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No Turning Back: The State of the European Content Delivery Market
After more than a decade of fits and starts, the content delivery market in the U.K. and Europe is poised for major growth.
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“3G mobile delivery is widespread compared to the USA,” says A stream’s Alex Wolfe. “Mobile streaming is a reality.”

“The UK is trail blazing with major broadcasters,” says Stephen Hemmings of Kontiki. “The world is very positive about Internet Video, and the UK, while a thriving market in its own right, is being seen as a testing/proof of concept ground for rest-of-world rollouts. Business models are working, both in the consumer and the enterprise space.”

What’s It All Mean?
Clearly, with a small sample of data any real conclusions you could draw would be loose, to say the least! Even so, I think we can draw some conclusions:
—I think that it’s clear that there is no dominant format at the moment, since although the largest single format catered to is Windows Media, all companies are seeing a significant growth in Flash (particularly Wowza) delivery and most claim to be “format agnostic”. Incidentally, this “agnosticism” is always a PR angle. The technical guys always herd you to the formats that are actually robust and already implemented unless you have a huge budget!
—The key European clients are from the broadcaster market.
—While most companies are small to medium enterprises (SMEs) in scale, many are beyond “startup” stage, with solid revenues above $2 million.
—There is a wide array of different service offerings.

Qbrick, Jet Stream, and Ipercast were particularly notable. They were the three non-U.K./U.S. companies that responded. They clearly have success and a high degree of activity in their respective countries.

Tobias Mannheimer of Qbrick comments that there are “surprisingly few European competitors (outside UK). Competition mainly from major U.S. players …” He indicates that in Europe activity in the U.K. is fairly notable, even against US companies.

“This increase on the offer for video services has however brought some confusion within the industry in the past 2 years,” says François Gobillot of Ipercast. “Our interpretation is that competition on price from new media, for example, has clearly reduced the value brought to customers, who aren’t in our opinion well educated about technological requirements such services should match.”

I want to pick up that Gobillot has had a sense of price competition recently. I would say that this has been common in Europe up to this year. It has meant that the margins have been pressurized, in turn creating lower-quality work and a poorer value proposition to end users. The good news is that prices have now stabilized and customers are willing to justify larger budgets—and with this, confidence and the market grow.

This is moving on from a simple price-per-GB commodity game and allows room for investment in the content and investment in the distribution technologies too—which in turn improves quality, interactivity, and appeal.

The technology has finally passed the tipping point and is becoming widely accepted. Obviously YouTube highlighted to the world that the internet could deliver watchable video, and now the demand for quality video is emerging on the tail of that popularisation. Bigger, quality-sensitive brands are looking seriously to internet video as a means to engage with consumers.

It is interesting that, without denying that pay-per-view and subscription models do work on the internet, there is a sense that internet video is not about monetization at the consumer end (it’s all free!). If you look at the plethora of Video 2.0 sites appearing on the internet, the trend of “free video” is not going away anytime soon.