S t u a r t W. Vo l k o w                             VP Strategy and Development                                     www....
Media & Entertainmnet                                   M e g a t r e n d s                                            1  ...
Piero GoliaCopyright 2009 Stuart Wayne Volkow. Xtropia Partners                                                       3
“The computer will disappear           into the environment. …all these           devices will be connected to the        ...
• “Societies have always been shaped more by  the nature of the media by which men  communicate than by the content of the...
“Media, by altering the environmont, evoke in us uniqueratios of sense perceptions. The extension of any onesense alters t...
Opportunities for Semiconductor / Hardware / Software / Services                                                          ...
UN Stats         The Global Picture    • World Population:      6.6      Billion    • Total Phone Lines:     4      billio...
Content    Distribution   Advertising   Infrastructure   Services               MSOs        Agencies      Satellites      ...
PWC                   http://www.pwc.com/outlookCopyright 2010, Stuart W. Volkow   Media Marketplace   10                 ...
PWC                       E & M Outlook 2009-2013 FINDINGS      • Global entertainment and media spending will        rise...
E & M Outlook 2009-2013 FINDINGS       •    TV advertising is declining 0.6%, with recorded            music expected to d...
E & M Outlook 2009-2013 FINDINGS             New platforms are boosting consumption of old content       •   Innovation in...
The Internet is Becoming the Dominant Media Platform         Worldwide                               14
Total Internet Users          Worldwide     1,966,514,816       2000-2010 Growth          444.8 %      www.internetworldst...
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       16
Most of the World’s Internet Traffic Travels          By Submarine Cables                                     www.telegeogr...
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       18
Pew Internet and American Life Project11/13/2006            Copyright 2006 Stuart Wayne Volkow   19                       ...
Why The “BRIC” Countries are Important                     2/3 of the Worlds Pop. in 15 Countries   Copyright 2007 Stuart ...
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       21
11/13/2006   Copyright 2006 Stuart Wayne Volkow   22                                                       22
23
“The mobile device will be the primary  connection tool to the internet for most  people in the world in 2020. “The Future...
“...we view the mobile Internet, and       related device proliferation, as one of       the biggest opportunities in the ...
The Dominant  Internet  Platform   Will be  Wireless/   Mobile   26               26
27
28
29
Impact of Google SMSKisaakye Bukenya who heard about MTN Google SMSfrom staff training, asked over 6 000 community members...
31
iPhone + iTouch Users = 8x AOL Users 8 Quarters After Launch                                   iPhone + iTouch vs. NTT doc...
2010E Inflection Point, Penetration >20%                                     Global 3G+ Subscribers & Penetration, 2007 – ...
Global Mobile Phone Subscribers   to Reach 4.5 Billion by 2012                                  34
On the typical day, nearly one-fifth(19%) of Americans use the interneton a mobile device.          The Future of the Inte...
Evolving Competing Wireless Standards                              EVDOWiMax                 3G      HSPA / HSDPA 3.5 G   ...
4G     37
38
The Ascent of Smartphones               From Geek to Chic   January 2005                    February 2009    45 models    ...
Smartphone Owners (Millions)     JA        N                 0                     2                         4            ...
Motorola Atrix Dual Core               T-Mobile’s G1Nokia’s 5800     Android               Android                        ...
Apple Mobile Share Should Surprise on Upside Near Term   Near term, Apple is driving the platform change to mobile   compu...
Fastest Hardware User Growth in Consumer Tech History                                            Global Cumulative Unit Sh...
The iPhone Changes Behavior                       Service Penetration, Market v. iPhone                                   ...
Open Mobile Video Coalition800+ TV Stations and Growing ...         800+ TV Stations, 4 Networks, ~100MM Homes Passed,   P...
Apps as a Medium75,000 iPhone Apps, 1.8 billion downloads,    $200 million USD in August 2009                             ...
47Stuart W. Volkow, Copyright 2009                                        47
48Stuart W. Volkow, Copyright 2009                                        48
49Stuart W. Volkow, Copyright 2009                                        49
Apple’s iPad SalesAccelerate: Three MillionSold in 80 Days                        50
Copyright 2010, Stuart W. Volkow   Media Marketplace   51                                                            51
How Many iOS Devices Have        Been Sold as of Jan 2011?          160 million!          8 million iPadsCopyright 2010, S...
Who Has More Cash, Apple or               Microsoft?      • Microsoft: 43.25 Billion (Yahoo Finance)      • Apple: $39.8 b...
Globalization of theEntertainment Marketplace   Hollywood Economic       Challenges         Copyright 2010 Stuart W. Volko...
• More than 50% (60%?) of Hollywood B.O. Gross is  International• The entertainment industry is growing fastest in  the As...
Universal joins the $1 billion club.THR, 14 August 08“Third studio to reach internationalmilestone in 08. Paramount Intern...
Domestic:  $600,788,188    32.6% + Foreign:  $1,242,091,767    67.4%===========================Worldwide:  $1,842,879,955 ...
In 2006, six films accounted fornearly 30% of all the majorstudios’ international grosses           Copyright 2010 Stuart ...
“Tentpole” Hits Are Still Hollywood’s Engine                     $306 Million                       $471 Million $244 Mill...
Domestic Total as of                                     Foreign Total as of   Jan. 4, 2010:                              ...
Behind Momentum of                    Avatar Are Big Sales                    Boosts From Abroad                    By ETH...
Total Lifetime Grosses                   Domestic:             $163,214,888                                               ...
Digital Cinema     Stuart W. Volkow                        63
Copyright 2010 Stuart W. Volkow   64                                       64
Electronic ProjectionDLP                          65
Christie Digital2048x1080                   66
•SONY CRXSONY SXRD 4 K Projector- Fantastic!!                                       67
Digital Cinema Server with a Digital CinemaDistribution Master. 180 GB for “CASANOVA”                                     ...
Christie 2K Digital Projection SystemAt The Entertainment Technology Center, Hollywood CA.                                ...
70
71
In Moscow, 3-D screenings of "Avatar" havebeen booked for a week in advance, and sometheaters have scheduled screenings at...
3D Digital Cinema                        CHICKEN LITTLE                        MEET THE ROBINSONS                       ...
Gaming andGamification           74
$22 Billion USA 2008                       75
76
Bestselling Game in the USA Jan, Feb ‘09           6 million units of Wii Fit                                           77
8 million sold in its first quarter                                     78
79
80
Trends...            Online, Casual,             Social,Mobile STEAM                    App Store                         ...
82
Social media  Copyright 2010 Stuart W. Volkow   83              34                                         83
Chris DeWolfeTom Anderson                84
$580 million        NYT, June 16, 2009, 1:34 PM  MySpace Cuts Work Force by 30            Percent             By BRAD STON...
http://tctechcrunch.files.wordpress.com/2011/01/facebookgraph-r7big.jpg                     Copyright 2010 Stuart W. Volko...
26 yr old Facebook             Billionaire       Mark Zuckerberg           USERS:        2006: 7 million       2007: 40 mi...
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       88
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       89
Largest Share Gainer of Online Usage Over Past 3 Years                                                              Share ...
91
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       92
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       93
Transformation of  the Television    IndustryStuart W.Volkow 2007                       94
From Fortune Magazines 25 most Powerful People In  Business:Steve Jobs, AppleRupert Murdoch, News CorpBob Iger, DisneyJeff...
Copyright 2010, Stuart W. Volkow   Media Marketplace   96                                                            96
Copyright 2008, Stuart W. Volkow   TV Reborn   97                                                    97
CATV Largest MSOs                      >80% subs‣US CATV Revenue: 86 Billion USD‣26 Billion USD in Advertising  ‣Source: N...
DBS                           32 million subsCopyright 2010, Stuart W. Volkow   Media Marketplace   99                    ...
Te l c o sCopyright 2010, Stuart W. Volkow   Media Marketplace   100                                                      ...
assets and cash estimated at $6 billion to $7 billion  Copyright 2010, Stuart W. Volkow         Media Marketplace   101   ...
Copyright 2010, Stuart W. Volkow   Media Marketplace   102                                                             102
103
Digital Mobile TV  MobiTV subscribers will reachseven million this year, or about 2%    of all U.S. cellphone users.      ...
105
1 billion    served        (per day)    Sold to Google      for $1.65B★ 52% of U.S. users use a  video sharing site (May ’...
YouTube: We’re Bigger Than        You Thought        By Miguel Helft ,October 9, 2009, New York        TimesThe company re...
36% of recent Internet users havewatched a TV show or other videostream online, compared to 28%at the end of 2005, while t...
CES 2010         CES 2011                                              109Stuart W. Volkow, Copyright 2009                ...
Anywhere..... Satellite TV Company EchostarAcquired SLING MEDIA in 2007          for $380 Million                         ...
VOD over the Internet       Copyright 2010 Stuart W. Volkow                                         111
Copyright 2010 Stuart W. Volkow   112                                        112
TODAY DIGITAL DISTRIBUTION HAS TAKEN A             COMPLETELY DIFFERENT COURSE WITH THE           POPULARITY OF INTERNET S...
114      114
Original Content with DistributionCopyright 2009 Stuart Wayne Volkow. Xtropia Partners                                    ...
Home Media Networking, IP TV,      7/15/06                Copyright Stuart W. Volkow 2006                                 ...
http://www.youtube.com/watch?v=vS0la9SmqWA&feature=player_embedded                                        117
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2/3 Screen Experience          We estimate that over 66 million US consumers are          simultaneously using a PC while ...
Marketing and                Advertising Budgets                   Are Shifting                                   120Stuar...
$23 Billion                                Google’s Ad                                Revenue ’09   $70 Billion Annual TVA...
PWC Internet Advertising Revenue Report    “The fundamentals of interactive advertising spend continues to be positive and...
PWC, IAB Internet Advertising Revenue Report 2008 FullYear Results                                                        ...
Copyright 2010, Stuart W. Volkow   Media Marketplace                                                       124
IN CONTEXT ADVERTISING Works     Revenue (ttm): 22.68B     Revenue Per Share (ttm): 71.861     Qtrly Revenue Growth (yoy):...
USA TrendsStuart Wayne Volkow, Copyright 2008    126                                              126
2007-2008                                          U.S. Census Bureau               Population                            ...
Pew Internet & American Life Project                                           Feb-March ’07 Survey % of USA Population   ...
woman, and child in a particular group. It is derived by dividing the total income of a particular group by the total popu...
Copyright 2007 Stuart Wayne Volkow. Xtropia Partners                                                       130
Gen X Vs Millennial Media Consumers       Gen X                     Millennials     Born 1965-1976                  Born 1...
75 Million Millennials in USA‣      Tech Savvy Digital Natives‣      Optimistic‣      First Gen to take computers for gran...
C o n s u m e r E l e c t ro n i c s    http://gallery.me.com/svolkow100330                                          133
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135Copyright Stuart W. Volkow 2006         7/15/06                                                  135
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Restructuring of The     Music BusinessMost people are getting music from theirfriends — either burning CDs or ripping dig...
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Technology MegaTrends-2011

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Slides for my lecture on Technology Trends. Covers Internet demographics, mobility, entertainment, and consumer behaviors.

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  • It's very interesting.
    Could you send me pdf version on dyurevich@rtrn.ru
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Technology MegaTrends-2011

  1. 1. S t u a r t W. Vo l k o w VP Strategy and Development www.theinstitute.tv UCLA Entertainment Studies svolkow@ucla.eduCopyright 2011, Stuart W. Volkow Media Marketplace 1
  2. 2. Media & Entertainmnet M e g a t r e n d s 1 2Stuart W. Volkow, Copyright 2009 2
  3. 3. Piero GoliaCopyright 2009 Stuart Wayne Volkow. Xtropia Partners 3
  4. 4. “The computer will disappear into the environment. …all these devices will be connected to the wireless Internet.” Bill Gates 4Stuart W. Volkow, Copyright 2009 4
  5. 5. • “Societies have always been shaped more by the nature of the media by which men communicate than by the content of the communication.”• “The new electronic interdependence recreates the world in the image of a global village.”11/13/2006 Copyright 2006 Stuart Wayne Volkow 5 5
  6. 6. “Media, by altering the environmont, evoke in us uniqueratios of sense perceptions. The extension of any onesense alters the way we think and act- the way weperceive the world”. Copyright 2010 Stuart W. Volkow 6 6
  7. 7. Opportunities for Semiconductor / Hardware / Software / Services Car Electronics Mobile Computing Growth Drivers Over Time, 1960 – 2020E GPS, ABS, A/V Video Home 1,000,000 Entertainment Mobile Consumer Games 100,000 Wireless HomeDevices / Users (MM in Log Scale) Appliances n Cellphone / atio Desktop Internet Smartphone 10,000 r t eg Kindle n gI 1000 asin PC 10B+ Tablet re 100 Inc Units??? MP3 Cell phone / Minicomputer 1B+ Units / PDA Users 100MM+ 10 Units Mainframe 10MM+ Units 1 1MM+ Units 1960 1970 1980 1990 2000 2010 2020 7 Note: PC installed base reached 100MM in 1993, cellphone / Internet users reached 1B in 2002 / 2005 respectively; Source: ITU, Mark Lipacis, Morgan Stanley Research. 32 Stuart W. Volkow, Copyright 2009 7
  8. 8. UN Stats The Global Picture • World Population: 6.6 Billion • Total Phone Lines: 4 billion • Mobile Accounts: 2.68 billion • 574.63 million in PRC • People Living on less than $1/day: 900 Million8 8
  9. 9. Content Distribution Advertising Infrastructure Services MSOs Agencies Satellites Google Studios Telcos Interactive Spectrum AmazonNetworks Agencies DBS Online Ad SkypeCommunity Data Centers Networks Broadcast Facebook Brands Fiber P l a t f o r m s HTML Android IPV6 FLASH iOS 9
  10. 10. PWC http://www.pwc.com/outlookCopyright 2010, Stuart W. Volkow Media Marketplace 10 10
  11. 11. PWC E & M Outlook 2009-2013 FINDINGS • Global entertainment and media spending will rise to $1.6 trillion in 2013, amounting to 2.7% compound annual growth driven by digital gains • U.S. will underperform the world at a 1.2% CAGR rate to reach $495 billion in 2013 • Digital media revenue will expand from 17% of U.S. revenue in 2008 to 25% by 2013 • There is a downward pressure on ad rates in the digital environment: Over capacity, falling demand PricewaterhouseCoopers annual "Global Entertainment and Media Outlook 2009-2013."Copyright 2010, Stuart W. Volkow Media Marketplace 11 11
  12. 12. E & M Outlook 2009-2013 FINDINGS • TV advertising is declining 0.6%, with recorded music expected to drop 4.7% on a compound annual basis. • Ability to monetize brand/rights across platforms is Critical for Success. music labels monetize events, producers go into talent management, broadcasters go into Web TV, leveraging branding, and customer data they own and/or can collect. • Consumers’ rising influence Companies are increasingly listening to their consumers and involving them in product development.Copyright 2010, Stuart W. Volkow Media Marketplace 12 12
  13. 13. E & M Outlook 2009-2013 FINDINGS New platforms are boosting consumption of old content • Innovation in devices and applications is enhancing the experience of the consumption of content. • Early adopters of tablets read more and access more content, suggesting that tablets could prompt a revival in book reading. • HDTV is supporting television revenues, 3-D is boosting film, and authorized music sites are steadily restoring the value of recorded music that was lost to illegal peer-to-peer downloading.Copyright 2010, Stuart W. Volkow Media Marketplace 13 13
  14. 14. The Internet is Becoming the Dominant Media Platform Worldwide 14
  15. 15. Total Internet Users Worldwide 1,966,514,816 2000-2010 Growth 444.8 % www.internetworldstats.com Active Digital Media Universe May ’09 381,285,866 Nielsen15 15
  16. 16. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 16
  17. 17. Most of the World’s Internet Traffic Travels By Submarine Cables www.telegeography.com 17
  18. 18. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 18
  19. 19. Pew Internet and American Life Project11/13/2006 Copyright 2006 Stuart Wayne Volkow 19 19
  20. 20. Why The “BRIC” Countries are Important 2/3 of the Worlds Pop. in 15 Countries Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 20
  21. 21. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 21
  22. 22. 11/13/2006 Copyright 2006 Stuart Wayne Volkow 22 22
  23. 23. 23
  24. 24. “The mobile device will be the primary connection tool to the internet for most people in the world in 2020. “The Future of the Internet III, The Pew Internet and American LifeProject (www.pewinternet.org). 24
  25. 25. “...we view the mobile Internet, and related device proliferation, as one of the biggest opportunities in the history of the technology industry. The opportunity to connect the 4+ billion mobile device users to the Internet is arguably 40x the opportunity to connect 100 million PCs to the Internet in the 1990s.” MORGAN STANLEY RESEARCH NORTH AMERICA, Apple Report, May 2009 25Stuart W. Volkow, Copyright 2009 25
  26. 26. The Dominant Internet Platform Will be Wireless/ Mobile 26 26
  27. 27. 27
  28. 28. 28
  29. 29. 29
  30. 30. Impact of Google SMSKisaakye Bukenya who heard about MTN Google SMSfrom staff training, asked over 6 000 community membersabout HIV/AIDS: how one can get infected with thevirus, how to prevent infection, how to care for someoneinfected with the virus and more. This informationprompted him to get tested at Mulago Kitoni, a clinic nearhis home in rural Masaka, Uganda 30
  31. 31. 31
  32. 32. iPhone + iTouch Users = 8x AOL Users 8 Quarters After Launch iPhone + iTouch vs. NTT docomo i-mode vs. Netscape vs. AOL Users First 20 Quarters Since Launch ~57MM 60 Mobile Internet Desktop Internet iPhone + iTouch Netscape* 50 Launched 6/07 Launched 12/94 40 Subscribers (MM) ~25MM Mobile Internet 30 NTT docomo i-mode Launched 6/99 20 ~11MM Desktop Internet 10 AOL* ~7MM v 2.0 Launched 9/94 Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19 Quarters Since Launch iPhone + iTouch NTT docomo i-mode AOL Netscape 32 Note: *AOL subscribers data not available before CQ3:94; Netscape users limited to US only. 33 Source: Company Reports , Morgan Stanley Research.Stuart W. Volkow, Copyright 2009 32
  33. 33. 2010E Inflection Point, Penetration >20% Global 3G+ Subscribers & Penetration, 2007 – 2014E 3,500 43% 45% 2010E: Inflection Point 3G+ Penetration Reaches 38% 40% 3,000 Sweet Spot 2,776 33% 35% 2,500 2,348 3G+ Penetration (%) 27% 30% 3G+ Users (MM) 1,928 2,000 25% 21% 1,503 1,500 20% 15% 1,055 15% 1,000 11% 8% 688 10% 430 500 273 5% 0 0% 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 3G+ Users 3G Penetration 33 Note: 3G+ technologies include WCDMA, HSPA, TD-SCDMA, 1xEV-DO, LTE and WiMax. Source: Ovum, Morgan Stanley Research. 35Stuart W. Volkow, Copyright 2009 33
  34. 34. Global Mobile Phone Subscribers to Reach 4.5 Billion by 2012 34
  35. 35. On the typical day, nearly one-fifth(19%) of Americans use the interneton a mobile device. The Future of the Internet III Dec 4, 2008 (Pew) 35
  36. 36. Evolving Competing Wireless Standards EVDOWiMax 3G HSPA / HSDPA 3.5 G (high speed downlink packet access) 4G? 36 36
  37. 37. 4G 37
  38. 38. 38
  39. 39. The Ascent of Smartphones From Geek to Chic January 2005 February 2009 45 models 202 modelsSource: Levi Shapiro www.m-e-f.org (Mobile Entertainment Forum) 0 39
  40. 40. Smartphone Owners (Millions) JA N 0 2 4 6 8 10 12 14 16 FE 200 B 5 M 20 AR 05 AP 200 R 5 M 200 AY 5 JU 200 N 5 2 JU 00 L 5 AU 20 G 05 SE 200 P 5 O 200 C T 5 N 20 O 05 V D 20 EC 05 JA 200 N 5 FE 200 B 6 M 20 AR 06 AP 200 R 6 M 200 AY 6 JU 200 N 6 2 JU 00 L 6 AU 20 G 06 SE 200 P 6 O 200 C T 6 N 20 O 06 V D 20 EC 06 JA 200 N 6 FE 200 B 7 M 20 AR 07 AP 200 R 7 M 200 AY 7 JU 200 N 7 2 Smartphone Adoption*, Jan05 to April08, US JU 00 L 7 AU 20 G 07 SE 200 P 7 O 200 C T 7 N 20 O 07 V D 20 EC 07 JA 200 N 7 FE 200 B 8 M 20 AR 08 AP 200 R 8 20 0840
  41. 41. Motorola Atrix Dual Core T-Mobile’s G1Nokia’s 5800 Android Android 41
  42. 42. Apple Mobile Share Should Surprise on Upside Near Term Near term, Apple is driving the platform change to mobile computing. Its mobile ecosystem (iPhone + iTouch + iTunes + accessories + services) market share / impact should surprise on upside for at least the next 1-2 years. Long term, emerging markets competition, open mobile web (paced by likes of Google Android) and carrier limitations pose challenges. RIM likely to maintain enterprise lead for 1-2 years owing to installed base. Morgan Stanley Presentation from Web 2.0 Summit 37 42Stuart W. Volkow, Copyright 2009 42
  43. 43. Fastest Hardware User Growth in Consumer Tech History Global Cumulative Unit Shipments in First 10 Quarters iPhone + iTouch vs. Wii / DS / PSP / iPod / BlackBerry 60 Nintendo WiiCumulative Unit Shipments (MM) 50 Apple iPhone + iTouch Nintendo DS 40 Sony PSP 30 20 Apple RIM iPod Blackberry 10 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Quarters Since Launch 43 Note: iPhone launched in CQ2:07; iTouch launched in CQ3:07; iPod launched in CQ4:01; Wii launched in CQ4:06; DS launched in CQ4:04; PSP launched in CQ1:05; Blackberry smartphone launched in C2002. Source: Apple, Nintendo, Sony, 38 RIM, Katy Huberty, Morgan Stanley Research. Stuart W. Volkow, Copyright 2009 43
  44. 44. The iPhone Changes Behavior Service Penetration, Market v. iPhone Owners, 51% iPhoneSocial Network/Blogs 5% Market 31% Video 6% 74% Music 8% 88% Browsing 14% 32% Playing Games 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Phone Owners Using Service in Month 44
  45. 45. Open Mobile Video Coalition800+ TV Stations and Growing ... 800+ TV Stations, 4 Networks, ~100MM Homes Passed, Public and Commercial Stations, NAB / MSTV / ATSC Coordination Confidential Property of the Open Mobile Video Coalition—Not for Distribution Without Authorization 45
  46. 46. Apps as a Medium75,000 iPhone Apps, 1.8 billion downloads, $200 million USD in August 2009 46
  47. 47. 47Stuart W. Volkow, Copyright 2009 47
  48. 48. 48Stuart W. Volkow, Copyright 2009 48
  49. 49. 49Stuart W. Volkow, Copyright 2009 49
  50. 50. Apple’s iPad SalesAccelerate: Three MillionSold in 80 Days 50
  51. 51. Copyright 2010, Stuart W. Volkow Media Marketplace 51 51
  52. 52. How Many iOS Devices Have Been Sold as of Jan 2011? 160 million! 8 million iPadsCopyright 2010, Stuart W. Volkow Media Marketplace 52 52
  53. 53. Who Has More Cash, Apple or Microsoft? • Microsoft: 43.25 Billion (Yahoo Finance) • Apple: $39.8 billion in cash and short-term investments (Apple Jan 25 Earnings Call)Copyright 2010, Stuart W. Volkow Media Marketplace 53 53
  54. 54. Globalization of theEntertainment Marketplace Hollywood Economic Challenges Copyright 2010 Stuart W. Volkow 54 34 54
  55. 55. • More than 50% (60%?) of Hollywood B.O. Gross is International• The entertainment industry is growing fastest in the Asia-Pacific region, which will see a 6.8% annual growth rate• Asia Pacific has been the second TV market after North America for more than a decade. Copyright 2010 Stuart W. Volkow 55
  56. 56. Universal joins the $1 billion club.THR, 14 August 08“Third studio to reach internationalmilestone in 08. Paramount InternationalPictures hit the mark on June 17, and20th Century Fox International andWarner Bros. Pictures International joinedon July 9 and July 19, respectively.” Globalization has raised the financial importance of many overseas markets, including Russia and Brazil—both of which are among the top 10 markets for "Avatar," WSJ, 5 Jan 2010 Copyright 2010 Stuart W. Volkow 56 34 56
  57. 57. Domestic:  $600,788,188    32.6% + Foreign:  $1,242,091,767    67.4%===========================Worldwide:  $1,842,879,955   Copyright 2010 Stuart W. Volkow 57 57
  58. 58. In 2006, six films accounted fornearly 30% of all the majorstudios’ international grosses Copyright 2010 Stuart W. Volkow 58
  59. 59. “Tentpole” Hits Are Still Hollywood’s Engine $306 Million $471 Million $244 Million ! Est. Gross % Share Gross 1. ! WARNER BROS. ! $2101 ! 14.1% 2. ! UNIVERSAL ! $1664 ! 11.2% 3. ! 20TH CENTURY FOX !$1518 ! 10.2% 4. ! PARAMOUNT ! $1402 ! 9.4% 5. ! BVI !$1246 ! 8.4% Copyright 2010 Stuart W. Volkow 59 34 59
  60. 60. Domestic Total as of Foreign Total as of Jan. 4, 2010: Jan. 4, 2010: $360,209,452 $702,942,307 Copyright 2010 Stuart W. Volkow 60 60
  61. 61. Behind Momentum of Avatar Are Big Sales Boosts From Abroad By ETHAN SMITH, ALAN CULLISON And MAX COLCHESTERCopyright 2010 Stuart W. Volkow 61 61
  62. 62. Total Lifetime Grosses Domestic: $163,214,888 33.1% + Foreign: $330,000,105 66.9% = Worldwide: $493,214,993 Domestic Summary Opening Weekend: $61,235,105 (#1 rank, 3,777 theaters, $16,213 average) % of Total Gross: 37.5% Widest Release: 3,802 theaters Close Date: July 22, 2010 In Release: 112 days / 16 weeksCopyright 2010 Stuart W. Volkow 62 62
  63. 63. Digital Cinema Stuart W. Volkow 63
  64. 64. Copyright 2010 Stuart W. Volkow 64 64
  65. 65. Electronic ProjectionDLP 65
  66. 66. Christie Digital2048x1080 66
  67. 67. •SONY CRXSONY SXRD 4 K Projector- Fantastic!! 67
  68. 68. Digital Cinema Server with a Digital CinemaDistribution Master. 180 GB for “CASANOVA” 68
  69. 69. Christie 2K Digital Projection SystemAt The Entertainment Technology Center, Hollywood CA. 69
  70. 70. 70
  71. 71. 71
  72. 72. In Moscow, 3-D screenings of "Avatar" havebeen booked for a week in advance, and sometheaters have scheduled screenings at 3 a.m.and 5:30 a.m.Tickets for 3-D screenings typically cost about50% more than for a two-dimensional movie,a fact that has fueled the sales numbers for"Avatar." About 30% of the screens outside theU.S. are showing the picture in 3-D, accordingto distributor Twentieth Century Fox; thosehave generated 64% of the moviesinternational total.WSJ, 5 Jan 2010 Copyright 2010 Stuart W. Volkow 72 72
  73. 73. 3D Digital Cinema  CHICKEN LITTLE  MEET THE ROBINSONS  BEOWULF  JOURNEY TO THE CENTER OF THE EARTH  U2  HANNAH MONTANA & MILEY CYRUSConcerts and  FLY ME TO THE MOONSports Events  AVATAR  MONSTERS VS ALIENS  9 3D movies planned from Pixar/ Disney Stuart W. Volkow 73
  74. 74. Gaming andGamification 74
  75. 75. $22 Billion USA 2008 75
  76. 76. 76
  77. 77. Bestselling Game in the USA Jan, Feb ‘09 6 million units of Wii Fit 77
  78. 78. 8 million sold in its first quarter 78
  79. 79. 79
  80. 80. 80
  81. 81. Trends... Online, Casual, Social,Mobile STEAM App Store 81
  82. 82. 82
  83. 83. Social media Copyright 2010 Stuart W. Volkow 83 34 83
  84. 84. Chris DeWolfeTom Anderson 84
  85. 85. $580 million NYT, June 16, 2009, 1:34 PM MySpace Cuts Work Force by 30 Percent By BRAD STONE $15 Salary million over two yrs 85 85
  86. 86. http://tctechcrunch.files.wordpress.com/2011/01/facebookgraph-r7big.jpg Copyright 2010 Stuart W. Volkow 86
  87. 87. 26 yr old Facebook Billionaire Mark Zuckerberg USERS: 2006: 7 million 2007: 40 million 2010: 500 million Authenticity of ID Opt-In News Feed Open APIsMicrosoft would pay $240 millionfor a 1.6 percent stake inFacebook. The investment valuesFacebook, Copyright 2007 Stuart Wayne Volkow. Xtropiahalf which is three and a Partnersyears old and will bring in about$150 million in revenue this year, at$15 billion. NYT, 10/14/07 87
  88. 88. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 88
  89. 89. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 89
  90. 90. Largest Share Gainer of Online Usage Over Past 3 Years Share of Global Online Time Spent, 6/06 – 8/09 14% 12%% Share of Global Minutes 10% 8% 6% 4% 2% 0% 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 Yahoo.com Msn.com Google.com YouTube.com Facebook.com Copyright 2007 Stuart Wayne Volkow. Xtropia Partners Source: comScore global, 8/09. 4 90
  91. 91. 91
  92. 92. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 92
  93. 93. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 93
  94. 94. Transformation of the Television IndustryStuart W.Volkow 2007 94
  95. 95. From Fortune Magazines 25 most Powerful People In Business:Steve Jobs, AppleRupert Murdoch, News CorpBob Iger, DisneyJeff Imelt, GESchmidt, Page, Brin, Google 11/13/2006 Copyright 2006 Stuart Wayne Volkow 95
  96. 96. Copyright 2010, Stuart W. Volkow Media Marketplace 96 96
  97. 97. Copyright 2008, Stuart W. Volkow TV Reborn 97 97
  98. 98. CATV Largest MSOs >80% subs‣US CATV Revenue: 86 Billion USD‣26 Billion USD in Advertising ‣Source: NCTA.com Copyright 2010, Stuart W. Volkow Media Marketplace 98 98
  99. 99. DBS 32 million subsCopyright 2010, Stuart W. Volkow Media Marketplace 99 99
  100. 100. Te l c o sCopyright 2010, Stuart W. Volkow Media Marketplace 100 100
  101. 101. assets and cash estimated at $6 billion to $7 billion Copyright 2010, Stuart W. Volkow Media Marketplace 101 101
  102. 102. Copyright 2010, Stuart W. Volkow Media Marketplace 102 102
  103. 103. 103
  104. 104. Digital Mobile TV MobiTV subscribers will reachseven million this year, or about 2% of all U.S. cellphone users. AT&T Mobile TV AT&T CV DVB-H DMB (470-750MHz) 104
  105. 105. 105
  106. 106. 1 billion served (per day) Sold to Google for $1.65B★ 52% of U.S. users use a video sharing site (May ’08)★ 27% of online video consumers use YouTube★ 49% of online viewers 18-29 use YouTube Pew Survey Chad Hurley 106 Chad Hurley 106
  107. 107. YouTube: We’re Bigger Than You Thought By Miguel Helft ,October 9, 2009, New York TimesThe company released more precise viewingfigures than it had in the past, saying it servesmore than 1 billion videos a day, or roughly30 billion in a month. The post appeared intended, in part, to rebut a much-quoted report by Spencer Wang, a Credit Suisse analyst, who predicted that YouTube would lose $470 million in 2009. 107
  108. 108. 36% of recent Internet users havewatched a TV show or other videostream online, compared to 28%at the end of 2005, while three-quarters of these adults have doneso in the past 30 days.Ipsos “Face The Web Report” 108
  109. 109. CES 2010 CES 2011 109Stuart W. Volkow, Copyright 2009 109
  110. 110. Anywhere..... Satellite TV Company EchostarAcquired SLING MEDIA in 2007 for $380 Million 110 110
  111. 111. VOD over the Internet Copyright 2010 Stuart W. Volkow 111
  112. 112. Copyright 2010 Stuart W. Volkow 112 112
  113. 113. TODAY DIGITAL DISTRIBUTION HAS TAKEN A COMPLETELY DIFFERENT COURSE WITH THE POPULARITY OF INTERNET SITES AND VIDEO ON DEMANDStuart Wayne Volkow, Copyright 2009 113 113
  114. 114. 114 114
  115. 115. Original Content with DistributionCopyright 2009 Stuart Wayne Volkow. Xtropia Partners 115
  116. 116. Home Media Networking, IP TV, 7/15/06 Copyright Stuart W. Volkow 2006 116Media Connector ? 116
  117. 117. http://www.youtube.com/watch?v=vS0la9SmqWA&feature=player_embedded 117
  118. 118. 118
  119. 119. 2/3 Screen Experience We estimate that over 66 million US consumers are simultaneously using a PC while watching TV. With broadband service becoming nearly ubiquitous, and consumers using a PC while watching TV,Copyright 2008, Stuart W. Volkow TV Reborn 119 119
  120. 120. Marketing and Advertising Budgets Are Shifting 120Stuart W. Volkow, Copyright 2009 120
  121. 121. $23 Billion Google’s Ad Revenue ’09 $70 Billion Annual TVAdvertising Revenue in USA >20 Billion to $26.8 Billion major Networks Internet Ad Spend ’10(CPG and Auto are largest) CATV Newspapers $34 Billion 26 Billion (2008) 121 121
  122. 122. PWC Internet Advertising Revenue Report “The fundamentals of interactive advertising spend continues to be positive and I would expect to see continued growth in the future.” said David Silverman, partner, Assurance, PricewaterhouseCoopers “The cyclical fourth quarter to first quarter drop in traditional media advertising spend, combined with an overall economic slowdown, resulted in a not so unexpected first quarter slowdown in the growth of online advertising.”Copyright 2006 Stuart Wayne Volkow 122 11/13/2006 122
  123. 123. PWC, IAB Internet Advertising Revenue Report 2008 FullYear Results 123
  124. 124. Copyright 2010, Stuart W. Volkow Media Marketplace 124
  125. 125. IN CONTEXT ADVERTISING Works Revenue (ttm): 22.68B Revenue Per Share (ttm): 71.861 Qtrly Revenue Growth (yoy): 7.30% Gross Profit (ttm): 13.17B EBITDA (ttm): 9.24B Net Income Avl to Common (ttm): 4.93B Diluted EPS (ttm): 15.504 Qtrly Earnings Growth (yoy): 27.10% ttm = Trailing Twelve Months (as of 6 Jan 2010) yoy = Year Over Year (as of 6 Jan 2010) (from Yahoo Finance) 125
  126. 126. USA TrendsStuart Wayne Volkow, Copyright 2008 126 126
  127. 127. 2007-2008 U.S. Census Bureau Population 300 million HHs 116.8 million Within Major Cities 39 million Persons / HH 2.59 % < 18 24.8 % > 65 12.4 Hispanic 14.4 Black 12.8 Median HH income $50,303 Per Capita Income $27,000 Rank in UNDP Index 19Copyright 2007 Stuart Wayne Volkow. Xtropia Partners Table 1. Income and Earnings Summary Measures by Selected Characteristics: 2007 and 2008 (Income in 2008 dollars. Households and people as of March of the following year. For information on confidentiality protection, sampling error, nonsampling error, and definitions, see www.census.gov/apsd/techdoc/cps/cpsmar09.pdf) Percentage change in 2007 2008 real median income (2008 less 2007) Characteristic Median income Median income 127
  128. 128. Pew Internet & American Life Project Feb-March ’07 Survey % of USA Population Activities by % of Userswho Use the internet Email 91Total Adults 71% Search for Info 9147% have “high-speed” access-------------------------- Get Map/Directions 86Women 70 Medical Info 80Men 71 Weather 78-------------------------- Buying Research 78Age Travel 7318-29 87%30-49 83 News 7250-64 65 Watch a Video Clip 5665+ 32 Recieve a Video Link 75 Copyright 2007 Stuart Wayne Volkow. Xtropia Partners View Video Daily 19 128
  129. 129. woman, and child in a particular group. It is derived by dividing the total income of a particular group by the total population in that group (excluding patients or inmates ininstitutional quarters). Source: U.S. Census Bureau, Current Population Survey, 2008 and 2009 Annual Social and Economic Supplements. Figure 1. Real Median Household Income by Race and Hispanic Origin: 1967 to 2008 2008 dollars Recession 80,000 70,000 $65,637 60,000 Asian $55,530 50,000 $50,303 White, not Hispanic All races 40,000 $37,913 Hispanic (any race) $34,218 30,000 Black 20,000 10,000 0 1959 1965 1970 1975 1980 1985 1990 1995 2000 2008 Note: Median household income data are not available prior to 1967. For information on recessions, see Appendix A. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners Source: U.S. Census Bureau, Current Population Survey, 1968 to 2009 Annual Social and Economic Supplements.U.S. Census Bureau Income, Poverty, and Health Insurance Coverage in the United States: 2008 7 129
  130. 130. Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 130
  131. 131. Gen X Vs Millennial Media Consumers Gen X Millennials Born 1965-1976 Born 1977 – 1998 51 million 75 million Accept diversity Celebrate diversity Pragmatic/practical Optimistic/realisticSelf-reliant/individualistic Self-inventive/individualistic Reject rules Rewrite the rules Killer life Killer lifestyle Mistrust institutions Irrelevance of institutions PC Internet Use technology Assume technology Multitask Multitask fast Latch-key kids Nurtured Friend-not family Friends = family Casual, friendly work Structured, supportive work environment environment · Involvement · Personalized work · Flexibility and freedom · Interactive relationship· Work as A place to learn · High demands & expectations 131
  132. 132. 75 Million Millennials in USA‣ Tech Savvy Digital Natives‣ Optimistic‣ First Gen to take computers for granted‣ Excellent Ability to Filter Out Advertising‣ Hard to Impress‣ The Internet is their most important medium Copyright 2007 Stuart Wayne Volkow. Xtropia Partners 132
  133. 133. C o n s u m e r E l e c t ro n i c s http://gallery.me.com/svolkow100330 133
  134. 134. 134
  135. 135. 135Copyright Stuart W. Volkow 2006 7/15/06 135
  136. 136. 136
  137. 137. Restructuring of The Music BusinessMost people are getting music from theirfriends — either burning CDs or ripping digitalfiles. And despite the record industryʼscrackdown, there is no reduction in thenumber of people of peer-to-peer file sharingservice. NPD Market Research 2008 Will movies / TV be next? 137
  138. 138. 138

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