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Emerging Trends in Digital Video
 

Emerging Trends in Digital Video

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    Emerging Trends in Digital Video Emerging Trends in Digital Video Presentation Transcript

    • Emerging Trends in Digital Video Joshua M. Wepman GCA Savvian Advisors
    • “Tremor Video Kicks Off a Web Ad IPO Wave” - Peter Kafka “AOL Buys Web Ad Platform Adap.tv for $405 Million” - Melodie Warner “Hulu Owners Call Off Sale, Instead Pledging to Invest to Take On Rivals” - Brian Stelter “YuMe IPO Start Stronger Than Expected” - Sam Thielman “Netflix, 'House of Cards' Trump Traditional Media on Emmy Nominations” - David Horsey “Maker Studios Reaches Deal in Principle to Acquire Blip” - Todd Spangler 1 Broad Strategic Focus on Digital Video
    • $1 $2 $3 $4 $6 $0 $2 $4 $6 $8 $10 2010 2011 2012 2013 2014 OnlineVideoAd Spending($Bn) Why Does Digital Video Matter? Rapidly Growing Market (1) Expanding Market Share (1) Notes: (1) Wall Street research. $57 $58 $63 $64 $67 $1 $2 $3 $4 $6 0% 2% 4% 6% 8% 10% $0 $25 $50 $75 2010 2011 2012 2013 2014 YoYGrowth(%) AdvertisingSpend($Bn) TV Ad Spend Digital Video Ad Spend Digital Video as % of Total TV Ad Spending 2
    • 3 The Drivers are All Up and to the Right 146 158 169 179 188 196 201 0 50 100 150 200 250 2010 2011 2012 2013 2014 2015 2016 USOnlineVideoViewers (MM) Scale (1) Engagement (1) Time Spent (1) 15% 72% 31% 71% 0% 20% 40% 60% 80% Worse than TV Advertising Same or Better Impact than TV Advertising Awareness Engagement 5 2 0 0 0 1 2 3 4 5 6 TV Radio Print Online Video TimeSpent 0% 25% 50% 75% 100% 0 25 50 75 100 125 150 Households(MM) Penetration (1) 1% (8%) (3%) 41% Change (%) Total TV Households Connected TV Devices Connected TV Device Penetration Notes: (1) Wall Street research.
    • Fragmentation Drives Consumption … and Ad Budgets 3 6 7 10 27 63 97 128 137 33 37 43 47 50 54 57 57 58 0 10 20 30 40 50 60 0 20 40 60 80 100 120 140 160 1950 1960 1970 1980 1990 2000 2005 2009 2011 WeeklySetUsageperHome ChannelsReceivableperHome Average Number of Channels Receivable per Home Weekly Set Usage per Home Notes: (1) Wall Street research. Increasing Choice Drives Higher Consumption (1) 1980-2000 2010+2000-20101930-1980 Network TV Cable TV Niche Cable Digital Video 4
    • + Battle for Media Dollars Blurs Content & Distribution Funding and investing in content to drive supply Acquired Blip to lower YouTube advertising “tax” Producing own content to lower content costs Acquired DBG to create agnostic distribution platform The future of video will be the combination of content and distribution to drive greater share of every dollar 5 Content Distribution
    • Publishers Transparency EfficiencyLiquidity Focus on Premium $190 $402 $686 $1,141 $0 $400 $800 $1,200 2011 2012 2013 2014 Programmatic video advertising is growing quickly but evolving differently than display TotalRTBVideo Spend($MM) Video Advertising is Going Programmatic Notes: (1) Forrester Research. 2013. Fast Growing Market (1) Brands & Agencies Drivers Programmatic Video Enablers 6
    • • Tweets are driving TV engagement • Results in increased ratings • Creates more attractive ad opportunities • Increasing volume of tweets during popular shows • Way for advertisers to capture engaged audiences Social is driving audience, engagement and advertising opportunities Tweets increasing audience and ratings Viewers are tweeting about shows … and creating inventory Second Screen Driving Engagement and Dollars 7
    • Video Advertising Growth Forecast (1) Notes: (1) Wall Street Research. Facebook Could Quickly Become a Major Digital Video Force $0 $2 $3 0% 5% 10% 15% 20% 25% 30% 35% $0 $1 $2 $3 2013 2015 2017 U.S. Facebook Potential Facebook % of U.S. Internet Video Facebook % of U.S. TV 8 • From standing start, Facebook could have a major impact on video advertising • Timeline video ads create new inventory and broadcast-like experience • Initial format designed to drive branding impact
    • OTT Platforms Erasing the Distinction Between TV & Digital OTT&WebApps TVBudget? DigitalBudget? OTT Platforms have the potential to disintermediate the MSOs and impact how content is monetized 9 Cable Company Not Required!
    • Convergence is Coming … • Online platforms designed for cross-channel delivery • High degree of targeting • Higher quality content designed for TV-like experience • Changing viewing behaviors • Development of Internet-enabled TVs to capture online video • Incumbents look to avoid disruption Online Offline Convergence will leverage the best of online and offline to optimize the video experience for audiences and marketers 10
    • … But TV is Safe (For Now)  No universal buying metric  Movement toward GRP as standard 11 New DevelopmentsInhibitors to Digital Growth  Concern over whether an ad has actually been viewed  Separate technology vendors and platforms  Separate Digital vs. TV media buying agencies and budgets  Tech platforms designed for cross-channel delivery  New consortium developed to ensure viewability  NewFronts highlighted budget shift
    • Content Creators Publishing Tools Delivery / Content Management Enablers Monetization Aggregation / Portals 2011 2011 2010 2006 2011 2013 2005 2010 2011 2010 2011 2008 2011 2008 2010 2010 2009 2006 2011 2008 2011 2010 2009 2011 2012 2010 2011 2011 2013 2013 2013 2012 2012 2008 2011 2006 Strategics Using Consolidation to Build Video Stack 12 InPlay from
    • 13 Sale of Acquired by Acquired by Acquired by Preferred Acquired by Acquired by Acquired by Preferred Stock Stock to We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor Fairness Opinion for Buddy Media We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller Pending August 2013 January 2013 August 2012 August 2012 August 2012 June 2012 June 2012 May 2012 Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Preferred Stock Acquired by Acquired by We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller We Advised the Seller May 2012 March 2012 February 2012 January 2012 December 2011 December 2011 November 2011 October 2011 October 2011 Merger with Preferred Stock Preferred Stock Acquired By Preferred Stock Acquired By Acquired By Acquired by Acquired by We Advised the Seller Financial Advisor We Advised the Seller Financial Advisor We Advised the Seller Financial Advisor We Advised lolapps We Advised the Seller We Advised the Seller September 2011 August 2011 August 2011 August 2011 August 2011 July 2011 July 2011 May 2011 April 2011 Sale of Subscription Acquisition of JV from Sale of Business Unit Secondary Preferred Stock Acquired by Acquisition of Preferred Stock Acquired by Music Service to Mogae Consultants Six Apart KK to Sale We Advised the Seller We Advised the Buyer We Advised the Seller We Advised the Founders Financial Advisor We Advised the Seller We Advised the Buyer Financial Adviser We advised the seller March 2011 January 2011 January 2011 January 2011 December 2010 December 2010 November 2010 October 2010 October 2010 Preferred Stock Acquired by Acquired by Acquired by Acquired by Acquired by Preferred Stock Acquired by Preferred Stock a Subsidiary of Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller Financial Advisor August 2010 July 2010 June 2010 June 2010 June 2010 January 2010 October 2009 April 2009 February 2009 Proven Leadership in Digital Media Transactions
    • TOKYO • SAN FRANCISCO • NEW YORK • LONDON • MUMBAI • SHANGHAI 14 Leading Global Advisory Firm • Leading investment banking firm with over 200 professionals worldwide • Publicly traded in Tokyo • Services include advice on mergers & acquisitions and private capital finance • Advised on over $100Bn in transactions since 2004