Verizon Overview Broadband during DigiWorld Summit 2011


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Verizon Overview Broadband during DigiWorld Summit 2011

  1. 1. DigiWorld Summit 2011 November 16, 2011
  2. 2. Verizon Overview Verizon Communications Wireline Wireless FiOS Presence <ul><li>Revenue (2010): $41B </li></ul><ul><li>Voice subs (3Q11): 24.5M </li></ul><ul><li>Broadband subs (3Q11): 8.6M </li></ul><ul><li>FiOS TV subs (3Q11): 4.0M </li></ul><ul><li>Revenue (2010): $63B </li></ul><ul><li>Retail Customers (3Q11): 90.7M </li></ul><ul><li>Smartphone penetration (3Q11): 39% </li></ul><ul><li>LTE markets (3Q11): 165 markets (covering population of >186M) </li></ul>
  3. 3. IPTV Is The Link To Multiplatform Consumption DEMAND DISTRIBUTION DEVICES Device shifting Time shifting Place shifting <ul><li>Higher broadband speeds </li></ul><ul><li>Cloud storage </li></ul><ul><li>Content security </li></ul><ul><li>Picture quality </li></ul>IPTV
  4. 4. Current Content Distribution Linear, VOD Authenticated, VOD, Live Events Linear, VOD, Apps <ul><li>Multichannel Providers (MVPDs) </li></ul><ul><li>300+ Linear Digital Networks </li></ul><ul><li>30K VOD Titles </li></ul><ul><li>MVPDs (Auth) </li></ul><ul><li>Online only (e.g., Hulu – 18K Titles) </li></ul><ul><li>Content providers (Ad-supported, Auth) </li></ul><ul><li>Library content (e.g., Netflix – 30K Titles) </li></ul>Content Availability Nascent Distribution Platforms Content distribution still limited by device <ul><li>In-home streaming MVDP authenticated apps </li></ul><ul><li>Hulu Plus, Netflix </li></ul><ul><li>Watch ESPN, HBO Go apps </li></ul><ul><li>Mobile only </li></ul><ul><li>MVPDs (Auth Trial) </li></ul><ul><li>Hulu Plus, Netflix </li></ul><ul><li>Content providers </li></ul>Authenticated, VOD, Live Events
  5. 5. Deployed Innovation Authentication OTT Interactivity <ul><li>Content ubiquitous across devices </li></ul><ul><li>Reach consumers at every point of access </li></ul><ul><li>Drive engagement </li></ul>Multiplatform Consumer aspiration: Favorite content anywhere, anytime IPTV Expands Content Reach
  6. 6. Authentication Overview In-Home (Live and VOD) Out-of-Home Authenticated Content Access MVPD Programmer Site 3 rd Party Authenticator iPad App Sling Adapter Xbox Limited Availability Players Devices Players Devices Authentication reinforces value of underlying video subscription
  7. 7. <ul><li>90% of HHs will connect TVs to internet by 2015 </li></ul><ul><li>Est 1.4 OTT subscriptions per OTT HH by 2015, many households with have 2-3 subscriptions </li></ul><ul><li>Most OTT subs will be Complementors – users supplementing current multichannel subscription with OTT </li></ul>Widely available broadband speeds for streaming… <ul><li>More than 75% of Households can stream SD video (2+ Mbps) </li></ul><ul><li>More than 25% of Households can stream HD video (7+Mbps) </li></ul>… and growing fast Large installed base of networked devices… Broad range of content offered… … about to triple by 2014 2010 128M 2014 368M … and more to come … and a growing Video OTT Market Movies TV Shows Sports more than 40% of HHs paying for video OTT Million OTT Paying HHs US market is primed for OTT Growth: from $6B in 2011 to $19B in 2015 US OTT Market Overview Game Consoles 89M Internet TVs 107M Blu-Ray Players 89M STB / DVR 82M
  8. 8. US OTT Competition Subscription EST/Rental Ad Supported Business Model Content Aggregators Content Creators <ul><li>OTT competitors are differentiating themselves based on a combination of: </li></ul><ul><ul><li>Content – high-affinity content or niche content </li></ul></ul><ul><ul><li>Access – availability across platforms and devices </li></ul></ul><ul><ul><li>Price – business models ranging from ad-supported to EST/Rental </li></ul></ul><ul><li>Current competitors include content aggregators and content creators </li></ul><ul><li>Opportunity for new competition such as MVPDs who also offer high-speed data services </li></ul>
  9. 9. Key Factors <ul><li>Consumer Behavior </li></ul><ul><li>Device Proliferation </li></ul><ul><li>Platform </li></ul><ul><li>Content Availability </li></ul>Consumer Expectation Opportunity <ul><li>Time shifting, place shifting, device shifting </li></ul><ul><li>High-affinity content </li></ul><ul><li>New revenue </li></ul><ul><ul><li>OTT subscription revenue </li></ul></ul><ul><ul><li>Additional advertising revenue </li></ul></ul><ul><ul><li>Rental/EST revenue </li></ul></ul><ul><li>Expand subscription market beyond multichannel </li></ul><ul><ul><li>Increase from 100M HHs to 150+M subs (US) </li></ul></ul><ul><li>Drive device sales </li></ul><ul><ul><li>Expand number of devices per customer </li></ul></ul>IPTV Opportunity Summary