Channels and Choices…Where will Broadband TV rank in the mixfor video content owners? Aditya Kishore Director, Media and E...
Agenda  •     Evolving media environment for the digital consumer  •     Channel comparison: Revenues, penetration & growt...
Sweeping technology changes are shaping new trends in theconsumer media market                                            ...
BEFORE: Traditional device-content relationships                    Video      VCR                                        ...
AFTER: Emerging digital consumer device map                                                                               ...
Video revenues today: Traditional media rules      Domestic Revenue In Billions Of US $                                   ...
Video landscape today: Traditional media rules      % US Households                                                       ...
Video landscape at start of 2010: Traditional channels still rule      % US Households                                    ...
Suitability of medium for advertising: TV is king      Avg. Viewing Minutes/Day/Viewer Today                              ...
Eliminating the middleman…         Quite apart from viewer driven advertising revenues, there are         billions of doll...
Summary and Conclusions• Reports of the death of television have been greatly exaggerated      – TV will most likely remai...
Summary and Conclusions•    In the long term, the Internet’s global aggregated audience could     revolutionize television...
Questions?Aditya KishoreDirectorMedia and Entertainment Strategiesakishore@yankeegroup.comwww.yankeegroup.com© Copyright 2...
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Broadband.tv.summit.deck.fnl

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Broadband.tv.summit.deck.fnl

  1. 1. Channels and Choices…Where will Broadband TV rank in the mixfor video content owners? Aditya Kishore Director, Media and Entertainment Strategies Yankee Group akishore@yankeegroup.comFebruary 27th, 2006© Copyright 2006. Yankee Group Research, Inc. All rights reserved.
  2. 2. Agenda • Evolving media environment for the digital consumer • Channel comparison: Revenues, penetration & growth • Summary and conclusions • Questions & Answers© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 2
  3. 3. Sweeping technology changes are shaping new trends in theconsumer media market • Format independence Digitization • Interactivity Device • Personalization Multifunctionality + • Distribution and storage New channel Broadband Internet development + • Portability New channel Mobility • Ubiquity development + • Seamless media transference Device Home Networking Independence New consumption behaviors and revenue opportunities© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 3
  4. 4. BEFORE: Traditional device-content relationships Video VCR TV TV Consumer Retail Radio Music Stereo Radio© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 4
  5. 5. AFTER: Emerging digital consumer device map Games Music Video Mobile/Portable Device Music Music Stereo Internet Video Retail Video PC DVD Consumer Games Games Console SneakerNet TVWhile potentially STBdisruptive, Broadband TV Internet IPTV Terrestrial Satellite Cableis only one of many videodistribution channels tothe consumer© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 5
  6. 6. Video revenues today: Traditional media rules Domestic Revenue In Billions Of US $ • TV advertising is $60-65 billion and subscription $125.0 $120.0 revenues are $55-60 billion $100.0 • Domestic home video sales $75.0 were $16 billion and rentals $8 billion in ‘04- combining $50.0 for almost 3x box office revenue $24.0 $25.0 • Mobile revenues were $122 <$0.5 <$0.1 $0.0 billion but video generated Multichannel DVD/VHS Broadband TV Mobile TV less than $100 million Video Investment – both monetary and otherwise - from content owners should be cautious and targeted given the size and scale of emerging platformsSource: Yankee Group, VSDA, 2005 Portable Entertainment Forecast, North American Mobile Premium Forecast All numbers are year-end 2005 © Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 6
  7. 7. Video landscape today: Traditional media rules % US Households • While 98% of all US homes have broadcast TV, 86% are 100% 95% 86% pay TV subscribers 75% • Nearly 40% of US HH subscribe to broadband, but 50% only 23% regularly view Internet video 23% 25% • 59% of US HH have at least 1% one mobile phone, but only 0% 1.6 million users regularly Multichannel DVD/VHS Broadband TV Mobile TV* Video use wireless video The disruptive impact of Broadband TV will be constrained by established consumer behavior and enhancements to traditional channelsSource: Yankee Group Analysis, VSDA, 2005 TAF Survey, 2005 VCDS Survey All numbers are year-end 2005 *Users, not households © Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 7
  8. 8. Video landscape at start of 2010: Traditional channels still rule % US Households • Telco entrants won’t grow 100% 95% multichannel video market, 86% merely cannibalize it 75% • Nearly 70 million US households will subscribe 50% 41% to broadband, with 41% viewing video regularly 25% 10% • 10-15 million mobile phone 0% users will use their devices Multichannel DVD/VHS Broadband TV Mobile TV* to access video content Video Even five years out, in spite of substantial growth of the emerging platforms, traditional video channels continue to be dominantSource: Yankee Group Analysis, North American Mobile Premium Forecast *Users, not households © Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 8
  9. 9. Suitability of medium for advertising: TV is king Avg. Viewing Minutes/Day/Viewer Today • Even in 2010, 1/3rd of US homes will have basic TV 300.0 259.0 service 250.0 • 40% of homes won’t have 200.0 broadband; and 60% won’t have a DVR - making them 150.0 well suited to the 30-second 100.0 commercial 50.0 • On average, broadband video 2.4 viewers will spend 25 minutes 0.0 viewing video daily TV Broadband TV Television remains valuable to advertisers despite the growth of new mediaSource: Nielsen Media Research, Yankee Group analysis © Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 9
  10. 10. Eliminating the middleman… Quite apart from viewer driven advertising revenues, there are billions of dollars tied to carriage revenues which will force consideration of traditional distribution channels Assume per subscriber per month carriage fee charged $0.95 for network Assume reach (as % of US Households) 80% Reach (in millions of US HH) 90 million Monthly revenue from carriage fees (in millions) $85.5 Annual revenue from carriage fees $1.03 billion© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 10
  11. 11. Summary and Conclusions• Reports of the death of television have been greatly exaggerated – TV will most likely remain dominant form of home video entertainment for average consumer at least through 2010 – However there are opportunities for second-run content, advertising, marketing and digital “brand cocooning” – In 2010, with 41% of US households viewing broadband video, there will be a viable audience for video programming• New forms of entertainment – podcasts, news and sports clips, ethnic programming, shorts and edge created content – will drive early adopters of broadband TV – But the mass market will need “Big Brand” programming• Portability is a key advantage in the immediate term for broadband TV providers – Steady growth in laptop penetration offers a foundation for video portability© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 11
  12. 12. Summary and Conclusions• In the long term, the Internet’s global aggregated audience could revolutionize television economics – Programmers should experiment with the medium and claim their spot today – But for now targeted and conservative broadband investments are the order of the day• Delivery of video programming to the TV will be a critical driver for broadband TV – A simple, cost-effective and easily managed approach is required – An effective UI will be paramount© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 12
  13. 13. Questions?Aditya KishoreDirectorMedia and Entertainment Strategiesakishore@yankeegroup.comwww.yankeegroup.com© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Channels and Choices February 2006 Page 13

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