Operators Survival Guide, Episode 2: Show Me the Money – OTT TV Summit 2013

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Second episode of the Operator's Survival Guide, entitled "Show Me the Money".
Presented by Viaccess-Orca's Deputy CEO, Haggai Barel, at the OTT TV Summit 2013.
Watch his presentation here: http://www.youtube.com/watch?v=LloorkPAFbk

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Operators Survival Guide, Episode 2: Show Me the Money – OTT TV Summit 2013

  1. 1. Operators Survival Guide, Episode two: Show Me the Money Haggai Barel @haggaibb Deputy CEO @ViaccessOrca
  2. 2. The Marketplace Non - Traditional Traditional Pay TV Providers Broadcasters CE Makers Technology Enablers Retention / Competition Maximize Exposure CE Sales / Margins Technology Advances OTT Service Providers Content Creators Social Networks Retailers Expansion Security / Max. Revenue Maximize Reach Ongoing Sales
  3. 3. Users’ Behavior and Expectations
  4. 4. Users’ Behavior and Expectations
  5. 5. Users’ Behavior and Expectations
  6. 6. Operator Challenges in Today’s Market • • • • • • Subscriber churn / retention Service adoption Premium services Content costs / licensing Business models Changing competitive environment
  7. 7. Tour Guide
  8. 8. Engagement Model Business Rules CAS / DRM Anti-Piracy Services
  9. 9. Engagement Model EPG, PVR VOD / Catchup Self Service Business Rules CAS / DRM Anti-Piracy Services
  10. 10. Engagement Model Social Profiles EPG, PVR VOD / Catchup Self Service Business Rules CAS / DRM Anti-Piracy Services
  11. 11. Engagement Model Cognitive Exploration Next Gen. Metadata Full Engagement Social Profiles EPG, PVR VOD / Catchup Self Service Business Rules CAS / DRM Anti-Piracy Services
  12. 12. Engagement Model
  13. 13. Engagement and Revenues User’s perspective Business perspective
  14. 14. Monetization Strategies
  15. 15. While in the US majority of spending is on SVOD services, ad-supported services dominate OTT revenue in Europe OTT Forecast: Share of OTT spending by Business Model- 2011-2013 100% 0.31% 0.24% 0.24% 3% 3% 4% 6% 7% 7% 4% 4% 5% 3% 5% 3% 90% Public Broadcast 38% 80% 38% 42% 50% 40% 41% 37% 33% 70% 39% 41% 52% 50% 14% 19% 41% 12% 19% 15% Advertising Revenue SVOD Revenue 15% 22% 12% 11% 23% 8% 19% 1% 17% 25% 10% 22% 11% 20% 21% 43% 30% 10% 56% 64% 60% 40% 55% 55% 16% 16% 13% 2013 27% 24% 21% 20% 11% 2012 29% 17% 18% 2013 2011 18% TVOD Revenue 22% 21% EST Revenue 2012 2013 19% 13% 13% 7% 0.36% 2% 11% 14% 12% 2012 2013 17% 0% 2011 US 2011 2012 UK 2013 2011 2012 Germany France 2011 Italy Source: Strategy Analytics' Digital Media Strategies -OTT Video Forecast
  16. 16. Change in Penetration of TV Everywhere % of Pay TV Subscribers with Access to TV Everywhere or Multiscreen Services through their Pay TV Operator Availability of Multiscreen / TV Everywhere Services 100% 86% 90% 92% July 2011 January 2012 July 2012 January 2013 (Est) 81% 80% 72% 66% 60% 53% 40% 40% 21% 20% 12% 25% 18% 16% 10% 7% 9% 3% 2% 5% 0% North America © 2013 Parks Associates Western Europe Eastern Europe Asia / Pacific ROW 21%
  17. 17. Changes in Awareness Awareness of TV Everywhere Service (Among BB HHs With Pay-TV Service) 30% 26% % Aware of a TV Everywhere Service from their Pay TV Provider 25% 20% 17% 18% December 2010 November 2011 15% 10% 5% 0% Parks Associates Consumer Analytics © 2013 Parks Associates November 2012
  18. 18. Western Europe OTT video spending is still a small fraction compared to US OTT video market OTT Forecast: Total OTT Video Spending- 2011-2013 $8,000 $7,000 2011 2012 2013 $6,000 $5,000 $M $4,000 $3,000 $2,000 $1,000 $0 US UK DEU FRA ITA Source: Strategy Analytics' Digital Media Strategies -OTT Video Forecast
  19. 19. A Look at TV Everywhere Users
  20. 20. TV Everywhere User vs. Average Subscriber: Video Spending • Higher overall ARPU (for triple-play bundles) • Likelihood to cancel service is not notably higher than for overall subscribers • More likely to have reduced part of their pay TV subscription • Higher overall spending on: • • • • • • DVD rentals and purchases (1.7x) Blu-ray rentals and purchases (1.7x) Video rental downloads (4x) Video purchase downloads (4x) Theater tickets (1.5x) OTT subscriptions (2x) 20
  21. 21. TV Everywhere User vs. Average Subscriber: Demographics TV Everywhere Users Average age Primary generations Children at home Average Pay TV Subscribers 38.5 44.7 Gen X (42%) Mil. / Gen Y (33%) Boomers (36%) Gen X (35%) 56% 36% Similar in: • Gender • Home ownership • Income • Number of adults per HH • Education • Number of kids per HH (among HH with kids) • Marital status
  22. 22. TV Everywhere User vs. Average Subscriber: Subscriptions to Premium Features Premium TV Subscriptions "Which of the following do you have with your TV service?" (Among BB HHs With Pay-TV Service) TV Everywhere User Avg. Pay-TV Subscriber HD Channels DVR Premium movie channels Premium sports package 0% 30% 60% % Subscribing to Service Parks Associates Consumer Analytics © 2013 Parks Associates 90%
  23. 23. TV Everywhere User vs. Average Subscriber: Viewing Quantity • Compared to average subscribers, TV Everywhere users spend fewer hours watching: • Broadcast TV • DVR recordings • OTT services are second to broadcast TV as most often used source of content (followed by DVR recordings) • TV Everywhere users spend more hours watching: • • • • DVDs Video-on-demand on TV Pay-per-view Video from online sources
  24. 24. TV Everywhere User vs. Average Subscriber: CE Environment • • • • • Average 2.6 more Internet-connected devices per household More likely to use a portable device for e-mail Twice as likely to update Facebook with a tablet 50% more likely to catch up on news and blogs via smartphone Over 85% use a device other than a TV to watch full length movies
  25. 25. Trends Impacting Monetization • • • • Availability / cost of content Personalization of the experience Content discovery Second screen experiences
  26. 26. Monetization Opportunities
  27. 27. Monetization Opportunities Bundling with existing packages
  28. 28. Conclusions • • • • • New landscape / new options Most lucrative customers Spill-over into paid video Shift to more personal experiences Tight link between personalized offering and increased revenues • Be prepared for some trial and error • Step up and start experimenting
  29. 29. Thank you Haggai Barel @haggaibb Deputy CEO @ViaccessOrca

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