Future of TV Mindshare
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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 ...

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….

Future of TV Mindshare Future of TV Mindshare Presentation Transcript

  • THEFUTUREOF TV 1
  • 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
  • > 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 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
  • > Strong linear TV brands will prosper Time Use, 2010 TVWe love TV.Over 4 hours a dayspent watching TV. 5
  • > 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
  • > 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
  • > 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
  • > 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
  • > 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
  • 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 – traditional vs emerging media. Revenue ‘The big head’ ‘The Long Tail’ ‘The sagging middle’ Top Bottom 12
  • > 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
  • > 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
  • > 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
  • > Social media will fuel the blockbuster Social media ‘chatter’ helps big content get bigger 16
  • > Social media will fuel the blockbuster Second screen consumption is the driver of Social TV 17
  • Socialcommunitiesprovide readyfanbase forlaunchingcontent 18
  • > Social media will fuel the blockbuster Social features enhance the viewer experience to sustain viewing 19
  • > 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
  • > 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
  • > 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
  • > 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
  • > 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
  • > 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
  • > 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
  • > 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
  • Advertisers will become increasingly involved throughout the value chain
  • > 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
  • > 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
  • > 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
  • > 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
  • Thanks 33