Newtec SATCOM HUB NAB 2019 - Riikka Koponen (IABM)

IABM Copyright 2019@THEIABM www.theiabm.org
Technology Horizon for 2019 – Key trends
Riikka Koponen, Principal Analyst, IABM

Agenda
Sources: IABM
Drivers of Change Buying Trends Technology Adoption Trackers

Drivers of Change
Forces disrupting the broadcast & media industry
Sources: IABM
Digital Warfare
More companies launch DTC offerings
in increasingly competitive market
Digital Inflation
Growth in content and number of
platforms increases complexity
Digital Speed
Media companies increasingly
streamline their operations to be
quicker
Shifts in Buying Trends
• From Media Company to Media Factory
• From Transactions to Partnerships (and BIY)
• From Hardware to Software (and Cloud)
• Increasing Importance of Data (and AI)
• Decreasing Importance of Immersive Formats

Digital Warfare
New DTC offerings
Sources: IABM, Digital TV Research
• Disney launched ESPN+ in 2018 and set to launch
Disney+ this year
• Apple set to unveil its streaming service this year
after 1$bn investment in 2018
• WarnerMedia to launch a streaming service this
year
• BBC and ITV to launch joint UK streaming service
this year
• BBC and Discovery to launch joint streaming
service focused on wildlife programming
• TF1, Télévisions and M6 removing content from
Netflix and Amazon after 2018 streaming launch
MoreMediaCompaniesGoDirect!
0
200
400
600
800
1000
1200
2017 2018 2019
MillionSubs
Pay-TV SVOD
GlobalSubs:Pay-TVvs.SVOD

Digital Warfare
Worldwide battle
• Disney launched ESPN+ in 2018 and set to launch
Disney+ this year. Planning to expand Hulu and
Disney+ internationally
• Apple to launch a global SVOD service
• WarnerMedia to launch a global streaming service
this year
• Comcast to plotting a global streaming service after
Sky’s acquisition
• BBC and Discovery to launch joint global streaming
service focused on wildlife programming
• Discovery to launch global streaming service focused
on golf
MoreMediaCompaniesGoGlobal
Sources: IABM
Implications
TV Exports Rise
Data from the UK, France and even
emerging content markets like Turkey
points to double digit growth
Scale & Complexity
Scale needed for global services. Added
complexity in making it work, from content
localization to rights management

Digital Warfare
Alliances
OTT
Many joint DTC initiativesin Germany and
France + Discovery/BBC partnership. UK
broadcasters could also teamup to launch
a joint DTC offering
Advertising
Rise in number of collaborativeinitiativesto
increase audience size and improve
targeting (European Broadcast Exchange,
Blockchain Insight Platform,Sky/Virgin
partnership)
AlliancesFocusonRevenue-GeneratingActivities InvestmentinTechSuppliersFollowingSimilarPattern

Digital Inflation
Content bonanza
Sources: IABM, Variety, MSCI, Statista
Given the success of Hulu so far
in terms of subscriber growth
and the relative brand strength
and other things too like
demographics, we think there’s
an opportunity to increase
investment in Hulu notably on
the programming side
Bob Iger, Disney CEO
Nov. 2018
0
50
100
150
200
250
300
350
400
450
500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NumberOfOriginalScriptedSeriesInTheUS TheFAANGsDoubleDownonMedia
Investment up
by over 40%

Digital Inflation
M&A and content landscape in the US & beyond
Sources: IABM

Digital Inflation
Content fragmentation
ContentDivide
Content Supermarkets
Netflix, Amazon, DAZN and now Disney
offering a variedslate of content
Niche Providers
Rise of niche OTT offerings by emerging
players and existing broadcasters
Sources: IABM

Digital Speed
Demand for content & tech spurs consolidation
Sources: IABM, Multichannel News
[The new offering will be funded
through] incremental efficiencies
within the WarnerMedia
operations, consolidating resources
from sub-scale D2C [direct-to-
consumer] efforts, library content,
and technology reuse
AT&T’s SEC Filing
Oct. 2018
Our strategic purchase of BAMTech
allowed us to enter this arena quickly
and effectively, as evidenced by our
successful launch of ESPN+ six months
ago. More than 1 million users have
already subscribed. And we continue
to see impressive growth.
Bob Iger, Disney CEO
Nov. 2018
BIY
Efficiencies

Digital Speed
Velocity and multi-platformdelivery
0% 10% 20% 30% 40% 50% 60% 70%
Multi-Platform Content Delivery
4K/UHD Production/Delivery
IP infrastructure
Media Asset Management
File-Based Workflows
Social Media Broadcasting
News Operations
Remote Production
Upgrading Operations to HDTV
Cloud-Computing
Cyber Security
Big Data Analytics & AI
Back Office Systems
Programmatic Advertising
VR Production/Delivery
TopMediaTechPriorities(Broadcasters)
Sources: IABM, Financial Times
[The iPlayer] is the way
people will consume the
BBC in the future. We need
more content there and for
longer. This is no longer a
catch-up service… it’s a
destination
Tony Hall, Director General, BBC
Dec. 2018

From a Media Company to a Media Factory
Media companies continue to streamline operations for the multi-platformworld
Sources: IABM
0% 20% 40% 60%
Makes us more efficient
Total cost of ownership
Makes us more agile
Cutting-edge technology
ROI
Installation support
Interoperable with other products
After sales services & support
Reputation of vendor
Vendor roadmap
Vendor's understanding of needs
Personal relationship with vendor
Availability of training
TopFactorsInfluencingTechnologyPurchase Top3 PrioritiesinContentChainManagement
Optimize
Resource utilization and
avoid effort duplication
Predict
Unknown variablesand
events
Gather
Data on content, rights,
operations, audiences

From Transactions to Partnerships
Relationships have changed
Sources: IABM,
BIY
Through acquisitions and
internal SW development
Partnerships
Through increased
collaboration with suppliers
We are not looking for
products anymore, we
are looking for
partnerships where
product development is
driven by our
requirements
European broadcaster
responding to our Buying Trends Survey
Digital Speed
Need to do things
quickly and effectively
in multi-platform
world

From Transactions to Partnerships
BIY
Sources: IABM
0%
5%
10%
15%
20%
25%
30%
35%
40%
It will increase
significantly
(by > 10%)
It will increase
(by 0-10%)
It will stay the
same
It will
decrease (by
0-10%)
It will
decrease
significantly
(by > 10%)
SWDevelopmentInvestment % of TechnologyDevelopedInternally
32%
33%
34%
35%
36%
37%
38%
39%
40%
41%
IBC 2017 NAB 2018 IBC 2018 NAB 2019

Technology Adoption
IP
Sources: IABM
IP – AdoptionTracker
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2018 NAB 2018 IBC 2019 NAB
We are already doing it today Very likely Likely Unlikely Very unlikely
Efficiency Driver
Efficiency-boosting activities like
remote production continue to drive
IP deployments
Quality Driver
69% of respondents want to go
UHD with IP or hybrid SDI-IP
New Facilities
Major upgrades driven by new
facilities so far

Technology Adoption
Cloud
Sources: IABM
0% 10% 20% 30% 40% 50% 60%
Manage
Produce
Create
Publish
Connect
Store
Support
Consume
Monetize
39%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Not at all likely Unlikely Somewhat
likely
Very likely We are already
doing it today
Cloud– AdoptionTracker Cloud– TopApplicationAreasUP from37%

Technology Adoption
Cloud
Sources: IABM
Cloud– TopChallenges Cloud– PreferredDeploymentModel
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Security and privacy concerns
Rising content storage costs
Conservative procurement approach
Lack of long-term vision and context
Transformation framework incomplete and
continuously changing
Lack of industry specific knowledge within
implementation teams
Lack of resources
Digital consumer acquisition costs
Poor global capabilities of cloud vendors
0% 5% 10% 15% 20% 25% 30% 35%
Hybrid cloud
Private cloud (off-premise)
Public cloud
Private cloud (on-premise)
Other

Cloud
Market outlook
Sources: IABM
ChallengesStatus quo
Use of cloud lagging behind of
other industries
Broad adoption of cloud will take
time
Launch of VOD services driving
adoption of cloud (e.g. Netflix,
Hulu in AWS)
Need for cloud first mentality
Transfer of large media files from
a local facility to the cloud (off-
premise data center)
Limited connectivity in certain
geographic areas (off-site
resources not usable)
Adoption:
39%
Opportunities
Improving network speeds
Limited financial risk (no long-
term commitment)
Paying only for usage
Quick prototyping of ideas
Security of big public clouds
(e.g. AWS, Microsoft Azure)

Technology Adoption
AI
Sources: IABM
AI – TopApplicationAreasAI – AdoptionTracker
0% 10% 20% 30% 40% 50% 60%
Manage
Produce
Create
Publish
Connect
Support
Monetize
Store
Consume
20%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Not at all likely Unlikely Somewhat
likely
Very likely We are already
doing it today
UP from13%

Technology Adoption
AI
Sources: IABM
0% 10% 20% 30% 40% 50% 60% 70%
Cost of deployment
Lack of strategy on AI
Lack of talent/skills
ROI uncertainty
Cost of data training
Data management and integration
Data infrastructure bottlenecks
Lack of data availability
Other
0% 10% 20% 30% 40% 50% 60%
Leverage cloud service provider's AI
capabilities
Leverage specific AI functionalities in
vendor's solution
Internal deployment/recruitment
Specialist AI platform
Other
AI – TopChallenges AI – PreferredDeploymentModel

AI
Use cases - Examples
Sources: IABM
2017 2018
IBM’s Watson created the
trailer of the movie
“Morgan” by 20th Century
Fox ( a movie about an AI).
Comcast launched the X1
Voice Remote, which
enables viewers to control
some features of the
service through their voice.
Tedial launched
SMARTLIVE using AI to
create sports highlights
automatically.
IBM’s Watson produced
highlights at the 2017 US
Open tennis event by
identifying key moments of
each game.
Alibaba created an AI
designer Luban that can
create banners and ads
thousands of times faster
than a human designer.
ClarifAI created a
computer vision API to
deploy AI in movie
content classification and
categorization.
MRMC, owned by Nikon,
introduced its Polycam Chat
solution which automates
camera operations.
Fox Sports and IBM Watson
Media co-developed the
Highlight Machine for the
FIFA World Cup 2018 to
produce fan-requested
highlights packages via AI.

AI
Market outlook
Sources: IABM
Media asset management using
image/emotion/speech
recognition to organize and
search content archives
Production/post-production
workflows at a very early stage
of AI adoption
Compliance monitoring via AI
 Scale required in data gathering
 Different types of data required (e.g.
audience/operational/content
data/metadata)
 Expensive human effort required in
training/updating/adapting AI model
(supervised ML)
 “Selection bias” (e.g. AI facial
recognition biased towards white men)
Adoption:
20%
Opportunities
 Automation of routine
workflows (augmenting human
resources)
 “360 Profile” of viewers (for
customer retention, content
monetization)
 Personal relationship with
viewers via personalization

Technology Adoption
Immersive Formats (UHD & VR)
Sources: IABM
Sports: The Silver Lining
Almost all initiatives in Sports where
UHD and VR provides attractive
consumer experiences
Production: Infinite Content
High priorities for production and post
companies, low priorities for
broadcasters
Niche: Limited Content
Limited content, content
fragmentation and occasional
broadcasts
0%
5%
10%
15%
20%
25%
2017 NAB 2017 IBC 2018 NAB 2018 IBC 2019 NAB
UHD VR
UHD& VR– AdoptionTrackers

Immersive Formats – UHD and VR
End-user deployments by business model
Sources: IABM
End-User Country Year Format Deployment Genre Model
Fox US 2016 VR VR broadcast of various sporting events Sports Free Trial
NBC US 2016 VR VR broadcast of 85 hours of Rio Summer Games Sports Free Trial
BT UK 2017 VR VR broadcast of UEFA Champions League Final Sports Free Trial
NBA Digital US 2017 VR VR broadcast of one game a week Sports Susbscription
Fox US 2017 VR Social VR broadcast of CONCACAF Sports Free Trial
ESPN US 2017 VR VR broadcast of X Games Sports Free Trial
MLB US 2017 VR VR broadcast of one game a week Sports Free Trial
PGA Tour US 2017 VR VR broadcast of The Players 2017 Sports Free Trial
Deutsche Telekom UK 2017 VR VR broadcast of live concert Music Free Trial
WWE US 2018 VR VR broadcast of WWE highlights Sports Free Trial
NBC US 2018 VR VR broadcast of 50 hours of PyeongChang Winter Games Sports Free Trial
BBC UK 2018 VR VR broadcast of 2018 FIFA World Cup Sports Free Trial
Netflix Global 2014 UHD UHD On-demand streaming Mixed Subscription
Amazon Global 2014 UHD UHD On-demand streaming Mixed Subscription
Sky UK 2016 UHD UHD Live broadcast Mixed Subscription
Sky Italy 2016 UHD UHD Live broadcast Mixed Subscription
Sky Germany 2016 UHD UHD Live broadcast Mixed Subscription
BT UK 2016 UHD UHD Live broadcast Mixed Subscription
DirecTV US 2014 UHD UHD Live broadcast Mixed Subscription
Orange France 2016 UHD UHD Live broadcast Mixed Subscription
SkyPerfect JSAT Japan 2015 UHD UHD Live broadcast Mixed Subscription
J:COM Japan 2015 UHD UHD Live broadcast Mixed Subscription
NHK Japan 2014 UHD UHD Live broadcast Mixed Free
BBC UK 2018 UHD UHD Live broadcast of Royal Wedding News Free Trial
BBC UK 2018 UHD UHD Live broadcast of World Cup Sports Free Trial
BBC UK 2018 UHD UHD Live broadcast of Wimbledon Sports Free Trial
Sony US 2015 UHD UHD On-demand streaming Mixed Subscription
SkyLife South Korea 2014 UHD UHD Live broadcast Mixed Subscription

4K/UHD adoption globally
China continues to lead in 4K/UHD adoption
Source: IBC, IHS Markit
-
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
50.000
2015 2016 2017 2018 2019 2020
Shipments(000s)
4K TV shipments forecast by region (2015-2020)
China North America Western Europe APAC (excl. China, Japan) Latin America Eastern Europe Middle East and Africa Japan
Nearly 100 million 4K/UHD
TV sets were sold in 2018,
and the number is expected
to double by 2022.
Better visual experience,
availability of 4K content,
affordable pricing of 4K sets
driving demand globally.

4K/UHD
Initiatives - Examples
Sources: IABM
2016 2017
DirecTV expanded its 4K
offerings with three
channels for qualified
subscribers (pay per view
movie, event and original
4K content channel).
Sky UK started
broadcasting sports, films
and TV shows in 4K/UHD
via satellite and via its Sky
Q technology.
BT UK launched its
4K/UHD service in IPTV
covering live sports (e.g.
UEFA Champions League,
the Premier League).
South Korean broadcasters
KBS, MBC and SBS all
transitioned to UHD when
preparing for the 2018
Winter Olympics in
Pyeongchang.
French IPTV operator Free
launched a 4K/UHD
channel (Festival 4K)
focusing on music festivals,
concerts and
entertainment events.
Hisense and Fox Sports
showed 2018 FIFA World Cup
in 4K/UHD available via 2018
FIFA World Cup Edition app.
Also Comcast and DirecTV
showed games in UHD.
2018
BBC UK showed 2018
FIFA World Cup in
4K/UHD via the BBC
iPlayer app.

4K/UHD
Market outlook
Sources: IABM
 UHD currently a niche market
for Pay-TV operators, most
channels launched by satellite
operators and IPTV
 A total of 70 unique linear UHD
channels available globally
(Q2/2018, by Ultra HD Forum)
 Adoption of 4K/UHD likely to
occur as part of the normal
technology replacement cycle
 Lack of interest (unclear viewing
benefits of 4K/UHD compared to
HD)
 Significant equipment updates
needed to move to UHD (e.g.
distribution)
 Consumers’ 4K/UHD TV sets
purchases growing faster than
4K/UHD content
production/distribution
Adoption:
22%
Opportunities
 Adoption of IP-based equipment
 Growth of OTT segment with much
higher UHD title availability than
other broadcasters
 Netflix and Amazon accepting only
content shot in 4K/UHD driving
demand for 4K/UHD cameras and
production equipment
 8K initiatives (e.g. Japan’s
roadmap)

VR
Initiatives - Examples
Sources: IABM
2015 2017
Facebook created Jurassic
World in partnership with
Universal and Felix& Paul
Studios marketing it as new
content for Oculus Rift
device.
NBC provided 85 hours of
Rio Summer Games content
in VR for the first time ever
via NBC Sports app
(Samsung Gear VR headset
+ Samsung Galaxy phone).
Venture Reality Fund started
to invest in early-stage
virtual reality, augmented
reality and mixed reality
startups with seed capital of
US$ 50 million.
BBC announced to
broadcast its first VR-
driven TV show Watch
This Space produced its
own in-house VR studio
founded in 2017.
Disney led a US$ 65
million fundraising round
participated by Comcast
and Time Warner for
NextVR.
Facebook acquired Oculus
VR for US$ 2 billion and
launched Oculus Rift
headset costing US$ 799.
2016
NBA Digital and NextVR
monetized VR technology
for the first time in
broadcasting by delivering
one game/week in VR,
charged via a subscription
model (NBA League Pass).
Facebook launched Quest
(a newer version of
OculusGo), an all-in-one
VR system with 6 DoF
priced US$ 399.
2018

VR
Market outlook
Sources: IABM
 VR technology still in its earliest
stages (mainly live sports,
concerts)
 VR not yet a top priority for most
media technology end-users
 High initial interest and
investment, with little
breakthroughs so far
 Lack of a consistent business model
to monetize VR
 Complexity and cost of VR content
production
 Lack of consumers’ awareness and
interest in VR benefits
 Expensive headsets for consumers
 Fragmented consumer equipment
Adoption:
8%
 Sports and live events main fields
for VR combined with older
techniques (e.g. selecting camera
angles, 3D, replays)
 Significant price cuts of high-end
VR equipment by manufacturers
(e.g. Facebook Oculus Rift and
Oculus Go, Quest)
Opportunities

Thank you – Q&A

Newtec SATCOM HUB NAB 2019 - Riikka Koponen (IABM)

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