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David Murray - General Manager, Communications Sector 18/03/2009 BUILDING A SMARTER PLANET: MEDIA & ENTERTAINMENT New Business – Not New Media
The need for operating “smarter” in this environment is clear. 100 million video streams Hosted by Yahoo daily in 2007 On the internet by 2010 - 60% will have broad band access 1.6 billion users 74 terabytes Of storage is required for just one hour of feature film in high resolution Created in 2010 –between digital still cameras and cell phones 500 billion images 60 million blogs Online today and growing $100 billion spent On personal digital devices annually The pace of change is accelerating.
The way the world works is changing— and leaders must lead through the unknown. Gap between envisioned change and past success at managing it. 9 in 10 Media & Entertainment leaders anticipate substantial change ahead. 53% M&E 53% 2% 94% 4% 29% 25% 41% Global 22% 6% 11% 83% 19% 20% 61% CHANGE GAP* CHANGE GAP* Past Change Success Change Needed Past Change Success Change Needed No/limited Change Moderate Change Substantial Change No/limited Success Moderate Success Successful
Smart media companies are working toward a framework to create sustained business performance. SEIZE DIGITAL MARKET OPPORTUNITIES The need to quickly develop new experiences, content and channels with agile and flexible business infrastructure REDUCE COST TO FUND NEW GROWTH The need to reduce cost of operations by creating a flexible, integrated, scalable infrastructure through open standards-based IT systems. INNOVATE BUSINESS MODELS Develop strategies and roadmaps for new digital realities such as platform-agnostic products and services, pricing strategies and delivery mechanisms . . CONNECT WITH CONSUMERS Establish and exploit relationships across channels to deliver next-generation digital products and services. MEDIA MEDIA
They are doing so by becoming interconnected, instrumented and intelligent.
People, systems and objects can communicate and interact with each other in entirely new ways.
Almost one third of the world’s population will be on the Web by 2011.
Nearly 4 billion mobile phone subscribers worldwide by the end of 2008.
All over the world, a growing number of people are joining online social networking sites with active memberships forecast to reach over 500M by 2012.
Source: 2008 IBM Digital Consumer Survey. Total responses = 2800 across six countries: Australia, Germany, India, Japan, UK, US
We now have the ability to measure, sense and see the exact condition of everything.
The digitally savvy 13-24 year old segment owns an average of 4 to 5 multimedia devices (e.g. music players, iPods, game consoles, portable game players)
“ Gadgetiers” – early adopters, estimated at 15% of the market – have an average of 7 to 8 multimedia devices
40% of consumers are interested in content portability – the ability to view and transport that same piece of content across devices
We can respond to changes quickly and accurately, and get better results by predicting and optimizing for future events.
41% of consumer would increase their use of digital content, online and mobile, if offered a single site with everything they wanted.
70% of consumer have rated video content online
Close to 60% of consumers are willing to provide information about themselves – such as age, gender, lifestyle or communications preferences – in exchange for something of value.
An opportunity for media and entertainment companies to think and act in new ways. + + = Delivery compelling content and connect with consumers across channels and in unique ways. Innovative business models that seize upon the new digital realities. Create a flexible business infrastructure and streamline processes to increase efficiency and agility. Gain greater efficiency and value with cost effective, environmentally responsible operations.
SMART IS Applying real-time knowledge of consumer preferences to provide better personalization of content and a more compelling experience. SMART IS Smart is using context information and social networking to optimize the consumer experience. Smart media: Connect with Consumers. SMART IS Building a complete picture of consumer preferences, interactions and identify rapid changes in demand. SMART IS Moving away from traditional one-to-many, broadcast-style delivery processes and channels to web-centric business models.
Masters: IBM delivered an immersive, personalized web video experience that increased traffic to the website and establish community of golf patrons. Usopen.com provides fans with near-HD live video, real-time scoring, and customizable player tracking to bring fans closer to the action. Zuda Comics: IBM delivered zudacomics.com-- a highly interactive consumer experience founded on user generated content, interaction, feedback and incentives. Maghound: IBM helped build a new subscription-based membership model and online virtual newsstand with home delivery. Named Publishing Innovator of the Year, this site will have a dramatic effect on how magazines attract new subscribers. Client: IBM Interactive helped Tribune Interactive properties refit their portfolio of publishing templates across over a dozen newspaper properties, design their faceted search interface, and lead the development of user generated content strategies for their websites, to better adapt to the changing nature of the online news business. Smart media: Connect with Consumers Need image. Need image.
Smart media: Innovate Business Models SMART IS Having the flexibility to introduce new products and services, revamp business processes, and enter or create new markets., as quickly as opportunities appear, or as soon as you happen to envision them. SMART IS Consolidating and streamlining complex financial processes to ensure successful compliance and regulatory management practices. SMART IS Creating cost-efficiencies in traditional supply chain in order to continue investment in high-growth, cross-channel distribution. SMART IS Having a holistic and trusted view of media assets across the enterprise, and meaningful metadata search and asset retrieval capabilities in order to repurpose and monetize assets.
Tata Sky built a robust, flexible business model and service-oriented architecture-based IT infrastructure to launch its direct-to-home satellite broadcasting services with unprecedented speed - about six months after work began – and crossed the one million connections mark in its first year of operations. Smart media: Innovate Business Models Sony Pictures Finance Re-engineering – Application Support: With implementation of shared services to rationalize, optimize and align processes, Sony Pictures realized an estimated 35% reduction in resource costs. Bharti Airtel : IBM is helping Bharti Airtel transform the way India communicates. Adding an astounding 1.5 million subscribers per month, the company has grown from a small service provider to a market leader. As Bharti’s strategic outsourcer of more than 60 major systems, IBM is enabling their hyper-growth to 50 million subscribers in just 4 years, 6 years ahead of plan.
Smart media: Flexible Business Infrastructure SMART IS Having a technology infrastructure that lets you to pick the best solutions from the most innovative industry solution providers and easily “snap” them into your workflow. SMART IS Increasing speed to market by being able to quickly configure production and distribution processes to meet your ever-changing business requirements. SMART IS Combining the power, flexibility and cost advantages of open Information Technology with media industry-specific workflows, to reduce the cost of production and streamline business and content processes. SMART IS Leveraging business intelligence and planning to improve insight and elevate performance with visibility and control.
The National Football League i mplemented a digital workflow to optimize content collection, management and use, that has made editing ten times faster, cut tape reviewing from up to three hours to 40 minutes, and quadrupled programming output. Vlaamse Radio and Televisie: Thanks to the efficiency of its integrated digital asset management solution, built on a layered service oriented architecture, VRT now produces 50% more programming assets. Smart media: Flexible Business Infrastructure Fox Business News: IBM brought together diverse and powerful standards-based hardware and software to create a tightly integrated news production environment for the launch of the business cable network, creating the most agile, cost effective and operationally efficient approach to the networks news production workflow. ProSeibenSat1 Group and IBM have set up the first pan-European digital platform to enable the delivery of TV programming to multiple platforms. IBM will set up a Broadcast Integration Center and modernize core processes and business applications for media enterprises. Expected savings of approximately 50M Euros over the next ten years. Need image.
Smart media: Value and Efficiency SMART IS Use of standard IT-based components to dramatically reduced cost compared to proprietary technologies. Significant savings accrue from workflow efficiency, lower fixed cost for storage and storage media, reduced floor space, heating and cooling, and potential labor savings. SMART IS Generating efficiency and cost savings to support new investments. Reallocating resources from operations to innovation. SMART IS Implementing highly automated management functions to deliver IT services and gain resiliency through self-healing, autonomic applications. SMART IS Scaling computing capacity without scaling power, cooling, floor space and management requirements.
Australian Open: IBM helps Australian tennis support more then 100 times typical volume during the event and scale down when the tournament is over – all without the need to make a large and permanent infrastructure investment. US OPEN: IBM virtualization technology has helped the US Open consolidate their 60 servers to just 6 system p6 550 serves; has reduced energy consumption by 23% and cooling load by 25%. While website visits have increased by 26%, the cost of each visit has been reduced by 38%. Smart media: Efficiency and Value High-Def Programming and Storage: IBM has helped Fox Sports implement a digital video storage solution that enables HD content to managed, stored and retrieved faster, more easily and at 1/2th the cost of a traditional broadcast videotape infrastructure. Trinity Mirror: Is transforming its editorial and advertising processes, and the technology it deploys , to become a leaner, smarter publishing business. The Midlands region is in process of reducing advertising staff by over 30%, while providing improved services. The company anticipates savings of typically over 20% in each region.
The industry must act now; experiencing deterioration in core revenues, pressure on cost models and challenges with digital. Reductions in Advertising Technology Adoption Digital Behavior Retail Weakness Consumer Spend Slows
The biggest risks to the M&E industry from the economic crisis derive from reduced consumer discretionary spending coupled with an advertising pull-back.
M&E enterprises will confront challenges in areas of Cost Take-out, Cross-channel Investment, Regulation/Security, B2B and B2C Demand and M&A/Market Consolidation.
Cost-take out can bring near-term bottom line effects in;
Front-office and back-office efficiencies
Business process effectiveness
Additional solutions can be implemented for longer-term competitive advantage and business visibility