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Digital content briefing_tour_may2010

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Introduction to the UK's Digital Content Sector.

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Digital content briefing_tour_may2010

  1. 1. May 2010 Tour Briefing Creative and Media Overview Tony Hughes Tony Hughes, May 2010
  2. 2. Digital Content Briefing Overview <ul><li>Sector Focus </li></ul><ul><li>Market trends </li></ul><ul><li>UK Strengths </li></ul><ul><li>Investor Opportunities </li></ul><ul><li>Other key selling messages </li></ul><ul><li>Case Studies </li></ul>09/06/10
  3. 3. Digital Content Key Industries <ul><li>Games </li></ul><ul><li>Media </li></ul><ul><li>Publishing </li></ul><ul><li>Film/Animation </li></ul>09/06/10
  4. 4. Digital Content Platforms 09/06/10 <ul><li>PC </li></ul><ul><li>Mobile </li></ul><ul><li>Console </li></ul><ul><li>TV </li></ul>
  5. 5. Sector Focus Internet as Channel <ul><li>Sport </li></ul><ul><li>Creative agencies </li></ul><ul><li>Auto </li></ul><ul><li>Consumer Products </li></ul><ul><li>Film </li></ul><ul><li>Finance </li></ul><ul><li>FMCG </li></ul><ul><li>Gaming </li></ul><ul><li>Music </li></ul><ul><li>Publishing </li></ul><ul><li>Radio </li></ul><ul><li>Television </li></ul><ul><li>Travel </li></ul>09/06/10
  6. 6. Market Trends Major themes <ul><li>Creative Agencies – interactive broadcasting, social media, behavioural targeting and measurement </li></ul><ul><li>Film – digital distribution, interactive broadcasting, micropayments </li></ul><ul><li>Gaming – digital distribution, interactive broadcasting, proliferation of devices, social media and micropayments </li></ul><ul><li>Music – digital distribution, social media, micropayments, measurement tools and tracking </li></ul><ul><li>Publishing – digital distribution, proliferation of devices, micropayments, real time measurement tools and social media </li></ul><ul><li>Radio – interactive broadcasting, proliferation of devices, micropayments and measurement tools </li></ul><ul><li>Television – interactive broadcasting, proliferation of devices, micropayments, measurement tools and social media </li></ul>09/06/10
  7. 7. Film Connected services 09/06/10
  8. 8. Film Monetising Media 09/06/10
  9. 9. Games Increasing size and scope of consumer base
  10. 10. Music Mobile consumer 09/06/10 <ul><ul><li>Graphic – Universal/EMI </li></ul></ul>
  11. 11. Publishing Digital distribution 09/06/10
  12. 12. Radio Interactive broadcasting
  13. 13. Referred by a friend on Facebook Checked out the official site Television Interactive broadcasting Watched the show Search beyond official site fan-sites, Wikipedia Downloaded samples Inspires further net ‘research’ Spreads the word to others via Facebook Who watch & feed back
  14. 14. UK Strengths General <ul><li>Access to Creative and Tech Talent </li></ul><ul><li>High spending & early adopter consumer market </li></ul><ul><li>Centre of Europe’s Advertising, Publishing, Telecoms & Media Industries </li></ul><ul><li>Substantial investment in fixed broadband and mobile infrastructure </li></ul><ul><li>Ease of doing business - ranks No.1 in Europe </li></ul><ul><li>Good communications routes </li></ul><ul><li>Home to larger % of EHQs than rest of Europe </li></ul>09/06/10
  15. 15. UK Strengths Creative Agencies <ul><li>Multiplicity of agency specialists </li></ul><ul><li>Articulation of digital opportunities to Ad agencies </li></ul><ul><li>Pull the converging industry models together </li></ul><ul><li>Increasing reliance on digital production in UK than outsourced </li></ul>09/06/10
  16. 16. UK Strengths Film <ul><li>Market: The UK has more digital cinemas than any other European country – 365 and counting </li></ul><ul><li>Spend: UK box-office takings are at record-breaking levels, worth £944 million in the UK in 2009, up 62% from 2000 </li></ul><ul><li>Variety: There are over 100 production studios in the UK, ranging from large studios capable of housing the biggest sets to small studios catering for music videos and commercial work. </li></ul><ul><li>Talent: The UK film industry directly employs almost 44,000 people, with extended employment impact of 95,000 jobs </li></ul><ul><li>Warner Brothers recently acquired Leavesden studios in Hertfordshire, making it the only major Hollywood studio to have a permanent base outside of the USA. </li></ul>09/06/10
  17. 17. UK Strengths Games <ul><li>Innovative and ground breaking IP </li></ul><ul><li>Largest developer pool in Europe </li></ul><ul><li>High % of employers with first or higher degrees </li></ul><ul><li>Multiplatform development expertise </li></ul><ul><li>Attracted major global publishers </li></ul><ul><li>Cross media links growing </li></ul><ul><li>Growth in online and casual gaming sub sectors </li></ul><ul><li>Developing Serious Games and Virtual World clusters </li></ul><ul><li>High spending, engaged consumer market </li></ul><ul><li>Broadening demographic playing casual games </li></ul><ul><li>Trusted and flexible payment mechanisms </li></ul>09/06/10
  18. 18. UK Strengths Music <ul><li>Largest market in Europe for music downloads </li></ul><ul><li>Centre of Europe’s music industry </li></ul><ul><li>Global music players all present </li></ul><ul><li>Thriving live events sector </li></ul><ul><li>Melting pot for technologist and music collaboration </li></ul>09/06/10
  19. 19. UK Strengths Publishing <ul><li>Largest single creative industry generating over £20bn </li></ul><ul><li>164,000 employees and over 8,000 companies in the UK </li></ul><ul><li>In its quality, diversity and reach, UK publishing leads the world </li></ul><ul><li>Despite the world economic downturn there is a positive outlook for the publishing industry in the UK. The PPA calculates that more than one billion consumer magazines were sold in 2009 </li></ul>09/06/10
  20. 20. UK Strengths Radio <ul><li>Radio audiences increasing across different platforms </li></ul><ul><li>Internet radio seeing largest increases in each segment </li></ul><ul><li>¼ listening through digital devices </li></ul><ul><li>The UK consumer is responding to the advantages of digital radio, with ownership of DAB increasing 14% year on year, with 16.6m households having a DAB receiver, compared to 14.5m a year ago. </li></ul>09/06/10
  21. 21. UK Strengths Television <ul><li>The UK television industry contributes around £12 billion to the UK economy, with exports approaching £500 million. </li></ul><ul><li>Best supply chain structure in the world outside LA </li></ul><ul><li>London is second only to LA in the size of the post production sector servicing TV and Film </li></ul><ul><li>Digital switchover creating more channels </li></ul><ul><li>BBC is a world leader in programme quality and broadcast innovation (e.g. Project Canvass). </li></ul>09/06/10
  22. 22. Investor Opportunties <ul><li>Expanding consumer base for paid for content (games, video, social media) </li></ul><ul><li>Leading expertise across Creative, Business and Technical disciplines </li></ul><ul><li>Client base across Creative Industries and related sectors </li></ul><ul><li>For example: </li></ul><ul><li>Publishing: real time tracking tools and marketing </li></ul><ul><li>TV – content, download and multiplatform tools </li></ul><ul><li>Games – development applications, mobile flash games, social gaming </li></ul><ul><li>Film – online, interactive and post production tools </li></ul><ul><li>Radio – strong consumer interest for new and innovative interactions </li></ul><ul><li>Music – social media applications and live event link-up applications </li></ul>09/06/10
  23. 23. Opportunities Television
  24. 24. Opportunities Television
  25. 25. Opportunities Television
  26. 26. Opportunities Music
  27. 27. Opportunities Radio 09/06/10
  28. 28. Opportunities All
  29. 29. Opportunities Games
  30. 30. Selling messages 09/06/10
  31. 31. UK Consumer Demand for Broadband <ul><li>Through their broadband connections, consumers are able to access and interact with a wide range of content and services and businesses can exploit new market opportunities. The current generation of broadband services in the UK have become a success story with competition, based largely on the use of local loop unbundling, driving choice and innovation, low prices and high take up. </li></ul><ul><li>The increasing number of consumers using their broadband connections for activities such as downloading or streaming videos and music, is beginning to limit the current networks. New networks being introduced today, using fibre optical cable to deliver super-fast broadband services, are expected to deliver significant benefits to UK consumers. </li></ul><ul><li>Super fast broadband (i.e. broadband with speeds greater than 24Mbps) has the potential to deliver speeds of 50 to 100Mb/s (megabits per second) and enhance new consumer services such as broadcast quality video services, High Definition and 3D TV and interactive fast, fibre optic broadband has the potential to deliver speeds of 50 to 100Mb/s (megabits per second) and enhance new consumer services such as broadcast quality video services, High Definition and 3D TV and interactive online gaming. </li></ul><ul><li>Source: OFCOM 2010 </li></ul><ul><li>BT has launched its super-fast broadband product and plans to cover 40% of the UK by 2012 and Virgin Media has rolled out 50Mb/s to 46% of the UK population and has recently launched a 100Mb/s service. Other smaller companies are also investing in these products including IFNL and H20. </li></ul><ul><li>Ofcom's Chief Executive, Ed Richard said: “ Super-fast broadband is starting to be a reality in the UK, with very significant advances in recent months in the speeds some providers are offering. Ofcom's proposed regulatory framework is intended to support the next phase of development by promoting investment, competition and innovation for consumers across the UK” </li></ul><ul><li>Availability of super-fast broadband in the UK (some 46% of homes) is now ahead of most large economies where deployments have been funded commercially. In the US, AT&T and Verizon have upgraded their networks to cover 17% and 12% of households respectively, while cable company Comcast is approaching coverage of around 35% of US households with super-fast cable broadband. In Europe, super-fast networks are available to 21% of households in France and 23% of households in Germany. </li></ul><ul><li>UK consumers and businesses have benefited from the development of broadband to date. Commercial investments in super-fast broadband are now well underway and almost half the UK population today has access to at least one super-fast broadband network which places the UK in a favourable position internationally. </li></ul><ul><li>Broadband is becoming increasingly central to the lives of UK consumers and the success of businesses. </li></ul>
  32. 32. Availability of selected mobile services 09/06/10
  33. 33. UK market developments Mobile Internet Use 09/06/10
  34. 34. European Headquarters (EHQs) in the UK <ul><li>Sources: European Investment Monitor, September 2008, UKTI 2010 </li></ul><ul><li>Number of EHQs </li></ul><ul><li>The attractions of the UK include its: </li></ul><ul><ul><li>stable economic and political environment; </li></ul></ul><ul><ul><li>good international transport links; </li></ul></ul><ul><ul><li>world-class communications infrastructure; </li></ul></ul><ul><ul><li>highly skilled and flexible workforce; </li></ul></ul><ul><ul><li>sound legal and regulatory environment; and </li></ul></ul><ul><ul><li>ready access to finance. </li></ul></ul>
  35. 35. The UK is Accessible <ul><li>An integrated system of airports, road and rail allows ease of movement between major cities in the UK, and internationally. </li></ul><ul><li>The UK has the largest air transport system in Europe, accounting for 211 million passengers and having 6 of the top 10 busiest international air routes. The leading airports in the UK are London Heathrow , London Gatwick and Manchester Airport . Other major international airports in the UK include Birmingham International, London Stanstead, Glasgow and Liverpool. </li></ul><ul><li>The UK offers the perfect location for accessing partners throughout Europe. Almost all of Europe’s leading ICT markets can be reached in under two hours from any one of the international airports serving the South of England such as London’s Heathrow Gatwick, City, Luton and Stansted. </li></ul><ul><li>The UK is home to many low cost Airlines offering incredibly competitive prices on Air Travel throughout the whole of Europe. </li></ul><ul><li>The UK also has a modern and privatised railway that links all UK and European mainland locations through the world class Eurostar rail service. There is also an advanced and comprehensive road system that links all locations throughout the UK. </li></ul><ul><li>Sources: Eurostat, 2008; UKTI 2009 </li></ul>
  36. 36. Ease of Doing Business It’s easy to do business in the UK <ul><li>In an assessment of 183 countries, the World Bank ranks the UK as the leading European economy, and 5 th globally, for ease of doing business, significantly higher than Germany. </li></ul><ul><li>The UK has received more investment from foreign companies than any other country in Europe. </li></ul><ul><li>The UK is the easiest place to set up and run a business in Europe. Setting up in the UK takes 13 days; the European average is 32 days. </li></ul><ul><li>The UK has one of the most open, competitive and transparent tax, security and regulatory environments in the world. </li></ul><ul><li>The UK has the most flexible labour market amongst all the major European economies. </li></ul><ul><li>The UK has one of the most supportive legal systems in the world for business. </li></ul><ul><li>The UK has the best international accessibility in Europe with a world-class transport network offering rapid links to mainland Europe and the rest of the world. </li></ul><ul><li>Source: UKTI 2010; World Bank 2010; UNCTAD World Investment Report, 2009 </li></ul><ul><li>“ Combination of UK investor opportunities, government support and a highly skilled workforce are very conducive to successfully establishing a new base in a short time.” </li></ul><ul><li>Kirk Adriano, VP R&D, Inion (Finland) </li></ul><ul><li>The figures above show the UK is rated as a significantly easier place to do business than Germany. </li></ul>Country Global Rank UK 5 th Germany 25 th
  37. 37. Case Studies/Testimonials 09/06/10 09/06/10 ‘ UKTI have been an invaluable source of industry contacts and connections, as well as helping me investigate Investment opportunities in the UK.’ Tom St John, CEO, Kontexto ‘ The UK is the gateway, and most important market Europe. If it succeeds here, it trickles elsewhere’ David Yarnton, UK General Manager – Nintendo UK &quot;UKTI's support has been invaluable in helping Sohu Games establish ChangYou.com in the UK and gaining an appreciation of the market and potential partners. For creative content companies it is always difficult to enter new territories and UKTI have enabled us to speed up our progress and rightly inform our decision making. ”   Aileen Yang, UK General Manager – ChangYou.com ‘ The UK games development industry has many of the most experienced game designers, programmers and artists in Europe. From the first tentative steps of &quot;Bedroom&quot; developers to today's cross-pollination with the UK Film Industry, there is an incredibly strong development tradition’   Colin Robinson, Vice President - EA Partners Europe
  38. 38. Thank you! tony.hughes@pera.com [email_address] August 2009

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