The Real “House
of Cards”
IAB MIXX Conference
March 21, 2013
a presentation by Dan Hill

Tuesday, 2 April, 13
How emerging mainstream
behaviours such as Binge
Watching, Second Screen and
Cord Cutting are apt to change
the TV video b...
Canadian Broadcast TV Industry
Revenues in $ Millions 2011

Source: CRTC Communications Monitoring Report 2012

Tuesday, 2...
Canadian Broadcast TV Industry
Revenues in $ Millions 2011

Advertising
$3,553

Source: CRTC Communications Monitoring Rep...
Canadian Broadcast TV Industry
Revenues in $ Millions 2011

3

Advertising
$3,553
Other
$429

Source: CRTC Communications ...
Canadian Broadcast TV Industry
Revenues in $ Millions 2011

3

Advertising
$3,553
Television Services
$10,991

Source: CRT...
Canadian Broadcast TV Industry
Revenues in $ Millions 2011

4

Subscriber Revenues
$2,403

Advertising
$3,553
Other
$429
C...
TV Services & Residential Internet
Revenues in $ Millions 2011

$12,500

5

$10,991

$10,000
$7,500

$4,900

$5,000
$2,500...
6

Tel-e-vi-sion noun
1. a system for transmitting visual
images and sound that are
reproduced on screens, chiefly
used to ...
We love TV

7

Tuesday, 2 April, 13
We’re
different TV
viewers at
different times

8

Tuesday, 2 April, 13
The sofa
and laziness
rules

9

Tuesday, 2 April, 13
Netflix subscribers watch it a lot - and most
of their time is spent on the TV
Share of Netflix Viewing by Screen*
Anglophon...
Long tail value by Genre
Sports

Political Humour

Long Tail
Value is
spread over
time

No Tail
Value is
Immediate

News

...
Long tail value by Genre
Documentary

12
Drama

Long Tail
Value is
spread over
time

No Tail
Value is
Immediate

Sitcom

T...
Binge
Watching

13

Tuesday, 2 April, 13
Time Spent* by Activity: Watching Regular
TV, Internet TV and Netflix
Anglophones 18+
Hours Per Week

14

Regular TV**

Int...
Serialized and Episodic
Programs

15

Serialized Programming

Episodic Programming

Defining Characteristics:

Defining Char...
Appointment TV and Binge TV
Appointment TV
Can’t be missed, we
set our schedules
around it

A great thing to do,
especiall...
17

HBO and “Game of Thrones”
Tuesday, 2 April, 13
HBO & Netflix Business
Models

Subscribers
Monthly
Subscriber Rate
Share to TV
Service Providers
Gross Monthly
Revenues

18...
Conventional vs. Specialty
Networks?

Tuesday, 2 April, 13

19
20

The Role for Advertising?
Tuesday, 2 April, 13
Connected TV Variants

Tuesday, 2 April, 13

21
Connected TV Variants

Tuesday, 2 April, 13

21
Connected TV Variants

Tuesday, 2 April, 13

21
Access the Internet on a TV Set*
Anglophones,18+

22

25%

21%
20%

16%
15%

11%
10%

7%

8%

5%
0%

Fall 2010 Spring 2011...
Cord
Cutting

23

Tuesday, 2 April, 13
Internet the “most essential
medium” for Americans
12+

12-34

24

35+
68%

70%
60%

46%

50%
40%

33%

33%

30%
20%

20%
...
Most to
Gain
Production Companies
Distributors
Talent including
Directors, Writers and
Actors

25

Tuesday, 2 April, 13
Most to
Lose
Television Service
Providers
Specialty Channels that
focus on scripted drama
and comedy

26

Tuesday, 2 April...
The Second Screen

Tuesday, 2 April, 13

27
Americans watching TV and using
a device at the same time

28

Tablets
• Skew older 25-34 and
55-64 are heaviest
users

Sm...
NFL Mobile

Tuesday, 2 April, 13

29
Republic of Doyle “Ride Along”

Tuesday, 2 April, 13

30
The future

31

Tuesday, 2 April, 13
The Changing Experience

Appointment TV

Single Screen

Tuesday, 2 April, 13

Binge TV

Multi Screen

32
Specialist
and
Generalist

33

Tuesday, 2 April, 13
Thank You
dan@terraformmedia.ca

terraformmedia.ca

Tuesday, 2 April, 13

34
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MIXX 2013: Terraform Media "House of Cards"

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How emerging mainstream behaviours such as binge watching, second screen, and cord cutting are apt to change the TV video business and how this could impact media spending patterns. Presented by Dan Hill, Principal, Terraform Media with Q&A by Susan Krashinsky, Reporter, The Globe & Mail in March 2013 at IAB Canada's MIXX Conference.

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MIXX 2013: Terraform Media "House of Cards"

  1. 1. The Real “House of Cards” IAB MIXX Conference March 21, 2013 a presentation by Dan Hill Tuesday, 2 April, 13
  2. 2. How emerging mainstream behaviours such as Binge Watching, Second Screen and Cord Cutting are apt to change the TV video business and how this could impact media spending patterns. Tuesday, 2 April, 13 2
  3. 3. Canadian Broadcast TV Industry Revenues in $ Millions 2011 Source: CRTC Communications Monitoring Report 2012 Tuesday, 2 April, 13 3
  4. 4. Canadian Broadcast TV Industry Revenues in $ Millions 2011 Advertising $3,553 Source: CRTC Communications Monitoring Report 2012 Tuesday, 2 April, 13 3
  5. 5. Canadian Broadcast TV Industry Revenues in $ Millions 2011 3 Advertising $3,553 Other $429 Source: CRTC Communications Monitoring Report 2012 Tuesday, 2 April, 13
  6. 6. Canadian Broadcast TV Industry Revenues in $ Millions 2011 3 Advertising $3,553 Television Services $10,991 Source: CRTC Communications Monitoring Report 2012 Tuesday, 2 April, 13 Other $429
  7. 7. Canadian Broadcast TV Industry Revenues in $ Millions 2011 4 Subscriber Revenues $2,403 Advertising $3,553 Other $429 Cable, Satellite & IPTV $8,588 Source: CRTC Communications Monitoring Report 2012 Tuesday, 2 April, 13
  8. 8. TV Services & Residential Internet Revenues in $ Millions 2011 $12,500 5 $10,991 $10,000 $7,500 $4,900 $5,000 $2,500 $0 TV Services Residential Internet Source: CRTC Communications Monitoring Report 2012 Tuesday, 2 April, 13
  9. 9. 6 Tel-e-vi-sion noun 1. a system for transmitting visual images and sound that are reproduced on screens, chiefly used to broadcast programs for entertainment, information, and education. Tuesday, 2 April, 13
  10. 10. We love TV 7 Tuesday, 2 April, 13
  11. 11. We’re different TV viewers at different times 8 Tuesday, 2 April, 13
  12. 12. The sofa and laziness rules 9 Tuesday, 2 April, 13
  13. 13. Netflix subscribers watch it a lot - and most of their time is spent on the TV Share of Netflix Viewing by Screen* Anglophone Netflix Viewers** 18+ 10 Smartphone 4% Tablet 4% Computer 27% TV 65% Source: Media Technology Report *Hours of watching Netflix on specific devices was only asked to the Landline sample ** Past month Tuesday, 2 April, 13
  14. 14. Long tail value by Genre Sports Political Humour Long Tail Value is spread over time No Tail Value is Immediate News Tuesday, 2 April, 13 11 Reality
  15. 15. Long tail value by Genre Documentary 12 Drama Long Tail Value is spread over time No Tail Value is Immediate Sitcom Tuesday, 2 April, 13
  16. 16. Binge Watching 13 Tuesday, 2 April, 13
  17. 17. Time Spent* by Activity: Watching Regular TV, Internet TV and Netflix Anglophones 18+ Hours Per Week 14 Regular TV** Internet TV Netflix 25 6 20 1 15 10 4 15 11 5 0 No Netflix Netflix Source: Media Technology Report ** Cable, satellite, IPTV or off-air TV * Survey respondents tend to underestimate time spent with traditional media (e.g. TV) and overestimate use of new technology (e.g. Internet) NOTE: Some overlap may exist between Netflix hours and Internet TV hours. Tuesday, 2 April, 13
  18. 18. Serialized and Episodic Programs 15 Serialized Programming Episodic Programming Defining Characteristics: Defining Characteristics: • Stories resolve within episode • Emphasis on formula (e.g. procedural) over character • Typically programs do well as Repeats • Weaker online • Long story arcs • Emphasis on character development and complex relationships • Obsessive fan base • Strong online following Game of Thrones Downton Abbey Breaking Bad Tuesday, 2 April, 13 The Good Wife Elementary New Girl NCIS Modern Family CSI
  19. 19. Appointment TV and Binge TV Appointment TV Can’t be missed, we set our schedules around it A great thing to do, especially when we have a block of time We like to be part of the shared experience Great to experience with someone close Time between episodes to reflect and imagine Tuesday, 2 April, 13 Binge TV Seeing it all at once allows us to see things on a deeper level 16
  20. 20. 17 HBO and “Game of Thrones” Tuesday, 2 April, 13
  21. 21. HBO & Netflix Business Models Subscribers Monthly Subscriber Rate Share to TV Service Providers Gross Monthly Revenues 18 30 Million 33.3 Million $15 $8 50% 0 $22.5 Million $26.6 Million Source: The Atlantic Wire, “The Economics of Netflix's $100 Million New Show” February 1, 2013 Tuesday, 2 April, 13
  22. 22. Conventional vs. Specialty Networks? Tuesday, 2 April, 13 19
  23. 23. 20 The Role for Advertising? Tuesday, 2 April, 13
  24. 24. Connected TV Variants Tuesday, 2 April, 13 21
  25. 25. Connected TV Variants Tuesday, 2 April, 13 21
  26. 26. Connected TV Variants Tuesday, 2 April, 13 21
  27. 27. Access the Internet on a TV Set* Anglophones,18+ 22 25% 21% 20% 16% 15% 11% 10% 7% 8% 5% 0% Fall 2010 Spring 2011 Fall 2011 Spring 2012 Fall 2012 Source: Media Technology Report Tuesday, 2 April, 13 * Past month
  28. 28. Cord Cutting 23 Tuesday, 2 April, 13
  29. 29. Internet the “most essential medium” for Americans 12+ 12-34 24 35+ 68% 70% 60% 46% 50% 40% 33% 33% 30% 20% 20% 10% 0% 2002 Tuesday, 2 April, 13 2007 2012
  30. 30. Most to Gain Production Companies Distributors Talent including Directors, Writers and Actors 25 Tuesday, 2 April, 13
  31. 31. Most to Lose Television Service Providers Specialty Channels that focus on scripted drama and comedy 26 Tuesday, 2 April, 13
  32. 32. The Second Screen Tuesday, 2 April, 13 27
  33. 33. Americans watching TV and using a device at the same time 28 Tablets • Skew older 25-34 and 55-64 are heaviest users Smart Phones • Skew younger 18-24 year olds are the heaviest users Favourite Activities • Seeking information about the programs they’re watching • Surfing and eMailing • Checking Sports Scores Favourite Activities • Social Media • eMail • Shopping Source: Nielsen Cross Platform Report, Q2, 2012 Tuesday, 2 April, 13
  34. 34. NFL Mobile Tuesday, 2 April, 13 29
  35. 35. Republic of Doyle “Ride Along” Tuesday, 2 April, 13 30
  36. 36. The future 31 Tuesday, 2 April, 13
  37. 37. The Changing Experience Appointment TV Single Screen Tuesday, 2 April, 13 Binge TV Multi Screen 32
  38. 38. Specialist and Generalist 33 Tuesday, 2 April, 13
  39. 39. Thank You dan@terraformmedia.ca terraformmedia.ca Tuesday, 2 April, 13 34
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