The document discusses the evolving landscape of over-the-top (OTT) content delivery and business models. It defines OTT as broadband delivery of multimedia content without involvement of multiple system operators. OTT delivery refers to content from third parties like Netflix delivered over broadband internet. The document also discusses the relationships between infrastructure providers, content creators, and networks; compares traditional and OTT business models; and envisions a future of hybrid OTT/syndication models bringing together Silicon Valley and Hollywood.

1. OTT -
WHERE DO WE GO FROM
HERE?
JUAN RAMON ZARCO
SILICON VALLEY GROWTH PARTNERS
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2. OUTLINE
Definitions
• Infrastructure and Content Providers
• Importance of Content – Intellectual Property
• The Economic and Operational Relationship among the MSOs, Content Providers, Networks
• Comparative Original Content Business Models
• Development of hybrid OTT/syndication model
• Marriage between Silicon Valley and Hollywood
• The new paradigm model for OTT
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3. Over-The-Top Content (OTT) is defined
as broadband delivery of multimedia content without
a multiple system operator (MSO) being involved in the
control or distribution of the content itself.
OTT in particular refers to content that arrives from
a third party, such as Netflix, Hulu or MyTV, and is
delivered to an end user device, leaving the
broadband internet provider responsible only for
transporting the IP packets.
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DEFINITIONS

4. WHICH ARE THE MSO AND CONTENT PROVIDERS?
Billions of Dollars in Infrastructure Costs
“Internet Provider”
Billions of Dollars Operational and Productions Costs
ABC, CBS, Fox and NBC account for 40 per cent of all primetime viewing.
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5. One needs Content in order to distribute
through an IP network. And it is Content,
Intellectual Property, that will drive the level
of success of OTT.
+60 hours of video per minute
>US$1 bill. Y/Y 2012
>net US$3.1 billion from 1998-2012
via syndication after initial
production and broadcasting. Note
syndication fees shared with regional
broadcasters
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6. OPERATIONAL AND ECONOMIC RELATIONSHIP BETWEEN
MSO, CONTENT ORIGINATORS, AND NETWORKS
• Content originators share ad revenue with Content Networks (ABC, NBC, FOX,
and CBS)
• Infrastructure Networks such as Time-Warner Cable or DISH Network share
40/50% per monthly fee with Content Networks such as ABC
• MSOs as IP Network providers (Time-Warner, Verizon, AT&T, DISH Networks)
charge monthly fees to end users for accessing infrastructure and can control
IP distribution – Net Neutrality Dispute
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7. OTT IS FILLING UP THE PIPELINE! (2012)
• YouTube now accounts for 24 percent of global mobile traffic.
• Facebook Chat consumes 22 percent of all instant message-
related mobile bandwidth.
• WhatsApp carries 5 percent of global messaging traffic.
• Netflix boasts nearly 30 million streaming subscribers.
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8. BUSINESS MODELS HAVE CHANGED IN MEDIA
TV NETWORK PRODUCTION
• US$3-$7 mill. per pilot, 10-13 episodes
required
• Netflix (OTT) invested $100 million for 2
seasons, 13 episodes/season original
production
• Smallville averaged 4.34 million viewers
over 10 seasons
• Seinfeld generated $200 million of ad
sales per annum
IP BASED/OTT CONTENT
• US$ 0.0 to $50,000 per video
• US$2-$3 per 1,000 viewers for average video
• Modern Family (Network) US$33 per 1,000
(10 million weekly viewers)
• Netflix $7.9 per month, 33 mill. Subscribers,
with 520,834 subscribers to cover $100 mill.
production
• Dreamworks Animation $33 mill. acquisition
of Awesomeness TV – Youtube channel
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9. DEVELOPMENT OF HYBRID OTT/SYNDICATION MODEL
• OTT as “incubator for Show Treatment”
• Placement of Consumer Products within Content
• Migration to Syndication Model after sufficient traction
• Metan Development Group – MetanMedia.com
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10. MARRIAGE BETWEEN SILICON VALLEY AND HOLLYWOOD
• www.PlayBraindexplay.com with notable entertainment
participants
• Growing number of Hollywood players, including Ben Stiller and
Sarah Silverman, are focusing on creating original digital content
that starts out, say, on YouTube, and then migrates downstream to
TV or film.
• With over 1.5 million views Stoopid Monkey, Seth Green, actor
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11. CONCLUSION: THE NEW REVENUE MODEL FOR
HYBRID OTT
• OTT - $/“x,000s” impressions advertising (Youtube)
• Gamification (PlayBraindex)
• Merchandising/Product Placements (Metan Development)
• Paid Subscriptions (Hulu Plus, Netflix)
• After Broadcasting,
Ad Revenues and Syndication Fees (Seinfeld)
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12. THANK YOU!
KÖSZÖNÖM!
JUAN RAMON ZARCO
SILICON VALLEY GROWTH PARTNERS LLP
703-376-4893
JRZARCO2001@YAHOO.COM
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13. QUESTIONS?
•Kérdése van?
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