Achieving Video Nirvana!

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Please check out this exclusive presentation from Cisco's Pankaj Gupta, Director of Video Solutions for SP Marketing, on "Achieving Video Nirvana!" presented at OTTcon.

Consumer behavior, content consumption and business models are changing across the video ecosystem, and online video appears to be the primary source of disruption. In fact, Cisco's annual market research report discloses that, by 2013, ninety percent of all consumer IP traffic will be video. In this presentation, the Cisco speaker will address the real-world dilemmas for service provider company executives as they confront the transformations taking place in the video market. The speaker will cite real-world examples of how service providers and their ecosystem partners are developing strategies to address and profit from the coming dominance of online video.

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Achieving Video Nirvana!

  1. 1. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1 Achieving Video Nirvana! Pankaj Gupta pagupta@cisco.com
  2. 2. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 2 Achieving Video Nirvana
  3. 3. © 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential Broadcasters and Media Hulu 27% Owner 12GB/sec. 2XOnline Video Brand Visibility $$ Consumer Electronics Internet on TV Opportunity to Leverage Online Video for Differentiated UserOpportunity to Leverage Online Video for Differentiated UserOpportunity to Create Revenue Generating Services Using theOpportunity to Create Revenue Generating Services Using the Network as a PlatformNetwork as a Platform Opportunity to Increase Popularity of the Content and RevenueOpportunity to Increase Popularity of the Content and Revenue Through CollaborationThrough Collaboration Innovate to Transform Consumer Experience Growing Video Consumption Dominated by Online Video Online Video Video = 90% of consumer IP traffic by 2012 Cisco VNI Study Revenue from $598 million to $3.4 billion annually By 2014 Web In 24 million Households By 2014 44% 5 billion5 billion 5B Videos Viewed Online in UK in April 2009 Service Provider “TV Everywhere” CDN ISP ISP ISP 33% iPlayer Traffic Market Dynamics
  4. 4. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 4 Consumers Want Unified Experience Despite Video Ecosystem Fragmentation Consumer Experience Content Fragmentation Broadcast, Premium, UGC Device & Screen Fragmentation TV, PC, Mobile, Gaming, PDA Interactivity Fragmentation Lean back, Lean forward, Social Subscription Fragmentation Broadband, TV, Mobile, Movie rentals, OTT Free vs. Paid Ad Dollars Fragmentation Transition from linear TV to online Business Models
  5. 5. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 5 Profitable Path Is To Turn This Challenge Into Opportunity Online video seems like replacement of TV experience ...killer of content business But… Online video can enhance the TV experience ….grow the content business models If… Carefully done right !
  6. 6. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 6 Expand Reach & Monetization The Transformation Strategy Unify Experience & Platform Rejuvenate Better TV experience
  7. 7. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 7 Expand The Audience Reach Demographics, Footprint, Any Screen, Anytime Expand Reach & Monetization Extend TV Experience To PC & Mobile For Current TV Subs Enhance value of current TV services, Higher stickiness, Brand retention Any device, Anywhere, Anytime online catch-up service Examples : “TV Everywhere” by Comcast, Time Warner, Verizon & others, USA “Yalp” Online TV services by Telecom Italia, Italy “SKY Play “ online TV service by BSkyB, UK “Canal Plus a la Demande” catch-up online service by Canal Plus, France “Now.Com.HK” service by PCCW, Hong Kong
  8. 8. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 8 Internet Video In Tune With All Generations PC is dominant with all, Young like mobile and gaming consoles too Total 18-34 Age 35-54 Age 55+ Age Computer with Internet Access 67% 85% 67% 53% TV with VoD Capabilities 45% 49% 45% 43% TV with DVR/TiVo 60% 65% 60% 55% TV with Video Extender Device 5% 12% 5% 2% TV with Gaming Device 8% 16% 8% 2% Mobile Phone 12% 22% 12% 6% MP3 Player 11% 19% 11% 4% Portable Gaming Device 2% 4% 2% 1% None of above 11% 4% 10% 18% Source : CBS Entertainment Panel Survey, July 2009 N=3461 N=704 N=1732 N=995 In past 3 Months, Have you used any of the following technologies to watch digital videos?
  9. 9. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 9 Expand Monetization Opportunities Online Video Subscription, Advertising, Transaction, Up Sell Expand Reach & Monetization Offer Subscription Online & Mobile Video Services Monetize your video assets beyond your network footprint Attract new demographic subscribers (students, cord cutters, niche content) Up sell top tier TV and broadband subscriptions Examples : “MLB.COM” had half a million online subscribers in 2008 with $120/Year ARPU “Hulu” & “Disney” announced plans to offer online subscription service in future “SKY Play “ online TV service ( 4 subscription packages) by BSkyB, UK “StarzPlay” for PC & Mobile ; and “V-Cast “ for Mobile customers by Verizon, USA Advertising For Online Video Portal TV advertising dollars are shifting to online advertising Online video ads has ~2X CPM of broadcast TV ads, but not gross revenue Consumers’ tolerance to online ads is not fully exploited yet Targeted advertising has much higher CPM potential Examples : “Simpsons” had higher CPM on Hulu than on Fox “TV Everywhere” by Comcast will carry “optimal” advertising “Hulu” and “TV Everywhere” may offer ads based on viewer profile in future Integrated Content Store: Download To Rent Or Own Integral part of online video portal & revenue share with content providers Examples : “Yalp” video portal by Telecom Italia offers download to rent “Canal Play” online video store with 6,000 videos & movies by CanalSat
  10. 10. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 10 Sky Player : 4 Online Packages To Address Diverse Demographics
  11. 11. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 11 MLB.TV Monetized Online TV service for Out of Market Games Successfully  Online TV service for out of market games Preserving exclusivity of its existing TV deals Supports PC, Roku, Boxee, iPhone 768Kb for MLB.TV, 1.5Mb for MLB.TV Premium, 3.0Mb for MLB.TV Premium with HD  For in-market games, working with MSOs and RSNs to make content online Yankees, YES Network, and Cablevision deal for in-market online streaming $49.99 for remaining 2009 season, $19.99 per month, similar deal with Cox Communications and the San Diego Padres  In 2008, half a million online subscribers with $120 ARPU Highly interactive, feature rich online streaming
  12. 12. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 12 90+% Viewers Willing to Watch More Ads For Free Online Videos: Both CBS & Disney Study Confirm 96% 90% Users did not mind seeing double the number of Ads (eight vs four) during an hour long online streaming. Users did not mind seeing if online video had same number of Ads as TV For details, Please see back up slide
  13. 13. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 13 But… Not enough new revenue from online advertising & subscription
  14. 14. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 14 Bring Them Back to TV & Rejuvenate The Experience
  15. 15. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 15 Immerse Viewers with Better TV Experience for Increased Revenue Leverage Online video to drive viewers back to TV Viewers like immersive experience on TV Internet viewing drives TV viewing (CBS study) Most viewers watch missed or not available on TV episodes online (CBS study) Examples : Disney only shares shorts clips of programming on YouTube. NBC, Disney, CBS only share few episodes (4-6) on Hulu Virgin Media STB supports BBC iPlayer, generating 1/3 traffic for iPlayer Many content providers use online videos to create demand for new shows “TV Everywhere” will only provide select programs online Rejuvenate TV : Web 2.0 experiences on TV Create new immersive TV experiences Make TV more social, personal, Interactive UGC and online video integration in TV experience Examples : “Verizon FioS” TV service will have 7 Million web clips from DailyMotion, BlipTV & more “ATT U-verse” TV service’s enhanced experience for 2009 Masters Tournament (Golf) “ATT U-bar” provides personalized weather, stock, traffic info on TV, also share Flickr “Project Canvas “ by BBC, ITV, Channel 4, BT joint venture “HbbTV” initiative by pan-European broadcasters “SkyPlay” IP based TV service enhancements with Microsoft Xbox by BSkyB Rejuvenate Better TV experience
  16. 16. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 16 Consumers Watch Mostly Missed Episodes Online Total 18-34 Age 35-54 Age 55+ Age Missed episodes of shows I watch on TV 88% 89% 88% 86% Episodes of TV shows I do NOT watch on TV 27% 36% 26% 20% Episodes of TV shows I have ALREADY watched on TV 16% 21% 16% 11% Episodes of past shows that are not on TV now 39% 44% 40% 31% None of these 4% 2% 4% 7% Source : CBS Entertainment Panel Survey, July 2009 N=2229 N=606 N=1122 N=476 What Kind of TV Programs do you Stream or Download and Watch on a PC?
  17. 17. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 17 Deliver Unified Experiences Using Network As Platform Unify Experience & Platform Monetize new transaction services Application store for TV and other devices (revenue share) Micro payment and billing services Examples : “TV Widget Bazaar “ by Verizon Monetize new value added services on network platform Retail and wholesale content delivery (CDN) services Network personal video recorder service Managed consumer TelePresence service Examples : BT (Wholesale), DT, Verizon plans to offer CDN services Cablevision offers Network PVR services Unify experiences across devices, content providers Cross platform advertising across PC & TV : Measure, Deliver, Monetize Single sign-on across services and screens Cross platform targeted adverting for very high CPMs Metadata aggregation across multiple content providers Examples : “TV Everywhere” initiative plans to offer single sign-on and unified cross platform ads “Project Canvas” will provide unified metadata aggregation across content providers
  18. 18. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 18 ATT Case Study: U-verse Keeps Getting Better! Expand Reach & Monetization Unify Experience & Platform Rejuvenate Better TV experience Launch in San Antonio: 06/06 U-verse OnTheGo on PC: 02/07 1 Million Subs: 12/08 1.8+ M Subs, 100+ markets, >75% Triple/Quad Play Subs: 09/09 U-bar application: 09/06 Yellowpages.com on TV: 09/06 Yahoo Games Apps: 09/06 Flickr App on TV: 04/08 NBC Olympics TV App : 07/08 Y! Fantasy Football App: 08/08 Total Home DVR: 09/08 HD VoD: 09/08 Y! College Basketball App: 03/09 Golf Masters 2009: 04/09 OnDemand Top Picks App: 08/09 Multiview App: 09/09 TV Awards & New Show App: 09/09 Web remote access to DVR: 11/06 Mobile remote access to DVR: 04/07 U-verse Voice: 02/08 Remote Access on iPhone: 06/09 Media Share: 09/09 Data Source : ATT.com
  19. 19. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 19 Expand Reach & Monetization Achieving Video Nirvana Unify Experience & Platform Rejuvenate Better TV experience
  20. 20. © 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialC25-452149-01 20

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