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Booz&Co Digital Consumer Markets 2013
 

Booz&Co Digital Consumer Markets 2013

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    Booz&Co Digital Consumer Markets 2013 Booz&Co Digital Consumer Markets 2013 Presentation Transcript

    • “Competition in Digital Consumer Markets”Competition in Digital Consumer MarketsMedia Briefing – April 11th 2013130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & CompanyThis document is confidential and is intended solely forthe use and information of the client to whom it is addressed.
    • We see six megatrends in the digital consumer spaceWe see six megatrends in the digital consumer spaceOnlineOnline& Offline& OfflinePersonalizationPersonalization& Customization& CustomizationDigitalInteractive,Interactive,I iI iIntegrationIntegrationDigitalMegaImmersiveImmersiveExperiencesExperiencesContent AsContent AsAdvertisingAdvertisinggTrends LeveragingLeveragingthe Crowdthe CrowdRealReal--timetimeData &Data &AnalyticsAnalytics130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 1Cutting across online, social, mobile, offlineSource: Booz & Company analysis
    • These trends have a particular strong impact on the mediaThese trends have a particular strong impact on the mediaconsumption pattern of the digital consumerThe Connected Media Lifestyle“Media” Platforms Content FormatsMore connected “media” devices:laptops smartphones, tablets,smart TVs, game consolesS t h & T bl t l iConnected content on-demand:games, apps, and videoNew content sources:b d dSmartphones & Tablets evolvinginto the “must have” media deviceusers, brands, and appsConsumption Patterns Social NetworksNew consumption occasionsby mobile devicesSimultaneous consumptionacross platforms commonAll age groups are on engage “social”More content consumed viasocial: (video, games, news)Recommendations used to130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 2across platforms common(e.g., TV + PC / tablet / mobile)Recommendations used todiscover and filter media contentSource: Booz & Company analysis
    • In the context of TV: Next generation of connectivity boost theIn the context of TV: Next generation of connectivity boost thetrend towards non-linear video consumptionLinear vs. non-linear TV consumptionEvolution of non-linear TV consumption Linear vs. non linear TV consumption(UK, 2012)Evolution of non-linear TV consumption(in % of total TV consumption, Germany)41%Linear50%26%95%26%% of people spendingNon-linear50%more time watching non-linear than linear TV202020125%18-24 yearldOveralll ti130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 3oldspopulationSource: YouGov Poll; Booz & Company analysis
    • But Germany lags behind leading markets like the US or UK -But Germany lags behind leading markets like the US or UKlimitations still hinder mainstream adaptation of VOD offersUse of Online Videos - Comparison Limitations to Online VideoUse of Online Videos - Comparison% of age group populationLimitations to Online VideoBreakthrough in GermanyUser ExperienceEase of use is still inadequate36%18-2438%Fragmented marketNo comprehensive platformsEase of use is still inadequatefor living room break through36%18 24years21%25-3433%25%No comprehensive platformswith all movies & seriesRelatively high prices for VOD35-44years21%years23%13%33%Streaming offers are moreexpensive than DVD rentalsContent availability / timing45-54years27%years12%6%17%Different availabilities and theblack periodsPayment methods13%18%6%55-64years3%130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 4Source: Media Perspektiven, OFCOMyPortals use few or unpopularpayment options
    • The ability to consume media content on multiple devices alsoThe ability to consume media content on multiple devices also“simultaneously” will further change consumption patternsSi lt M di UN li TV C ti Pl tfMobilesComputer50%42%Simultaneous Media Usage(in hrs. per day)Non-linear TV Consumption PlatformsTabletsHandheld 29%42%34%30%26%97% 37%TabletsMusic Player18%20%16%26%3%1%% of devicesused to consumef i lGaming ConsoleConnectedE-Reader10%professionalTV ContentConnectedTV 2000 2005 2010 2015F 2020F14 - 49y 8 - 18y3%2%2%130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 5Source: NM Incite14 49y 8 18y
    • New offerings and new players spur a new competitive dynamicNew offerings and new players spur a new competitive dynamicfocussing the competition on customer interface and contentStrategic Thrust of Market Players along the TVValue Chain P t tiT i iContentBroadcastersPresentationLayerCPETransmission/ DistributionPackaging(Production /Licensing)CableoperatorsTelcooperatorsDTHPlPlayersNew MediaPlayersBattleground Battleground2 1130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 6Battleground“Content”(Depth of Offering)Battleground“Customer Interface”(CPE, Presentation Layer)2 1Source: Booz & Company analysis
    • Comprehensive “Video” interfaces are seen as way to build-up2 Battleground: Customer AccessComprehensive Video interfaces are seen as way to build updeep and enduring customer relationships across usage occasionsXfinity Entertain SkyHorizonXfinity(Comcast)Entertain(Deutsche Telekom)SkyHorizon(Liberty Global)Unified user interfaceintegrating multiple devicesMulti device access to TVprograms and recordingsSingle interface acrossfixed and mobile devicesDevice independent TVaccess through Sky Gog g pTriple play offer36,000 on demand choicesp g gTriple play offer1,500+ on demand filmsTriple play offer20,000 on demand filmsg yTriple play offer1,000+ on demand films$137 per month (US)22mn cable subscriber (US)€58 per month (NL)Current roll-out in NL & CH€45 per month (DE)2mn subscribers (DE)£34 per month (UK)3.2mn homes (UK)130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 7Source: Company websites; Broadband TV News Magazine; Booz & Company analysis
    • Next to the offerings of infrastructure players, OTT entrants try toBattleground: Customer Access1Next to the offerings of infrastructure players, OTT entrants try tocompete for the customer relationship via new "boxes"Apple TV Roku X-BoxBoxeeApple TV Roku X-BoxBoxeeiTunes movies, TV showsNetflix, YouTube, VimeoMLB.com, NBA, NHLTV shows, movies and musicNetflix, Pandora and VUDULive sports, local news andTV shows, movies and musicNetflix, HuluPlus, AmazonInstant Video, HBO Go,Aggregator of content fromnetworks (e.g., ESPN, HBOGo), Netflix, Hulu Plus, ,AirPlay enabled – playcontent from iPad, iPhoneUp to 1080p HD qualityPart of iCloud ecosystemRetails for $99p ,special eventsLocal broadcast stations (e.g.,ABC, CBS, FOX, NBC)Social features integrated withFacebook, Twitter and Tumblr, ,NBA, NHL, MLS, UFCPandora, X Factor channelUp to 1080 HD qualityRetails for $99), ,TV, Films, Music, Social66 million units sold40MM Xbox Live members18MM Kinect for Xbox 360usersUp to 1080p HD qualityRetails for $19912 Mo. Subscription = $59.99Units sold = 4.2MM since 2010;1.4MM during Q42011 alongUnits sold = 200K through endof 2011Units sold= 2.5MM since 2009 60% of Xbox Live subscribersare using entertainment apps or130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Companyabout ~20-25MM users8Source: Company websites; Booz & Company analysis
    • As the ultimate consumer need will always be content, also newBattleground Content2As the ultimate consumer need will always be content, also newplayers invest heavily in original content to secure their relevancePlanning to allocate 5-15% orprogramming spend to originalcontentLaunched “People’s ProductionCompany” to develop originalkids and comedy programmingIn mid-Feb, launched 13-episode “dramedy” series“Battleground” about fictionalcontent2013 launch of exclusive digitalTV series “House of Cards”,becoming “most watched piecekids and comedy programmingFirst-look deal in place withWarner Bros; “Amazon Studios”sources original screenplaysBattleground about fictionalcampaign for U.S. Senate seatin Wisconsin; released everyTuesdayof content” on Netflix2012 streaming of first Netflixoriginal series “Lillyhammer”Development of six comedyseries pilots for exclusive airingon Amazon Instant Video130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & CompanySource: Netflix, Amazon, Hulu, Booz & Company analysis9
    • Five clear messages for the industryFive clear messages for the industryThe digital consumer is, more than ever in the driver seatTo win the new digital consumer players need to offer “Interfaces” that1To win the new digital consumer players need to offer Interfaces thatenable the consumer to… have seamless experience across platform and devices2… customize and interact with the requested content at hisconvenienceBut content will stay king the digital media consumer uses the new3 But content will stay king - the digital media consumer uses the newinterfaces only to get the content that he wants, when he wants itMarket boundaries between content and infrastructure mobile and fixed43Market boundaries between content and infrastructure, mobile and fixedaccess, as well as between individual infrastructures are dissolvingNational markets will stay important, but the race to win them is more45130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 10y p ,crowded than ever5
    • Thank You !Thank You !130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 11
    • Seven Questions and MaterialSeven Questions and MaterialOn which areas of the digital consumer market do most successfuldigital players position themselves?1So will all consumption be all digital all the time?What does the digital media consumer look for ?23 What does the digital media consumer look for ?What role will be left to the TV-Set in the non-linear world?43How will the monetization models look like going forward?How do leading TV player respond to the online drift and56 How do leading TV player respond to the online drift andfragmentation of audiences ?What role does Innovation play in terms of the market success ?67130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 12What role does Innovation play in terms of the market success ?7
    • Leading digital media players are positioned in all 4 of the digital1Leading digital media players are positioned in all 4 of the digitalfuture marketsCONNECTIVITY COMMERCE1 2CONNECTIVITY COMMERCEDeviceShoppingMarket-PlaceMulti-ChannelMobileBigDataCloudAccessfixedDeviceeShopSearchClubSocialAccessmobileCommerceSales……DisplayAdvertisingCPM/GRPMarketingServicesPerformanceAdvertisingCPA/ CPSWebsites /PortalsUGCUser GeneratedContentVid &CrowdNews/ContentSharingSalesPartnershipsDigitalMarketingROI DataPlatforms… eEducation /Peer-LearnigServicesAdTechVideo &Multi-Media ContentMarketingContentCustomi-zationInter-Activity4 3Platformsg130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 13CONTENT MARKETING4 3…Source: Booz & Company analysis
    • Not all digital all the time - Integration between online and offline2Not all digital all the time Integration between online and offlineis becoming one big trend in eCommerce130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 14Source: Next Web; Booz & Company analysis
    • There are five key things that the digital media consumer looks for3Today’s Media Consumer Wants…There are five key things that the digital media consumer looks forAnytime,Any Device,AnywhereAccessContent that adapts to users’ schedulesContent optimized for device capabilities –not just made availableT di t li d i th tGrowing consumerfrustration withtraditional packagersand media bundlesAccessTailored andTransmedia storylines and experiences thatmove seamlessly across media platformsFlexibilityMany consumersactively avoidingadvertising(e.g., low CTR,growing DVR usage)Media MadeFor Metargeted to userspecific needs“Gets to know me”,rewards me forti (Flexibility& Choice inBusinessModelsgrowing DVR usage)Personalization inpayment modelsdesired and expanding(e.g., rent, own, subs-Devices ContentA participatory role witht t t diactions (e.g.,badges, points)(e.g., rent, own, subscribe, ad supported)Consum-ptionPatternsSocialNetworksMoreInteractiveTwo-Way MediaDirect Accessto Content,Tools & Brandscontent -- access to mediacontent and copyrights (e.g.,remix culture)An active role in creating anddistributing brand content &More and more interactivity anddepth expected by consumersMore social and video gamingelements (gamification)130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 15yExperiencesTools & Brandsdistributing brand content &contributing to brand reputationelements (gamification)necessary to drive engagementSource: Booz & Company analysis
    • The TV battle remains in the living room; most people will4The TV battle remains in the living room; most people willconsume TV, linear and non linear on the “first screen”Daily TV Consumption1%Daily TV ConsumptionGermany, in Min Per User48%33%5%3%11%7%25012%9%2572141%3% 1%2302%-2% -0,2%82% 79%99% 96%Cl i TVPCM bil d i202020152002 2010130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & CompanyClassic TVPC screenMobile devices16Source: Booz & Company analysis
    • New revenue streams will need to be accessed both in the linear5New revenue streams will need to be accessed both in the linearand in the non-linear worldNon-linear TV WorldLinear TV World Non linear TV WorldNo value-add throughreal-time consumptionLean backwards worldLinear TV WorldValue-add through real-timeconsumptionLive/event- character Lean backwards worldNew syndication mechanismsInteractive elementsLive/event characterLean forward worldConnection with the viewerand among the viewersRevenue for Concurrent Viewing(2012 & 2020, Germany, in EUR bn.)6.4Revenue for Non-Concurrent Viewing(2012 & 2020, Germany, in EUR bn.)%4.346%14%5.126%3%1%Gaming& BettingCommerce &Transaction35%10%5%40%69%Advertising /MarketingPaidContent0.620%80%50%130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 1720202012gServices201220%2020Source: Booz & Company analysis
    • Aggressive investments in owned content ecosystems6Aggressive investments in owned content ecosystemsDigital Streaming ServiceLocalTV AppsMobile Web/AppsMobile Web/AppsSocial GamesOnline Games/Services130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 18Source: ESPN; Booz & Company analysis
    • Innovation will drive market success in the digital field –7Innovation will drive market success in the digital fieldsomething to be learned from natively digital playersAnnual Innovation Spend CompetitorsMicrosoft 7,340Annual Innovation Spend, CompetitorsIn EUR mn, 2012 or latest availablea 2 607Google 5,286a 2,607DTAG 66983845VF 352130411_Booz FF_Presentation_short.pptx Booz & Company - Prepared for SESBooz & Company 19Source: Bloomberg, 2013; Annual Reports & Public Interviews; Booz & Company analysis