Mobile media distribution strategy of contents players<br />[Table of Contents]<br />Ⅰ. Mobile Internet Environment Change...
Contents<br />Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution...
Mobile internet experiencing shift of value to APP/Web<br />Number of mobile internet subscribers ,which showed slow growt...
Creativity/Innovation <br />Monopoly<br />Closed Platform<br />App Advertisement<br />Preferred by APP.CP <br />Web 2.0<b...
10 Billion Downlaod Accomplishment <br />Game Book  Music Trip Education Utilities Hobby Rest<br />The 1st rank of book <b...
Google focuses on mobile web 2.0 - Openness/Sharing/Participation/Group Intelligence <br />Core mobile strategy of Google ...
Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for...
Name<br />Provider<br />Name<br />Provider<br />Name<br />Provider<br />Golden age of Mobile App Stores<br />Competition b...
Mobile web growth forecast<br />CPs such as the press prefer App Stores to be ‘Contents sales + targeted ADs' rather than ...
Various types of mobile business models<br />Mobile business model became possible with the mobile traffic activation with...
 Apple acquired mobile AD company (Quattro Wireless, 2010) for device + contents combination model. AD order amount of $60...
 Google released Android, an open-source based platform, in the end of 2007, and signed contracts to share AD revenue with...
Applications[1/2]<br />The ranking of the most attractive paid App category before the release of iPadwas in the order of ...
As the number of Apps grow in the future, portion of free Apps will be increased and thus lead to rising interest in buyin...
Applications[2/2]<br />Average number of Apps installed by Korean iPhone users is 86. Intention to change to paid Apps was...
Mobile advertisement[1/3]<br />Web mobile AD, which has features such as Targeting, Anytime &Anywhere, Multi-interactive a...
Search is currently the leading method in internet advertising, but internet web related areas are expected to take about ...
 Domestic mobile AD market is expected to grow 21% from 250 billion won in 2009 to about 300 billion won in 2010 (ET News)
Global mobile AD market is expected to reach $11.2 billion in 2010, which is 51.5% increase compared to previous year (eMa...
Mobile advertisement[2/3]<br />Search ADs and application-based ADs, which are specialized in personalization, localizatio...
Apps such as NYT and Urbanspoonare directly usedrather than using search engine for news or famous restaurants</li></ul>- ...
Mobile advertisement[3/3]<br />iAd, which has been announced with the release of iPhone OS 4 (Apr 8th) , is evaluated as p...
Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for...
Finding differentiation factors related to contents mobile distribution!<br />Key features of Contents 2.0 are mobile, add...
Key differentiation factors of mobile distribution: Mash up LBS, SNS and AR with contents!<br />As boundaries between trad...
Change consumption behavior of wired environment into that suitable for mobile environment!<br />Secret of Facebook’s succ...
Differences between Facebookand Myspace include simple interface, rapid adaptation to mobile App (iPhone, Blackberry etc.)...
Specialize in contents category considering loyalty and frequency of App Store App usage!<br />Looking at the consumer usa...
Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for...
High frequency & High sustainment ratio : News[1/3]<br />iPad, on which 28% of the users planned to read the news, is expe...
Features of paper newspaper and mobile media – ‘passive, producer-oriented, entertaining and consuming'vs. Features of PC ...
Payment for purchasing </li></ul>  package..<br /><ul><li>Similar to newspaper and magazine subscription in the past</li><...
High frequency & High sustainment ratio : News[2/3]<br />Smart phone and iPadoffer newspaper companies, which have been su...
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Mobile media distribution strategy of contents players

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Mobile media distribution strategy of contents players

  1. 1. Mobile media distribution strategy of contents players<br />[Table of Contents]<br />Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for Mobile Media of Content <br />Ⅳ. Distribution Strategy for Mobile Media of Content Player<br />July 5, 2010<br />Song Min Jeongmzsong@kt.com<br />
  2. 2. Contents<br />Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for Mobile Media of Content <br />Ⅳ. Distribution Strategy for Mobile Media of Content Player<br />
  3. 3. Mobile internet experiencing shift of value to APP/Web<br />Number of mobile internet subscribers ,which showed slow growth due to the lock-in of mobile communication companies, is growing rapidly, even faster than the growth of wired internet subscribers in the past, with the advent of smart phone (iPhone)<br />- iPad was expected to create synergy between iPod+iTunes & iPhone+App Store, and 2 million of them were sold only in 60 days. iPad is anticipated to create new mobile paid-service model in e-Book (22% M/S) and gaming market as well as for the media companies which offer online news<br />- Number of worldwide iPhone+iTouch subscribers grew to 85 million after 3 years from its release. iPhone 4G with multi-tasking function is now released (July, 2010, Korea)<br />[Comparison between growth of wired internet and mobile internet based on“iPhone+iTouch”]<br />iPad<br />• 17 APPs installed per iPad<br />• 5 million eBooks download in 65 days<br />• Open HTML5, 220 thousand APPs<br />• 10 million eBay APP downloads <br />iPhone 4<br />• Recorded 5 billions download via App Store<br />• Yahoo, Google, Bing search engine setting<br />• 3D game with gyroscope installed<br />• WiFi video calling enabled (iMovieediting) <br />3<br />
  4. 4. Creativity/Innovation <br />Monopoly<br />Closed Platform<br />App Advertisement<br />Preferred by APP.CP <br />Web 2.0<br />Open/Share/Participation<br />Open Platform<br />Mobile Web Advertisement<br />Preferred by Web-portals <br /> Google<br /> Apple<br />Establishment Date<br />1976<br />1998<br />CEO<br />Steve Jobs<br />Eric Schmidt<br />CEO Salary<br />$1<br />$1<br />Biz <br />Structure<br />Infra<br />Investment<br />Service<br /> Outline<br />Market Capitalization<br />$190 billion <br />$186 billion <br />$36.5 billion <br />Revenue<br />$22.6 billion <br />Think different<br />Don’t be evil<br />Motto<br />Secret for Success<br />Elegance<br />Algorithm<br />Source : The Business Week(2010), Taurus Investment Security(2010) Re-quotation<br />Competition for mobile ecosystem leadership<br />With Apple and Google changing their business portfolio, competition for market leadership between closed (or managed open) and open ecosystem is in progress. Enterprises including device manufacturers, OS companies, and communication companies are struggling to find their own formula for success <br />• With the release of smart phones by Apple, Google, and followed by MS, the opportunity is opening up for the mobile advertisement market based on full-browsing, and fierce competition is anticipated<br /> [Mobile leadership? : Closed vs. Open]<br />[Google business structure, Investment in infrastructure, Service outline]<br />Do <br />Document <br />Schedule <br />Management <br />Shopping<br />Find <br />Information <br />Place <br />Person<br />Enjoy <br />Video <br />Audio <br />Game<br />Communicate<br />Story <br />SMS <br />Email<br />4<br />
  5. 5. 10 Billion Downlaod Accomplishment <br />Game Book Music Trip Education Utilities Hobby Rest<br />The 1st rank of book <br />in number of download(18%). <br />Game 15% <br />Book Game Entertain Education Trip Utilities Hobby Rest<br />Innovative Apple opens up new mobile market<br />Apple, which was no match for MS in PC market due to its closed policy, chose the relatively open (managed open) model based on iPhone<br />•Purpose of releasing(Feb) iPad, which is short of H/W specifications of netbooks, is to maintain iPhone UI, increase use of contents, and expand the contents of iTunes/App Store into eBook/Multimedia. Apple’s main strategy is to distribute APP contents, with a concept of open-24 hours store (copyright protection) <br />•Allowed various contents to be sold on iTunes by forming alliance with film makers and broadcasting contents providers such as CNN and CNBC, to expand its contents<br /> - Separated contents for Mac OS and Windows, 10 billion songs sold since the opening of music store in 2003, NBC was once excluded for increasing its price<br /> ☞ Apple is preparing for an internet TV service through iTunes at $30 monthly subscription, but negotiation with major CPs such as ground-wave channels which are targeting the mass, is not easy<br /> ☞Apple recently blocked applications such as Soribada at App Store in Korea, stating their payment method as the reason for abandonment. However, some suspect it as a localization strategy of iTunes<br />[App Store contents before and after the release of iPad]<br />[iTuneshomepage : PC & Mobile phone]<br />Source:Yujin Security. Mar,2010 *PDF viewer and note addition to iPad, 22% M/S of eBook market(June, 2010) Only 3 days later from iPad release in April 3, game App took the 1st rank with 33% of total <br />5<br />
  6. 6. Google focuses on mobile web 2.0 - Openness/Sharing/Participation/Group Intelligence <br />Core mobile strategy of Google can be summarized as the establishment of combined on/offline platform, LBS (Location Based Service) and cloud computing<br />- Assigned Android for Mobile OS, Chrome for web-browser, and Gears for combined on/offline platform<br />- Cloud computing & web integration are Google’s core strategies in 2010, because explosive use of them is expected as the restrictions of PCs disappear<br /> ☞ For cloud computing, Google presented G-sync (Feb, 2010) which synchronizes PC and smart phone data with wireless using MS technology, and acquired companies such as Picnick (cloud-based picture editing S/W, Mar, 2010) and DocVerse (Office program, Mar, 2010)<br />[Google platform profile ]<br />[Google Latitude (finding friends) and Goggles (image search)]<br />[Product line of Google cloud computing ]<br />Documentation using Word/Spreadsheet<br />Conversion of documentation from PC-based to <br />Web-based through Cloud Computing<br />3D design/Planning<br />Cloud Computing can make internet work as <br />platform such as OS<br />Combined on/offline platform<br />Source : Taurus Security, Mar, 2010<br />6<br />
  7. 7. Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for Mobile Media of Content <br />Ⅳ. Distribution Strategy for Mobile Media of Content Player<br />7<br />
  8. 8. Name<br />Provider<br />Name<br />Provider<br />Name<br />Provider<br />Golden age of Mobile App Stores<br />Competition between App Stores is on the rise and developers will gradually wish to develop APPs applicable on cross platform.<br />In other words, dependency on specific OS will be reduced, and direct processing from web-browers and servers will be preferred<br />- Each companies are launching their own App Stores, as Apple App Store does not share its revenue with communication companies and device manufacturers<br />- Gradual change into de facto standard development environment is expected, and Apple also starts embracing HTML 5 web APP<br />- In a short term, global App Store market (smart phone+MID*) is expected to grow more than 3 times from $4 billion in 2009 to $15 billion in 2012 (Gartner, 2010) <br />[T Store VS Show App Store vs Apple App Store comparison]<br />[Competition composition of App Store for mobile ]<br />Smart phone manufacturer and S/W company<br />Name<br />Provider<br />Name<br />Provider<br />Name<br />Provider<br /><ul><li>Free App: </li></ul>No registration fee<br /><ul><li>Paid App: 1 thousand won per App </li></ul>(Developer should pay 30 thousand won/case for verification fee, should profit from contents sales occur)<br />-Individual : <br /> yearly subscription fee 100 thousand won<br />-Corporate : 100, 200 and 300 thousand won for 2, 5 and 10 cases respectively <br />-Individual : <br /> yearly subscription fee $99<br />-Corporate : <br />yearly subscription fee $299<br />Name<br />Provider<br />Name<br />Provider<br /> Developer <br /> registration<br /> fee<br />Cell phone manufacturer<br />Name<br />Provider<br />Name<br />Provider<br />The Same ratio, '7(developer):3(communication company)' for all<br />Name<br />Provider<br />Name<br />Provider<br />7(developer):3(communication company)<br />7(developer):3(Apple)<br />Profit <br />allocation<br />Mobile communication company<br />Wi-Fi <br />support<br />Name<br />Provider<br />Name<br />Provider<br />Name<br />Provider<br />-Wi-Fi available <br />-Wi-Fi available <br />-Wi-Fi available<br />Name<br />Provider<br />-iPhone unlimited data plan<br />3G 8GB->$99<br />3GS 16GB->$199<br />3GS 32GB->$299<br />-Data-only plans<br />:internet access fee 3won/1KB, <br />data fee for contents download 3.5won/1KB<br />-Flat-rate plan:<br />Data fee 50won/1MB<br />-Volume-rate plan:<br />Data fee 500won/1MB<br />Plans<br />Independent line<br />Name<br />Provider<br />Name<br />Provider<br />Source:Nikkei Electronics. Nov 30,2009<br />Source:Daewoo Security, Mar, 2010 *Mobile Internet Device<br />8<br />
  9. 9. Mobile web growth forecast<br />CPs such as the press prefer App Stores to be ‘Contents sales + targeted ADs' rather than web environment which depends on simple Flash-based online ADs. However, mobile web is expected to be preferred in a long term, avoiding CP discrimination of Apple in a standard web environment such as HTML5<br />- Apple promotes policy of rejecting Flash for monopolistic preoccupancy of the App Store market, but iPhone OS4 recently embraced HTML5 as well<br /> ☞ Main reasons why Apple rejects Flash are the concern about its business model destruction and preemptive blocking for their own mobile AD business <br />- Going along with Apple’s platform is advantageous in a short term, but domestic music portals are beginning to move into mobile web due to factors such as Apple’s discriminatory policies. Decrease in number of App Store downloads is expected in a long term, as APP functions can be replaced by establishing HTML5 (web document rule) standard<br />☞ Ostensible reason why Apple removed domestic music Apps such as Soribada from its list is because their small-payment system using mobile phones does not comply with Apple’s card payment policy<br />[Movement in a short term: Case of App preference of the press ]<br />[Movement in a long term: Forecast of global App downloads]<br />√ Number of App downloads expected to rapidly increase from 2.4 billion in 2009 to 7 billion in 2013, and drop thereafter<br />- Mobile web functions are becoming more diverse<br />- Device/service companies are developing and installing their own Apps<br />※ Online bookstore Aladdin recently changed from App to mobile web<br />Contents <br />Contents<br />Major portal <br />Free<br />Press(Newspaper,Magazine)<br />Self portal<br />Low AD <br />Fee<br />PC Web Environment<br />AD Insertion<br />(One way AD based on Flash)<br /> Web Environment<br />Advertiser<br />Press moves to Apple model <br />due to high profit<br />Contents<br />(Applications)<br />Contents<br />App <br />purchase cost<br />Press(Newspaper,Magazine)<br />High AD Fee+<br />App purchase cost <br />Target AD insertion<br />(Apple AD Platform)<br />Apple App Store<br />Advertiser<br />Source: Atlas DB, Mar, 2010<br />Source : ABI Research 2010<br />9<br />
  10. 10. Various types of mobile business models<br />Mobile business model became possible with the mobile traffic activation with the appearance of App Store. Five main ways to generate profit are App sales, service charge, fee, device sales and mobile advertisement<br /><ul><li>App sales at the App Store is currently a key revenue model, and LBS-based mobile AD is expected to grow</li></ul> ☞ App Store sales portion for smart phone (feature phone) of non-communication companies is increasing rapidly in a short term, and is expected to record 40% M/S of mobile media market in 2012 (Gartner 2009)<br /> ☞ i-MOP Sendai port of Japan Koozy is LBS –based mobile AD service to lookup nearby store information and map of each floor, as well as discount information of the store<br /><ul><li> Internet finance/ payment/ commerce based on feeare expanding along with security solution (21% of mobile internet in Japan was commerce in 2009)
  11. 11. Apple acquired mobile AD company (Quattro Wireless, 2010) for device + contents combination model. AD order amount of $60 million after the announcement of OS4 iAD. An announcement by Apple that accumulated App download number reached 5 billion, and $1 billion was paid to developers (Apple WWDC, 2010)
  12. 12. Google released Android, an open-source based platform, in the end of 2007, and signed contracts to share AD revenue with Telco companies that adopted Android</li></ul>[iPhone BM of Apple ]<br />[Android BM of Google]<br />AD revenue<br />Advertiser<br />+ Nexus One which bypassed Telcom<br />Mobile Communication Company<br />Application <br />Provider<br />Terminal : iPhone<br />Platform : Mac OS X <br />Contents : iTunes<br />Terminal manufacturing<br />Open API<br />Mobile communication<br /> company<br />Google phone provision<br />• Voice-service cost<br />• Data fee<br />• Actvation fee, terminal sales revenue<br />• Contents usage fee through iTunes<br />+iAD(announced in Apr, 2010)<br />• Mobile search, <br /> AD and contents <br /> usage fee<br />• Registration cost<br />• Voice-service cost<br />• Terminal cost<br />Source: KT Business & Economics Research Center, 2008<br />10<br />
  13. 13. Applications[1/2]<br />The ranking of the most attractive paid App category before the release of iPadwas in the order of game, eBook and specialty S/W. eBook App and need for Killer App is increasing<br /><ul><li> Domestic games are not activated due to preliminary deliberation regulation. Instead, games are purchased from USA and Hong Kong App Store
  14. 14. As the number of Apps grow in the future, portion of free Apps will be increased and thus lead to rising interest in buying/selling of digital itemswithin gaming Apps</li></ul>- Under 10 Apps are expected to be used among hundreds, and special version (10 min etc.) is required for publications and newspapers (VOD/Sports)<br /><ul><li> The profit of Apple App store in 2009 is expected to be around $1 billion (About 2.8% of Apple’s total sales, $36.5 billion) </li></ul> Accumulated sales expected to be $3 billion by 2010. 99.4% of mobile App downloads are from Apple App Store http://www.rimarkable.com/apples-appstore<br />[Top 15 Paid Apps (July.2009)]<br />[Share of global App Store by category (Aug.2009)]<br />Source: Distimo Report. July, 2009 : Kim Ki Tae(Industrial Bank). Oct 5, 2009<br />Source: Apps.biz(standard of Aug 18.2009)<br />11<br />
  15. 15. Applications[2/2]<br />Average number of Apps installed by Korean iPhone users is 86. Intention to change to paid Apps was in order of 'game‘ and 'productivity'<br />- Domestic users download Apps in the order of Photo > Productivity > SNS. Ratio of domestic usage among entire Apps is 1% <br />Q3. Have you ever changed <br /> from free to paid Apps?<br />Q4. If yes, what category of Apps did you change? <br />Game Productivity SMS Camera Music Contact Rest<br />10s<br />20s<br />30s<br />40s<br />Sum<br />NO 48%<br />Yes 52% <br />Apps Registered* About 189,060 types <br />Domesitc User Downloads 1,909 types(1%)<br /> Game Book Entertain Education Utility Lifestyle Trip Reference Sport Music<br />Registry Event<br />Download Event<br />Weight <br />News Business Navi Productivity Health Photo SNS Finance Medicine Weather<br />Registry Event<br />Download Event<br />Weight <br />Source: KT Businsess & Economics Research Center<br />12<br />
  16. 16. Mobile advertisement[1/3]<br />Web mobile AD, which has features such as Targeting, Anytime &Anywhere, Multi-interactive and Highly cost effective, is expected to lead the mobile AD market, and is expected to grow domestically as well as globally with realization of full-browsing in 2009<br /><ul><li>As targeting AD becomes possible, business operators with data such as demographics, usage time, location information and expenditure information will have competitive advantage
  17. 17. Search is currently the leading method in internet advertising, but internet web related areas are expected to take about 48% by 2011
  18. 18. Domestic mobile AD market is expected to grow 21% from 250 billion won in 2009 to about 300 billion won in 2010 (ET News)
  19. 19. Global mobile AD market is expected to reach $11.2 billion in 2010, which is 51.5% increase compared to previous year (eMarketer,2010) </li></ul>[Targeting AD, the greatest merit of mobile AD]<br />[Domestic mobile AD market status and forecast]<br />AD1<br />AD2<br />AD3<br />AD4<br />AD5<br />AD2<br />Consumer<br />[Estimated portion of global mobile AD in 2011E]<br />[Global mobile AD market status and forecast]<br />Source: Nielsen Mobile. Solomo Investment Security(June,2010), Re-quotation<br />Internet Search TV Game App Video SMS MVS <br />Source: Electronic Newspaper, eMarketer, Solomo Investment Security(June, 2010), Re-quotation<br />13<br />
  20. 20. Mobile advertisement[2/3]<br />Search ADs and application-based ADs, which are specialized in personalization, localization, and augmented reality, are expected to expand the advertising market<br />- Mobile ADs are classified into message, search, display, App application and videoAD (Classification by Korea Advertisement Academic Society)<br />☞ 25~30% of mobile media revenue are generated from mobile ADs and ADs based on free Apps (Gartner 2010)<br /><ul><li>The size of mobile AD market based on smart phone (54.7 million smart phones in 1Q, 2010 - 56.7% increase compared to 1Q 2009, IDC) will be $15 billion in 2013 (StrabaseJune.2010)
  21. 21. Apps such as NYT and Urbanspoonare directly usedrather than using search engine for news or famous restaurants</li></ul>- Mash up platform using open API such as LBS, SNS, AR(Augmented Reality)*, 3D are starting to integrate with mobile AD<br />[Mobile AD classification, features, business operators]<br />[LBS mobile AD, 3D AD] <br />Message AD Search AD Display AD Side App AD Footage AD<br />Offered by Admob<br />AD <br />Type <br />•Banner ADs on Mobile websites<br />•Simple message and readability are important due to limited space<br />• Exposed before or after the video or TV via mobile network<br />• Directly linked to shopping through interactive ADs<br />• AD on applications installed in cell phones <br />• High Interest induction<br />• Low repulsion <br />• Based on SMS, MMS<br />• Can be sent to all cell phones<br />• Simple and does not induce interest<br />•Growth rate will be high with the development of mobile internet<br />Offer by iPhone (HoloAD)<br />Main <br />Feature<br />Main<br />Business <br />Operator<br />*Augmented Reality : Technology for showing virtual object or <br />information synthesized to real environment which user watches with eye <br />Sourece : Korea AD Academic Society. Solomon Investment Security Re-quotation. June.2010<br />14<br />
  22. 22. Mobile advertisement[3/3]<br />iAd, which has been announced with the release of iPhone OS 4 (Apr 8th) , is evaluated as part of N-Screen strategy differentiated from other companies<br />- iAd (released July 1st), which has been announced after the acquisition of mobile AD company, 'Quattro Wireless‘, displays ADs by clicking the banner at the bottom of Apps<br /> ☞ iAd received $60 million worth of Ad orders from global enterprises such as Nissan, Unilever and GE (Segye-ilbo, June 14). It is expected to take 48% of mobile AD market in the second half of this year<br />- iAdannounces the beginning of collision between native application usage environment and usage environment based on web by Google<br />☞ Apple, which does not have a search engine, is scheduled to select mobile AD model based on 190,000 Apps, but will allow web App as well (accepting Web standard HTML5 /safari web-browser), LaLa (online music streaming, Dec, 2009), Siri (Sound recognition search, Apr, 2010) and Intrinsity (chips for mobile, Apr, 2010) were acquired sequentially<br />[Screen from Toy Story3 AD based on Apple iAd]<br />[In-House platform + Cloud strategy outline for N-Screen by Apple]<br />Share email, contacts and documents on iPhone and PC through Mobile Me service<br />Cloud<br />In-House Platform<br />Album company<br />Video company<br />Press company<br />App development <br />company<br />Content & App<br />Profit allocation<br /> AD<br />Service<br />Web Service Company<br />Access through Safari, <br />Synchronization <br />through Mobile Me<br />Download&AD<br />Synchronization Synchronization Synchronization Synchronization<br />Native App Use User verification/charge/payment with Apple ID Cloud use<br />Source: Engadget, Atlas (May, 2010), Re-quotation<br />15<br />
  23. 23. Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for Mobile Media of Content<br />Ⅳ. Distribution Strategy for Mobile Media of Content Player<br />16<br />
  24. 24. Finding differentiation factors related to contents mobile distribution!<br />Key features of Contents 2.0 are mobile, addictive, multi-platform, participative, new experience etc. (IMMA General Meeting, 2010). Differentiation factors related to these key features for mobile environment and mobile contents are S(Situation recognition), M(Mash), A(Active), R(Rapid) and T(Tailored) (LG Economics Research, Feb, 2010)<br /><ul><li>Situation recognition: LBS(6,000 LBS Apps in Apple App Store – as of Jan, 2010), SNS(understanding the needs of the users based on on&offline personal connection information)</li></ul>- Mash service : Augmented reality (iPhoneRedLaser App combines information from camera + internet shopping mall, provides barcode information)<br />- Active service : Push (checking eBay auction bidding information through iPhone App 'Push Notification')<br />- Rapid service : Offers a path through which users can access service they want with One-Click<br />- Tailored service : App by Barnes&Noble recognizes book cover image taken with a camera and finds related information<br />[Characteristics of mobile internet usage environment and differentiation factors of mobile contents]<br />[Content 2.0]<br />Mobile <br />Strongly addictive<br />Cross media<br />Participative<br />Offering experience <br />Use on the road<br />Terminal with various <br />combined function<br />Personal exclusive use<br />Constant access<br />Necessity for immediate <br />purpose achievement<br />Restriction of control method <br />Source: Gerd Leohard(2010). The Future of News. Publishing&Media, The 80th INMA General Meeting Reference. Press Promotion Foundation 2010 Reorganization<br />Source: LGERI market expection report, Feb, 2010.<br />17<br />
  25. 25. Key differentiation factors of mobile distribution: Mash up LBS, SNS and AR with contents!<br />As boundaries between traditional contents and services become vague, mash up platform combining contents and services are becoming important. The platform is expected to decide the contents standard (adobe of web) of future devices and offer new business opportunities<br />LBS + AR[Layer] or LBS+SNS[Foursquare]<br />[Case] (source : Youtube)<br />Layer: Offers ADs and<br />information of objects<br />shown on users’ camera. <br />Utilized as marketing<br />method by the third party<br />Foursquare: LBS + SNS<br />• Killer Apps, 'LBS, SNS, AR' through contents/services mash up<br /><ul><li>Domestic App download ranking is Picture > Productivity > SNS</li></ul> (KT Business & Economics Research, March, 2010)<br />√ Picture, 'MoreLomo > PS Mobile'<br />√ Productivity 'Awesome Note’ > Kantacts' <br />√ SNS, 'Skype > Sekai camera'<br />√ LBS, 'Daum Map > Seoul Bus'<br />• Trend of Apple/Google’s LBS becoming closed<br />- Apple rejected Google Latitude* and acquired an LBS service, Playbase<br />• Trend of SNS being OPEN OS in life<br />- Open API as a main trend (i.e. Facebook)<br />- Expansion into marketing OS*** (Australian Airline)<br />- Connecting revenue model based on high royalty<br />√ AD: Facebook etc.<br />√ Item Sales: Cyworld etc. <br />√ Fee: LastDotFM etc.<br />SNS or SNS + Game[Social (network) games, Farmville]<br />[Case]<br />Twitter becoming an OS: <br />Strength in linkage with various <br />social media. Integrated model <br />with existing SNS <br />Zynga** 'Farmville' <br />social game<br />** $180 million Investment. 12 million active users added from Facebookonly in <br /> 7 days. Currently has 230 million users<br />AR: LBS + AR, SNS + AR, Search + AR[Goggles]<br />[Case] (Source: Atlas, Apr 12, 2010)<br />30% of users access Twitter<br />directly, while the rest use<br />the 3rd party Apps. <br />Usage background is various <br />mash up. Goggles has <br />visual search function<br />* Service provided by Google, which lets family or friends know users’ location information based on Google Maps through cell phone<br />*** Advertisers expect low cost and high efficiency<br />18<br />
  26. 26. Change consumption behavior of wired environment into that suitable for mobile environment!<br />Secret of Facebook’s successful transition to mobile service lies in preoccupying mobile SNS based on web market by offering the best mobile environment despite the difference in P-N-T with Apps (C content) suited for each multi-platforms and various versions of websites<br /><ul><li>Current mobile contents market is focused on personal services such as ringtones, coloring and standby screen. However, it is expected to be transitioned from wired environment to mobile</li></ul> ☞ Ovum(2010) classified mobile contents into personalization, music, game, TV/video(real time/VOD), and premium(pay per use). Music and video shows the highest growth rate<br /><ul><li> The number of worldwide SNS users, Facebook users, and mobile SNS users are 800 million, 400 million and 380 million respectively in 2010 (eMarketer, 2010)
  27. 27. Differences between Facebookand Myspace include simple interface, rapid adaptation to mobile App (iPhone, Blackberry etc.), competitiveness of mobile App ‘Facebook Connect’*, and creating an open API-based (known as "Social OS") ecosystem</li></ul>[Myspace and Facebook in the viewpoint of transition of competitiveness from wired to mobile]<br />Facebook - Example of wire influence enlargement through mobile competitiveness reinforcement<br />Myspace- Failed in transition of competitiveness from wired to mobile<br />Service detail Service screen capture<br />Section Detail<br />- Writing a post/reply and uploading photos on blog<br />- Editing profile and search<br />- Making friends<br />- Sending and receiving emails<br />Service <br />Fee <br />Service screen <br />capture<br />Offers same service by <br />changing the existing website <br />to be suitable for mobile environment<br />Being able to upload photos etc.<br />directly using cell phones, and <br />check upload status of other friends <br />Through the 'Friend's Upload' tab<br />Mobile text messaging function<br />- Monthly basic fare : $2.99<br />* Technology used in desktop and App devices which allows the 3rd party's website to access Facebookaccount information, friends privacy setting etc.<br />Source : Taurus Security, Mar, 2010.<br />19<br />
  28. 28. Specialize in contents category considering loyalty and frequency of App Store App usage!<br />Looking at the consumer usage behavior by each App category of Apple App Store using loyalty and frequency as two axis, various usage behaviors appear for 19 categories , including entertainment, news, game, book, reference, weather and etc. The result needs to be applied to web as well.<br />- Sustainment measured by how long the users maintained the App after the download – surveyed sustainment ratio for 90 days<br />- Frequency measured by how many times an App which users have downloaded has been used per week<br />☞ Apps with high frequency and sustainment showed high customer loyalty<br />[Consumers’ behavior by App Store Application category : Loyalty & Frequency]<br />High frequency & High sustainment ratio<br />- Life information: news, reference<br /><ul><li>Convenient contents: weather, health</li></ul>High frequency in a short term & Low sustainment ratio<br />- Game<br /><ul><li> eBook : Books have high consumption frequency</li></ul>Low frequency & Low sustainment ratio<br /><ul><li>Entertainment</li></ul>Medium frequency & Medium sustainment ratio<br />- Social Networking(?)<br /><ul><li> Information related to productivity/work</li></ul> (finance, travel)<br />- Navigation, education, music etc.<br />Number of <br />use per <br />week<br />Sustainment ratio for 90 days<br />Source : Flurry, Oct, 2009<br />20<br />
  29. 29. Ⅰ. Mobile Internet Environment Change<br />Ⅱ. Diversification of Mobile Business Model <br />Ⅲ. Distribution Direction for Mobile Media of Content <br />Ⅳ. Distribution Strategy for Mobile Media of Content Player<br />21<br />
  30. 30. High frequency & High sustainment ratio : News[1/3]<br />iPad, on which 28% of the users planned to read the news, is expected to accelerate 'newspapers and magazines to become online'. UX of iPad, which is similar to paper is expected to offer attractive reading experience, so respective strategy is required<br /><ul><li>Equation 'Contents = Information' no longer is true due to diversification of platform. Subscribers want experience and service suitable for corresponding platform, and have high loyalty
  31. 31. Features of paper newspaper and mobile media – ‘passive, producer-oriented, entertaining and consuming'vs. Features of PC web - 'active, search and endlessly continuous'</li></ul>[Contents which will be used on iPad?]<br />Path of News transfer<br />Reading magazines<br /><ul><li> As if choosing goods at the Kiosk..
  32. 32. Payment for purchasing </li></ul> package..<br /><ul><li>Similar to newspaper and magazine subscription in the past</li></ul>Internet <br />Surfing<br />Email<br />eBook<br />News<br />Video<br />Source: Gerd Leonhard(2010). The Future of News. Publishing & Media. <br />The 80th INMA General Meeting Data. Press Promotion Foundation.<br /> 2010 Reorganization<br />Source: Mario Garcia(2010). Selling Printing to Readers and Advertisers in <br />the Times of the iPad & Beyond. The 80th INMA General Meeting Data.<br /> Press Promotion Foundation. 2010 Reorganization <br />22<br />
  33. 33. High frequency & High sustainment ratio : News[2/3]<br />Smart phone and iPadoffer newspaper companies, which have been suffering from lack of revenue model, with the possibility of paid subscription model. Strategy for paid model focusing on genuine subscribers based on high frequency and sustainment ratio is required<br />- There is no fixed paid model as each newspaper companies have different number of subscribers, characteristics of subscriber segments and media usage behavior of target subscribers<br /><ul><li>However, common factors to consider are that main target of paid model is genuine subscribers and adequate price has to be set based on survey to subscribers</li></ul> ☞ Attempt to bring 47% of the total visitors who skim through the news website to paid model can be dangerous<br />[Dow-joneslocal media group paid model classification]<br />[Categorization by news website’s usage behavior]<br />Contents free for a certain number of articles<br />3 articles for non-registered / 10 articles for registered users per month<br />Paid subscription required for more than 10 articles per month<br />Genuine local subscriber 18%<br />20 times visit per month <br />2~3 times visit on the same day<br />Subscribers residing within the area<br />One-time visit 47%<br />Once per month<br />Inflow through <br />search engine<br /> Complete paid contents<br />Paper PDF service/ Email newsletter/ Breaking news alert function<br />General local subscriber 35%<br />1~3 times visit per month<br />2~3 times visit on the same day<br />Assumed to be local subscriber<br /> Free contents<br />News from communication company such as AP / Contents using blogs<br />[Portion of page view by loyalty]<br />General local subscriber 3%<br />Once time reader 6%<br />Subscription fee<br />Daily use fee<br />Use fee per article<br />Unknown subscriber 1%<br />Subscribers’ <br />evaluation <br />on online <br />subscription fee<br />Genuine local subscriber 90%<br />Cheap A little expensive Too expensive7<br />Source : Kurt Lozier(2010). Contents and the Value of Paid vs. Free. The 80th INMA General Meeting. Press Promotion Foundation. 2010 Reorganization<br />23<br />
  34. 34. High frequency & High sustainment ratio : News[3/3]<br />Korea Online Newspaper Association which introduced free APP 'On news' last month declared to move to paid model from August. 12 participating newspaper companies are gathering opinions on the specifics such as timing/range. Donga Daily News begins to offer paid App on iPhone/iPod (Donga Daily News, June 24, 2010)<br /><ul><li>Features of Donga Daily News : News reading service in a form of traditional newspaper. Major daily news directly selected and offered by the editing desk, breaking news updated in real time, and contents classified into the politics, economics, society, entertainment, sports and editorial/column
  35. 35. Differentiation points of Donga Daily News : Automatic scrolling function with adjustable speed based on news and news reading service in a form of traditional newspaper, word size adjustment, category button with scroll function, article search, magnified picture viewing, downloading the whole article. and reading downloaded portion of the article during the download</li></ul> ☞ It is confirmed that Google is contacting newspaper companies for the possibility of adopting online news payment platform ‘Newspass' (ZDNet Korea, June 21, 2010)<br />[Donga Daily News basic App information]<br />[Donga Daily News Screen Capture]<br />CompleeteSetting Cancel Complete Search Cancel<br />Donga Daily News<br />Field : News<br />Release Date : June 24, 2010<br />Version : 1.3<br />Capacity : 0.3 MB<br />Manufacturer : DONGA.COM<br />Price : $2.99<br />Information Renewal<br />Receive all new information<br />Donga Daily News<br />Read Article<br />Fast article movement<br />Moves directly to previous(next) article when selected<br />Automatic reading speed<br />Select article automatic scroll speed<br />Line spacing<br />Select article’s line spacing<br />Line interval<br />Select line interval degree<br />Word to search<br />President<br />Search Condition<br />(And = search sentence including all the words)<br />(Or = search sentence including more than 1 word)<br />Click for QR code use method!<br />Source : Naver Search (2010)<br />24<br />
  36. 36. High frequency in a short term & low sustainment ratio: eBook[1/3]<br />Rapid increase of Apple App store eBook App download as iPad’s killer contents. Expected to increase the profit of publishers<br />- Amazon Kindle(64%M/S): Main customers 40~50s, Free 3G (Whispernet) offered through alliance with Sprint, Ensuring functions through M&A (Stanza, Smaptell)<br />- Apple iPad: $499 (Wi-Fi 16GB), $14.99/month, 250MB wireless data, multi-touch support, App/contents download through App Store<br /><ul><li>Paper book sales: 50% profit for publishers & margin of $4.05 for a $26 book vs. eBook sales: 70% profit for publishers & margin of $5.05 for a $26 book</li></ul> ☞ 14,000 eBooks by Pearson in 2009, 95% of McGraw-Hill university education publications are e-textbook, $40for 'Connect’ courses per semester ($80 including eBook)<br />[Amazon Kindle]<br />[Tablet eBook reader format competition]<br />Subscriber Publisher<br />terminal, <br />eBook offer<br />Publication <br />right cost<br />Killer App of iPad<br />3G writing royalties<br />access <br />service <br />terminal, <br />eBook cost<br />eBook<br />Amazon<br />Web surfing<br /> Email<br />Communication <br />Company Writer<br />service use fee<br />existing iPhone function added function <br />[USA eBook market(Since Kindle, 69% growth rate)]<br />Billion$ Million$<br />Amazon Kindle Release<br />Publication <br />market(left)<br />eBook(right)<br />*Retail price model was selected. Though publisher provides at $10~12, Amazon sells at $9.99/book(no margin). <br />Publisher:Apple– Maintained at 7:3 ($13~15). Amazon applied this policy since June, 2010.<br />Source : Taurus Security, Mar, 2010 : eBook included inclusion of terminal numerical value in eBook <br />25<br />
  37. 37. High frequency in a short term & low sustainment ratio: eBook[2/3]<br />Major change of the eBook market brought by the release of iPad is conversion to Agency Pricing Model, which means increase in publishers’ share of the profit<br />- Apple presented a model which destroys Retail Pricing Model of Amazon, assuming that the key contents of iPad are eBook<br />- Contacted large education publishers to ensure e-textbook contents which can be used on iPad, 7,000 text books offered<br />- Conflicting opinions about the possibility of iPad as a device for work: iPad focuses not on production but on consumption of contents<br /> • Pros : No problem with expansion thanks to cloud environment. Efficient for work in the aspect of UI and user convenience<br /> • Cons : Lacks expansion and security. Inconvenient typing via by touch-screen, no USB, limited memory capacity<br />[Changes and profit model innovation by iPad]<br />Changes brought by iPad<br />iPad, 'trigger of change'<br />Apple gives right to <br />publisher <br />for sale price decision<br />Publisher:Distributior=7:3<br />After<br />Sale price is decided <br />to $9.99<br />despite best seller<br />Price decision maker?<br />Price decision range?<br /> Distributor Publisher<br />Before<br />Publisher decides the sales <br />price. Profit allocation, <br />'Publisher:Distributor = 7:3' <br />Supplied by publishers with <br />around 30~40% discount <br />from the listed price.<br />Supplied at around $10~12.<br />Sales price at $9.99<br />1)Improvement of Amazon <br />outward appearance and profit<br />2) But, explosive increase <br />in demand of Kindle may <br />be restricted<br />3) Improvement of <br />publishers' profit<br />Promoting consumers' <br />demand by ensuring price competitiveness. <br />But, both publisher <br />and distributor <br />bear low margin<br />eBook sales price increases. <br />Sales and profit of distributors <br />are improved as well. <br />However, eBooks might lose<br />its price competiveness and<br />result in decrease in demand. <br />Amazon(Distributor) bears <br />low margin to preoccupy the<br />market. <br />However, as distributor’s<br />market share increases,<br />it asks the publishers to<br />cut down price – reducing <br />the margin of the publishers <br />Ensured publishers’ right<br />on sales price. <br />Ensured advantageous <br />position of contents company <br />due to diversity of <br />distribution network<br />Resistance from publishers for low price, but Amazon ensured bargaining power with high controllability<br />in eBook market<br />Source : Taurus Security, Mar, 2010<br />26<br />
  38. 38. High frequency in a short term & low sustainment ratio: eBook[3/3]<br />Domestic eBook market expected to grow more than 10 times from 210 billion won in 2006 to 2,380 billion won in 2012 (KyoboBookstore)<br /><ul><li> Leading players entering the domestic eBook market: device manufacturer (Samsung Electronics released 6 inch e-ink), mobile communication company [KT signed contract with Kyobo for eBook network lease, LGT signed MVNO contract with Interpark(Biscuit)], distribution companies [Kyobo+Samsung alliance, Interpark+LGInnotek = Biscuit (March), Mobibook of Booxen], publishing companies (establishment of joint corporations such as 'Korea Epub'. Appearance of 1 person publishers is most likely due to changes in profit allocation ratio)
  39. 39. Reasons for slow alliance among mobile communication, publishing and distribution companies are preference for 'terminal + contents' alliance like Kindle, and conflicting requests by mobile communication and publishing companies (difference in price level for rental fee, intention to bypass using WiFiby collaborating with device manufacturers etc.)</li></ul> ☞ Need to start from consumer-oriented philosophy of iPad : Offer differentiated product/service by accessible network and storage capacity, difference in price of the device is around $10 compared to Amazon, focusing on ePub format selection and offering iPhoneSDK etc.<br />[Domestic offline and online market] [eBook domestic market competition and cooperation status]<br />Book purchase channel is gradually moving online<br />Large bookstore<br />Local small bookstore<br />Bookstore around company/school<br />Internet<br /> Kyobo Bookstore<br /> Interpark<br /> Korea ePub<br /> Aladdin<br />Story <br />LG Innotek<br />LG Electronics<br />Bookcube<br />LG Telecom<br />Source: The Ministry of Culture, Sport and Tourism. <br />Taurus Security(Mar, 2010) Re-quotation<br />Source: Atlas DB, Mar, 2010 <br />27<br />
  40. 40. Low frequency & Low sustainment ratio: Entertainment[1/2]<br />Entertainment and information are core of mobile contents industry, and entertainment Apps are expected to be diffused in the beginning stage of growth. Mobile videos with passive characteristics such as Mobisodes* and Push&Store are expected to grow rapidly<br /><ul><li>Entertainment Apps take 15% of Apps in Apple App Store, and Apple needs to provide plans to eradicate illegal download of contents. Legal part of Napster, iTunes, DRM free indirect profit(imom.com), monthly fee based downloads(Pandora radio) etc.</li></ul>- Mobisodes, which is currently installed in iPhone in Korea, includes Africa, Daum TV Pot, Nate TV and GomTV (direct download of music video clips)<br /><ul><li> Distribution optimization by each platform(scalability), OSMU model, system flexibility(archiving tool), contents editing and transmission automation are urgent for N-Screen</li></ul>[Comparison of App Store and mobile website contents usage]<br />√ Information websites such as Shopping(20.3%), Photo(16.3%) and Social(11.6%) are preferred on Mobile Web<br />√ Entertainment Apps such as Game(17.9%), Entertainment(14.3%) and Books(14.2%) are ranked at the top category for Apps<br />Internet video player’s as an App<br />[Case]<br />(Source : KT Business & Economics Research Center, Apr, 2010)<br />'Netflix instantly watch‘, an internet video service offered at flat rate ($8.99/month), went beyond the website and became OPEN API to expand into devices such as STB, game console, and TV. It is offered in a form of App on Apple iPad<br />Source: ABI Research 2010<br />* Existing broadcasting contents transformed into a format suitable for mobile environment<br />** Contents store which is broadcasted to all registrants, stored in terminals, and played on demand<br />28<br />
  41. 41. Low frequency & Low sustainment ratio: Entertainment[2/2]<br />Domestic ground wave broadcasters are planning to offer not only ‘ground wave TV portal’, which is already provided to paid broadcasting, but also connected TV ('Dot TV') and App<br /><ul><li> Release of free connected TV, 'Dot TV' in a form of consortium between domestic ground wave broadcasters and manufacturer, Samsung Electronics (Established in Mar, 2007, California)</li></ul> : Offers features such as bookmark of favorite scenes, recording, partial scene search, and 3-Screen while watching TV, but is limited to ‘short-length’<br /> ☞ In US, CBS offers N-Screen through a standard web based on HTML5, and ABC directly offers App for iPad<br /><ul><li> 3 domestic ground wave broadcasters agreed on the development of shared TV portal, and are currently in trial to offer online download service, conting.com</li></ul> : 3 domestic ground wave broadcasters began the development of optimized platform for multi-platform, and are planning to implement linkage test in the second half of this year <br /> ☞ Out of total advertisement sales($62 billion) of the USA ground wave/PP, 2.4% ($1.6 billion) are online ADs and 54% are MSO profit allocation<br />☞ 'SBS on-air‘, a high-end iPhone App by SBS, ranked 1st among the paid-Apps during the World Cup period despite its expensive price ($4.99) (news are offered for free)<br />[Possibility of OSMU by domestic ground wave broadcasters]<br />• Ground wave re-transmission<br />• App not permitted by ground wave broadcasters cannot be uploaded <br /> to broadcasting image by communication cable companies<br />Independent TV portal of ground wave broadcasters<br />Real time channel<br />[Ch6, 7, 9, 11, <br />Ground wave line cable PP]<br />TV platform<br />[IPTV/Cable TV]<br /> Big Head Content<br />√ Recent 6 months’ <br /> broadcasting contents<br />√ About 720~1,000 hours <br />• Possession of controllability over <br /> independent contents/services<br />(formation, planning, operation, development)<br />• Independent <br /> member management/marketing/payment<br />Free <br />ground wave <br />TV platform <br />K-View<br />• Digital TV Data broadcasting<br />√ Direct processing of data broadcasting return by ground wave.co.kr<br />√ STB only acts as a gateway<br />√ Integrated interactive service<br />√ Direct implementation by ground wave broadcasters<br />Ground wave broadcasting.co.kr<br />(Ground wave broadcasting portal)<br />ConTing<br /> Broadcasting Contents<br />√ Broadcasting contents since 1990<br />√ About 50,000~100,000 hours <br />Online<br />Video<br />Company<br />Webhard <br />Company<br />Mobile<br />(iPhone)<br />Samsung <br />Electronics<br />(WebTV)<br />Source: SBS, Atlas reorganization<br />Source: Atls, Jan, 2010<br />29<br />
  42. 42. Medium frequency and sustainment ratio: Mobile music[1/2]<br />Reason for increase in demand for music along with distribution of smart phones, despite its medium frequency and sustainment ratio, are simplification of distribution/profit allocation structure, improvement in manufacturers’ profit, normalization of price, diversification of form of music services such as App/Web release, which all are positive for growth<br />- Demand of mobile App is continuously increasing due to MP3 explosion, reduced procedure in purchasing and playing music, easy use of buttons when using Apps etc.<br /><ul><li> Distribution structure ('Manufacturer -> Sound distributor/Mobile communication company -> Consumer') is simplified with the appearance of App Store ('Manufacturer -> Open market -> Consumer')
  43. 43. Used as a marketing tool by existing mobile communication companies. Price, which used to be flat-rate due to difficulty in increasing unit price, can be normalized through differentiation and packaging</li></ul> ☞ Price of domestic digital sound source is 125 per song when download and 3 per song when listened via streaming vs. 700~1,500 per song when downloaded from the USA iTunes<br />–-Neowiz Bugs and Soribadaare trying to diversify their service by offering web and music streaming App on smart phones. Opening of a DRM free era<br />[Simplification of distribution structure & Change in profit allocation structure]<br />DRM free online sound source sales website<br />Independent Music Label evolving into music SNS<br />Past<br />Future <br />[Case] (source: ROA, 2009)<br />Rhapsody opened "Digital Sound Source" which is DRM free & accessible on Apple iPod. Allied with4 sound source majors. "Music Without Limit" strategy<br />Device <br />subsidiary<br />Device <br />subsidiary<br />OS <br />company<br />Mobile <br />communication <br />company<br />Portal <br />company<br />Music contents profit allocation <br />structure of smart phone open market<br />Profit allocation structure <br />of existing mobile music contents<br />[Case] (source: ROA, 2009)<br />imeem: Able to search sound sources as well as music videos. Announced developer-only platform, <br />"imeem Media Platform" <br />Data fee<br />of mobile <br />communication <br />company<br />OS <br />company<br />Contents<br />provider<br />Contents distribution <br />margin of mobile <br />communication <br />company <br />Contents<br />provider <br />Source: Atlas, June, 2010<br />30<br />
  44. 44. Medium frequency and sustainment ratio: Mobile music[2/2]<br />Future opportunity factors of domestic sound source market are continuous growth of smart phone, which are used to communicate directly with the global market, improvement in internet users’ awareness of copyright, and normalization of price<br /><ul><li> Conversion from closed structure around domestic mobile communication companies to open and global structure, triggered by wide distribution of smart phones. Captive market dissolution for mobile communication companies. Competition expected to be accelerated without the constraints of time and place at a global level based on customer convenience and brand power</li></ul> ☞ The smart phone album of Girls Generation is known to be downloaded over 200,000 times in the global market (Neowiz internet source. June, 2010)<br /><ul><li>Revision of copyright law in 2009 led to improvement in consumers’ awareness on copyright, which resulted in growth of legal market</li></ul> ☞ Number of paid users in 10~20s for Bugs Music increased from 1,800 in Jan, 2008 to 19,000 in June, 2009, a tenfold increase in 15 months<br /><ul><li>Increase in ARPU is expected due to less price competition and introduction of meter-rate system in a long term (current ARPU of 5 sound source companies is 4,000~5,500/month)</li></ul>[Sound source market ecosystem]<br /> Domestic sound source market trend<br />Global mobile sound source market sales trend<br />100 million won<br />Million $<br />Digital <br />music <br />market<br />Manufacturer Composer/Lyric writer Singer/Player<br />Album <br />market<br />Copyright Association Federation of Performers<br /> Profit allocation <br />Sound source distributor Right approval<br />Online music service Consumer<br />company <br />• Estimated market size of digital sound source market in 2009, 300 billion(domestic), $18.1 billion (worldwide)<br />• Sound source composition in the order of Full-track(streaming+download) 52%, phone related(ring tones, coloring) 36%, background music(mini-homepies, blog) 12%<br />• Market expansion around Full-track, sound source consumption can show rapid growth<br />• Music portals, which has advanced UI and awareness, are advantageous due to open market activation<br />Source: Samsung Security, Apr, 2010<br />31<br />
  45. 45. Medium frequency and sustainment ratio: SNS [1/2]<br />Three SNS profit models: advertising, fee from users, inducing other websites and linkage model<br />- SNS AD market is divided into result compensation(Affiliate) AD market and AD market through AD dealers/agencies. The latter is in introductory stage <br />- The competition structure for global market is Twitter-Facebook-MySpace, and Cyworld-MeToday-Twitter for domestic market<br />- Looking at the market share of 1st quarter banner AD market in 2010, Facebook(16%) outperforms search portals such as Yahoo(12%) and Google(2.4%)<br />Comparison of 3 SNS companies<br /> Banner AD M/S in 1/4 quarter, 2010<br />[SNS AD market structure and profit generation process]<br />Result compensation type(Affiliate) AD market<br />SNS Publication Market<br /> Publisher <br /> etc.<br />125 million persons<br />OpenSocial networking<br />Over high <br />school student<br />Mutual consent<br />Feb, 2004<br />Game sales<br />High-end portal<br />50 million persons<br />Open Social networking<br />No limit<br />Strong privacy<br />June, 2003<br />Sound source sales<br />Change to<br />entertainment portal<br />24 million persons<br />140 words <br />short message<br />Foundation info share<br />No limit<br />No consent<br />July,2006<br />AD<br />real time <br />communication <br />hub<br />Net visitors/month<br />characteristics<br />Registrant limit<br />Communication <br />method<br />e-commerce <br />companies<br />Result compensation<br /> Medium<br />Result compensation <br />type AD company<br />Establishment year<br />Revenue model<br />Future strategy<br />Product sales Medium Result <br /> compensation<br />Royalties<br /> Contents<br /> Paid service Medium AD sales <br />PC mobile AD agency Advertiser<br /> Service AD fee AD fee<br />Paid members, avatar sales etc.<br />SNS market<br />SNS market/related <br />market<br />SNS <br />establishment <br />(internal SNS <br />etc.<br />SNS system<br />provider<br />Usage fee<br />Source : Japan, the Ministry of Internal Affairs and Communications. <br />Ktb Investment Security, May, 2010<br />Source: Comscore, Ktb Investment Security. May, 2010<br />Provide SNS S/W<br />32<br />
  46. 46. Medium frequency and sustainment ratio: SNS [2/2]<br />Facebook (an unlisted company) outperformed Google in the number of visits within the US in 2009, and are doubling its advertising revenue every year<br />- Facebook and Twitter usage in Korea is rapidly increasing since the release of iPhone<br />- In the US market, Facebook(176.3 billion times) has more AD exposures than Yahoo($166 million display AD revenue) <br />- Facebook’ssales composition: CPC(Cost Per Click) AD takes 55% and AD/exposure(Cost Per Mile) takes 35% of total sales<br />- Recommendation from acquaintances is very important in Facebook ADs : When the ADs recommended by acquaintances are exposed, the list of acquaintances who made the recommendation appears together<br />[Number of times of the USA display AD exposure and M/S in the 1st quarter, 2010]<br /> [Facebook sales composition in 2009 (industry estimation)]<br />AD goods composition and exposure method of facebook<br />Source : Facebook. Sinyoung Security. May, 2010<br /> Site name AD exposure number of times Exposure M/S<br />General AD<br />Source : ConScore. Sinyoung Security. May, 2010<br />Event AD <br />If button is clicked, it is informed <br />to acquaintances<br />Section Amount<br />When recommended by acquaintances, corresponding person’s name appears<br />Source : Inside. Facebook.com. Sinyoung Security. May, 2010<br />33<br />

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