Online and on Demand Services as a Means of Generating Revenue Growth as a Complementary Service Kyiv, 15 September 2011
2
3
What does Pop Idol have to do with Brussels??? 4
EU Priorities for 2012 ? <ul><li>Radical reform of how rights are bought and sold (football rights case) ;  </li></ul><ul>...
Overview of Commercial TV Markets Today <ul><li>The short term :  </li></ul><ul><ul><li>Strong recovery from the depths of...
<ul><li>Newspapers : </li></ul><ul><li>Music sales : 46% decline in physical sales 1997-2007 </li></ul>7
Challenges Facing Commercial Broadcasters Today <ul><li>Shift from broadcast - only to multiplatform distribution </li></u...
<ul><li>€ 25bn of public money (for little discernible benefit?) </li></ul><ul><li>A business model developed in an era of...
10
11
(1) We are not the music industry or the newspapers – rather than a “Napster” or a “Craigslist”, the structural challenges...
<ul><li>“ This is part of the company’s strategy for driving the growth of its copyright businesses </li></ul><ul><li>We a...
<ul><li>Above all, diversify : TV advertising is now the core of a successful media business, rather than the sole source ...
Main Characteristics of Online and On-demand Services : brand extension, or a revolution?  <ul><li>Catch-up TV </li></ul>15
<ul><li>On-demand </li></ul>16
<ul><li>Apps and Mobile </li></ul>17
<ul><li>Particular innovations :  </li></ul><ul><ul><li>The end of distribution windows?  </li></ul></ul>18
<ul><li>A role for social media? </li></ul>19
<ul><li>VOD across frontiers?   </li></ul>20
Conclusions <ul><li>This is evolution not revolution … the TV business model is not broken;  </li></ul><ul><li>But a const...
Thank you! Questions? Contact: ACT Association of Commercial Television in Europe Rue Joseph II, 9-13, BE - 1000 Brussels ...
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Ross Biggam - Online and on-demand services as means of generating revenue growth as a complementary service

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Ross Biggam - Online and on-demand services as means of generating revenue growth as a complementary service

  1. 1. Online and on Demand Services as a Means of Generating Revenue Growth as a Complementary Service Kyiv, 15 September 2011
  2. 2. 2
  3. 3. 3
  4. 4. What does Pop Idol have to do with Brussels??? 4
  5. 5. EU Priorities for 2012 ? <ul><li>Radical reform of how rights are bought and sold (football rights case) ; </li></ul><ul><li>Anti-piracy; </li></ul><ul><li>Media freedom </li></ul>5
  6. 6. Overview of Commercial TV Markets Today <ul><li>The short term : </li></ul><ul><ul><li>Strong recovery from the depths of 2009; </li></ul></ul><ul><ul><li>Advertising markets : some (Germany, Austria, Scandinavia, Estonia, France) stronger than others (Greece); </li></ul></ul><ul><ul><li>Short term softening </li></ul></ul><ul><ul><li>Visibility a key challenge </li></ul></ul><ul><li>The medium term : </li></ul><ul><ul><li>TV’s key metrics are very strong : </li></ul></ul><ul><ul><ul><li>Revenues back to pre-2009 levels; </li></ul></ul></ul><ul><ul><ul><li>Viewers watch more TV than ever – increasing for the tenth consecutive year to 228 minutes of linear TV per day </li></ul></ul></ul><ul><ul><li>Especially when compared to other “content” businesses : </li></ul></ul>6
  7. 7. <ul><li>Newspapers : </li></ul><ul><li>Music sales : 46% decline in physical sales 1997-2007 </li></ul>7
  8. 8. Challenges Facing Commercial Broadcasters Today <ul><li>Shift from broadcast - only to multiplatform distribution </li></ul><ul><li>Wish to control & be paid for distribution across numerous platforms </li></ul><ul><li>Exclusivity & importance of retention of content rights </li></ul><ul><li>Protection of content against unauthorised distribution </li></ul><ul><li>Diversification of revenue base </li></ul><ul><li>Fair competition against public broadcasters & new market entrants </li></ul><ul><li>Fair access to digital spectrum </li></ul><ul><li>Transparency & fair payment mechanisms </li></ul>8
  9. 9. <ul><li>€ 25bn of public money (for little discernible benefit?) </li></ul><ul><li>A business model developed in an era of scarcity (47 European channels) now expected to cope with 8000 “channels” </li></ul><ul><li>Advertising in tunnels of 30” spots </li></ul><ul><li>Politicians interfering in random fashion, e.g., deciding which sports can be shown on pay TV </li></ul><ul><li>… and the future is the internet? – Google TV, Apple TV, Hulu, etc… </li></ul>Would we invent television today? 9
  10. 10. 10
  11. 11. 11
  12. 12. (1) We are not the music industry or the newspapers – rather than a “Napster” or a “Craigslist”, the structural challenges facing broadcasters are long-term: 12 <ul><li>Audience fragmentation has been a reality since the late 1980s, and revenue diversification from advertising a key indicator since 2001 </li></ul><ul><li>Entry of larger, new players - BT broadcast ban, 1996/98; </li></ul><ul><li>“ OTT” distribution of content – first trialed in QUBE, Time Warner Cable in Columbus, Ohio – in 1977 </li></ul><ul><li>Video-on-Demand ? </li></ul>
  13. 13. <ul><li>“ This is part of the company’s strategy for driving the growth of its copyright businesses </li></ul><ul><li>We are the largest creator and distributor of copyrights in the world, and as the first to deploy the FSN – an entirely new distribution channel – we can now accurately assess the potential for such on-demand programming as movies, sports, news, advertising, shopping, education, games, music and more. This knowledge, and having it before anyone else, will give us a competitive advantage” </li></ul><ul><li>Gerald M. Levine, chairman and CEO of Time Warner – in 1994… </li></ul>13
  14. 14. <ul><li>Above all, diversify : TV advertising is now the core of a successful media business, rather than the sole source </li></ul><ul><li>Towards a 60:40 model? </li></ul><ul><li>“ Diversification” can include any number of initiatives: new forms of advertising, product placement, programme sales, rights trading (including football club ownership), live event organisation, music downloads, teleshopping, gambling … </li></ul><ul><li>Common trends across Europe </li></ul><ul><li>Diversification of revenue base </li></ul><ul><ul><li>FTA broadcasters moving into pay (“Every major free-to-air broadcasting group needs a pay strategy”) </li></ul></ul><ul><ul><li>Online and on-demand services </li></ul></ul>How to respond? 14
  15. 15. Main Characteristics of Online and On-demand Services : brand extension, or a revolution? <ul><li>Catch-up TV </li></ul>15
  16. 16. <ul><li>On-demand </li></ul>16
  17. 17. <ul><li>Apps and Mobile </li></ul>17
  18. 18. <ul><li>Particular innovations : </li></ul><ul><ul><li>The end of distribution windows? </li></ul></ul>18
  19. 19. <ul><li>A role for social media? </li></ul>19
  20. 20. <ul><li>VOD across frontiers? </li></ul>20
  21. 21. Conclusions <ul><li>This is evolution not revolution … the TV business model is not broken; </li></ul><ul><li>But a constant need to innovate to generate revenue growth : or, to act as a hedge against fluctuating advertising markets; </li></ul><ul><li>Broadcasters now see online as an opportunity (increase in viewing time, ability to use the archive, more scheduling freedom) as much as a threat (audience fragmentation, piracy); </li></ul><ul><li>Core strengths – understanding of what content viewers enjoy – can be translated to online . </li></ul>21
  22. 22. Thank you! Questions? Contact: ACT Association of Commercial Television in Europe Rue Joseph II, 9-13, BE - 1000 Brussels Tel: + 32 2 736 00 52 - Fax: + 32 2 735 41 72 www.acte.be Ross Biggam Director General [email_address]

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