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Janice Hughes, Redshift, Preparing for change


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Janice Hughes of Redshift, presentation on "Preparing for change" TV content seminar, 16 July 2012, part of the Communications Review. Find out more at

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Janice Hughes, Redshift, Preparing for change

  1. 1. Session 3: Preparing for changeWill content, platforms or technology drive future growth? Janice Hughes, Redshift Redshift Strategy 2012
  2. 2. The connected living room1 Redshift Strategy 2012
  3. 3. Rapid take-up and usage of connected TV devices Connected device forecasts, m Today by 2020 20m 40m 60m 80m “50% of TiVo subscribers begin their viewing experience in the ‘My Shows’ section” Connected 5.7m HHs have – Neil Berkett, CEO Virgin Media set-top-boxes a primary connected TV “Users of our smart TV portal average 20-25 TV OTT devices device today, 24.6m by 2020 app sessions per month” and smart TVs – Senior director, Philips Smart TV Tablets “By 2014 nine out of ten TVs shipped in the UK will be a smart TV” – Rovi Smartphones “Of the 78% of tablet owners who multitask while watching TV, 57% are accessing content Penetration of connected TV devices on the primary set: related to the programme or advert” Today: 22% 2016: 65% 2020: 90% – YahooSource: Redshift analysis2 Redshift Strategy 2012
  4. 4. Enablers of new content experiences TV app stores Second screen Voice and gesture control • Creating a marketplace for • Opening access for content • Gesture control and voice content providers via app providers control stores • Providing opportunity for new • Enable new types of content • Redefining the EPG types of content, ie. second • Redefine the way content is screen, AR accessed3 Redshift Strategy 2012
  5. 5. New sources of content creation and investmentNew content creators are entering the market, How do we maintain highincluding publishers, brands, retailers, etc. quality of content production? M&S TV Jamie Oliver iPhone & iPad apps Typical TV spend-per-hour £1m Illustrative £200k All3Media VOD store YouTube TV £2-10k Drama Factual YouTube • App offering 230hrs of All3Media BROADCASTERS content on a PPV basis … but the sums invested A wider pool of content creators are investing in content are relatively smallSource: Redshift analysis4 Redshift Strategy 2012
  6. 6. Have we reached the limit of what current funding can invest incontent? Revenue vs. originated content spend, £bn New monetisation opportunities % Change 2006-2011 Revenue Originated content spend £4.8bn £2.7bn £2.4bn Includes 1. Broadening the scope of the TV ad market: -15% - 21% sport & news £1.3bn • Interactive advertising, targeted advertising, £1.2bn connected TV advertising £0.4bn (e.g. product placement, sponsorship) Pay TV Licence fee Ad-funding 2. Pay-as-you-go and in-app purchasesNote: Licence fee revenue for year-end March 2011, only includes portion spent on TV 3. Second screen Sky’s pay TV originated content spend does not include sports rights Revenue and originated content spend from advertising includes ITV, C4 and C5 onlySource: Redshift analysis, Ofcom communications market report 2011, Ofcom PSB annual report 2012, BBC annual report 2011, Sky annual report 20115 Redshift Strategy 2012
  7. 7. Gaming monetisation: an example of multiple revenue sourcesCase study: Rockstar Red Dead Redemption 1 Sale of game: 3 Add-ons: • Standard edition £40 • Legends and killers • Limited edition £60 • Liars and cheats £8 • Free roam pack • Undead nightmare pack Game lifecycle 2 4 Rockstar’s Micro-transactions: Rockstar Social Club: Grand Theft Auto IV: • In-game virtual goods • Game is registered by user Sold 6m copies in week 1 • Eg. Weapons, missions, worth $500m of revenue etc… £0.99+6 Redshift Strategy 2012
  8. 8. Increasing competition from global platforms and non UKplayers UK format and programme exports Outflow of platform and content licence fees to overseas players Licence 30% platform fees Fees Advertising Pay TV Foreign imports of new content7 Redshift Strategy 2012
  9. 9. Do broadcasters and content creators have enough time toadapt to a mixed media an IP-based ecosystem? Loss of spectrum is accelerating the shift to DTT /PSB ecosystem supports high viewing shares connected TV and high revenues to reinvest in original content 500 band 600 band 700 band 800 band PSB Non-PSBToday TV free TV Mobile Viewing shareFrom 2015 TV MobileFuture TV Mobile Originated content spend “The universal take-up of broadband could enable IPTVservices to provide a viable substitute for the DTT platforms, enabling a potential future DTT switch-off scenario” 0% 50% 100% Consultation: Strategy for UHF bands IV and VSource: Redshift analysis, BARB data, Ofcom PSB annual report 20128 Redshift Strategy 2012
  10. 10. Issues for discussionContent• How do we retain viewership and revenues for PSBs and commercial broadcasters to invest in UK originated content?• How do we increase funding for existing broadcasters and producers?• What new monies can we target to increase investment in content? eg. New data sources, second screen and in-app add-ons…Platforms and technologies• How do we tap into consumers’ willingness to spend more on entertainment through on- demand, pay-as-you-go and other micropay enablers?• How do we maintain or increase the UK’s net trade surplus from content exports?• Issues from the floor…9 Redshift Strategy 2012
  11. 11. 2 Cavendish Square London W1G 0PU +44 (0) 207 636 6488 Redshift Strategy 2012