DIRECTV Product Strategy - The Future of Television

DIRECTV
DECEMBER 15, 2014
xDNA Strategy
1 Big Spaceship + DIRECTV DIRECTV xDNA Strategy 15.11.14

The Business Landscape
How It Looks In 2020
Big Spaceship + DIRECTV DIRECTV xDNA Strategy 15.11.141

Fragmentation in entertainment persists, and competition
is becoming more fierce. Every day tech news sites publish
stories about a new product or initiative from an existing
competitor or an ambitious new entrant determined to
challenge the status quo.
2013 marked the first full-year net decline of cable subscriptions,
decreasing by 250,000 over the course of the year. In that same
period, 5 million people subscribed to over-the-top services. This
trend has shown no sign of abating as people continue to cut the
cord and an entire generation grows up never having had the
cord in the first place.
Even the networks that once thrived on Linear TV, such as HBO
and Showtime, are offering standalone over-the-top products.
Compounding this, Netflix, Hulu, and YouTube have become
full-fledged content producers, making huge bets on original
and exclusive content. In short, it’s changing fast, and there are
no great unifiers to bring the offerings together.
The Business Landscape

IN 2 DAYS (DECEMBER 9th & 10th, 2014)
NEWS HAPPENS FAST

LIVE SPORTS
LINEAR TV
EXCLUSIVE CONTENT
LIVE EVENT TV
VOD/DVR
USER EXPERIENCE
APP ECOSYSTEM
HUB OF THE HOME
COMPETITIVE SET
PLUS UNKNOWN FUTURE PRODUCTS

STRENGTHS VS. THREATS
HIGH STRENGTH
LOW STRENGTH
HIGH THREATLOW THREAT
LIVE TV
LINEAR TV
EXCLUSIVE
CONTENT
VOD/DVR
HUB OF
THE HOME
APP
ECOSYSTEM

The Technology Landscape
How It Looks In 2020

The 3rd quarter of 2014 was the first time people spent more
time on their mobile devices than they did on their televisions.
Mobile continues to take viewing share from TV.
Rapid iteration is the norm, as companies build, deploy, and
test new features and technologies with increasing frequency.
As mobile connection speed improves, web technologies begin
to take back previously lost market share from native apps.
Developers are drawn to the efficiency of building a single,
cross-platform application.
Recommendation & personalization services as well as voice
recognition systems have improved exponentially and are
available as 3rd party services.
New televisions are shipping with front-facing cameras
& microphones. Wearables, such as fitness trackers and
smartwatches, have become ubiquitous. Devices can seamlessly
connect to both one other and to available wireless networks.
The Technology Landscape 2020

THE TRENDS ARE CLEAR
“In 2013, activity trackers generated an estimated $290 million in
American retail sales, according to Ben Arnold, an analyst at New
York’s NPD Group, who says the market could double this year.”
WELL BLOG
“Another new application area seen as having great potential for SR is
the smart TV, which is still suffering from the cumbersome interface
of the conventional remote control. Speech is seen as a potentially
more natural, powerful way of controlling the next generation of TVs”
NEWELECTRONICS
TECH OUTLOOK

The 2020 Individual
& Their Relationship To Society & Media

Increased quality of connectivity has lead to increased
mobility. The population centers where people traditionally
came to work have seen competition from smaller cities
attracting companies and talent. Additionally, the changing
nature of work has led to more companies hiring independent
contractors rather than employees, resulting in a workforce
that’s more nomadic than ever before. This type of working
arrangement places a decreased importance on both time and
place, freeing people from the traditional 9-5 working hours.
Additionally, baby boomers are retiring in greater and greater
numbers and heading for warmer climates.
The sharing economy has become mainstream. To this
generation, access is far more important than ownership.
All media is personalized and tailored to the user. And after
over 10 years of owning smartphones, this generation natively
multi-tasks, resulting in the paying of only segmented
attention to what they are viewing.
The 2020 Individual & Their
Relationship To Society & Media

BASIS FOR THESE ASSUMPTIONS
The average American now spends more time on their
mobile devices than in front of the television
A majority of Americans are comfortable using a secondary
form of device at the same time as watching television
Nearly 50% of licensed drivers say that they would sometimes choose
to spend time with friends online rather than driving to see them
SOCIAL/PERSONAL

Strategy & Key Concepts

We must know what we are. Great design stemming from
ruthless product discipline, with laser focus on the content
viewing experience. The breadth of entertainment options
has become so great that it’s virtually impossible to keep track.
DIRECTV integrates all the best entertainment content
sources and offers them to the users in a logical, fast, and easy to
use experience.
We must know what we’re not. Avoid adding functionality that
clutters the experience without adding value to the viewing
experience. We are not the hub of the home, a game system, or
an app ecosystem. These do not contribute to the core viewing
experience.
The experience will be social by design, encouraging shared
collective experiences even when people are not together in
either space or time. DIRECTV’s national footprint offers a
unique advantage over most other providers in this space.
DIRECTV brings the entire entertainment universe to our
viewers in an organized, curated, and delightful way across all
devices, connecting them with friends, family, and the world.
Experiential Strategy

Having had top of the line mobile devices that “just work” for
more than a decade, users will no longer accept an inferior
user experience. They expect modern, responsive interfaces
that are updated in real time. There are plenty of competitors to
choose from across a myriad of platforms if we do not deliver on
this basic idea.
The entire system will be built on a technology stack that is
flexible, scalable, and allows for rapid deployments. Clean,
responsive code with no lag will be a priority throughout the
entire device ecosystem, including televisions, mobile devices,
and over-the-top experiences.
Engineering Delight

DIRECTV brings the entire entertainment universe
to our viewers in an organized, curated, & delightful
experience across all devices, connecting them with
friends, family, and the world.

Ultimate Entertainment Aggregator
The New Channels
TV is still the “Great Uniter”
Location Independence
Interactivity, Not Apps
01
02
03
04
05
Pillars

SEARCH ALL CONTENT ACROSS ALL PLATFORMS
01
Ultimate Entertainment Aggregator

Viewers want to watch House of Cards because their friends are
talking about it on Facebook, not because it comes from Netflix.
In other words, they care more about the content than they do
about the source. They just want to find it quickly and easily in
order to start binge watching.
Additionally, an entire universe of supporting content is
available. Interviews, behind the scenes video, soundtracks,
tweets, actor profiles, and reviews can be found online, but
rarely in a central location.
content page
The Ultimate
Entertainment
Aggregator

DIRECTV will become the universal destination for all entertainment
content. We will bring the entire entertainment universe to the viewer
by scouring all networks, websites, and social channels.
Searching for the same content in different contexts could serve the
results in different priorities based on any number of factors
including device, time of day, location, weather, and more. A rainy
Sunday afternoon television search might prioritize longer form video
while a mobile device search might on the evening commute might
prioritize shorter form video, social content, or reviews from fan sites.
The Ultimate
Entertainment
Aggregator

TRADITIONAL NETWORKS OTT NETWORKSUGC NETWORKS
MEDIA
SOCIAL LINKS/RELATIONSHIPS MUSIC CONTENT
THE CONTENT SOURCES:

THE CHANNEL IS DEAD...LONG LIVE THE CHANNEL
02
“TELEVISION
EXECUTIVES
ALREADY SHARE
HORROR
STORIES ABOUT
HOW THEIR
CHILDREN HAVE
ASKED THEM
WHAT A
‘CHANNEL’ IS”
THE ECONOMIST
OCT 25 2014
The Sunset of Linear TV
& The “New Channels”

Linear TV and the traditional channel guide are becoming an
obsolete content delivery model. People want content when
they want it and, as a result, everything is now on demand as
soon as it is released.
However, the choices have become complicated. There is an ever
growing range of entertainment options, both free and paid.
While at first unbundling seems like a boon for consumers, it
actually creates more problems than it solves. People realize that
it’s a much better value to pay for an inclusive DIRECTV package
rather than a disparate assortment of OTT services. The OTT
services are starting to feel this, so DIRECTV can strike
favorable licensing agreements with these providers as they face
pressure from both viewers and competitors.
“FOR ON UNNAMED SERIALIZED DRAMA ON
NETFLIX, 25 PERCENT OF VIEWERS FINISHED
THE ENTIRE 13 EPISODE SEASON IN JUST TWO
DAYS, WHILE 48 PERCENT TOOK ONLY
A WEEK. ‘THE INTERNET’, SAYS NETFLIX
EXECUTIVE TED SARANDOS, ‘IS ATTUNING
PEOPLE TO GET WHAT THEY WANT WHEN
THEY WANT IT”
THE WEEK
NOV 29 2014
The Sunset Of Linear TV

THE PROBLEM WITH UNBUNDLING:
THE AVERAGE VIEWER WATCHES AN AVERAGE OF 15 CHANNELS | AVERAGE OTT SUBSCRIPTIONS COST APPROXIMATELY $10/MONTH
THIS WOULD MEAN THAT THE UNBUNDLED CONTENT COSTS $150/MONTH
& THEN FACTOR IN NETFLIX, HULU & MUSIC SUBSCRIPTIONS - ALL PAID TO DIFFERENT PROVIDERS ON ALL DIFFERENT DAYS OF THE MONTH
A DIRECTV PACKAGE IS A BETTER DEAL
ALL YOUR CONTENT IN THE SAME PLACE
WHERE YOU NEED IT, WHENEVER YOU NEED IT
& PAY JUST ONE MONTHLY FEE
CONTENDING WITH A MESS OF DIFFERENT INTERFACES... ... IF YOU CAN EVEN FIND THE SHOW IN THE FIRST PLACE
THIS INVOLVES:

The benefit to having access to every content option is its huge
selection. However this is also it’s drawback, as huge content
libraries can cause “analysis paralysis,” making it very difficult to
decide what to watch.
DIRECTV will create a new offering to help navigate this issue.
Rather than the linear channels of yesterday or the endless
menus offered by some of today’s OTT services, the focus
instead will be on curated channels of shows, movies, music,
podcasts, and other content from disparate sources.
We will take this crazy world and make it not only logical,
but delightful.
The “New Channels”

LIVE TV
LIVE EVENT, HAPPENING RIGHT NOW
(SPORTING EVENT, AWARD SHOW, ETC.)
BASED ON YOUR CURRENT INTERESTS,
FROM THE DIRECTV BROWSER COOKIE
CURATED BY IN-HOUSE DIRECTV CURATORS
CURATED BY POPULAR TASTEMAKERS
USER CURATED COLLECTION OF DIRECTV
OR FOUND CONTENT
PRIVATE CONTENT FROM FRIENDS AND
FAMILY, LIKE BABY VIDEOS, ETC.
VIDEO POSTED TO YOUR SOCIAL MEDIA
FEEDS
CURATED BY BRANDS.
BRANDS TO SUBSIDIZE
CERTAIN CONTENT
TECH NEWS
90’S PRIME TIME SITCOMS
IGGY AZALEA’S FAVORITE SHOWS
DAVE’S SPACE
YOUR FAMILY CHANNEL
SOCIAL
EXPLORER MOVIES
- BROUGHT TO YOU BY NORTHFACE
EXAMPLES OF WHAT A CHANNEL MIGHT CONSIST OF:

HUMAN
FRIENDS/SOCIAL
TASTEMAKERS
DIRECTV CURATORS
BRANDS / SPONSORED CHANNELS
PRIVATE FAMILY
BASED ON MOOD & MODE
LOCATION
BROWSING HISTORY
INTERESTS
SOCIAL FEEDS
BESPOKE FUNCTIONALITY
AUTOMATIC&
MEET THE CURATORS...

ADDING “LIVENESS” TO TIME-SHIFTED CONTENT
03
“PSY’S ‘GANGNAM
STYLE’ BREAKS
YOUTUBE VIDEO
COUNTER”
BILLBOARD
DEC 03, 2014
TV is Still The Great Uniter

One of the drawbacks of watching time-shifted programming is
that the viewer can feel disconnected from the social experience
of real-time viewing. Once upon a time, millions of people sat
down at the same time to experience moments like the moon
landing or the series finale of blockbuster shows like M.A.S.H.
and Cheers. This continues today as people text and tweet along
with the program while it airs. This type of entertainment plays
a role in a far larger social and cultural conversation, and people
don’t want to miss out.
As entertainment moves away from a linear, appointment model
towards an always available, on demand model, we must inject
that feeling of “liveness” that threatens to be lost.
TV Is Still The Great Uniter

THEN & NOW
MOON LANDING
WATCHED BY 530 MILLION PEOPLE IN ONE MOMENT
(14% OF THE WORLD’S POPULATION)
JULY 20, 1969
GANGNAM STYLE
OVER 1 BILLION VIEWS IN 5 MONTHS
(14% OF THE WORLD’S POPULATION)
JULY-DECEMBER 2012
MOMENTOUS ENTERTAINMENT OCCASIONS

DIRECTV can create an experience that brings that sense of
liveness to the timeshifted viewing experience.
Using the 2nd screen, encourage social interactions, like
dropping a comment or making an animated GIF of whatever
they are watching. Viewers watching later on DIRECTV will be
able to see this content layer unfold in real time as they watch
the program. These viewers would have a number of different
“layers” they could toggle between, including celebrities, friends,
DIRECTV, or pre-set groups.
image of out screen in situ
- in similar style to the phone above? or
from the photo story boards
TV Is Still The
Great Uniter

APPOINTMENT VIEWING IN AN ON DEMAND WORLD
04
Location Independence

As mobility increases and people move around with greater
frequency, the desire to experience entertainment with family
and friends persists. In fact, that distance likely makes that
urge even stronger. However, it’s difficult to share these
moments when people are apart, and doubly difficult if the
content is time shifted.
Location
Independence

Create an experience that enables people to watch both live and
time shifted content when they are apart. Using the built-in
cameras on newer TVs and mobile devices, users will connect
visually with each other while watching their favorite shows,
allowing them to laugh, cry, or cheer together from across town
or across the world. To ensure time shifted content is synced
between viewers, they can either schedule a time to watch later
or join a friend who is already watching.
Location
Independence

THE WORLD DOESN’T NEED ANOTHER APP STORE
05

In addition, technology giants like Apple, Google, Microsoft, and
Amazon have different app stores. Each of these has a different
SDK and code base, and already engage in fierce competition for
developers.
In some cases DIRECTV is an OTT app on other devices, so
proprietary experiences won’t be compatible across all devices.
Users don’t need another grid of apps to contend with in
their daily lives, especially if they don’t add value to the core
viewing experience. A system where every network has its own
dedicated app, with different interfaces and interactions within,
would be a terrible user experience. This would be
an unwelcome evolution from the already overwhelming
channel grid.

Introduce a web based platform that enables DIRECTV,
content producers, and 3rd party developers to create
interactive experiences around the programming. To be
clear, this is not an app store, but rather bespoke interactive
experiences exclusively tailored to the on-screen content.
Because the interactive experiences are web-based instead
of native, there is no need for a complicated SDK. These
experiences can work on any device.
Interactivity,
Not Apps

The Stories
The User Experience

STORY 1:
Recommendation,
Curation & The
New Channel

Adam is home watching TV.
Adam’s girlfriend stops by and joins him on the couch. DIRECTV
recognizes and greets her: “Welcome, Alana.”
Even though Alana does not have DIRECTV herself, having created
her profile a few months earlier means that DIRECTV is able to
personalize recommendations for both viewers.

DIRECTV knows Adam and
Alana’s favorite shows, and
recommends programs they
might like watching together.
This means no more 40 minute
debate on what to watch, or settling
for something boring.

Adam and Alana’s friend, Martha, is
an avid curator who loves sharing her
favorites with her friends. Since they
all share some similar taste in shows,
DIRECTV recommends her “Must Watch”
channel. They select to see what Martha
has picked.

Martha’s curated list of her favorite shows.

When Adam and Alana select a show, their friends can also see what they’re watching and join in.

STORY 2:
A World Of
Entertainment
Options

Dana activates the voice search feature and says,
“Show me the O.C.”
Immediately, she sees an array of results.

The results range from across the entertainment spectrum, including seasons, related
channels and videos, soundtracks, and more.

If Dana were to perform the same search
on her mobile device, DIRECTV would
offer additional mobile friendly content,
including articles and relevant social
interactions.

STORY 3:
Entertainment
Tailored to Life

After a day of intense meetings and last-minute holiday
shopping, Eric is finally ready to head home.
As he gets on the train, his smartwatch detects that
his stress levels are higher than usual, and notifies the
DIRECTV app on his phone.
DIRECTV suggests two entertainment options to help
him unwind on the journey home:
1. Arrested Development
2. Spotify playlist – “Relax and Keep Calm”

At home, Eric decides to relax in front of the TV before heading out to the Tribe Called Quest concert later that evening. When he turns
on the TV, he receives a suggestion to watch the Tribe Called Quest documentary to help get him in the mood.

As Eric sits in his driveway preparing to leave, DIRECTV suggests his favorite Tribe songs for his drive to the show.

STORY 4:
Time-Shifted
Liveness

Irene and her friend Amanda have
been binge watching “How I Met Your
Mother.”
While waiting at the airport, Irene picks
up where she left off on her tablet.
Comments added by Amanda, who
finished the episode the night before,
pop up on screen as Irene watches.
She replies to a couple comments as well
as adding a few new ones.

After boarding the plane and finding her seat, she casts the next episode
to the seat-back TV in hopes of finishing the season during the flight.

STORY 5:
Oscar Night
Viewing Party

Irene invites over a few friends to watch
the Oscars.
While watching, everyone is notified via
mobile phone to vote for Best Actress in
a national social poll.
Everyone votes and the results are
displayed on the TV screen.

Jennifer Lawrence is announced the
winner. As she walks up to receive the
award, she trips and falls on the steps.
Amused, Irene saves the moment
using her tablet.
She then uses the clip to make a funny
GIF, posts it to Facebook, and casts
it to the TV for everyone in the room
to enjoy.

Irene posts the GIF to Facebook.

& casts it to the TV for her friends to see.

STORY 6:
Watching
Together From
A Distance

Three friends want to watch Keeping Up
With The Kardashians together but since
going away to college, they live in three
different cities.
The DIRECTV app automatically finds
an open slot in their calendars and sends
out an invitation. All accept and an
appointment is set on their calendars.

As the time to watch approaches, they all receive a notification to join the viewing session.

They enjoy video chatting while the
show is playing so they can laugh at
their favorite moments together.
Carolina jumps onto the couch
to watch and connects using the
camera on her TV.
Leah joins from her dorm room bed
on her iPad.
Charlotte pushes in headphones and
takes a study break in the back of the
library using her phone.

Leah on her iPad.

Gemma jumps on the treadmill and switches on DIRECTV. She sees that her new work friend Carolina is watching Keeping Up With The
Kardashians and begins watching mid-way for some light entertainment. It will be fun the laugh about the episode together the next
day at work.

Gemma begins watching the show while working out.

Family and friends can also stay better connected while watching
live events, even when they are miles apart.
Mike loves watching the Browns with his son, Haden, and his
father, Pete.
Although they can’t be together, DIRECTV allows them to
simulate a similar viewing experience.
The Browns score a touchdown, which automatically launches the
video chat panel so they can celebrate together!

Thanks.

DIRECTV Product Strategy - The Future of Television

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