Panel Iii Video Symposium

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Panel Iii Video Symposium

  1. 1. Jefferies & Company, Inc. Jefferies 3 rd Annual Internet Conference February 28, 2007 CONFIDENTIAL DRAFT Member, SIPC Panel III: Video Symposium
  2. 2. Panelists Doug Stevenson Founder and CEO <ul><li>Panelists are </li></ul><ul><li>representative of the </li></ul><ul><li>many facets of the video </li></ul><ul><li>opportunity </li></ul><ul><li>Media </li></ul><ul><li>Technology </li></ul><ul><li>Internet </li></ul><ul><li>TV </li></ul><ul><li>Large corporate and SMEs </li></ul><ul><li>Ad Networks </li></ul>Keith Richman Founder and CEO David Liu Managing Director Internet & Digital Media Group Lou Kerner CFO Gus Warren VP, Strategic Partnerships 1
  3. 3. Sector Snapshot 2
  4. 4. The Future of Video Entertainment? 3
  5. 5. What is the Video Market Opportunity? <ul><li>Source: Wallstreet Research, 2005. Includes paid-subscription and free (over-the-air) television households. </li></ul><ul><li>Source: eMarketer, November 2006. Online video viewer defined as an individual ages 3+ who downloads or streams video (content or advertising) at least once a month. </li></ul><ul><li>Source: FCC, Kagan Media Research, Company Reports, WPP Annual Report. </li></ul><ul><li>Source: eMarketer, November 2006. </li></ul>1.4% CAGR 13.6% CAGR US Television Advertising Revenue, 2005-2009E 3 US Online Video Advertising Revenue, 2005-2009E 4 ($ millions) ($ billions) 8.5% CAGR 72.7% CAGR 4 US Television Households, 2005-2009E 1 (millions) US Online Video Viewers, 2005-2009E 2 (millions)
  6. 6. How Do We Find Video Today? What Do We Watch? <ul><li>Source: Jupiter Research, November 2006. </li></ul><ul><li>Source: InsightExpress for Advertising.com, January 2007. </li></ul>From Search Engine Results Recommendations From Friends From a Portal TV or Movie Previews/Trailers Directly From Online Video Sites From a Link in an E-mail Newsletter From Ads on TV, Radio, Or Print From Print Article From a Blog Methods Of Online Video Discovery 1 Video Content Viewed Online 2 News Clips Music Videos Movie Trailers TV Shows User Generated Videos Movies Sports Clips Other 5
  7. 7. Who are the Online Video Media Players? <ul><li>comScore Media Metrix, February 2007. </li></ul>Total Unique Video Streamers – July 2006 to December 2006 1 (millions) 6
  8. 8. Meet the Panelists 7
  9. 9. Dave’s Top Ten 8
  10. 10. Dave’s Top Ten <ul><ul><li>Agree or disagree? </li></ul></ul><ul><ul><ul><li>“ Content is king!” </li></ul></ul></ul><ul><ul><ul><li>“ Content should be free!” </li></ul></ul></ul><ul><ul><ul><li>“ User Generated Content is trash!” </li></ul></ul></ul><ul><ul><li>Mobile. Opportunity or money pit? </li></ul></ul><ul><ul><li>What will be the advertising unit for video? </li></ul></ul><ul><ul><li>Video can be viewed free with ads (network, online), subscription (cable, satellite), and a la carte (pay-per-view). What’s the best model? </li></ul></ul><ul><ul><li>What will limit growth in online video? </li></ul></ul><ul><ul><ul><li>Bandwidth? Devices? </li></ul></ul></ul><ul><ul><ul><li>Content? Distribution? </li></ul></ul></ul><ul><ul><ul><li>Search and Discovery Tools? </li></ul></ul></ul><ul><ul><li>1920s </li></ul></ul><ul><ul><li>1950s </li></ul></ul><ul><ul><li>1940s </li></ul></ul>9
  11. 11. Dave’s Top Ten (Cont.) <ul><ul><li>If you could LONG or SHORT any stock to exploit Video 2.0 what would it be? </li></ul></ul><ul><ul><li>If you could start ANY Internet based business in 2007 what would it be? </li></ul></ul><ul><ul><li>Who loses the most if you gain? </li></ul></ul><ul><ul><ul><li>Network TV? Radio? Cable? Newspapers? </li></ul></ul></ul><ul><ul><ul><li>No one!? </li></ul></ul></ul><ul><ul><li>What is your biggest competitive threat? </li></ul></ul><ul><ul><ul><li>What are the big Internet companies doing? Worried? </li></ul></ul></ul><ul><ul><li>Overpaid or underpaid? </li></ul></ul><ul><ul><ul><li>Sony buying Grouper for $65 million? </li></ul></ul></ul><ul><ul><ul><li>News Corp buying MySpace for $0.6 billion? </li></ul></ul></ul><ul><ul><ul><li>Google buying Youtube for $1.7 billion? </li></ul></ul></ul><ul><ul><li>1980s </li></ul></ul><ul><ul><li>2000s </li></ul></ul><ul><ul><li>Beyond? </li></ul></ul>10
  12. 12. Appendix 11
  13. 13. Online Video – Hot or Not? <ul><li>Source: Accustream iMedia Research. </li></ul><ul><ul><li>Online Video Has Tremendous Mass </li></ul></ul><ul><ul><li>Appeal </li></ul></ul><ul><ul><li>Overwhelming abundance of online video content </li></ul></ul><ul><ul><li>While YouTube and MySpace Video have accumulated massive collections, they only encompass a portion of what is available </li></ul></ul><ul><ul><li>Every Website either has or is considering video offering </li></ul></ul>Total Video Streams Served 1 46.7% CAGR (billions) 12
  14. 14. What is Tomorrow’s Advertising Unit? <ul><ul><li>Video Site Monetization Strategies </li></ul></ul><ul><ul><li>“ Pre/post-roll” / In-Stream Ads – 15-30 sec video ads inserted before or after video </li></ul></ul><ul><ul><li>“ In-Page” / Rich Media Ads – Ads with video/audio or interactivity which run on any site </li></ul></ul><ul><ul><li>Sponsorship – Superimposed logos, integrated content, branded channels or media players </li></ul></ul><ul><ul><li>Promotions – Unique contests such as user-generated commercials </li></ul></ul><ul><li>Source: JupiterResearch Internet Advertising Model, July 2006. </li></ul>US Online Display Advertising Spending, 2005 to 2011 1 ($ billions) 13
  15. 15. What are the Major Media Companies Doing? <ul><ul><li>Rapid Growth of Online Video Demonstrates Major Shift in Viewing Behavior </li></ul></ul><ul><ul><ul><li>Rise of UGC (aka User Generated Content) </li></ul></ul></ul><ul><ul><ul><li>On-Demand Entertainment: work isn’t just for sleeping anymore! </li></ul></ul></ul><ul><ul><li>Traditional Media Companies Trying to Use Online in Cost-Effective / Profitable Manner </li></ul></ul><ul><ul><ul><li>Pressuring free video-sharing sites to remove copyrighted material </li></ul></ul></ul><ul><ul><ul><li>Launched branded sites allowing access to proprietary content </li></ul></ul></ul><ul><ul><ul><li>iTunes and Wal-Mart.com Pay-Per-Download currently seen by major networks as safe online bet </li></ul></ul></ul><ul><ul><li>“ The Children Are Our Future” </li></ul></ul><ul><ul><ul><li>Despite tensions between old and new media, online sites access to the younger demo has necessitated partnerships and M&A </li></ul></ul></ul>Partnerships <ul><li>Google / YouTube ($1,650MM) </li></ul><ul><li>Sony / Grouper ($65MM) </li></ul><ul><li>Viacom / Atom ($200MM) </li></ul><ul><li>Viacom / iFilm ($49MM) </li></ul><ul><li>AOL / Truveo ($50MM) </li></ul>Investments <ul><li>Limelight Networks ($130MM) </li></ul><ul><li>BrightCove ($60MM) </li></ul><ul><li>Heavy ($20MM) </li></ul><ul><li>CinemaNow ($20MM) </li></ul><ul><li>MetaCafe ($15MM) </li></ul>M&A <ul><li>YouTube: NBC, CBS, Warner </li></ul><ul><li>Joost: Viacom </li></ul><ul><li>Akimbo: AT&T </li></ul><ul><li>Veoh: Time Warner </li></ul><ul><li>Blinkx: AOL, Dow Jones </li></ul>14

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