Future of TV and Video from Asia
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Future of TV and Video from Asia

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Presentation for \"New Era, New TV\" Seminar @ OrangeLabs in Beijing in December 2008. Details on services from Korea and Japan (Pandora.tv, Afreeca.tv, Nico Nico Video) and ideas on why pure ad......

Presentation for \"New Era, New TV\" Seminar @ OrangeLabs in Beijing in December 2008. Details on services from Korea and Japan (Pandora.tv, Afreeca.tv, Nico Nico Video) and ideas on why pure ad model might be a bad idea, and why mobile is still unproven.

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  • 1. What Asia can tell us about the future of TV and Video Benjamin Joffe, CEO | Plus Eight Star | December 2008
  • 2. www.plus8star.com
  • 3. Cross-Market Consulting Mobile & Internet Innovation China | Japan | South Korea
  • 4. Agenda 1. Why looking at China, Japan & Korea? 2. Is advertising the only valid business model? 3. Some services giving hope 4. What are the barriers? 5. How about mobile?
  • 5. 1. Why China, Japan & Korea?
  • 6. In Japan & Korea, broadband is among the fastest and cheapest on Earth (100Mbps for <30 USD)
  • 7. 3G penetration in Japan and Korea is over 70%
  • 8. 100% 80% USA 60% 3G users 40% Japa Chin 20% n a 0% 0% 20% 40% 60% 80% % of Internet connections measured above 5Mbps (Source: Akamai, 1H2008)
  • 9. 1. Why China, Japan and Korea? China is the world‟s largest market Japan is the most “mobile literate” Korea is the most “Internet literate”
  • 10. 2. Is advertising the only valid business model?
  • 11. Can advertising revenues scale for video services?
  • 12. US$23.8 billion Movie Paper TV 6% of total ad market New media Outdoor TV/video
  • 13. What if…? Hockey Stick of Broken Illusions “The model is flawed” Content / $ Content / Costs Curve of Unclear Hope Revenues “We‟re profitable!” Everyone Here today Costs start before Time revenues Source: Plus Eight Star
  • 14. Facts and Assumptions #1 | YouTube is still not profitable #2 | Ad revenues grow “linearly” (?) #3 | Content grows much faster #4 | Costs follow content #5 | Ad$/Content goes down #6 | …囧
  • 15. Winter is at the door. Who will survive?
  • 16. Where are the people? Do people reduce travelling budget due to economic crisis? -- at Ad: Tech, Nov 25, Shanghai Hans Geng Nielsen-Net Ratings China, CEO
  • 17. Poor ad market share TV/video
  • 18. 3 main categories Remaining issues for UGC IPR Content Control
  • 19. Faster growth brings more players to new media e.g. CCTV online, Phoenix TV online
  • 20. Looking back #1 Internet winter had 2 types of survivors (1) Game companies (2) WVAS providers Tencent Sina Sohu Shanda
  • 21. Stocks NetEase: online gaming Tencent: virtual Sina: ad goods, gaming, WVAS Baidu: ad Are B2C models safer than B2B?
  • 22. Easier to sell to end-users than to companies?
  • 23. Promising revenue models #1 | Pay per view #2 | Monthly subscription #3 | Premium services #4 | Rev. share w/ producers & “sharers” #5 | Connection with e-commerce
  • 24. 2. Is advertising the only valid business model? Ad-only models seem to have problems Now, online video is already a media So there must be some solutions…
  • 25. 3. Some services giving hope
  • 26. Profitable Video Sharing Site
  • 27. Founded: October, 2004 Revenue: 10 million EUR 80~90% from ads Breakeven in Q1 2008
  • 28. 3 million subscribers 10 million UVs/month 2% CTR = 20x Naver! (leading portal) P2P saves 40% expenses
  • 29. Pandora TV vs. YouTube Korea (Page Views) Number of Page Views for Pandora TV and YouTube Korea 500 Page Views (million) 400 Pandora TV 300 200 Over 3 times! 100 YouTube Korea Jul.08 Aug.07 Sources: Daum directory
  • 30. Pandora TV | Business Models Companies Content Creators (advertisers) Provide advertising contents with payment Creating/posting and >80% of total Sharing UCC contents revenue ‘CUPI’ convertible • Share ad revenue with virtual currency content creators & sharers • Charge users premium content/option
  • 31. Video + E-commerce Nico Nico Douga ”smiling videos” quot;Japan's YouTubequot;
  • 32. Paying members: 7 million members in 200,000 total by Jun 08 (started July 2007) Mobile members: 1.7 million (started Aug 2007)
  • 33. Breakdown by gender Breakdown by age 30s 18% Female: 29% >30 20s 8% 47% Male: 71% <20 27%
  • 34. Main features • Registration only • On-video comments – Over 1.2 billion comments on 1.1 million videos – Average: 1,000 comments per video! • Most of the content focus on local pop culture – Anime, video-games, J-pop music videos, etc.
  • 35. The text on the videos is based on a timeline, which allows a new form of asynchronous communication. In fact, we see ourselves as a communication service using videos -- at “Infinity Ventures Summit”, Nov. 2008, Sapporo Seiji Sugimoto CEO, Niwango
  • 36. Revenue sources Premium members 47% 200,000 (June 2008) 5 USD / month Affiliate links 39% 820,000 USD / month Online ad 14% 300,000 USD / month Monthly revenues 2.1 million USD
  • 37. Affiliate links related to mouse and pet product
  • 38. Video + e-Commerce = Social Commerce or TV Shopping 2.0?
  • 39. Online/Offline mass media?
  • 40. Afreeca TV (March, 2006) Monthly unique visitor: 5 million Time Period of Staying : 45 minutes YouTube+ Live broadcasts + Game Portal
  • 41. BJ = Broadcasting Jockey “Broadizen” (Broadcast + Netizen)
  • 42. 1.5 million Private Channels run by BJ “BJ Managers” for content monitoring
  • 43. Encouraging Creation: Open Studio
  • 44. Afreeca TV | Business Model 1. Premium options 3. Create / Upload / Share 2. Use of Afreeca TV‟s cybercash „Star Balloon‟ Broadizen (Broadcast + Netizen) Organizations/ Communities Advertising Companies Providing ad platform for advertisements Setting-up of broadcasting system
  • 45. Don’t forget to turn off your webcam…
  • 46. 4. Where are the barriers?
  • 47. Are users willing to pay? Drawing inspiration from digital music
  • 48. iTunes = 5 billion songs
  • 49. More music is sold “online” than “offline” in China and Korea
  • 50. Ringback tones were created in Korea in 2001 They reached 30% penetration in less than 2 years
  • 51. Digital music revenues in Japan Source: Infinity Venture Partners, 2008
  • 52. 90% of digital music sold in Japan is mobile
  • 53. Chinese users too! ~1.2 billion EUR Source: China Mobile, 2008
  • 54. Affordable content Mega TV (IPTV) in Korea 0.5 USD per TV episode 1 USD for a movie
  • 55. 4. Where are the barriers? Ecosystem different from traditional TV Users pay for the right user experience Need for 1-click payment systems
  • 56. 5. How about mobile?
  • 57. Mobile TV penetration in Japan and Korea is over 30%
  • 58. 37 million mobile TV phones were sold by June 2008 in Japan Mobile TV started in May 2006
  • 59. In Japan over 70% of new handsets are mobile TV-enabled
  • 60. 2008 Trends
  • 61. Mobile Service Trends: Japan Mobile TV service “One Seg” Twist screen with data menu overlay Decorated and animated mobile Internet browsing (left) messaging
  • 62. Mobile Service Trends: Korea Mobile TV Mobile web browsing service Video phone call Mobile widget
  • 63. Is it a success?
  • 64. Remaining Questions What business models for mobile TV? (data back-channel? M-commerce?) Who pays for the infrastructure? How to attract advertisers? How to get the right content? How to charge users for content?
  • 65. 5. How about mobile? Is it too late for broadcast mobile TV? Affordable alternatives Ecosystem hard to create
  • 66. About +8*
  • 67. There are more ideas outside your country than inside Tom Kelley CEO, IDEO The 10 faces of Innovation
  • 68. “Innovation Arbitrage” • About us – +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia. – We provide local expertise & global perspective on mobile and Internet innovation from China, Japan and South Korea to add value to and accelerate the development of our clients’ businesses. • Our services – Analysis of proven best practices and business models from Asia – Other services: executive study trips, market entry strategy, M&A advisory, partners identification, negotiation support. • Founder & CEO: Benjamin Joffe – 9 years experience with mobile & Internet in Asia – Selected among “China’s Top 100 mobile industry influencers” in 2007 – Regular speaker at events on mobile and Internet in Asia – Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and Spanish
  • 69. Selected References • Adidas | E-commerce strategy for China, Japan & Korea • Bouygues Telecom | Cases studies of leading Asian Web 2.0 services and virtual worlds • Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet convergence strategies • Hemisphere | Analysis of mobile marketing best practices in Japan and South Korea (Hemisphere is a leading digital advertising agency), analysis of leading social platforms (SNS, virtual worlds, online games). • Microsoft | Analysis of Japan’s key players and market catalysts for mobile commerce market positioning in China • DeNA | Case studies of the best practices of leading social networks in China and South Korea (DeNA operates Mobile Game Town, Japan’s leading mobile SNS service) • China Mobile | Benchmark of Korean leading online communities • Sands Capital Management | Evaluation of China’s investment opportunities in social networks in China
  • 70. Social Work • Mobile Monday – Founder of the Mobile Monday forum in Beijing since 2006 (3,000+ members, 23 events, over 80 presentations). • Media – Monthly column on Asian innovation for Asian Business Leaders (one of the leading Chinese business magazines), numerous interviews in international media. • Events – Regular keynote speaker and moderator at Internet, Telecom, Media and Investment events e.g. ITU Asia, Asia Venture Capital Forum, China Mobility International Summit, O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08 Conference, Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile Monday Global Summit, etc.)
  • 71. Contact Us www.plus8star.com benjamin@plus8star.com benjamin0123 +81 | Japan +82 | Korea http://twitter.com/plus8star +86 | China Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star