DCMS Communications Review Seminar SeriesCompetition in content marketsYih-Choung Teh, Competition Policy Director, Ofcom9...
Overview• Consumer attitudes and use of content services• Examples of market developments• Implications for competition   ...
Technological innovation and convergence is changingthe way we consume content         Broadcast       On Demand          ...
The take-up of new technologies is increasingly rapid   Number of years taken to reach 50% penetration               Tradi...
For example, use of the internet to access content andbundling of services has increased... Proportion of web users access...
...and consumers now want to access contentanytime, anywhere Mobile device take-up (%)                                    ...
However, demand for traditional services remains strong Viewing per head, per day (hours)                 Average amount o...
‘Must-have’ content remains critical for success                                               Premier League live rights ...
Innovation is supporting greater competition in contentdistribution though network effects remain important     DTT       ...
Electronic Programme Guides are evolving into moresophisticated User Interfaces raising new challenges                    ...
Greater integration across the value chain / convergencemay raise issues for the competition regime               OTT PLAT...
Analysis of viewing data is an increasingly valuableasset with implications for advertising markets                       ...
Implications for the broadcasting competition regimeBroadcasting markets have existed in the context of, and been shapedby...
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Yih-Choung Teh, Ofcom, Competiton in Content Markets

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Presentation given on 9 July 2012 at the Competiton in Content Markets DCMS Communications Review seminar

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Yih-Choung Teh, Ofcom, Competiton in Content Markets

  1. 1. DCMS Communications Review Seminar SeriesCompetition in content marketsYih-Choung Teh, Competition Policy Director, Ofcom9 July 2012
  2. 2. Overview• Consumer attitudes and use of content services• Examples of market developments• Implications for competition 1
  3. 3. Technological innovation and convergence is changingthe way we consume content Broadcast On Demand services services 2
  4. 4. The take-up of new technologies is increasingly rapid Number of years taken to reach 50% penetration Traditional AV adoption Faster AV adoption Web adoption ’86 ’88 ’75 ’23 ’86 ’67 ’00 ’97 ’09 ’98 ’04 ’07 ’99 ’05 ’06 (UK launch date) Source: Oliver & Ohlbaum 3
  5. 5. For example, use of the internet to access content andbundling of services has increased... Proportion of web users accessing Proportion of homes buying bundled video content every week (%) communications services (%) 30 60 57 26 50 53 9 Other 46 11 20 39 10 20 18 40 7 19 6 16 Fixed 14 17 20 2 voice, interne 12 2 2 t & pay-TV 10 20 3 2 Fixed voice 24 27 18 22 & pay-TV 16 0 0 Fixed voice TV programmes/films Short clips 2008 2009 2010 2011 2012 & internet 2010 2011 Source: Ofcom research Source: Ofcom (note: data as at Q1 of each year) 4
  6. 6. ...and consumers now want to access contentanytime, anywhere Mobile device take-up (%) Accessing content has moved beyond the 39 40 traditional TV screen and home: 30 26 • In 2011, 25% of mobile web users 20 watched TV / video content or listened to 11 music online 10 2 • 2011 also saw the emergence and 0 increase in popularity of tablets, in addition Tablet computer Smartphone to smartphones Q1 2011 Q1 2012 Source: Ofcom research 5
  7. 7. However, demand for traditional services remains strong Viewing per head, per day (hours) Average amount of media used per day in all homes for the UK TV industry (minutes) 4.1 250 4.0 200 3.9 3.8 150 3.7 3.6 100 3.5 50 3.4 3.3 0 Text comms Games Voice comms Print media All video Other offline media All audio Other internet 2005 2006 2007 2008 2009 2010 media Source: BARB Source: Ofcom research 6
  8. 8. ‘Must-have’ content remains critical for success Premier League live rights values per Sports Movies and Other season (£m) US content 1200 1000 800 600 400 200 0 88/89 - 91/92 92/93 - 96/97 97/98 - 00/01 01/02 - 03/04 04/05 - 06/07 07/08 - 09/10 10/11 - 12/13 13/14 - 15/16 Source: Ofcom’s first Pay TV consultation; news sourcesOfcom Pay TV CompetitionReview, 2010 Commission, Movies on Pay TV, 2012 7
  9. 9. Innovation is supporting greater competition in contentdistribution though network effects remain important DTT Satellite Cable Broadband 8
  10. 10. Electronic Programme Guides are evolving into moresophisticated User Interfaces raising new challenges 9
  11. 11. Greater integration across the value chain / convergencemay raise issues for the competition regime OTT PLATFORMS INTEGRATED PLATFORMS CONTENT RIGHTS Data Transfer Content Packaging Supply and Delivery Data Hosting CONNECTIVITY PROVIDERS DEVICE MANUFACTURERS 10
  12. 12. Analysis of viewing data is an increasingly valuableasset with implications for advertising markets 11
  13. 13. Implications for the broadcasting competition regimeBroadcasting markets have existed in the context of, and been shapedby, regulatory frameworks, including in relation to competition• Technological change. How can issues be addressed in a timely fashion, given the rate of technological change?• Service innovation. Should the scope of the regime go beyond broadcast licensed services (eg standalone video on-demand)?• Convergence. Should the regime take more explicit account of telecoms markets to ensure effectiveness, given convergence?• Globalisation. Does the regime need to recognise that broadcasters and service providers may increasingly be based outside the UK? 12

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