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Motorola's Strategy for Media Distribution
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Motorola's Strategy for Media Distribution

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This presentation is the result of a 24 hour case competition sponsored by Boston University and Motorola. The question was, "how can Motorola play a leading role in the future of digital media?" ...

This presentation is the result of a 24 hour case competition sponsored by Boston University and Motorola. The question was, "how can Motorola play a leading role in the future of digital media?" Our presentation suggest that they leverage their position in the set-top box market to make the livingroom the center of content distribution.

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Motorola's Strategy for Media Distribution Motorola's Strategy for Media Distribution Presentation Transcript

  • Team ROKR Garret Dodge Damian Fernandez-Lamela Ryan Hudson Bala Venkatrao March 31, 2007
  • Seamless Mobility: Enabling Cool Experiences Cable TV/Music System Upstairs TV IP Set-top box Consuming content at any time in any place Wireless Carrier
  • How can Motorola play in the media delivery ecosystem?
  • The Video Long Tail “ Blockbuster: The top 100 titles account for 69.4% of sales. Netflix: The top 100 titles account for 38.8% of sales. www.thelongtailblog.com “
  • A New Opportunity Peer IP STB Peer IP STB Create a P2P media distribution network TV/Music System Upstairs TV Home IP STB Wireless Carrier
  • The Video Long Tail
  • A Global P2P Content Distribution Platform
    • Source content from anywhere
      • Displaced local content
      • Sporting events
      • Niche content
      • Consumers
    • Distributed to any platform
      • TV
      • Phone
      • Computer
  • Set Top Box P2P Architecture
  • Value Proposition for Consumers
    • Access to interesting but currently unavailable content
    • “MyChannel” user generated content broadcasted to friends and family
      • Video, digital picture slideshow, tvblog
    • Easy to use and makes content readily available on the preferred large screen viewing platform
  • Value Proposition for Content Providers
    • Professional
      • Provides a new platform to reach millions of consumers
      • New revenue stream from premium subscription and/or targeted advertising network
      • Information about viewers
    • Amateur/Consumer
      • Novel distribution platform to reach previously unreachable audiences
        • Friends and family photo/video channel
        • Bloggers
  • Value Proposition for Operators
    • Cable
      • Premium fees for currently unavailable content
        • Monthly subscriber packages
        • A la carte viewing
      • Increase average revenue per user, by co-sharing revenue opportunities with Motorola
      • Opportunity to participate in monetization model through ad insertion
    • Cellular
      • Drive adoption of premium data packages
      • Increase usage of photo and video capability
  • Value Proposition for Motorola
    • Increased sales of premium STBs driven by cable operator desire to sell long tail content packages (higher ARPU)
    • Control of a valuable P2P content distribution network
      • Monetize through revenue share with cable operators
      • Monetize through ad network partnership
    • Extend the vision of seamless mobility to include content creation drive premium mobile device sales
  • DRM
    • Closed P2P system controls content accessibility across network
    • Permissions managed at STB level
    • Limited piracy exposure in user content
      • User generated content submission tied closely to authenticated cable accounts
    • Limitations
      • Apple DRM doesn’t play well with others
  • Revenue Potential Source: 2006 Annual Report/eMarketer 4691.5 2551.2 1563.8 815.6 401.9 Total Revenue ( $ millions) 2816.1 1200.3 316.5 18.0 0 Service Revenue ($ millions) 60 48 24 6 0 Revenue per subscriber ($) 0.35 0.25 0.15 0.05 0 % STB Using P2P Services 1875.4 1350.9 1247.3 797.6 401.9 STB Revenue ($ millions) 80 80 80 80 40 Profit on Unit (20%) ($) 23 17 16 10 10 Box Upgrades (millions) 134.1 100.025 87.925 59.9 50.24 Total Motorola Boxes (millions) 447 400.1 351.7 299.5 251.2 World Broadband Households (millions) 2010 2009 2008 2007 2006  
  • Competition
    • Is Apple a game changer?
    • Yes.
      • Accelerates innovation – and partner’s willingness to work with Motorola
      • iPhone: will be adopted and push advanced capabilities to the mainstream (at a high price point)
      • Leverage on iPod / iTunes
    • And no…
      • AppleTV: opens segment to iPod enthusiasts but limited broader appeal
  • Competition
    • Microsoft
      • Xbox as STB, Windows media center PC’s, Vista
    • Cisco
      • Scientific-Atlanta acquisition
      • Likely approach: WiFi/WiMax phone network
    • Other players: Sony, Samsung, Slingbox, etc.
    • FCC regulation changes the STB game in July 2007
      • First generation 3rd party STBs will have limited functionality
  • P2P/Online Competition
    • Joost
      • Founders of Kazaa and Skype
      • P2P video distribution platform (PC)
    • Google/YouTube
    • News Corp / NBC
    • MobiTV
      • Computer/Cell phone distribution
      • 1+ million subscribers at $10/month
  • Implementation
    • Customers
      • Partnerships with cable operators like Comcast and demand for HD STB upgrades will enable rapid deployment of P2P STB network
    • Hardware and Software
      • Uses IP STB technology through Kreatel acquisition
      • Develop real time P2P video technology in-house or acquire P2P start-up based on university research
    • Partner for Initial Content
      • Content network partnerships (i.e. Brightcove, Yahoo)
      • User generated (i.e. Flickr)
  • Assumptions
    • The company will be able to secure the partnerships with carriers and cable co.
    • Motorola can successfully create the technology layer and it is possible to enforce the IP protection
    • Feasibility of deals for copyright management with content providers
    • FCC won’t block the deployment and the new device will be compliant with the new FCC rules regarding third party providers of set top boxes
  • Why Motorola? Why Now?
    • Motorola is uniquely positioned to address this high margin market opportunity
      • Motorola alone has position in both phone and STBs
      • Operator/carrier partners have revenue motivations for pushing extended seamless mobility framework
      • Competitive pressure from Apple entry will push partners to seek alternatives
      • Multi-billion dollar, high margin, recurring revenue opportunity
  • Questions?
  • Appendix STB Growth Driven by HD & Broadband Adoption
  • References
    • Motorola Mobile TV solutions, Connect Home, Service provider
      • http://broadband.motorola.com/consumers/
      • http://www.motorola.com/networkoperators/pdfs/new/mobile_tv_brochure.pdf
      • http://www.motorola.com/content.jsp?globalObjectId=5114-8158
    • Sling media is currently offering a product that provides some functionalities
      • http://us.slingmedia.com/page/home
    • Sony Freeview microsite
      • http://www.npe.sony.co.uk/
    • Cisco acquired Scientific Atlanta
      • http://newsroom.cisco.com/dlls/2006/hd_022706.html
    • Microsoft TV IPTV Edition and Microsoft phone
      • http://www.microsoft.com/tv/IPTVEdition.mspx
      • http://www.microsoft.com/presspass/press/1996/jan96/phnvcepr.mspx
    • Nokia licenses Spyglass web technology for digital set-top boxes
      • http://press.nokia.com/PR/199804/776473_5.html