Business environment analysis yle 2013

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Media usage keeps growing and fragmenting. As content available for media consumers increases, media companies must work harder to be interesting and discoverable. As media consumption habits change, the use contexts of TV change too.

One million households in Finland have no access to broadband connection fast enough to enable diverse media consumption.

This is a summary of observations of Finnish Broadcasting Company’s environment produced by network of experts in various positions in Yle.

Tuija Aalto
Head of Stategy, Yle

Published in: Business, News & Politics
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Business environment analysis yle 2013

  1. 1. Finnish Broadcasting CompanyBusiness Environment AnalysisMay 2013
  2. 2. To ReaderMedia usage keeps growing and fragmenting. Ascontent available for media consumersincreases, media companies must work harder tobe interesting and discoverable. As mediaconsumption habits change, the use contexts ofTV change too.One million households in Finland have no accessto broadband connection fast enough to enablediverse media consumption.This is a summary of observations of FinnishBroadcasting Company’s environment producedby network of experts in various positions in Yle.Tuija AaltoHead of Stategy, YleWorkgroup• Annika Ruoranen, Head of Audience Insight, Newsand Current Affairs• Eija Moisala, Head of Audience and MediaInsight, Media Unit• Erja Ruohomaa, Head of Strategy Research• Jari Lahti, Chief Strategy Officer, Yle Media• Jarno Liski, Journalist• Janne Holopainen, Media Regulation Manager• Juha Haaramo, Audience researcher• Kaj Backman, Media producer• Leevi Kokko, Head of Audience Insight, Yle.fi• Maria Hausen, Producer• Marina Österlund-Karinkanta, Senior Media Analyst• Marjo Ahonen, Head of Strategy and Planning, Newsand Current Affairs• Olli Sipilä, Head of Technology and Development &CTO• Outi Roivainen, Audience researcher• Pasi Ekman, Development Manager, Technologies• Sami Kallinen, Head of Yle Internet Development• Satu Keto-Kantele, Head of Content, CreativeContent• Susanna Snell, Head of Audience Insight, CreativeContent15.5.2013 2
  3. 3. Megatrends in media business15.5.2013 3UbiquitouscomputingAutomationDigitalisationGlobalisationMedia is transformed by the combinedeffects ofautomation, digitalisation, globalisation andubiquitous computing.The following affect media content andmedia user experience:• Huge amount of content available• Free content & services• New business models• Development of devices• Cloud computing• Differences in regulation accross nationsand regions• Recommendation algorithms• User data based personalisation anddeteoration of privacy as its result.
  4. 4. Yle’s competitors are global in all ofthe relevant business areas15.5.2013 4Mass mediaLeisureactivitiesInteraction &participationOnline Video Services Social MediaNews services
  5. 5. Commercial media suffer from therecession and global competition15.5.2013 5According to TNS Gallupmedia advertising fell13,3% in a year (Q12013/2012) in Finland.This was the fourthconsequtive quartal ofadvertising falling.Some newspapers inFinland raise paywalls(HelsinginSanomat, Keskisuomalainen, Aamulehti) while otherscount on online ad sales(Iltasanomat, Iltalehti).Google launched it’s localversion of YouTube foradvertisers in Finland inFebruary 2013 and willgrow its already high82M€ share of advertising.Facebook’s share ofFinnish online ad revenueis rising fast, too.TNS Media Intelligence
  6. 6. On the rise: subscription basedservices and user data15.5.2013 6Assuming Netflix has 200 000 monthly payingsubscribers in Finland, its turnover will be 15M€ in2013. All of the VOD service providers combined(including Netflix, HBO, Viaplay etc.) can togetherreach a total turnover of 20-30M€. In comparison, theFinnish television companies’ pay-TV operationsgenerated a combined turnover of 70-90M€ in 2012.YouTube is launching pay TV channels in severalcountries – not yet in Finland.Music streaming service Spotify already accounts forthe lion’s share of digital music sales in Swedenaccording to Swedish Recording Industry Association(GLF).The value of the data generated by using digitalservices is considered to be remarkable and globalbusinesses have the economy of scale in using suchdata compared to smaller national media companies.User data powers targeted advertising andpersonalised recommendations. Several EUcontries, concerned about their citizens’ privacy, havelaunched an inquiry attempting to stop Google fromcombining user data from the many online propertiesit offers.
  7. 7. Finns under 45 use slightly lessradio and TV than five years ago7Radio listening of the over 45-year olds seemsto have stabilised to four hours a day. Thoseunder 45 listen to radio less and less.Over 45 year old Finns seem to watch more TVevery year. However, comparing TV viewingfrom year to year is increasingly difficult asthe possibilities of TV viewing are changing.Under 45 years old watch five minutes less TVtoday than in 2008. Will the trend contiunue, orwill TV watching increase as moreopportunities to watch online emerge andthe content available keeps increasing?Sources: KRT Online, Finnpanel/Yle Media. TvPeoplemeter, Finnpanel/Yle Media.Note: Radio and TV figures are measureddifferently and are not fully comparable.
  8. 8. 11% of the 25-44-year-olds’ TVviewing is time-shiftedThe population’s (4+) TV viewing inFinland according to Finnpanel• 91% live• 7% time-shifted• 2% online viewing15.5.2013 8Tv Peoplemeter, Finnpanel, comScore - Yle Media1275 615171497%10%7% 7%11%11%6%3%02468101214161820All 10yearsand older4-9 y 10-14 y 15-24 y 25-34 y 35-44 y 45-64 y 65+(minutes/day)
  9. 9. Free time daily internet usefrequency by devicesHow often internet is accessed on different devices in one’s free time(n = does access internet on the device in question)Source: Taloustutkimus Web & Mobile Tracking 2012
  10. 10. TV viewing contexts are in a flux withsecond screens and social TV15.5.2013 10TV industry is developing second screen concepts inorder to enhance TV viewing experience by interactivityand engagement.Second screen also delivers new, measurable advertisingopportunities to advertisers.Social TV29 % of all surveyed use internet simultaneously with TV.Being social online while watching is a regular habitfor half of the under 44-year-olds.12% of viewers want to comment and discuss TV online• 17% of men• 10% of women37 % of 15-29-year –old –Finnsshare media content via social media.Source: Monimediatutkimus 2012, Yle Media.Television is becoming a background medium aspersonal devices command the viewers’ attention.”TV is often on, even though I’m not actuallywatching any program”50 percent of women 15-44 agree with thestatement according to a multi media survey byYle.
  11. 11. Internet ready TV sets but a fraction ofonline video devices at homes15.5.2013 11Internet ready TV sets (Smart TV, Connected TV) are only a small part ofall the devices capable of online video consumption even if they becomemore common in households. Playing programmes from mobiledevices on big screen increases. Tablet device sales and use are risingwhile PC’ and TV set sales fall. Game consoles are also used for mediaviewing.TV-set ownership in homes inFebruary 2013TV-set: 93%Flat screen 75%Recording capable STB 50%Full HD TV 38%Sourcre: Statistics Finland
  12. 12. Current key players in Finnishaudiovisual content marketCompany Turnover Linear TV-channelsTurnover 2012,Estimate 2012A rough estimate 2013Free-to-air Pay-tv FTA + Pay Weeklyreach (*Averageweeklyviewingminutes (*Yle 423 4 4 87 604MTV3, C More 268 3 19 22 88 406Sanoma-Nelonen 110 3 5 8 83 212Discovery-SBS 13 2 5 7 56 75FOX ≈ 5-10 1 2 3 50 44Viasat-Viaplay 20 (** 0 20 20 7 5Netflix ≈ 10-20 ? ?HBO Nordic VOD ≈ 5 ? ?You Tube.fi ? ? ?Makuuni, largest DVD-rental chain 16 ? ?15.5.2013 12*) Weeks 1-15/2013, Source http://www.finnpanel.fi/en/tulokset/tv.php**) Viaplay VOD and linear pay-tv-operations, excl. tv-ad revenuesMajorFinnishtv-companies&VOD-services
  13. 13. Comparison of some VOD servicesavailable in Finland May 2013Netflix has best user experience in the heuristicassessment conducted by Yle Media in May 2013.The user interface is simple and therecommendation algorithm is unrivalled.None of the compared services had very broadcontent or the newest titles. Viaplay had more titlesthan Netflix.The broad device support of the international VODservices leaves national broadcasters’ VODservices such as Yle Areena, Ruutu and Katsomobehind. Not many of the services have Smart TV orgame console support. In smartphones, the weakestsupport was for Windows Phone.In addition to monthly subscription price, several ofthe VOD services offered pay-per-view-prizedcontent as well (series season, hockeygame, movie).15.5.2013 13NetflixViaplaySVT PlayYle AreenaYouTubeBoox TVBBC iPlayerKatsomoRuutuHBO NordicTv-kaistaElisa ViihdeSonera Viihde
  14. 14. Availability of news services onlineSeveral Finnish newspaper have announcedpaywalls in 2013: Helsingin sanomat andKeskisuomalainen (HS 9,90e/month, 5 free articles /week.)Example price: Keskisuomalainen online :Tablet newspaper: iOS, Android, Windows 8.PDF paper, Archives, unlimited access to onlinenews KSML.fi, mobile service, subscribers’ benefits- 18,90€ /month.Aamulehti is expected to implement paywall during2013. Both advertisers’ expectations and paywalllogic are driving publishers towards more localnews content.News UI. Helsingin Sanomat and Maaseuduntulevaisuus have touchscreen apps.Most of the newspapers have digital editions (aprint paper facsimile), resulting in less thanoptional user experience in mobile devices. Othernews publishers have specific mobile optimisednews sites as well as apps, according toobservations on the most important news media inFinland by Yle in May 2013App stores. Vertical ecosystems such as Apple’sApp Store and Google Play Store offer distributionplatforms for news apps and charge a roayalty ofthe price. To reach smartphone users publishershave to make their paid for contentavailable, although they end up taking a loss onrevenue because of that.Yle news is the only news medium in Finlandwithout an iOS app. Yle has a news applicationfor Windows 8 .Yle News is also the only to have responsivenews site, which functions on all devices. Thepage layout adapts to screen size and offers thesame functionalities on all devices.Aamulehti has responsive betahelppo.aamulehti.fi.Volume. Yle and Ilta-Sanomat published mostnews online during the observation period inMay, nearly 200 per day.All news publishers have RSS feeds.15.5.2013 14
  15. 15. Cost structure of linear broadcastingover IP and broadcastBroadcasting cost is lowerthan IP unicast distributionin a situation where everyFinn 10 years or olderwatches a channel morethan 45 minutes per day.The distribution costs arelower on broadband networksthan via broadcasting networkin Finland until the averagedaily viewing of TV channelreaches 45 minutes.Sources: Akamai estimateand Digita C-mux list price.15.5.2013 15Cost, eurosViewing, minutes
  16. 16. Availability of TV-over-broadbandApprox. one million households are living in single familyhouses, outside or close to densely populated areas. Most ofthose households can have only copper wire based DSL-FBB, in addition to wireless BB.FBB population coverage will be reduced from current 92%to approx. 80% by 2020.Sources: Ficora, MITC, Markab Oy.15.5.2013 16In Finland there are 2,5 million households.59 % of households have subscribed fixedbroadband.Approx. one million households are living ondensely populated areas, where high speedbroadband is a commodity.several HD-channelsone HD-channel or two SD-channelsone SD-channel with good qualityone SD-channel with uncertain qualityVOD onlyFixed BB allows ….25MB4 MB10 MB2 MB< 2MB25 Mbits FBBavailable for60% of households84%10MB88%4MB91%2MB8% ofhouse-holdshave noFBBavailable92%<2MBFixed broadband (FBB) population coverage
  17. 17. Broadcast radio might be digitizedthrough cellular networks15.5.2013 17Several European countries are preparingor building digital broadcasting networksfor radio (DAB etc). DAB uses in mostcases VHF III frequency band.Finnish public and commercial radiocompanies seem not to be willing to investin digital audio broadcasting networks. InFínland the VHF III band is used for digitaltv-brodcasting.The potential of 4G cellular networks forradio channel distribution will be studied inFinland.Audio content from radio channels isalready available over internet. Alldomestic radio channels are streamed overinternet and several companies areoffering also audio on demand services.11% of population 9+ years are listeningto radio channels over internet onweekly basis, according to Finnpanel .
  18. 18. Ubiquitous media in cars15.5.2013 18Media content is brought to cars using personal devices: smartphones, tablets and wearable computingdevices such as Google glasses.Service information such as realtime traffic information and weather servcices are delivered to in carcomputers as part of intelligent traffic. Open traffic, weather and similar data allows for combinations of newkinds of services.
  19. 19. YLE STRENGTHENS FINNISH SOCIETY AND CULTURE BY PROVIDINGEVERYONE WITH INFORMATION, EDUCATION, INSIGHTS AND EXPERIENCES.STRATEGIC GOALSYLE SERVES ALL FINNSYLE PROVIDES VALUE TO SOCIETYYLE HAS THE MEDIA SECTORS BEST COMPETENCEYle Strategy
  20. 20. VISIONWe provide a world-class public service..VALUESReliability, independence, and respect for everyone.MISSION, VISION, VALUESMISSIONYle strengthens Finnish society and culture by providingeveryone with information, education, insights and experiences.20
  21. 21. STRATEGIC GOALSYle serves all FinnsYle provides value to societyYle has the media sectors best competenceSTRATEGIC GOALS211.Yle serves all Finns1. Our content is relevant to all Finns regardless of age, gender, place ofresidence, background or situation of life.2. We create diverse culture in an open way, through interaction with Finns.3. Our content is easy to find in a multi-channel world.2.Yle provides value to society1. Finns appreciate Yle and deem it important to society.2. We create an opportunity for everyone to participate in communication andinteraction in a digital age.3. We promote the vitality of the creative sector and our goal is that it is easy forpartners to cooperate with us.3.Yle has the media sectors best competence1. We have the best people and partners.2. We boldly renew our operations.3. We operate in a transparent, effective way.

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