The document discusses the transformative changes in the broadcasting industry over the next five years, highlighting the shift from traditional business models to asset-based valuation and the growing influence of digital platforms and consumer behavior. Key challenges include the erosion of advertising revenue and the need for broadcasters to adapt to a multi-screen and connected environment. It calls for a focus on innovative revenue streams, improved content management, and understanding audience engagement to remain competitive.

1. Future Of BroadcastGame Changers & Business Change Over The Next 5 Years.

2. Many Messages From Broadcasters At IBC...

3. Each managed by less peopleImpact of VOD Less channels in futureSocial Changes:Post-modern societyGen YFibre to homeGoogle ImpactEcosystem Short term shockCurrent biz models in troubleFrom channels to assetsFuture of BroadcastDigital SwitchoverInternet TVImpact of gamingCreate contentIPTVDistributeEditorial Retail Paternalism to goMobile TVErosion of AdvertisingOwning the consumerDiscovery & SearchPermanent Change scenarioExperience ManagementSubscriptionsHD3DInteractiveCentralized Repository of MetadataReduction in content windowConnected EnterpriseIT Mgmt / Offshoring

4. Sorting The Messages GAME CHANGERSINDUSTRY TRENDSPOSSIBLE RESPONSELess channels in futureErosion of AdvertisingMulti-channel, convergence based modelsImpact of VOD Each managed by less peopleCentralized Repository of MetadataFuture of BroadcastFibre to homeDiscovery & SearchFrom channels to assetsGoogle ImpactEcosystem Retail Social Changes:Post-modern societyImpact of gamingOwning the consumerIPTV/ Internet TVGen YDigital SwitchoverExperience ManagementPermanent Change scenarioMobile TVSubscriptionsPaternalism to goConnected EnterpriseCurrent biz models in troubleCreate contentReduction in content windowDistributeEditorial Short Term ShockHD3DInteraciveIT Mgmt / Offshoring

5. Game Changers“The old business models are starting to fail” – Jeff Rossica, Grass Valley“There are 2 billion TV screens in the world” – Tom Morrod, Screen Digest

6. Erosion Of Traditional TV (Ad) Revenueslaunching local ad server on the boxknowledge about the audience - effective measurement / skyview panelRevenue sharing models?8.5% global advertising slowdownAll segments except online downNon broadcast content – EU/ Sports Brands“broadcast no longer the single most powerful mechanism for brands”Music labels? Artists? Subscription revenues > Ads for the first time ever, in 08-09Global video consumption up, so revenue/ video stream much lowerLong term: adv £/stream to dropPayTV models still strongRory Sutherland, Ogilvy: conventional advertising no longer has the stranglehold that it used to have on the ability to create a brand.

7. How It Might Play OutReduce cost base Maximize existing advertising opportunitiesBuild alternative revenue streamsAd RevenuesReduced advertising revenues for the future is a realityAdvertising Revnues Over TimeTimeSky STBInternet & GoogleCurrent RecessionTemporary Recovery

8. Internet TV / IPTV/ Fibre To HomeSky opening up 1.3m HD boxes to broadband content

9. 10% of all iPlayer streams delivered consumed by PS3 – in the week after iPlayer was ported to PS3

10. 30% of homes in the UK have access to catch up TVGame Changer: Fibre to HomeUser generated content along with TV consumptionReal time highlights with timelines; PIPNDS – Widgets : based on content keywords, always on vs broadcaster driven, social media, youtube, IMDB; user-owned widgets UK high coverage (70%) but poor on speedBT Fibre to the curb by 2012“The Internet is at the heart of the BBC. It’s about democratizing access to the living room ” Eric Huggers

11. Value Shift In the Broadcast IndustryContent Ownership & CreationContent Scheduling And ProvisionContent RetailSky – Spans all 3Connect content owners with retail pointsValue typically out of time and place benefits: stocking”Direct consumer commercial relationshipPoint of purchase/ consumptionOwn defendable rightsWant to commercializePure TV ChannelPure ProductionPure Platform

12. Value Shift In The Broadcast IndustryContent Ownership & CreationContent RetailEditorial ValueDirect consumer commercial relationshipPoint of purchase/ consumptionClearing House ModelsOwn defendable rightsWant to commercializePure Platform Content DistributionPureProductionScheduling and channel orientation

13. Levels of investment and cost in creating schedules

14. Specialization of editorial role

15. Creation of clearing house models with rights & royalty management built in

16. Investment in building parallel cost systems around assets

17. Integration through value chain for asset metadataWarner- DC acquisitionDisney – Marvel acquisitionComcast – NBCBT – ITV

18. Mobile TV/ Mobile Content – A Threat Or Opportunity? Complement, not substitute (2-Screen & 3-screen Models)ControlPersonalize CRMCommunicate EPGs, alertsTransactRetail pointPromotional strategy for VOD worldWill it grow the pie? How can it be leveraged?QQ – currencies in China

19. Google/Youtube ImpactYoutube 2nd most searched website in the world10 billion videos : ComScore30billion videos/month : YoutubeGoogle – better at swine flu tracking than the federal teams “BG” – the world Before Google7m items already scanned into google books - by 2008/9Rights holders could gain more Channel 4 set for deal with YoutubeWith rights to sell advertising

20. Long Term: Business Models In TroubleAdvertisers Looking Elsewhere?Conventional advertising no longer has the stranglehold that it used to on the ability to create a brand – Rory Sutherland, OgilvyBiggest decline in TV Ads: Spain 28%; US 35%Consumers Looking Elsewhere?When a senior exec from Warner Bros asked some NYU students at a lecture “so how many of you watch traditional broadcast TV?” – not a single hand went up - Brad Coller, Warner BrothersBroadcast needs to adapt content to post-modern values – Arnaud Simon, EurosportTraditional model is obsolete, and paternalism is dead – Eric Hugger , BBCNew model: address multi-screen, connected home, always on world with direct consumer relationships and rights ownershipTraditional Linear TV Model“Everybody has a strategy till they punch you in the face “– Mike Tyson

21. Industry & business Response So What Do You Need To Survive & Prosper?

22. Towards Leaner Broadcast ModelsSelective outsourcingModel: Planet ArmstrongTransformativeAnimation offshoring = $250mVFX offshoring = 24% YoY growthNarnia/ Golden Compass etc. done offshoreFull length movie $85m  $15mCloud computings/w as a serviceInfra as a service Platform as a serviceFlexible ConsumptionAnywhere, anytime accessNYT – 11 m articles on Amazon EC2 in 24 hoursNBC Files/ NBC Stage/ NBC Apps/ NBC Grid – National Business CentreGo Animate – SaaS – Cartoon N/wWatch out for: Confidentiality/ integrityPoor/ non-existent SLAsPermissions/ password protectionService & data integrationData location/ tiered optionsLocationAutomationEmploymentInnovationRationalization

23. Beware of HD/ 3DHD will not be a safeguard for tv as bandwidth grows exponentiallyfundamental changes in infra and costshigher investment in content with same budgets

24. Key Business Change: From Channels To AssetsWhy?Measuring revenues against assets rather than by channels – to identify the most valuable assets in the stableBuilding a asset based costing system to run in parallel with the Channel based one How?Preparing for an asset based regulatory environment – with content labelling Model for investment decisions based on value of assets, not value of channels – both for content & systemsIncrease in VOD & reduction in channel & schedule based viewing makes an asset centric model a necessity E.g. Olympics VOD Content Athens 500 hrs/ Beijing 2700 hrs London 100% + coverageTransition from channels to assetsMeasurement /parallel accounting to be set upAsset based Metrics for investment to be definedRegulatory trends to be trackedUnderlying software capability in place (e.g. Market leaders in Channel Management Systms such as Pilat & Mediagenix) Ammortization models, revenue recognition models, cost allocation modelsFormulas need refining “The London Olympics will mark the end of the traditional model of broadcasting in sport” – Eric Huggers, BBC

25. Making The TransitionIdentifying existing channel – asset combinationBuilding asset taxonomy Reviewing existing cost/ revenue systemsCreating a (parallel) asset based reporting and accounting modelIdentifying appropriate ratios for allocation of costs and revenuesClassification of assets by cost & revenueIncorporating into existing systems

26. MetadataBirth & Death Certificates: Life begins and ends with metadata “Content value is ALL about the metadata” – Gary Morris SVP Content Technology, 20th Century Fox

27. Maximizing Current Commercial ValuePhilippe Dauman,:VIACOM exploring ways of getting people to subscribe to its popular online games based on characters such as Dora the Explorer – Economist Oct 09 “Triumph Of The Monthly Bill”Future Getting Consumers to PaySubscriptions

28. ThinkPLANK OverviewBroadcastInternetPublishingIPTVMusicEntertainmentTechnologyTelecomDigital ConvergenceCore TeamExecution Networkved@thinkplank.com

29. Thanksved@thinkplank.compragna@thinkplank.com