Broad Cast Asia 2012 Rob Van Den Dam 20 June 12

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The Connected Consumer Era has arrived

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Broad Cast Asia 2012 Rob Van Den Dam 20 June 12

  1. 1. IBM Institute for Business Value The ‘Connected Consumer Era’ has Arrived Rob van den Dam Global Communications Sector Leader IBV © 2012 IBM Corporation
  2. 2. IBM Institute for Business ValueAgenda  Global digital behavioral trends of consumers  Challenges presented by the changing media landscape  Go beyond digital to deliver customized experiences  Looking ahead2 © 2012 IBM Corporation
  3. 3. IBM Institute for Business ValueIBM questioned close to 17,000 consumers in 25 countries to evaluateglobal behavioral trends in the age of consumerism South Korea China India Japan 2 types of surveys conducted in 25 countries mid 20113 (2011 Global Telecom Consumer Survey & 2011 Digital Consumer Survey) © 2012 IBM Corporation
  4. 4. IBM Institute for Business Value Consumers in Asian emerging countries expect to increase spending on almost everything, including Pay TV and communication services Net Increase/Decrease Mature Net Increase/Decrease China markets Mobile Telephony M obileTelephony 40% UtilitiesUtilities 4% Mobile Broadband M obile broadband 36% Food & drinks Food & drinks -15%average -3% Transportation Transportation 33% Transportation Transportation -6% Fixed Telephony. Fixed Telephony 33% MobileMobile Broadband broadband -10% Holidays Holidays/vacations 32% Mobile Telepony Mobile Telephony -14% Clothing Clothing 28% Pay television Pay television -16% Utilities Electric/Gas Utilities 27% Sports Sports -18% Food & drinks Food & drinks 27% FixedTelephony Fixed Telephony -19% Going out Going out 20% +26% average Clothing Clothing -19% Elect. Appliances Electrical appliances 16% Holidays Holiday/vacation -23% Pay television Pay television 16% Elect.Electrical Appliances-24% appliances Sports Sports 5% Going out -32% Going out4 Source: 2011 IBM Global Telecom Consumer Survey, © 2012 IBM Corporation Question: Compared to previous years, are you likely to spend less, the same or more on the following products / services in the next 2-3 years?
  5. 5. IBM Institute for Business ValueInternet users in these emerging markets access media/ contentservices more frequently than their counterparts in mature markets, … Daily Usage 1 2 User Generated Video Online Audio Content 40% 40% 40% of Internet users in 3 Online news Video 36% emerging markets 4 Online Music Video 35% user access 5 Live Video Broadcast 32% generated Access to 6 Full Length Movie 24% video daily media/content services 1 User Generated Video 22% 2 Online Audio Content 21% 40% Mature markets of Internet users in 3 Online news Video 18% emerging countries 4 Online Music Video 16% online listen to 5 Live Video Broadcast 16% audio content 6 Full Length Movie 11% daily5 © 2012 IBM Corporation Source: 2011 IBM Global Telecom Consumer Survey,; S08 How often do you access the following media/content services over the Internet?
  6. 6. IBM Institute for Business Value…and around half of the heavy content/media users claim to do thatvia a mobile device Devices Daily users to access media/content services100% 6% 6% 6% 4% Other smart phone 9% 7% 3% 4% 3% 4% 4% 3% 6% 5% 6% 6% 6% 7% 4% 6% 5% 5% 5% Android device 80% 5% 7% 8% 8% 8% 9% 9% Blackberry 23% 23% 60% 22% 22% 22% 22% Tablet PC 40% iPhone 48% 50% 49% 52% 45% 47% 20% Laptop/Netbook via Mobile Broadband 0% Laptop/ PC via Fixed Broadband Online Live video User Online Online Full movie audio broadcast generated Music News content video video clips video clips6 Q08. Which of the following do you use to access the media/content services in the last question © 2012 IBM Corporation Source: 2011 IBM Global Telecom Consumer Survey,
  7. 7. IBM Institute for Business ValueIn the emerging markets 60% of consumers with (fixed and/or mobile)internet access use social network sites to communicate Mature markets Usage of Social Networking Sites 100% 100% 8% 12% 8% 14% Daily Weekly 27% Occasionally 30% 30% 27% 80% 24% 80% 26% 32% 35% 60% 60% 28% 24% 26% 33% 40% 40% 68% 60% 60% 53% 20% 20% 45% 44% 46% 41% 0% 0% Emerging China South India Mature US UK Germany Markets Korea Markets7 © 2012 IBM Corporation Source: 2011 IBM Global Telecom Consumer Survey,; S06 How often do you use the following communications services – Social networking sites ?
  8. 8. IBM Institute for Business ValueInternet Search, Family/Friends and Social Media have becomethe preferred sources of information Preferred Sources of Information 70% Internet search 66% 64% Recommendations from friends/family 51% 51% Social media 28% 45% Web sites of providers 35% 31% Traditional advertising 19% 22% Emails/ promotional offers 13% 19% Emerging markets Retail stores 23% Mature markets 17% Shopping portals/ auctions 8% Source: IBM Institute for Business value Global Telecom Consumer Survey 2011,8 Question: What are you preferred sources of information when you are looking for communication products and services? © 2012 IBM Corporation
  9. 9. IBM Institute for Business ValueThe “Connected Consumer” era has arrived Media and Entertainment evolutionary eras9 © 2012 IBM Corporation
  10. 10. IBM Institute for Business ValueToday’s connected consumers are empowered, demanding instantaccess to personalized content, wherever they are I want access to I want access to content tailored content to the device I am using whenever I am ready for it I want access to content relevant to my current I want content location options based on my preferences I only want to pay for content I access I want content I want to choose choices based on whether I immerse my past myself socially in consumption selected content behaviors10 © 2012 IBM Corporation
  11. 11. IBM Institute for Business Value Rampant adoption of digital devices has fueled the growth of digital content consumption behaviors globally Global Content Consumption Viewing on demand Viewing onthe run Behaviors “I’ll Catch You “Do you want that Later” to go?” Distracted Viewing Social Viewing “THIS I have to check “How YOU doin’?” out right now”11 Source: IBM’s 2011 Digital Consumer Survey © 2012 IBM Corporation
  12. 12. IBM Institute for Business Value The new behaviors of connected consumers have greatly impacted M&E providers in both mature and emerging markets Viewing on demand Viewing on the run 95% 97% 95% 99% 91% Early adopters 87% 88% 91% 81% 82% 71% (12 % of global sample) 73% 68% 65% 62% Mainstream consumers 55% (35% of global sample) Video on Demand Search/Email On Home TVs On Mobile Phones US UK Japan China US UK Japan China Distracted Viewing Social Viewing 100% 97% 76% 76% 94% 71% 90% 91% 81% 85% 78% 58% 55% 52% 46% 31% Surfing the Web Uploading Photos While Watching TV Source: I On Social Media Sites IBM’s 2011 Digital Consumer Survey12 US UK Japan China US UK Japan2012 IBM Corporation © China
  13. 13. IBM Institute for Business ValueTo be able to meet demand for connected content it is critical tounderstand the key challenges Address content Challenges Get in tune with todays cannibalization digital consumers  Consumers are already  Consumers now wield reducing their existing level of unprecedented power over how pay TV service, or even brands are perceived canceling it entirely $ Finding new digital Serve a splintered revenue models mass audience  Digital revenue models are  Age is far less meaningful than weaker than traditional revenue before in differentiating micro- streams segments13 © 2012 IBM Corporation
  14. 14. IBM Institute for Business ValueContent cannibalization is realTraditional media and devices are in decline China 73% Respondents in China, Japan and the U.S. watch substantial less Japan regular TV as their use of United States 35% mobile video increases 23% Mobile video use Reduction in TV viewing 23% Source: IBM’s 2011 Digital Consumer Survey: Q13: Please indicate 28% how watching television shows through online or mobile/portable devices has impacted your “regular” television consumption (watching 41% on your television set as the regularly scheduled time).14 © 2012 IBM Corporation
  15. 15. IBM Institute for Business ValueProviders need to recognize that consumers are in control andconducting conversations in which they may not be included In the connected world, consumers have Blogs unprecedented power to build and Social Tweets demolish brand strength as they Networks blog, text and comment via social media Peer about their various consumer experiences Reviews RTL Nederland analyses social media buzz to optimise its Customer Analytics can be product offering 4 May 2011. RTL Nederland is a trend-setting used to mine digital channels, such multimedia and entertainment company with a as blogs, tweets, social networks and leading position in the Dutch broadcasting market. It owns five television channels, two ………. peer reviews15 © 2012 IBM Corporation
  16. 16. IBM Institute for Business ValueWith weaker revenue streams, digital revenue models haveyet to deliver value comparable to traditional models $ Lack of Willingness to Pay for Digital Media Content By type of content and device, globally All consumers Late Adopters Stragglers 61% 59% 60% 60% % of Respondents 56% 52% 52% 53% 52% 48% 47% 47% 48% 48% 45% Movie on Tablet Newspaper on Video Games on Magazine on TV Shows on Website Smartphone Tablet Website16 Source: IBM’s 2011 Digital Consumer Survey, Q14: What is your preferred way to pay for the following types of media content? © 2012 IBM Corporation
  17. 17. IBM Institute for Business ValueAge-based segmentation NO longer suffice – adoptiondistinctions between younger and older audiences have closed 18-24 25-34 35-44 45-54 55-64 100% 94% 96% 96% 93% 90% 85% 86% 86% 87% 86% 82% 82% 79% 75% 76% 74% Global Digital 64% 69% 72% Adoption Leaders by age, 2011 55-64 >65 5% 2% Willingness to Adopt New Consumer Electronic Devices, 2011 18-24 By Age and Country 45-54 12% 14% China Japan US UK 95% 91% 35-44 25-34 88%90% 88%86% 79%80% 78% 29% 38% 71% 73% 67% 66% 58% 53% 52% 37% 35% 30% 31% Internet on Mobile Phone, 2011 By Age and Country China Japan US UK17 Source: IBM’s 2011 Digital Consumer Survey; Q5: How would you categorize your adoption of consumer electronics devices? © 2012 IBM Corporation Q6: How often do you use the following digital content services?
  18. 18. IBM Institute for Business ValueBehavior-based segmentation is now essential to delivering compellingconsumer experiences Digital Consumer Segmentation Analysis, 2011 High Connected Access to Content Maestros Content 35%* Kings 9%* 15%* Efficiency Social Experts Butterflies Low 41%* Low High Intensity of Interaction Note: * of respondents18 © 2012 IBM Corporation Source: IBM’s 2011 Digital Consumer Survey; IBV analysis
  19. 19. IBM Institute for Business ValueContent providers need to deliver experiences tailored to their digitalconsumers’ personalities Example Digital Consumer Experience Models High “All Access Pass” “Always On” Smart Immersive Access to Content “Path of Least Resistance” “We Gotta Talk” Convenient Social Low Low High Intensity of Interaction19 © 2012 IBM Corporation
  20. 20. IBM Institute for Business ValueFor example, sports programmers should consider how their fanssegment and the resulting differentiated services they require Illustrative Future Sports Fan Experience Models Sports stats available Virtually play with High simultaneously with action professionals or other fans Smart Immersive Access to Content Advanced analytics enable Instrumentation and gaming blur tailored, “smart” sports the lines between “spectating” entertainment experiences and “participating” “Traditional” viewing with added Experiences created and convenience of instant availability controlled by consumers Convenient Social Experiences largely driven by The ability to connect socially matters more than the Low enhancements to the broadcast model production quality Low High Intensity of Interaction20 © 2012 IBM Corporation
  21. 21. IBM Institute for Business ValueA critical mass of global consumers embrace the ability to interactmore personally with content Appeal of Interacting More Personally With Content By Country US 78% 74% UK Germany % of Respondents Japan 49% China 48% 42% 40% 37% 26% 24% 23% Control Replay, Angle of Scene Play Alongside a Sporting Event Source: IBM’s 2011 Digital Consumer Survey, Q18: As content becomes more digital, we as consumers will have the opportunity to experience21 various forms of content in new ways. Please rank on a scale of 1-5 (5 being very appealing) how appealing the following types of © 2012 IBM Corporation experiences would be for you.
  22. 22. IBM Institute for Business ValueContent is still king – BUT must be augmented with the three other keyattributes of the Connected Consumer Era Connected Consumer Era Key Attributes Content + Social + Analytics + Distribution More video is updated to Social - embedded into Smart: personal, Seamless, integrated YouTube in 60 days than the content experience, insightful, relevant, experiences across the three major US and Immersive - lines contextual analytics devices networks created in 60 blur between “spectating” years and “participating”22 © 2012 IBM Corporation
  23. 23. IBM Institute for Business Value Providers Must Move Beyond Digital To Deliver Tailored Experiences  Target consumers based on their “digital personalities”  Deliver individualized experiences, not just content  Act like a B2C company, no matter where you are in the industry value chain  Connect consumers, content, and monetization23 © 2012 IBM Corporation
  24. 24. IBM Institute for Business ValueRecent IBV Publications24 © 2012 IBM Corporation
  25. 25. IBM Institute for Business Value Thank you Rob van den Dam Global Telecom Industry Lead IBM Institute for Business Valuewww.ibm.com/iibv rob_vandendam@nl.ibm.com25 © 2012 IBM Corporation

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