabetical order) Digital itunes KPN OnDemand Netflix Pathe Thuis Videoland Ziggo Movies & Series Comparison Physical vs Digital Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

39 APPENDIX Video market: Netherlands General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m % Consumer price index (100 in 2010) % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Euro m % Growth % -9.6% -17.5% -15.5% 11.0% 12.8% 14.9% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Euro m % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Euro m % Total spending on physical video retail Euro m % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

40 Spain APPENDIX Spain key data Population 46.1m TV households 18.6m Consumer spending on physical video software 101m Comparison with % Consumer spending on digital video and TV VoD 128.1m Comparison with % Consumer spending by segment TV VoD Digital Video Physical Video retail and rental Growth 20.0% 0.0% -20.0% -40.0% Key players in the market Physical + Digital 20th Century Fox Home Entertainmente España Aurum Cameo Divisa Red Karma Films Sony Pictures Entertainment Iberia Tri Pictures Versus Entertainment Walt Disney Studios Home entertainment Warner Bros Entertainment España (in alphabetical order) Comparison Physical vs Digital Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

41 APPENDIX Video market: Spain General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m 1, , , , , , , % Consumer price index (100 in 2010) % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Euro m % Growth % -21.5% -10.9% -11.0% 2.9% 3.9% 11.2% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Euro m % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Euro m % Total spending on physical video retail Euro m % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

42 Sweden APPENDIX Sweden key data Population 9.9m TV households 4.6m Consumer spending on physical video software 96.2m Comparison with % Consumer spending on digital video and TV VoD 326.9m Comparison with % Consumer spending by segment TV VoD Digital Video Physical Video retail and rental Growth 20.0% 0.0% -20.0% Key players in the market Physical Cdon Coop Discshop Hemmakväll Ica (in alphabetical order) Digital Bredbandsbolaget Canal Digital Comhem itunes Plejmo Sf Anytime Telia Viaplay/Viasat Comparison Physical vs Digital Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

43 APPENDIX Video market: Sweden General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m % Consumer price index (100 in 2010) % Exchange rate EUR/Skr 1 = Skr % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video Skr m 3, , , , , , , % Total spending on video Euro m % Growth % -6.7% -5.5% 3.5% 3.8% 12.0% 14.2% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software Skr m 3, , , , , , % Total spending on physical video software Euro m % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental Skr m % Total spending on physical video rental Euro m % Total spending on physical video retail Skr m 2, , , , , % Total spending on physical video retail Euro m % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video Skr m , , , % Total spending on digital video Euro m % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD Skr m % Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

44 APPENDIX UK UK key data Population 65.6m TV households 27.3m Consumer spending on physical video software 1149m Comparison with % Consumer spending on digital video and TV VoD m Comparison with % Exchange rate EUR/GBP -> 1 = 12.9% Consumer spending by segment Key players in the market 4, % Physical Digital 2, % -20.0% Amazon Asda HMV Morrisons Play Sainsburys Tesco Amazon Prime BT Store Google Play Store itunes Netflix Now TV Sky Store TV VoD Digital Video Physical Video retail and rental Growth The Hut Group (in alphabetical order) Sony - Playstation.Store Talk Talk Virgin Media Comparison Physical vs Digital 3, , , , , Physical (Rental & Retail) Digital (Rental & Retail) See next page for detailed description of Digital Video Comparison Retail vs Rental 3, , , , , Retail (Physical & Digital) Rental (Physical & Digital) Estimates for the entire digital market including SVoD International Video Federation 2017

45 APPENDIX Video market: UK General Population m % TV households m % Population Total Europe m % TV households Total Europe m % Broadband households m % Nominal GDP Euro m 1, , , , , , , % Consumer price index (100 in 2010) % Exchange rate EUR/GBP 1 = % DVD Video player/recorder % % Blu-ray Disc player/recorders penetration % % DVD Video player/recorder Total Europe % % Blu-ray Disc player/recorders penetration Total Europe % % Total video software market CONSUMER LEVEL ALL VIDEO Total market figures include consumption of both physical and digital video Total spending on video m 2, , , , , , , % Total spending on video Euro m 2, , , , , , , % Growth % -4.6% 1.9% -3.7% 6.7% 15.5% -8.5% Total spending on video Total Europe Euro m 9, , , , , , , % CONSUMER LEVEL PHYSICAL VIDEO Total market figures include consumption of legacy formats not broken out separately (eg, VHS, HD-DVD, UMD) where relevant. Total spending on physical video software m 2, , , , , , % Total spending on physical video software Euro m 2, , , , , , , % Total spending on physical video software Total Europe Euro m 8, , , , , , , % Total spending on physical video rental m % Total spending on physical video rental Euro m % Total spending on physical video retail m 1, , , , , , % Total spending on physical video retail Euro m 2, , , , , , , % Total spending on physical video retail Total Europe Euro m 7, , , , , , , % CONSUMER LEVEL DIGITAL VIDEO (OTT) The purchase or rental of films and TV series delivered over the open internet through transactional models (also known as EST, DTO, Internet VOD) or on a subscription basis. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on digital video m , % Total spending on digital video Euro m , , % Total spending on digital video Total Europe Euro m , , , , % CONSUMER LEVEL PAY TV TRANSACTIONAL VOD The rental of film and TV content on a transactional (VoD, NVoD/PPV) basis via cable/satellite/iptv services. These, paid for at the point of consumption, transactions occur only on set-top-boxes or through online services provided as part of a wider pay TV package to which consumers must subscribe prior to purchase. This category specifically excludes sports, live events and adult content to ensure it is comparable to physical video data. Total spending on pay TV TVOD m % Total spending on pay TV TVOD Euro m % Total spending on pay TV TVOD Total Europe Euro m % Note 1: Consumer level digital video (OTT) and pay TV transactional VOD figures may differ from locally published figures due to the application of different definitions. Note 2: Historical numbers in this section may differ from those published in previous years owing to changes in IHS methodology. Note 3: The current online figures are a snapshot of the market in June Figures are updated regularly and so it may not possible to compare directly to figures published after this date. Note 4: Total Europe include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Croatia, Czech Republic, Hungary, Poland, Russia, and Slovakia Source: IHS Markit International Video Federation 2017

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