This document discusses the future of premium content delivery and managing customers in the digital economy. It notes that by 2020, there will be 12 billion mobile users and 24 billion total connected devices. It emphasizes that content providers must aggregate large audiences, have compelling content to drive subscriptions and advertising revenue, and make the customer experience easy. Four key trends - mobile, cloud, social media, and big data - will drive 80% of IT industry growth and force companies to look beyond traditional models to all devices. Media companies must focus on building their business rather than just running infrastructure.

1. The Future of Premium Content
Delivery
Taras Bugir
WW Managing Director, Media & Cable, Microsoft
May 21st 2013

2. The Connected Life by 2020
2011
6B Mobile
2020
12B Mobile
2011
9B Total
2020
24B Total
Revenue opportunity for
Mobile Network Operators
$1.2 Trillion
7x 2011 Revenues
Automotive $202B
Health $69B
Consumer Electronics $445B
Utilities $36B
Connected Devices
Source: GSMA, Mobile World Congress 2012

4. “If you are good at something, never do it for free”

5. “If you are good at something, never do it for free”
In the Digital Economy it’s all about
– aggregating enough Audience
– having the right Product
– managing the Customer

6. Aggregating enough Audience
85-95%
5-10%
Fans and Regulars
2x Week
Fly-bys
2x Month
User interaction.
Create rich content
products to drive audience
and advertising revenue but
make content compelling
enough for subscription
revenue – balance.

7. Consumer perceptions of advertising
73%
67%
67%
67%
66%
57%
57%
54%
53%
51%
44%
30%
27%
22%
19%
12%
Advertisements should tell a unique story, not just try to sell
A video is worth 1,000 words
User product reviews are the best source of truth
In-Store experiences trump online experiences
Television commercials are more effective than online
People buy what celebrities wear / like
The Super Bowl is the best advertising opportunity of the year
Web Banner advertisements do not work
Most marketing is a bunch of B.S.
Beautiful advertising is more effective
Advertising works better on women than on men
Online advertising isn't effective
No one watches TV commercials anymore
All "likes" are good in social media
Every brand needs a funny viral video
Advertising works better on men than women
Source: Adobe Study, October 2012 (Rate each of the following statements based on whether you agree or disagree) The data points come from a study commissioned by Adobe, produced by research firm Edelman Berland and
conducted as an online survey among a nationally representative sample of 1,000 adults, 18 years or older, and 250 professional marketers in the United States. Interviewing took place from October 8 to 16, 2012. The margin of error is
+/-3% for consumers and 6% for marketers.

8. Having the right Product
2-10% 1-2%
83-95% 2-5%
Immediate or Breaking Content
ExclusiveorUniqueContent
N Y
N
Y
Commodity content, but brand
and editorial context can affect
value and therefore advertising
revenue as well as provide
subscriber prospects
5-17% of content is ‘payable’
Motivate users.
Create products which
balance the advertising
revenue stream with the
subscription revenue.

9. Managing the Customer
Customers
Audience
Reach Attract Try Use Buy Bid Grow
Not just about converting existing audience, it is about creating
new users of technology. Social becomes increasingly important.

10. Managing the Customer
Customers
Audience
Reach Attract Try Use Buy Bid Grow
Not just about converting existing audience, it is about creating
new users of technology. Social becomes increasingly important.
You’re in retail now. You’re selling content. Make buying easy.

11. Connecting to and managing customers is
complicated

12. Four megatrends will dominate the next decade
By 2020, mobile, cloud, social and big data technologies will drive at least 80% of the IT industry’s
growth (Gartner)
57%of
enterprises will
be invested in
enterprise
social by 2014
>70% of CIOs will
embrace a cloud-first
strategy in 2016
of organizations
plan to increase
public cloud
spending in 2013
54%
of CIOs see mobile
as most disruptive
technology over
next decade
70%
Social networking will
follow not just people but
also appliances, devices
and products
Spending
on Big Data:
of all new
application
development will
target a mobile form
factor
1/3
In 2013,
Percent
of digital
universe
tagged:
3%
(2020)
33%
(today)
$10 billon 2013 >
$20 billion 2016
zettabytes
in 2013
450%
From
2012
Total
digital
content
will grow
=
SocialMobility Big dataCloud

13. …which are driving media industry priorities

14. having the right
Product
aggregating enough
Audience
managing the
Customer
Windows Azure Media Services

16. How do you create value?
….by running the infrastructure, or building the business?

17. How do you create value?
….by running the infrastructure, or building the business?
The business must… In order to…
Look beyond traditional broadcast Enable ubiquitous delivery across all devices
Balance advertising/transaction revenue focus Grow consumer relationships & transactions
Reduce staff focus on infrastructure Focus staff on business requirements
Avoid unnecessary distraction & costs Drive innovation and competitiveness
Remove rigidity and wait time Fast fail and launch innovation
Grow market share Permeate and monetize all screens

18. How do you create value?
….by running the infrastructure, or building the business?
Growing
your talent
base
by attracting and
motivating a next-
generation workforce
Attracting
and retaining
customers
with richer
experiences
Impacting
financials
by using data and
new technologies to
identify efficiencies
Anticipating
and acting
on opportunities
with better insights
from data
Driving
innovation
and inspiring
customer
experiences with new
possibilities