DIGITAL MEDIA CONVERGENCE: Opportunity & Challenges For Incumbents

ArcInsight
PARTNERS

Convergence Dynamics
In The
Technology, Media & Entertainment Industry

ArcInsight Partners launched an extensive ongoing research initiative in 2011
spanning multiple geographies and identified several consistent trends in the M&E
industry. The trends clearly identified a Technology-Media-Entertainment Convergence.
Their implications pointed to new opportunities & challenges in the emerging media
marketplace and on its existing business models. Some of these observations are
outlined here.

TRENDS & INSIGHTS FROM
RESEARCH, INTERVIEWS AND CLIENT STRATEGY SESSIONS
CONDUCTED BY
ARCINSIGHT PARTNERS

ArcInsight
PARTNERS

Tech | Media | Entertainment |
| CONVERGENCE |
Strategy Advisory Services to
Content-Owners, Distributors and Aggregators on
Monetization Opportunities in the
Global Technology, Media & Entertainment markets.

ArcInsight
PARTNERS

December 20, 2012 © ArcInsight Partners LLC Client Slide 2

ArcInsight
Key Tech-Media-Entertainment Convergence Themes PARTNERS

Value shifting from content-producers Packaged media consumption falling
Packaged media consumption falling Infrastructure bandwidth constraint
Value shifting from content-producers #ONLINE AS A MATURE MEDIA
ONLINE AS A MATURE MEDIA Infrastructure bandwidth constraint
##RISE OF AGGREGATORS
RISE OF AGGREGATORS # ##USAGE-BASED PRICING
USAGE-BASED PRICING

Proliferation of streaming-enabled devices Explosion in mobile-video traffic
Explosion in mobile-video traffic Time/space shifting goes mainstream
Proliferation of streaming-enabled devices #DOMINANCE OF MOBILE INTERNET
DOMINANCE OF MOBILE INTERNET Time/space shifting goes mainstream
##DEVICES EXPLOSION
DEVICES EXPLOSION # ##ANYTIME ANYWHERE TV
ANYTIME ANYWHERE TV

Demand for better viewer- experience Opportunity to monetize Content long-tail
Opportunity to monetize Content long-tail All content moving to online delivery
Demand for better viewer- experience All content moving to online delivery
##IMMERSIVE, HIGH-ENGAGEMENT
IMMERSIVE, HIGH-ENGAGEMENT ##SEARCH & CURATION
SEARCH & CURATION
##ONLINE CONTENT EXPLOSION
ONLINE CONTENT EXPLOSION

Gold-rush to find new viewers for content From STBs to home- hubs
From STBs to home- hubs Uncertain Content Rights for Authentication Model
Gold-rush to find new viewers for content #BATTLE FOR CONSUMER-HOME
BATTLE FOR CONSUMER-HOME Uncertain Content Rights for Authentication Model
##BATTLE FOR CONSUMER ACCESS
BATTLE FOR CONSUMER ACCESS # ##ONLINE CONTENT RIGHTS
ONLINE CONTENT RIGHTS

Content release-windows disrupted
Content release-windows disrupted Proliferation of apps. on devices &&TV
Proliferation of apps. on devices TV
Television no longer just aaviewing screen
Television no longer just viewing screen
#NEW MONETIZATION STREAMS
NEW MONETIZATION STREAMS ##RISE OF THE APPS ECONOMY
RISE OF THE APPS ECONOMY #CONNECTEDTV AS A PLATFORM
CONNECTEDTV AS A PLATFORM
# #

New Complexities in Content-Sharing Agreements
New Complexities in Content-Sharing Agreements STBs incorporating OTT interactivity
Challenges tracking tv &&online viewers
Challenges tracking tv online viewers STBs incorporating OTT interactivity
##INTEGRATED VIEWER-TRACKING
INTEGRATED VIEWER-TRACKING ##EMERGING CONTENT RIGHT
EMERGING CONTENT RIGHT
# HYBRID ACCESS DEVICES
#HYBRID ACCESS DEVICES
ISSUES
ISSUES

Authentication, fingerprinting, paywalls
Telecom &&PayTV jousting for dominance
Telecom PayTV jousting for dominance Authentication, fingerprinting, paywalls Customer access-point, affiliate fees, etc
Customer access-point, affiliate fees, etc
#TELECOM/PAYTV TRI/QUAD PLAYS
TELECOM/PAYTV TRI/QUAD PLAYS ##ONLINE VIDEO “WALLED-GARDEN”
ONLINE VIDEO “WALLED-GARDEN”
# ##REGULATORY GRAY-AREAS
REGULATORY GRAY-AREAS

##ADDRESSABLE, TARGETABLE PAY-
ADDRESSABLE, TARGETABLE PAY- OTT aggregators pay high-rates to license shows
TV ADVTG. TECHNOLOGIES ##DIGITAL LOCKERS, CLOUD-BASED
DIGITAL LOCKERS, CLOUD-BASED OTT aggregators pay high-rates to license shows
TV ADVTG. TECHNOLOGIES CONTENT SYNCHRONIZATION
CONTENT SYNCHRONIZATION ##RISING SYNDICATION VALUES
RISING SYNDICATION VALUES

$60B TV/Online Ad Revenue Gap
$60B TV/Online Ad Revenue Gap Competition Heating In VOD Streaming-to-home
Losing PayTV Subs., But Rising ARPU
Losing PayTV Subs., But Rising ARPU Competition Heating In VOD Streaming-to-home
# TV/ONLINE AD REVENUE GAP
#TV/ONLINE AD REVENUE GAP
##STREAMING GETS COMPETITIVE
STREAMING GETS COMPETITIVE
##SUBSCRIBER CHERRY-PICKING
SUBSCRIBER CHERRY-PICKING


The Digital Media Convergence: ArcInsight
PARTNERS

Incumbents Face A Vast Array Of Monetisation Opportunities & Challenges

1. Looking At Hollywood Through Silicon Valley’s Lenses

2. Tech-Telecom-Media-Entertainment Convergence - A View From The Cockpit

3. Business Challenges For Filmed & Television Entertainment

4. The Attention-deficit Economy

5. Shifts In The Content-distribution Business

6. The Multi-screen Delivery Challenge

7. The Digital Media Asset-Management Challenge

8. A View Of Digital Asset Monetisation & Its Ecosystem


Convergence Dynamics: ArcInsight
PARTNERS

Tech-Telecom-Media-&-Entertainment Industry


ArcInsight
About ArcInsight Partners PARTNERS

ArcInsight Partners launched an extensive ongoing research initiative in early-2011 spanning multiple geographies,
enterprises and leveraging 1:1 interviews, executive conversations, secondary data analysis and strategy sessions. The
research identified clear convergence dynamics of Technology-Telecom-Media-&-Entertainment industries, with the potential
to define whole new marketplaces and consumer behaviors. It also provided insights into key drivers and business-model
implications that pointed to whitespace opportunities and emerging challenges for both incumbents and new entrants.

Insights Into The Tech-Media-&-Entertainment Ecosystem : Digital supply chain (content-creation, asset
management, delivery infrastructure, distribution, aggregation), consumption-enablers (mobile, tablet, connected TV and app
platforms), content & service business models (cloud, web based services), content rights, media consumption dynamics &
emerging monetization models.

Consulting & Thought leadership: Identifying competitive positioning, market trends & monetization-opportunity
sizing. Management consulting support includes strategic assessment, facilitation of executive workshops, visioning sessions,
strategic planning process, develop analytical frameworks for technology-media-entertainment convergence trends, building
an enterprise balanced–scorecard, thought-leadership materials including position-papers.

Research & Analytics: Track industry developments in select countries from a regulatory, media-consumption &
monetization standpoint, as well as their development ecosystem (infrastructure, software and services) to support media
management & delivery.

Collaboration Opportunities & Partnerships: with media technology ecosystem (social computing, audience
research, user-experience design, set-top box analytics and security), advertising technologies linked with multi-screen
consumer environments, and delivery-infrastructure to gain insights into monetization dynamics, metadata management
challenges, use-cases, and other areas.

Bridge-Building To Professional Networks: key industry-vertical experts (corporate executives & strategists),
venture-capital arm of technology & media companies, media technology experts, content producers & aggregators & IP value
assessment experts.


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