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THEFUTUREOF TV         1
Sir Martin Sorrell   Peter Bazelgette    Claire EndersWe’ve talked to a   Mark Thompson         David Elstein        Danie...
> 4 trends shaping the UK TV market       Strong linear                  Social media       TV brands will                ...
> 4 trends shaping the UK TV market       Strong linear                  Social media       TV brands will                ...
> Strong linear TV brands will prosper                                         Time Use, 2010                             ...
> Strong linear TV brands will prosperTV viewing hasn’t changed over last 20 years.In fact, hours viewing has increased ov...
> Strong linear TV brands will prosper                                         UK LAUNCH                                  ...
> Strong linear TV brands will prosper       Sky + timeshifted viewing by years                 We have over-       of own...
> Strong linear TV brands will prosper… & the significance ofonline video viewing 19 mins a day of online video, but 80%+ ...
> Strong linear TV brands will prosper                                                     Estimated video viewing by type...
As content choiceincreases, channelbrands’ navigation role will be more     important
> Strong linear TV brands will prosperStrong channel brands will gain share in a VoD world.Distribution of revenue – tradi...
> 4 trends shaping the UK TV market       Strong linear                  Social media       TV brands will                ...
> Social media will fuel the blockbusterBlockbuster content has held                          TV Viewing Figures by rank (...
> Social media will fuel the blockbusterNew forms ofaccess help                                 Broadcaster player on devi...
> Social media will fuel the blockbuster    Social media    ‘chatter’ helps    big content get    bigger                  ...
> Social media will fuel the blockbuster    Second    screen    consumption    is the driver    of Social TV              ...
Socialcommunitiesprovide readyfanbase forlaunchingcontent                18
> Social media will fuel the blockbuster Social features enhance the viewer experience to sustain viewing                 ...
> 4 trends shaping the UK TV market       Strong linear                  Social media       TV brands will                ...
> Pay will re-shape the TV industry                                                    TV Industry Revenue (£m)           ...
> Pay will re-shape the TV industryThe value of a subscriber                            Sky Annual ARPU (£) 2006-2010conti...
> Pay will re-shape the TV industry…making content that                                  Likelihood of subscribing to Pay ...
> Pay will re-shape the TV industry                                             Estimated Revenue mix for ITV Wholesale mo...
> Pay will re-shape the TV industryThe ‘ARPU hole’will start to be                           Where is the pay-            ...
> 4 trends shaping the UK TV market       Strong linear                  Social media       TV brands will                ...
> The TV ad model will change – but slowly                 TV industry revenue £bn, real terms 2009 -2020 (f)             ...
Advertisers will become increasingly involved   throughout the value chain
> The TV ad model will change – but slowlyContent funding will grow but within limits                                     ...
> The TV ad model will change – but slowly       Addressable advertising is the bigger opportunity                        ...
> The TV ad model will change – but slowly                 But a combination of factors will                              ...
> 4 trends shaping the UK TV market       Strong linear                  Social media       TV brands will                ...
Thanks         33
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Future of TV Mindshare

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This is part of Mindshare's ongoing Future Of... research programme which explores the development of the media and technological landscape, and assesses the likely impact on advertisers and media businesses.

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  • So looking at each area in turn in a bit more detail….
  • So looking at each area in turn in a bit more detail….
  • So looking at each area in turn in a bit more detail….
  • So looking at each area in turn in a bit more detail….
  • So looking at each area in turn in a bit more detail….
  • So looking at each area in turn in a bit more detail….
  • Transcript of "Future of TV Mindshare"

    1. 1. THEFUTUREOF TV 1
    2. 2. Sir Martin Sorrell Peter Bazelgette Claire EndersWe’ve talked to a Mark Thompson David Elstein Daniel Eklot of people… Alan Yentob Steve Ballmer Mathew Horsman Troy Esther Dyson James Surowiecki 2
    3. 3. > 4 trends shaping the UK TV market Strong linear Social media TV brands will will fuel the prosper blockbuster. Pay will re- The TV ad shape the TV model will industry change – but slowly. 3
    4. 4. > 4 trends shaping the UK TV market Strong linear Social media TV brands will will fuel the prosper blockbuster. Pay will re- The TV ad shape the TV model will industry change – but slowly. 4
    5. 5. > Strong linear TV brands will prosper Time Use, 2010 TVWe love TV.Over 4 hours a dayspent watching TV. 5
    6. 6. > Strong linear TV brands will prosperTV viewing hasn’t changed over last 20 years.In fact, hours viewing has increased over the last couple of years. 6
    7. 7. > Strong linear TV brands will prosper UK LAUNCH No of years to reach 50% penetration MobilesBut the pace of 1986 1988 MultichannelTV 15 14 Traditional AVtechnological 1975 1923 VCRs Radio 12 14adoption has 1986 CD Players 12 1967 Colour TV 10quickened 2002 3G 10 2001 DAB 10 2001 DTRs 9 2001 HDTV 9 Digital AV 2000 Broadband 7 1998 Digital TV 7 1997 DVDs 6 1999 Audio on PC 6 2005 TV on PC 4 Web content 2006 Social Media 4 Source: O&O
    8. 8. > Strong linear TV brands will prosper Sky + timeshifted viewing by years We have over- of ownership (%) estimated our appetite% timeshifted viewing 30 for new ways of 25 watching TV (self- 20 16 16 17 17 scheduling)… 15 15 Sky+ usage is 15-20% on average – 10 significantly less than 30%+ that was 5 predicted. No evidence of greater 0 use over time. 1 2 3 4 5+ Number of Years of Sky+ Ownership Source: SkyView 8
    9. 9. > Strong linear TV brands will prosper… & the significance ofonline video viewing 19 mins a day of online video, but 80%+ is porn + YouTube (UGC) - neither of which is likely to become mainstream. 56% of all online video viewing is porn Source: Comscore 9
    10. 10. > Strong linear TV brands will prosper Estimated video viewing by type 2010-2020 (f), minutes 281 259 40 Online Video 19 70% of video viewing 2 14 29 TV VOD 31% will still be to linear TV 19 DTR timeshift Non-linear viewing will nearlytreble to 90mins pd, but viewing to Live 223 the linear schedule will remain 193 dominant. 2010 2020 Source: BARB / Comscore / Mindshare estimates 10
    11. 11. As content choiceincreases, channelbrands’ navigation role will be more important
    12. 12. > Strong linear TV brands will prosperStrong channel brands will gain share in a VoD world.Distribution of revenue – traditional vs emerging media. Revenue ‘The big head’ ‘The Long Tail’ ‘The sagging middle’ Top Bottom 12
    13. 13. > 4 trends shaping the UK TV market Strong linear Social media TV brands will will fuel the prosper blockbuster. Pay will re- The TV ad shape the TV model will industry change – but slowly. 13
    14. 14. > Social media will fuel the blockbusterBlockbuster content has held TV Viewing Figures by rank (% change 2000 – 2010 )up well in the digital era 0 UK -5 US*The top 5 programmes have lost fewer -10viewers over the past 10 years than therest of the top 100 -15 -20 -25 -30 -35 1-5 11- 21- 31- 41- 51- 61- 71- 81- 91- 15 25 35 45 55 65 75 85 95 Source: BARB / Nielsen 14 * 2001-09
    15. 15. > Social media will fuel the blockbusterNew forms ofaccess help Broadcaster player on device Online aggregatormaintain theviewer-programmerelationshipVOD & online TV platform player TV platform web playervideo allowadditionalopportunities toview Broadcaster site Aggregator player on device 15
    16. 16. > Social media will fuel the blockbuster Social media ‘chatter’ helps big content get bigger 16
    17. 17. > Social media will fuel the blockbuster Second screen consumption is the driver of Social TV 17
    18. 18. Socialcommunitiesprovide readyfanbase forlaunchingcontent 18
    19. 19. > Social media will fuel the blockbuster Social features enhance the viewer experience to sustain viewing 19
    20. 20. > 4 trends shaping the UK TV market Strong linear Social media TV brands will will fuel the prosper blockbuster. Pay will re- The TV ad shape the TV model will industry change – but slowly. 20
    21. 21. > Pay will re-shape the TV industry TV Industry Revenue (£m) 2004-2010 Subscription is already 5000 Subscription the dominant source 4000 of TV funding Advertising 3000 Subscription has risen by c6%pa+ BBC Licence Fee (TV) over last five years, whereas 2000 advertising has fallen by c2%pa 1000 Other 0 2004 2005 2006 2007 2008 2009 2010 Source: Ofcom 21
    22. 22. > Pay will re-shape the TV industryThe value of a subscriber Sky Annual ARPU (£) 2006-2010continues to grow… 541 550 8.2% 492Added TV functionality (PVRs, HD etc) 500 444and triple-play bundling have increased 450 421the value of a subscriber. 394 400 350 300 250 2006 2007 2008 2009 2010 Source: BSkyB company reports, Dec year end 22
    23. 23. > Pay will re-shape the TV industry…making content that Likelihood of subscribing to Pay TV if ITV’s content migrated to Paydrives penetration (% agreement, non-Pay HHs)increasingly valuable ITV Digital 4 7 11If moved to Pay, ITV’s content coulddrive significant Pay penetration All ITV 6 18 24 Much more likely More Likely Source: GfK / BoA Merrill Lynch Global Research 2010 23
    24. 24. > Pay will re-shape the TV industry Estimated Revenue mix for ITV Wholesale model (£m, 2008-2015E)Also offering morediverse income for ITV 3,000 2,500 OtherPay TV operators likely to pay 2,000 Contentstrategic premium for ITV content 1,500 Subscription 1,000ML estimate £200m pa revenue 500 Ad Revenuesupside by 2016 0 2008 2009 2010 2011 2012 2013 2014 2015 Source: GfK / BoA Merrill Lynch Global Research 2010 24
    25. 25. > Pay will re-shape the TV industryThe ‘ARPU hole’will start to be Where is the pay- lite TV model?filled in‘Over-the-top’ access throughconnected TVs & YouView willhelp growth of pay-lite 25
    26. 26. > 4 trends shaping the UK TV market Strong linear Social media TV brands will will fuel the prosper blockbuster. Pay will re- The TV ad shape the TV model will industry change – but slowly. 26
    27. 27. > The TV ad model will change – but slowly TV industry revenue £bn, real terms 2009 -2020 (f) 12 17 100 Other 6% 10% Public Funds (BBC) 23% 17% 24% 80 Spot Advertising 30% Subscriptions 41% 49% Content 5 15 Addressable 2010 2020 (f) 2020(f) The TV ad market Advertising will become a smaller source of revenue for the TV industry. New advertising revenue will evolve slowly streams will be constrained. 27
    28. 28. Advertisers will become increasingly involved throughout the value chain
    29. 29. > The TV ad model will change – but slowlyContent funding will grow but within limits Challenges Transaction costs Suitability (genre / advertiser) Risk for advertiser Demonstration of ROI
    30. 30. > The TV ad model will change – but slowly Addressable advertising is the bigger opportunity Price comparison site Car execution Platform Eg Demographics Viewing habits Pre roll / ITV (VOD / Linear) owned data linear break Stated preferences Car insurance up for renewal Home insurance up for renewal 3rd Party Eg Experian integrated data Pre roll / ITV (VOD / Linear) linear break Price comparison site Home execution
    31. 31. > The TV ad model will change – but slowly But a combination of factors will constrain the growth of addressable advertisingProduction Messaging - Creating tailored TV content cost - Tailoring messaging across multiple segments efficiently Creative - Speed of production - How explicit should understanding of past behaviour be?Implementation Targeting - Market power of Data - Balancing mass reach with platform owners Trading precision targeting Analysis - Integration of data - Ability to select targets & across platforms messaging dynamically
    32. 32. > 4 trends shaping the UK TV market Strong linear Social media TV brands will will fuel the prosper blockbuster. Pay will re- The TV ad shape the TV model will industry change – but slowly. 32
    33. 33. Thanks 33
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