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Business Models for Web TV  - Research Presentation
 

Business Models for Web TV - Research Presentation

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    Business Models for Web TV  - Research Presentation Business Models for Web TV - Research Presentation Presentation Transcript

    • Business models for web TV Alessandro Masi Milan, 19 Dec 2009
    • TOWARDS WEB TV…• Shift of the audience from traditional to new TV• Increase of Internet broadband connections• Media integration process Web TV = open online video distribution over unicast or P2P protocols
    • RESEARCH QUESTIONWhat are the business models that allow togenerate revenues from web TV? How are theyshaped according to the strategic objectives?Is web TV a sustainable business in the long run?Is there any theory that supports (or denies) thisargument?
    • RESEARCH METHODS• Top 200 websites (Unique Visitors) for online video distribution,either of user generated or professionally-produced content• 44 variables analyzed for each website: features, businessmodel, content licensing, uploading and privacy regimes• Accessible from Italy• Language: italian and/or english• 2 on-demand or 1 live channels (at least)• Self-organizing maps and k-means algorithms cluster analysis;two-step clustering
    • MAIN FINDINGS…Two primary variables determine the business strategy of aweb TV:• Business model• Type of contentThose two variables are inter-dependent, and the choice isalso related to the core business of the operator.Then, some secondary variables allow the web TV todifferentiate from competitors:• The range of VOD channels• The amount of live content• The role of the community• The type of advertising
    • MAIN FINDINGS…
    • BUSINESS MODELS• B2c premium model  sale of the contents (pay-per-view orwith subscription), with marginal revenues from advertising• B2c ad-based model  banner, pre-roll, overlay, ad-fundedcontent• B2c mixed  premium + “freemium”, ad-revenues sharing,• CRM-based model  communication and interaction, bothinternal and external• Free model  self-financing and fund-raising• B2b model  service, solutions and content providers
    • BUSINESS MODELS PA – subscription PA – subscription PA - PayPerView PA - PayPerView PA - free with advertisement PA - free with advertisement PA - free (no advertisement) PA - free (no advertisement) PA – donation PA – donation 0% 50% FE - Operator - Broadcaster and 0% 100% Local TVFE - both produced and UG content FE - Operator - News and 50%FE - only professionally-produced content magazines 100%FE - only UGC FE - Operator - On-line video company FE - Operator - PA and other companies 100% 90% 80% PA – donation 70% PA - free (no advertisement) 60% FE - only UGC PA - free with advertisement 50% PA - PayPerView 40% 66% PA – subscription 30% FE - only professionally- 20% produced content 10% 0% FE - both produced and UG content 5% 14% 12% 3%
    • STRATEGIC ISSUESPure strategiesPure players  ad-based,integration of premiumcontents, b2b marketPortfolio strategiesWeb editors  ad-basedwith premium sectionsMultichannel/portfoliostrategiesOther media  ad-basedMultichannel strategiesBroadcasters  ad-basedand premium modelCRM strategiesPA and companies  free
    • MONEY??? US online video ad spending in 2011: • $4,309 mlnREVENUES • 9.8% of total• Pay-per-view for VOD online ad spending• Subscription Source: eMarketer• Donation• Advertising (banner, Google Ads, embedded video)OPERATING COSTS• Production, acquisition, or digitalization• Storage• Publishing and distribution
    • WEB TV’S LONG TAIL“Forget squeezing millions from a few megahits at the topof the charts. The future of entertainment is in the millionsof niche markets at the shallow end of the bitstream.”Anderson, C. (2006). The long tail: why the future of business isselling less of more.
    • WEB TV: STRENGHTS & WEAKNESSES Strengths Weaknesses Multi-channel Loss of controlContent (niches) over contents Ad-hoc contents DRM systems UGC Lack of visibility Personalization Interactivity Accessibility The “logic of theEconomics Targeted free” advertising Ad skipping Undefined business model
    • IN CONCLUSION…• The current context is highly scattered, given the high accessibilityto the market: webcasters shape the business model according todifferent strategic objectives, which are basically related to the corebusiness of the operator and to the type of content. Either a cleardefinition of business models or innovative ones are needed.• The majority of money for web TV currently comes fromadvertising. The free-logic of the Internet does not allow to rely onpremium services (subscription and pay-per-view), but webcastersshould find the way to monetize by increasing the value of theoffering or enhance the involvement of the communities (e.g.advertising revenues sharing, UGC, self-financing).• Internet overcomes distribution constraints and limited offeringand makes possible even to the smallest business to generaterevenues reaching the market niches: the long tail theory explainsthe reason for the growth and the long-term sustainability of web TVbusiness.
    • Thanks for your kind attention!