TV the Internetand Social Media   Stuar t W. Volkow   Xtropia Par tners  svolkow@ucla.edu www.stuar tvolkow.com           ...
2
Traditional TV Business Models1. Advertising:  Vimeo,Youtube, Crackle, Hulu, Blip TV, Funny or Die etc2. Pay TV (CATV, Sat...
Emerging TV Business Models1. Brand / Product Integration:  VuGuru, Electus, Revision 3,Youtube, Crackle, Hulu, Blip  TV, ...
TV is Changing in Fundamental Ways•From one-way to two-way•From one-to-many to Multi-Modal•From Scheduled to On-Demand•Fro...
TV is Changing in Fundamental Ways• Reality is here to stay worldwide and in more    forms•   Networks struggle to find nic...
FAC T S   7          7
The US Broadcast NetworksCopyright 2008, Stuart W. Volkow   TV Reborn   8                                                 ...
9    9
Global Advertising 2011=$500 Billion at 4.5% CAGR*         $70 Billion / YR        U.S. TV Advertising             Revenue...
11     11
Copyright 2009, Stuart W. Volkow   Media Marketplace                                                       12
2006-2011                                                  Wild Ride!                                                  Dis...
Copyright 2008, Stuart W. Volkow   TV Reborn   14                                                    14
Copyright 2008, Stuart W. Volkow   TV Reborn   15                                                    15
16
Nielsen 3 Screen Report Vol #8 Q1 2010 Highlights:• The amount of time spent watching television is still increasing:viewe...
Time Warner CEO Jeff Bewkes:            Growth Coming From Overseas            And TV Everywhereexpects to see a doubling ...
Connected Devices and TVs• Apple TV              • Samsung• Google TV                 • PS3              • LG• Roku       ...
Internet Enabled TVsInternet-Enabled        iSuppli estimatesTelevisions             that by 2014(IETVs) set to          s...
21
22     22
23     23
24
Copyright 2009 Stuart Wayne Volkow                                     25
Revue just wasnt hitting the sales targets Logitechoriginally set; after the company dropped the Revue downto $199 in May,...
Google TV 2.0 ?  http://www.google.com/tv/  http://www.google.com/tv/apps.html                  27                        ...
Movies start at $2.99 to rent and $9.99 to     own, and you can download TV series for     even less. And don’t worry abou...
29     29
30     30
“Absolutely, it is aguaranteed productfor Apple,” I wastold by one            “prototypes forindividual. “Steve     a mass...
The Big Worry for Pay TV                Cord Cutting  Reed Hastings - Netflix - CEO - Q3 2010 Earnings  Report...on cord cu...
Cost of Traditional TV                               Cost to Replace Traditional TV                                       ...
Strategy Questiosn✦ What TVContent Should be Made Available Over The Internet (fixed/mobile)? ✦ Under What Terms? ✦ Pricing...
Conflicting Business Models     Networks Block Web Programs From Being     Viewed on Google TV     Sam Schechner, Amir Eefr...
Time Warner VOD plans could threaten movietheaters, Netflix and RedboxJon Swartz, USA TODAY, Nov 3, 2010 • "will help lead ...
TV Over the Internet       • Hulu / Hulu+       • Netflix       • Vudu (Wallmart)       • Amazon Prime       • iTunes      ...
lf GEtEs,r                                                   FRtDAy,                            ApRt[   13,   2097,     l ...
39     39
40     40
✦ 23   million Subscribers✦>    20,000 Instant Streaming Films and TV Shows✦ Releases    often before Blu-Ray✦ $2 Billion ...
This isn’t a subscription     service. It’s on-demand with     rentals available from $1 to     $5.99 and purchases starti...
new pricing, variations on old models                 43                                        43
iTunes  44         44
45     45
Amazon  46         46
47     47
YouTube: Movies, TV, Storehttp://www.youtube.com/shows                               48                                   ...
US Networks Hedge The Internet                                 49
50
?51         51
52     52
Internet Direct   • New Platforms   • Content Networks   • Youtube Channels   • Youtube Stars            53               ...
TV (STB) Software                        F A I L1.2 million users (CEO Avner Ronen)                  54                   ...
55     55
Internet Content NetworksCopyright 2011 Stuart Wayne Volkow. Xtropia Partners                                             ...
57     57
http://blip.tv/58                       58
Copyright 2011, Stuart W.Volkow. Xtropia Partners                                                    59
T V S P O RT S O V E R T H E I N T E R N E T                     60                                               60
http://www.nba.com/leaguepass/broadband/index.html       61                                                 61
62     62
Subscriptions Advertising Stuart W.Volkow 2007   63                             63
CommerceStuart W.Volkow 2007   64                                       64
Youtube Stars      65                65
Creators of LG15                     Mesh Flinders     Miles Beckett66                                 66
67     67
Br and Integr ation and    Brand Channels           68                          68
69
70
Branded Channels                        www.myxenergy.comStuart W. Volkow, Copyright 2011   71                            ...
iTV - CommerceCopyright, Stuart W.Volkow 2011                                  72
TV A p p s /Widgets        73                      73
74
VUDU Apps - Theapplications platformfor connected TVs andBlu-ray players                        75                        ...
76     76
Google TV Apps      77                 77
http://connectedtv.yahoo.com/services/tv-widgets/                        78                                               ...
Mobile79              79
80     80
Personalization and  Recommendation Sifting Through Endless Choice               81                                  81
82     82
83     83
Jim Lanzone, Founder-CEO Clicker                                   "We were looking at the next 50                        ...
85     85
86
http://www.youtube.com/watch?v=-P0tkjkSO20&feature=player_embedded                                 87                     ...
88
Social TV    89            89
Over 66 million US consumers are simultaneouslyusing a PC while watching TV.                   90                         ...
“Already more than half of Americans arewatching TV and surfing the Websimultaneously. But another trend--givingconnectivit...
According to Nielsen, over 70% oftablet owners and 68% ofSmartphone owners say they usetheir devices while watching TV –mu...
93     93
IntoNow     Social Checkinhttp://youtu.be/GmEiE4qcV3k               94                              94
Real time or near real time two screen or     three screen      interaction                         95
96     96
97     97
98     98
99     99
100      100
101      101
102      102
http://twitter.com/   betty_draper        103                      103
104      104
Social Games               105
Conclusions• TV Business Models Must Change• Ad Sales will get tougher - Slow or No Growth• More competition for audience•...
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TV, The Internet and Social Media: Executive Briefing

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An executive briefing on the future of Television including Internet enabled Smart TVs, TV Apps, mobile, and social media integration.

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TV, The Internet and Social Media: Executive Briefing

  1. 1. TV the Internetand Social Media Stuar t W. Volkow Xtropia Par tners svolkow@ucla.edu www.stuar tvolkow.com 1 1
  2. 2. 2
  3. 3. Traditional TV Business Models1. Advertising: Vimeo,Youtube, Crackle, Hulu, Blip TV, Funny or Die etc2. Pay TV (CATV, Satellite Subs)3. Pay Per View or rental: Red Box,Youtube,Vudu (Wallmart)4. Pay to Own: DVD, Downloads: iTunes, Amazon5. Subscription: Netflix, Amazon Prime, Hulu+6. Transactions / Direct Sales 3 3
  4. 4. Emerging TV Business Models1. Brand / Product Integration: VuGuru, Electus, Revision 3,Youtube, Crackle, Hulu, Blip TV, Funny or Die, L-Studio, Xfaxtor, American Idol etc.2. Online Content Networks/Ad Networks(Revision3, Machinima,Outrigger)3. Direct to Audience Subscription: HBO GO, ABC, Xfinity4. Pay to Own: DVD, Downloads: iTunes, Amazon5. Transactions / Direct Sales 4 4
  5. 5. TV is Changing in Fundamental Ways•From one-way to two-way•From one-to-many to Multi-Modal•From Scheduled to On-Demand•From Sequential “Windows” to Simultaneous•From Broadcast to Variable Quality(exponential growth in UGC)•From Channels to Markets 5
  6. 6. TV is Changing in Fundamental Ways• Reality is here to stay worldwide and in more forms• Networks struggle to find niches and ID• Edgy, dark, fantasy, stylized, ?• More complex distribution deals all-around• Gobalization: Where the growth is. 6
  7. 7. FAC T S 7 7
  8. 8. The US Broadcast NetworksCopyright 2008, Stuart W. Volkow TV Reborn 8 8
  9. 9. 9 9
  10. 10. Global Advertising 2011=$500 Billion at 4.5% CAGR* $70 Billion / YR U.S. TV Advertising Revenue Google’s Ad Revenue 2010 >20 Billion to $29 Billion** major Networks (CPG and Auto are largest)Global Online Advertising 2011=$80 Billion at 17.2% CAGR* 10 10
  11. 11. 11 11
  12. 12. Copyright 2009, Stuart W. Volkow Media Marketplace 12
  13. 13. 2006-2011 Wild Ride! Disney News Corp Comcast Time Warner CBSCopyright 2008, Stuart W. Volkow TV Reborn 13 13
  14. 14. Copyright 2008, Stuart W. Volkow TV Reborn 14 14
  15. 15. Copyright 2008, Stuart W. Volkow TV Reborn 15 15
  16. 16. 16
  17. 17. Nielsen 3 Screen Report Vol #8 Q1 2010 Highlights:• The amount of time spent watching television is still increasing:viewers watched two more hours of TV per month in Q1 2010than in Q1 2009• Average time spent simultaneously using TV and Internet in thehome grew 9.8%, to 3 hours and 41 minutes per month• The number of people who are timeshifting has grown 18%since last year to 94 million, with the average user nowtimeshifting 9 hours and 36 minutes per month• The mobile video audience grew 51.2% year-over- year,surpassing 20 million users for the first time• 52.7% of US homes now have HDTVs and receive HDTVsignals 17
  18. 18. Time Warner CEO Jeff Bewkes: Growth Coming From Overseas And TV Everywhereexpects to see a doubling of his overseas business that now generatesabout $2.5B a year in revenue and $500M in operating profit. Most ofthe increase will come as the company’s pay TV networks and showsbecome more broadly distributed, generating higher ratings and adsales. “The value of American-produced content is going up pretty fastaround the world,” 18
  19. 19. Connected Devices and TVs• Apple TV • Samsung• Google TV • PS3 • LG• Roku • XBOX • Panasonic• Vudu 19 19
  20. 20. Internet Enabled TVsInternet-Enabled iSuppli estimatesTelevisions that by 2014(IETVs) set to some 148 millionrise by a factor televisions withof six by 2013, Internetaccording to connectivity williSuppli Corp. be sold annually. 20 20
  21. 21. 21
  22. 22. 22 22
  23. 23. 23 23
  24. 24. 24
  25. 25. Copyright 2009 Stuart Wayne Volkow 25
  26. 26. Revue just wasnt hitting the sales targets Logitechoriginally set; after the company dropped the Revue downto $199 in May, they decided to drop another $100 off thisweek. Engadget, 7/28/2011 FAIL 26 26
  27. 27. Google TV 2.0 ? http://www.google.com/tv/ http://www.google.com/tv/apps.html 27 27
  28. 28. Movies start at $2.99 to rent and $9.99 to own, and you can download TV series for even less. And don’t worry about filling up your hard drive and not having room for games. The PlayStation®3 system is the only console that lets you save all your movies and TV to an external drive.28 28
  29. 29. 29 29
  30. 30. 30 30
  31. 31. “Absolutely, it is aguaranteed productfor Apple,” I wastold by one “prototypes forindividual. “Steve a mass-marketthinks the industry television setis totally broken.” that wouldNick Bolton NYT allow users to access all their media through iCloud and could reach the market in late 2012 or 2013.” SJMN 31
  32. 32. The Big Worry for Pay TV Cord Cutting Reed Hastings - Netflix - CEO - Q3 2010 Earnings Report...on cord cutting we still see no evidence that our subscut cords at greater rates than the general population, andits something we survey now and then on. On yourpersonal experience, you know, it is all over the map. Wehave tons of anecdotes of people who -- the streamingstimulates the uses of other formats for, like you saidstreaming meets most of their entertainment needs. So,quite a lot of variety with 17 million members. 32 32
  33. 33. Cost of Traditional TV Cost to Replace Traditional TV Digital antenna (over-the-air local channels and✦ Comcast Digital Premier sports) $50 Hulu Plus, per year ($9.99/month) $119.88 Package: $136.93 per month, Joost, YouTube, TV.com, network Web sites (ABC, NBC, CBS, FOX)free 1,632 per year. Netflix Instant, per year: ($8.99/month) $107.88 Includes 200 digital cable channels, with Cost for Roku box, $79.99 premium movie channels, a sports package, on- (free if you have an Xbox, TiVo, Wii, or PS3) demand movies and shows, local programming, Apple TV: Cost for box $229 and DVR service. $1.99 Cost for one premium show per weeknight for a year = $517.40✦ Satellite TV, per year: OR Amazon Video on Demand: Standard-def episodes $1,463.88 $1.99 Cost for one show per weeknight for a year DirecTV Premier Package: $121.99 per $517.40 month. Includes 285-plus digital channels, with premium movie channels plus HD First year (includes equipment costs) $1,104.15 channels and HD DVR with service. Beats cable by $539.01 Beats satellite by $359.73Cable, per year $1,643.16 Second year (no equipment costs) $745.16 Really beats cable and satellite ($898.00; $718.72) 33 33
  34. 34. Strategy Questiosn✦ What TVContent Should be Made Available Over The Internet (fixed/mobile)? ✦ Under What Terms? ✦ Pricing?✦ WhatContent Should Be Kept Exclusive for Broadcast?✦ WhatNew Business Models Will Work With Which Audience? 34 34
  35. 35. Conflicting Business Models Networks Block Web Programs From Being Viewed on Google TV Sam Schechner, Amir Eefrati, WSJ, 10/22/10 • ABC, CBS and NBC are blocking TV programming on their websites from being viewable on Google TV service • Hulu, whose owners include Disney, NBC Universal and News Corp., also blocks its video • Time Warner Inc.s HBO and Turner Broadcasting networks agreed to be onboard as well as FOX and MTVhttp://online.wsj.com/video/digits-networks-block-web-programs-from-google-tv/F6EB2E6F-DF74-4F1E-8CA6-62C5B814428A.html 35 35
  36. 36. Time Warner VOD plans could threaten movietheaters, Netflix and RedboxJon Swartz, USA TODAY, Nov 3, 2010 • "will help lead the (film) industry" to show brand new flicks -- ones that are still playing in theaters -- on VOD by mid-2011, Bewkes told Wall Street analysts in a conference call. • Under the plan, called premium VOD, studios would charge $50 or so to give cable or satellite customers the opportunity to gather family or friends and watch a new movie from the comfort of the living room instead of a theater • Warner Bros. might lengthen the delay period before it offers new DVDs to Netflix and Redbox. The studio 36 36
  37. 37. TV Over the Internet • Hulu / Hulu+ • Netflix • Vudu (Wallmart) • Amazon Prime • iTunes 37 37
  38. 38. lf GEtEs,r FRtDAy, ApRt[ 13, 2097, l VARI i,r.-i.frr,;:i,#r,*iii.:1it:.:.fii: iiii*i,ilF,ilifiiii{i.l,irl:iililiiS!ii;1tii $illll::flf![il:!$ $OBSBIOuau r $ uuu uru UI BID rrYD H unveils portal Net rlitt Web partnersh i q ByBEilFRITZ I video or communitysitesgeftingtheir first premium I content,including Bebo, Brightcove,CNE! Com- ti CBS Corp. has unveileda broadarrayof online I cast,Joost,Nefvibes,Sling Media andVeoh. ;s distributionpartnerships forgedin thepastfew weeks | "I dont think the world needs portal;CBS another ili venture to put their con- and News Corp. The two $ tent on theNet. plan to build their own il The Eye haslandedall video portal on the Webin the ma_ror Donars rnar tn" aocunonro worrung u,lth a ,tou L ano rc+S uot_o. E rvanenv olnalmers. ceot lbr NlySoace.*hi.h adcied."Bur we rhoughr- ri tutuiro-ou",.o-*,rnu *J-.";if,;;;g"ar..ii --.-;-...-----;;l-..-;._.,=.,--:;J.:"-... ncl5tnatafcc|tncr,n-nu||I|)geInerallTneSenar. iaili:tt irtr1li,8,irliil.uilililtll]irl i::liii.:ii;i.itiitli:riilifii.i;iiij;iiflriilliti,ii,Stuart W.Volkow 2007 38
  39. 39. 39 39
  40. 40. 40 40
  41. 41. ✦ 23 million Subscribers✦> 20,000 Instant Streaming Films and TV Shows✦ Releases often before Blu-Ray✦ $2 Billion on Movie Rights by 2011✦ Epix✦ Trouble with STARZ and other Producers✦ 200 plus Netflix enabled products that will result in 60 million plus devices sold in 2010 41 41
  42. 42. This isn’t a subscription service. It’s on-demand with rentals available from $1 to $5.99 and purchases starting at $4.99.42 42
  43. 43. new pricing, variations on old models 43 43
  44. 44. iTunes 44 44
  45. 45. 45 45
  46. 46. Amazon 46 46
  47. 47. 47 47
  48. 48. YouTube: Movies, TV, Storehttp://www.youtube.com/shows 48 48
  49. 49. US Networks Hedge The Internet 49
  50. 50. 50
  51. 51. ?51 51
  52. 52. 52 52
  53. 53. Internet Direct • New Platforms • Content Networks • Youtube Channels • Youtube Stars 53 53
  54. 54. TV (STB) Software F A I L1.2 million users (CEO Avner Ronen) 54 54
  55. 55. 55 55
  56. 56. Internet Content NetworksCopyright 2011 Stuart Wayne Volkow. Xtropia Partners 56
  57. 57. 57 57
  58. 58. http://blip.tv/58 58
  59. 59. Copyright 2011, Stuart W.Volkow. Xtropia Partners 59
  60. 60. T V S P O RT S O V E R T H E I N T E R N E T 60 60
  61. 61. http://www.nba.com/leaguepass/broadband/index.html 61 61
  62. 62. 62 62
  63. 63. Subscriptions Advertising Stuart W.Volkow 2007 63 63
  64. 64. CommerceStuart W.Volkow 2007 64 64
  65. 65. Youtube Stars 65 65
  66. 66. Creators of LG15 Mesh Flinders Miles Beckett66 66
  67. 67. 67 67
  68. 68. Br and Integr ation and Brand Channels 68 68
  69. 69. 69
  70. 70. 70
  71. 71. Branded Channels www.myxenergy.comStuart W. Volkow, Copyright 2011 71 71
  72. 72. iTV - CommerceCopyright, Stuart W.Volkow 2011 72
  73. 73. TV A p p s /Widgets 73 73
  74. 74. 74
  75. 75. VUDU Apps - Theapplications platformfor connected TVs andBlu-ray players 75 75
  76. 76. 76 76
  77. 77. Google TV Apps 77 77
  78. 78. http://connectedtv.yahoo.com/services/tv-widgets/ 78 78
  79. 79. Mobile79 79
  80. 80. 80 80
  81. 81. Personalization and Recommendation Sifting Through Endless Choice 81 81
  82. 82. 82 82
  83. 83. 83 83
  84. 84. Jim Lanzone, Founder-CEO Clicker "We were looking at the next 50 years of television, and how it was merging with the Internet," says Lanzone, Clickers CEO and co- founder. "How would you navigate all of that? A daily calendar wouldnt cut it anymore, which is what programming guides were in the previous 50 years. ... It would need to be a lot more like a search engine."1 million TV episodes and 2million monthly visitors. 84 84
  85. 85. 85 85
  86. 86. 86
  87. 87. http://www.youtube.com/watch?v=-P0tkjkSO20&feature=player_embedded 87 87
  88. 88. 88
  89. 89. Social TV 89 89
  90. 90. Over 66 million US consumers are simultaneouslyusing a PC while watching TV. 90 90
  91. 91. “Already more than half of Americans arewatching TV and surfing the Websimultaneously. But another trend--givingconnectivity to the device itself--is going tofundamentally change the business modelsaround television and the way we consumeand interact with content.”Adam Ostrow, 10.12.10 91 91
  92. 92. According to Nielsen, over 70% oftablet owners and 68% ofSmartphone owners say they usetheir devices while watching TV –much of the time to look up contentabout a show, piece of news, thatthey are watching. 92 92
  93. 93. 93 93
  94. 94. IntoNow Social Checkinhttp://youtu.be/GmEiE4qcV3k 94 94
  95. 95. Real time or near real time two screen or three screen interaction 95
  96. 96. 96 96
  97. 97. 97 97
  98. 98. 98 98
  99. 99. 99 99
  100. 100. 100 100
  101. 101. 101 101
  102. 102. 102 102
  103. 103. http://twitter.com/ betty_draper 103 103
  104. 104. 104 104
  105. 105. Social Games 105
  106. 106. Conclusions• TV Business Models Must Change• Ad Sales will get tougher - Slow or No Growth• More competition for audience• Growth is international• Internet integration necessary• Make all programming social and interactive• Work harder to make less $$ in the near term 106

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