Jordan Bitterman on The Makegood: The Future of Video


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Digitas’ Jordan Bitterman, Senior Vice President and Social Marketing Practice Director, provides his view on the future of video.

“Summary: Video is being freed – It’s moving to the cloud. Software is becoming just as important as hardware. Business models & technology are slowing the pace of change. Familiar names are emerging as the new video power players.”

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Jordan Bitterman on The Makegood: The Future of Video

  1. 1. Predicting the Future of VideoJordan BittermanSVP, Social Mobile & Content, Digitas
  2. 2. SummaryVideo is being freed - It’s moving to the cloud.Software is becoming just as important as hardware.Business models & technology are slowing the pace of change.Familiar names are emerging as the new video power players. 2
  3. 3. Outline•  Current Situation•  Industry Drivers•  Major Innovations•  Futurescape 3
  4. 4. Section 1: Current Situation
  5. 5. Current Factors1. Time spent with media is rising, not falling2. Consumers fragmenting in search of their own solution3. Proliferation of options are changing habits & conventions4. Americans have new devices on their wishlists 5
  6. 6. 1. Time Spent With Media Is Up: Now 699 Mins/DayTV +5.3%, Online +11.6%, Mobile +141% (from 2010 – 2012) 300 Americans: 11.7 hrs/day 250 with media 200 2010 150 2012 100 50 0 Television Online Radio Mobile Print OtherSource: eMarketer, October 2012 6
  7. 7. 2. Dozens of Ways to Watch VideoAfter television, tablets are most popular, blu-ray/dvd next 35% 32% Game consoles & 31% 30% Smart TVs have also gained ground 25% 25% 24% 20% 17% % Respondents 15% 13% 13% 10% 5% 0% iPad Blu-Ray iPhone Game Smart TV Apple TV Roku player consoleSource: ChangeWave Research, Alternative TV options Transforming Traditional TV, October 2012 7
  8. 8. 3. Americans: Multiple Devices/Activities at Once 77% of connected U.S. population simultaneously watches TV while using another device 80% 77% 75% 70% 67% 60% 57%Simultaneous activities: 50%•  E-mailing: 60% % of All Interactions•  Browsing: 44% 40%•  Social: 42%•  Playing games: 25% 30%•  Searching: 23%•  Watching other video:20% 9% 10% 0% Television Tablet Computer Smartphone Source: Google and Sterling Brands, The New Multi-Screen World: Understanding Cross-Platform Consumer Behavior, August 2012 8
  9. 9. 4. Americans Plan to Buy: Tablets & Game ConsolesComputers & Smart TVs lag far behind 80% Devices on Wishlist: 70% 72% •  iPad: 21% 65% •  iPad Mini: 11% 60% •  Kindle Fire: 11% •  Samsung Galaxy: 9% 50% •  Microsoft Surface: 3% 40% % Respondents 37% 30% 20% 19% 10% 13% 0% Tablets Game Smartphone Computer Smart TV consoleSource: Nielsen, 360 Gaming Report: U.S. Market, November, 2012 9
  10. 10. Current Landscape Assigning Order to a Fast Changing Industry: 5 Key Segments
  11. 11. Continuum of Options: Established to Emerging Cable/Satellite Smart TV Game Consoles OTT Solutions Next GenEstablished Emerging Software Cable Manufacturers Game Consoles OTT Solutions Platforms 108.2M consoles 56.6M 15.2M in U.S.; Approx. 7.8M OTT 61.2M mobile cable subs Smart TVs 15M used devices video users –in 2012; down 3.1% in U.S. – 12.7% of 19.3% of U.S. for video owned in the U.S. from 2011 HHs population Advantages installed base, cut the cord, Portability, cut the cord, cut the cord & best content, youthful/rabid scale opportunity, all-in-one device pay-as-you-go Triple plays base New triple playAll statistics sourced from eMarketer reports, 2012 & 2013 11
  12. 12. Section 2: Industry Drivers
  13. 13. Industry Drivers 1.  Need for video portability 2.  Transmedia desire drives adoption 3.  Content deals become ubiquitous 4.  Consumer cost will play a role 5.  Look out for “The Big Bang” 13
  14. 14. 1. Need For Video Portability Momentum towards solutions allowing for anywhere, anytime viewing Hanging on a Wall Carried in Your PocketPortability requirements won’t make providers Major mobile operating systems will irrelevant; but software may trump hardware benefit from a shift to portability 14
  15. 15. 2. Transmedia Desire Drives Adoption Common, cross-platform software will win out over proprietary solutions Samsung DirecTVXbox 360 Apple iOS Apple TVGoogle TV Google Android 15
  16. 16. 3. Content Deals Become Ubiquitous A more level playing field as content providers begin to license more broadly 16
  17. 17. 4. Consumer Cost Will Play A Role Advantage will go to solutions that would have been bought otherwise Last 2 years: 44% downgraded to less Avg. price for a flat panel TV set is $1,224**; expensive TV package, 33% spent less with Avg. replacement time for U.S. TVs: 9 years***; cable company, 6% dropped pay service*; With other options available, usage/growth will But: no equipment to buy be there, but will be challenged Big 3 sold 32.6M units in 2012, but growth from Product innovation and content acquisition will video will ultimately depend on consumer desire have to proliferate to drive purchase at critical to forgo Smart TV & tablet purchases mass – otherwise, OTT will be a “nice to have” and that won’t be good enough to justify cost To-date: phones and plans to handle high consumption of video, so we don’t know costs of hardware and plans; But: mobile is becoming primary device, so consumers may be justifiedSource: * Market Strategies Int’l, Cord Frayer Consumption Trends, October 2012; ** IHS Research, July 2012; *** Morgan Stanley analyst 17Katy Huberty, December 2012
  18. 18. 5. Look Out For “The Big Bang” Many product categories have had game change innovations sparking adoption Big Innovations Catalyzed Mobile What About Video? Form factor: an Apple television Acquisition: Google buys Twitter for integrated socialiTunes TV experience Experiential: Google search functionality for television; the “mother of all channel guides” iPhone 18
  19. 19. Section 3: Major Innovations
  20. 20. Product Innovations Affecting Video Multiple company and product developments are driving/enabling portability. Slingbox Roku Today’s ultimate remote control: OTT leader now enables Cable your living room TV, anywhere on subs to watch programming any device anywhere Aereo TV Samsung: OLED Screen Watch live TV on the Internet. Screens are innovating at a fast pace. 20
  21. 21. Section 4: Futurescape
  22. 22. What The Future Looks Like
  23. 23. Predictions For The Next 3+ Years All companies will build and refine their mobile approach. 50% Smart TV We will still watch growth to 47M the walls of our users Video software will living room, but we rival hardware in will control the driving purchase experience from our decisions laps Video will be 37% tablet growth watchable from to 109M users & Content deals will everywhere via 19% smartphone make it easier to tablets and growth to 138M watch from any smartphones users device 2013 2014 2015 2016All statistics sourced from eMarketer reports, 2012 & 2013 23
  24. 24. For further discussion contact: @jordanbitterman