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Streaming wars sprockit webinar series-jan 30

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Over the course of Sprockit's webinar series, our Thought Leaders will highlight insights on today’s market trends, challenges, and opportunities in media, entertainment, and technology. In this inaugural webinar, Gerard and Patrick brought their considerable expertise - including previous executive level experience at Microsoft, Comcast, Cablevision, and Time Warner Cable - to a discussion on the “New Era of Streaming: Business Dynamics, Ad Models, and Content”.

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Streaming wars sprockit webinar series-jan 30

  1. 1. Sprockit’s Thought Leader Webinar Series A regular series of Webinars sponsored by Sprockit, and produced by the best thought leaders in tech, communications, media, entertainment and advanced advertising – bringing you insights on today’s market trends, challenges and opportunities
  2. 2. Thought leaders Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) Gerard Kunkel Business leadership, media strategy, advertising technology, UX, product design and development u Next Media Partners – executive advisory at the intersection of media and technology u Microsoft – Executive Advisor - media & entertainment strategy, Xbox u Comcast – SVP, Advanced Product - established UX design foundation for Xfinity u GuideWorks – President of Comcast/TV Guide JV u WorldGate – President Patrick Donoghue Media & telecommunications strategy, UX, product development, virtual reality u Next Stop Willoughby – Founder – interactive media consultancy - VR & AR development u Cablevision – SVP, User Experience and Emerging Products u Time Warner Cable – VP, ITV Product Management u Extend Media – EVP, Development 3
  3. 3. SOURCE: New York Times, July 10, 2019 4 P
  4. 4. Key Topics to be Covered 5 q The What and Why of TV streaming in 2020 q The Reasons we have evolved here q The Three C’s (cost, content, convenience) of digital services q The Monetization approaches q The Data & Advertising drivers q Future prognostications G
  5. 5. What is Streaming in 2020? DISTRIBUTION TYPE BUSINESS MODEL q On Demand Streaming q Live Streaming q Subscription q Ad Supported Simple distribution classifications and basic business models differentiate the competitors who are offering live and on demand TV and movies Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) 6 P
  6. 6. How Do The Service Providers* Stack Up? Live TV Streaming On Demand Subscription Ad Supported Amazon Prime › ˜ ˜ ˜ Apple TV + › ˜ ˜ ™ CNN Go ˜ ˜ ™ ˜ Disney + ™ ˜ ˜ ™ FuboTV ˜ › ˜ ˜ HBO Now ˜ ˜ ˜ ™ Hulu Live ˜ ˜ ˜ ˜ Netflix ™ ˜ ˜ ™ Peacock ˜ ˜ ˜ ˜ Pluto › ˜ ™ ˜ Roku › ˜ ™ ˜ Sling TV ˜ ˜ ˜ ˜ YouTube TV ˜ ˜ ˜ ˜ 7 ˜ ™ › Supported Not supported Partially support, or supported by partner * Not an exhaustive list of Service Providers. Services selected to illustrate the variety of consumer facing packages and business models. G
  7. 7. How did we get here? The three C’s plus technology creates a powerful force for change 8 P
  8. 8. How did we get here? New Tech The three C’s plus technology creates a powerful force for change 9 P
  9. 9. How did we get here? New Tech Positive choice, convenience, cost The three C’s plus technology creates a powerful force for change 10 P
  10. 10. How did we get here? New Tech New behaviors form Positive choice, convenience, cost The three C’s plus technology creates a powerful force for change 11 P
  11. 11. How did we get here? New Tech New behaviors formCord cutting begins Positive choice, convenience, cost The three C’s plus technology creates a powerful force for change 12 P
  12. 12. How did we get here? New Tech New behaviors form New services Cord cutting begins Positive choice, convenience, cost The three C’s plus technology creates a powerful force for change 13 P
  13. 13. How did we get here? New Tech New behaviors form New services Cord cutting begins Positive choice, convenience, cost CTVs add fuel The three C’s plus technology creates a powerful force for change 14 P
  14. 14. How did we get here? New Tech New behaviors form New services Cord cutting begins Positive choice, convenience, cost Cord cutting grows CTVs add fuel The three C’s plus technology creates a powerful force for change 15 P
  15. 15. How did we get here? New Tech New behaviors form New services Cord cutting begins Positive choice, convenience, cost Cord cutting grows CTVs add fuel Reality sets in The three C’s plus technology creates a powerful force for change 16 P
  16. 16. How did we get here? New Tech New behaviors form New services Cord cutting begins Positive choice, convenience, cost Cord cutting grows Super aggregation begins CTVs add fuel Reality sets in The three C’s plus technology creates a powerful force for change 17 P
  17. 17. How did we get here? New Tech New behaviors form New services Cord cutting begins Positive choice, convenience, cost Cord cutting grows Super aggregation begins CTVs add fuel Reality sets in The three C’s plus technology creates a powerful force for change 18 P
  18. 18. 19 by the numbers 64M viewers of Stranger Things. Super Bowl LIII viewers streamed more than 560M hours of live game coverage. More than 50% subscribed to a streaming service for original content. q Studio business model aides in stimulating OTT streaming growth q Creative challenger brands introduce unique content – grabbing audience share q Exclusive content creates must- have anxiety and FOMO q Original content (when it’s good) draw subscriber base and loyalty Content: A powerful motivator Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) G
  19. 19. 20 by the numbers Entertainment companies spent $121B on original content in 2019 96% of audiences watch original content produced by streaming services. Original Content: A differentiator P
  20. 20. Cost: Can Cord Cutters match Cable? q The average pay-TV bill is $106, and cord cutters pay an average of $45 q Free streaming TV services such as Crackle and Pluto TV provide hundreds of channels q An estimated 44 million US homes will use a digital antenna in 2020 to receive free live television programming Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) 21 by the numbers 10%of Pay TV subscriptions come from virtualMVPDs Virtual MVPDs average cost per channel is $1.20 Xfinity Flex can cost $0/month when bundled w/Xfinity services G
  21. 21. 22 Convenience: Tech and Design Deliver by the numbers 33%report it’s hard to manage too many streaming services. Of those surveyed, 47% were interested in aggregating all paid subscriptions into a single interface, with 26% being very interested SOURCE: Forbes, 10/15/2019 q The UX matters q Design of the UX evolved into functional, friendly, and sometimes fun interfaces q Tech advancements opened the door • PCs = showed us how • Tablets = showed us a new way • CTVs = delivered on convenience • Super Aggregators = raise the bar q Voice and AI driving simplicity and better personalization & recommendations Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) P
  22. 22. Comcast Voice Remote Far field microphone array Convenience: The UX Matters 23 G
  23. 23. Some services solve well for this challenge Others, not so much Content fragmentation means that the act of choosing between content on competing services is broken. Super-aggregators are looking to support this need. vMPVDs are the re-aggregators Personalized channels The UX Matters Quality UX delivers a significant ROI (can we prove it) Editorial curation Discovery & Navigation Data Points l Data Point 1 l Data Point 2 24 P
  24. 24. Monetization q We are in the early days of grand experiment as providers try varying pricing models q Subscriptions provide for predictability, and the potential for ad-free, or ad-light UX q Free with ad support creates an attractive no-cost access, that hopes to build habits q Free with related support in the form of sponsorship, or subsidization from another revenue area (Amazon Prime) Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) 25 by the numbers Amazon is estimated to have 100M Amazon Prime members in the U.S. G
  25. 25. Advertising & Data by the numbers I really think [sizing content investments is] 70- 80% art and 20-30% [data and analytics] science. – Ted Sarandos, Chief Content Officer q Data, data, and data will drive monetization, content, and the UX of many services q Deeper user knowledge can be gathered by OTT providers, than traditional video providers q MVPD’s knowledge of the physical address and the ability to build a device graph gives them a leg up on advanced advertising q CTVs deliver great ad targeting solutions for all media, including broadcasters Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) 26 G
  26. 26. The Big Players have Big Advantages q Strategic partners drive adoption and reduce churn • T-Mobile / Netflix • Comcast / NBCU • Verizon / Disney+ q Bundling is key for lower prices and free trials • iPhone / AppleTV+ • Hulu / ESPN / Disney+ q Studios and Networks leverage their assets, IP & library • Disney+, Peacock, CBS All Access, HBO Now Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) 27 P
  27. 27. Where are we going? q Simultaneous consolidation and expansion q New forms of entertainment will continue to expand our thinking, and present challenges in discovery and navigation q Voice and AI will continue expand in our lifestyle, interconnecting all aspects of our entertainment q Super Aggregation of traditional and OTT video providers will remain attractive Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) 28 P
  28. 28. Where are there opportunities? BUSINESS ADVERTISING q Super Aggregation q Entertainment in exchange for other revenue q Better advertising, reduced ad load q As SMBs discover their pathway to advertising on popular OTT services, cheap programmatic ad content can damage a quality video product q Varied advertising models q Cross-provider, cross- DSP, frequency capping CONTENT UX q Casting a wider content net q Integration of podcasts, music, VR/AR, and other entertainment forms q Exploration of experiential mediums q Creating a higher order of discovery solutions to cover all media types q Better integration with one’s lifestyle – a whole entertainment perspective q Well integrated voice assistants tied to expert systems and AI 29Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) G
  29. 29. QUESTIONS and ANSWERS Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) Patrick Donoghue patrick@patrickdonoghue.com Gerard Kunkel gerard@nextmediapartners.com
  30. 30. Want to refer a startup or apply? Copyright 2020, Gerard Kunkel (gerard@nextmediapartners.com) and Patrick Donoghue (patrick@patrickdonoghue.net) Contact startups@sprockit.com

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