Download as PDF, PPTX
Uploaded byRob Van Den Dam
CSTB 2011 Moscow Rob Van Den Dam 2 Feb 2011
The document discusses the shift from traditional broadcast media to social media platforms on the open internet. It notes that traditional media companies are experiencing uncertainty and complexity in the new economic environment. Meanwhile, younger audiences are turning away from linear TV viewing and embracing online video platforms like YouTube. While telecom companies have invested in IPTV, most do not expect it to be a major revenue driver. The open internet allows for new advertising-supported models but has yielded lower returns than broadcast TV. Younger consumers increasingly expect entertainment to be free or low-cost and prefer social networks over traditional providers. The emergence of shared social spaces like Facebook and YouTube is shaping the future media landscape.
More Related Content
Similar to CSTB 2011 Moscow Rob Van Den Dam 2 Feb 2011
CSTB 2011 Moscow Rob Van Den Dam 2 Feb 2011
- 1. Rob van denDam Global Telecommunications Sector Leader IBM Institute for Business Value Social Media Where Broadcast and Broadband come together © 2010 IBM Corporation
- 2. Majority of CEOs,including those of media and communications companies, experience the New Economic Environment as distinctly different Face-to-face interviews with over 1,500 CEOs The New Economic Environment % 13% 18% 69% More volatile Deeper/faster cycles, 79% 30 Complexity more risk gap* More uncertain 60% 14% 21% 65% Less predictable 49% More complex 18% 22% 60% Multi-faceted, interconnected 26% 21% 53% Structurally different Sustained change Currently Expect high/very Feel prepared experiencing high level of for expected Not at all/ To a large/ high/very high complexity over 5 complexity To some extent to a limited extent very large extent level of complexity years © 2010 IBM Corporation
- 3. Two trends -shift to the Open Internet and collaborative communication - are shaping the future of the media landscape Collaborative Gated Communities Shared Social Space Communication Pattern n ctio dire t Traditional ke Open and Free Broadcasting ar M Terrestrial Satellite Telco TV One-to-One Broad Broad providers casters casters One-to-Many TV Cable News companies Channels Provider-Controlled Communication Environment Open Internet © 2010 IBM Corporation
- 4. The traditional medialandscape where large media players were controlling the channels and messages is increasingly slipping away Share Change 2004 – 2009 Devices 28% 39% + 11% Distribution 22% 25% + 3% Advertising 31% 23% - 8% Paid Content 19% 13% - 6% 2004 2009 (US$915 billion (US$1,126 revenue) billion revenue) © 2010 IBM Corporation
- 5. Telcos have enteredthe scene and are investing heavily in IPTV Which of the following consumer/residential services do you believe are most critical for you to invest in over the next 5-10 years? Social media 43% IPTV/ Video on Demand 34% Intelligent lifestyle services 30% Fixed Mobile Convergence (FMC) 29% End-user, security, authentication 27% Mobile Payments 21% Content storage 20% Internet-basedCommunications 14% Location-based /availability Services 13% Mobile TV/Video 9% 3D Television /Video 9% Unified messaging 7% Mobile B2C transactions 7% Face-to-Face interviews with Mobile e-Mail 5% Telecom Executives Mobile / multi-player games/Virtual Worlds 5% (IBV 2009 Video telephony 4% Global Telecom Voice conferencing 2% Industry Survey) Video conferencing 2% © 2010 IBM Corporation 2009 IBM Institute for Business Value Telecom Industry Survey N=61
- 6. However, only atiny proportion of Telcos expect IPTV to make significant contributions to their revenues over the next 5-10 years What do you believe will be the relative contributions of the following models/services to your revenues over the next 5 – 10 yrs? IPTV 4% 14% 10% Revenue 30% 27% 26% Contribution 33% 96% Above 10% 86% 90% 70% 73% 74% Below 10% 67% Source: 2009 IBM Institute for Business Value Telecom Industry Survey N=61 Traditional per Mixed tariff Tiered broadband Triple/Quad play Analytics to Internet IPTV minute voice bundles incl. 'all- based on speed / reduce churn, communications (subscriptions you-can-eat' quality improve cross/up- (e.g. VOIP, IM and advertising) sell Social Networks) Many Telcos see offering TV/video services mainly as a necessity to combat the trend of losing subscribers to cablecos which are increasingly offering triple-play bundles © 2010 IBM Corporation
- 7. The Open andFree model provides alternatives to traditional video and entertainment services on open internet platforms at no – or very little - costs Razor Blade Model Inverse Razor Blade Model Cheap Razor Pricey Blades Pricey Device Cheap music/videos Apple is using iTunes and the AppStore to drive demand for hardware and foster audience monetization © 2010 IBM Corporation Source: 2009 IBM Digital Consumer Survey. Total responses = 2800 across six countries: Australia, Germany, India, Japan, UK, US
- 8. The substitution threatto traditional media is real. For television, it is most apparent with the converted younger audiences Impact of Online Video Viewing on “Traditional” TV Viewing 50% US Respondents Segmented by Age 40% Watch slightly less TV 30% Watch significantly less TV 20% 10% 0% 18 - 21 21 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+ New channel consumption is happening at the expense of traditional linear television, particularly for the younger demographics © 2010 IBM Corporation Source: 2009 IBM Digital Consumer Survey. Total responses = 2800 across six countries: Australia, Germany, India, Japan, UK, US
- 9. The Open andFree model alters the equation for the Traditional and IPTV providers. Clashes will be unavoidable for distribution and ......advertising! Google TV: Google partners with Sony, Intel for Google TV Targeted Advertising Matching content - whether it is a regular tv program or video from the Internet - , web browsing patterns and email behaviour will result in more effective advertising Google CEO Eric Schmidt: “Google TV will bring both search and context to traditional television, with behavioral data to both. That would shift the $70 billion annual TV advertising market in favor of Google’s strengths. W’re getting into the game by tilting the playing field.” © 2010 IBM Corporation
- 10. Relying on subscriptionsand PPV models is unsustainable in a world where consumers do not expect to pay for all content Global Users interested in Online Video Ad-supported versus paid content online Add-Supported Consumer-Paid 90% 83% 80% 73% 69% 70% 70% 64% 62% 60% 50% 38% 40% 36% 31% 30% 30% 27% 20% 17% 10% 0% Australia Germany India Japan UK US Ultimately it all revolves around advertising relationships and the possibilities the Internet offers for more efficient targeting Source: 2009 IBM Digital Consumer Survey. Total responses = 2800 across six countries: Australia, Germany, India, Japan, UK, US © 2010 IBM Corporation
- 11. Many consumers willaccept advertising and provide information about themselves in exchange for relevancy and value Under What Circumstances Would you Provide Information About Yourself? If message and content are ONLINE MOBILE 71% relevant and personalised If offered a discount for voice 64% 1 /text services in return Free digital music/video Relevant content & download messaging If offered free shopping 2 61% Shopping vouchers Free airtime minutes vouchers 3 Travel discounts Shopping vouchers If offered free music or video 46% downloads 4 Relevant content & Free digital music/video download If it is entertaining, innovative messaging 39% or amusing Listed in order of importance If it is embedded in content I 19% am already watching Source: IBM Institute for Business Value Global Telecom Consumer Survey, 0% 20% 40% 60% 80% © 2010 IBM Corporation
- 12. However, online ad-supportedmodels have yielded a substantial lower unit return Broadcast television value per thousand viewers per episode $560 “We (the industry) trained the online audience to de-value Advertising 3x content. Not only have we given the online content away for free, value but we inserted fewer ads as we tried to grow the audience base.“ $170 Executive Vice President Strategy, Major Broadcast Television Company Broadcast TV Online Broadcast TV viewer estimated at 3 times the value of online viewer due to scarce inventory placement per show 12 Sources: UBS Global Can Pay TV, Benefit from Online Video; IBM Analysis © 2010 IBM Corporation NOTES: Broadcast TV online value estimated as the average between high and low scenarios for pricing.
- 13. The Gated Communitiesis still a “walled garden” approach – but one that facilitates collaboration services Telecom providers are Communications Content uniquely placed to • SMS • Apps • Mobile web integrate all forms of • Social media • Mobile video communications providing • Search/maps • Location-based • Sponsorships seamless social media services • In-game advertising experience across the ‘three screens’ Commerce • Shopper apps • Mobile couponing “Mobile has the opportunity to be • Loyalty programs a game changer because of its • RFI ability to transcend time and • Barcoding space to deliver true utilitarian value to the consumer.” Source: IBM analysis CEO Digital, Global Agency Holding Company © 2010 IBM Corporation
- 14. The power ofTelevision to view and share Personal Media. « View and share my personal content like any TV channel » Personal media « The basics » management on TV Family calendaring Share Social TV Upload, restore, Photo/Video Preview, organize Repository News headlines, watch/share Share My YouTube Playlist on TV YouTube top20 on TV New photo notification / preview Add to my screenshow, view my Upload FlickR on TV screenshow Share my screenshow photos My Personal channel TV chat My photos on TV Thematic Web2.0 on TV Music streaming on TV TV integration Mobile integration © 2010 IBM Corporation
- 15. There are differentoptions for traditional providers to move to the Gated Communities space Open Community Community of developers, AppStore / Revenue Pro-consumers Sharing model Commercial parties Apps developed by applications, e.g. major partners but hosted brand TV presence by the Service Provider Applications developed & hosted by the Scope of technical/ Service Provider Partnering capabilities Service Provider applications as Media Management and Sharing, Social TV, TV Chat, Family calendaring, etc © 2010 IBM Corporation
- 16. Many IPTV providersare experimenting with these concepts However, the question remains whether .............. Verizon Communications has developed TV-based widgets for Facebook, Twitter and other features in an attempt to make FiOS TV a more fully- integrated TV an online content experience. In addition, plans to add the ability to stream online videos from YouTube. It has also opened its widget platform application programming interface to outside developers, and its "Widget Bazaar " . © 2010 IBM Corporation
- 17. ....Telcos are seenas the logical providers for consumers to turn to for online video and other entertainment content US NL Spain UK Sweden Germany Australia China India Internet Internet Internet Internet Internet Internet Internet Internet Internet Information Information Information Information Information Information Information Information Information Provider Provider Provider Provider Provider Provider Provider Provider Provider Pay TV Pay TV Telecom Pay TV Telecom Telecom Telecom Telecom Pay TV Provider Provider Provider Provider Provider Provider Provider Provider Provider Social Telecom Pay TV Telecom Device Content Pay TV Pay TV Telecom Network Provider Provider Provider Provider aggregator Provider Provider Provider Sites Social Social Social Content Content Pay TV Pay TV Content Device Network Network Network aggregator aggregator Provider Provider aggregator Provider Sites Sites Sites Social Social Social Telecom Content Device Device Device Device Network Network Network Provider aggregator Provider Provider Provider Provider Sites Sites Sites Social Social Device Device Content Device Content Content Content Network Network Provider Provider aggregator Provider aggregator aggregator aggregator Sites Sites © 2010 IBM Corporation Source: IBM Institute for Business Value: Global Telecom Consumer Survey, 2009
- 18. Moreover, the youngergeneration seems to prefer Social Networks above Telcos as provider for online video and other entertainment Question: Over the next 5 - 7 years, whom will you expect to go to for online video, music, games and other entertainment content? Select all that apply 80% 70% 68% 65% All ages 60% Under 25s 50% 42% 42% 40% 35% 30% 29% 29% 29% 30% 25% 23% 26% 20% 10% 0% Internet Pay TV (e.g. Telecom Social Device Content Information Cable) Provider Provider Networking Manufacturer aggregator Provider (e.g. Sites (e.g. Nokia) (e.g. Apple Google) iTunes) Source: IBM Institute for Business Value: Global Telecom Consumer Survey, 2009 © 2010 IBM Corporation
- 19. Social Media havebecome a primary destination for people to manage and enrich their digital lifestyle, also for communicating Nov 2010: Facebook launches a 'next generation' messaging service © 2010 IBM Corporation
- 20. Shared Social Spaceis the domain of players as Facebook & YouTube - throughout the world, people are turning en masse to these sites Aug-04 Aug-06 May-10 1 Yahoo! Yahoo! Google 2 MSN MSN Facebook 3 Google Google Youtube 4 Microsoft MySpace Yahoo! 5 Passport Live Live Twitter was the 6 eBay eBay Blogger fastest-growing 7 Amazon Youtube MSN Web brand growing 8 Offeroptimizer Microsoft Twitter 1,928 % from June 9 Fastclick Amazon Wordpress 2008 to June 2009 10 Doubleclick Orkut MySpace 11 go Blogger Google UK 12 Alibaba Google UK Microsoft 13 CNN Passport Amazon 14 BBC BBC Bing 15 165.254.12.202 Craigslist eBay The largest Social 16 AOL Go LinkedIN Network with over 17 Google UK CNN Flickr 500M unique 18 Gator Alibaba Craiglist visitors worldwide 19 eBay UK Megaupload Rapidshare per month 20 Searchscout Imdb Livejasmin Social Media Sites Note 1. Ranking reflects top 20 English Language Web sites; the multilingual Wikipedia is not shown in this list Note 2: The traffic rank is based on three months of aggregated historical traffic data, and is a combined measure of page views and users (reach). © 2010 IBM Corporation
- 21. With the “DigitalNatives” at the forefront of this shift, older audiences have followed the younger audiences to social networking sites Adoption of Social Networking Sites by Age US 2007 - 2009 100% 2007 85% 85% 2008 2009 80% 77% 74% 73% 68% 60% 56% 52% 50% 40% 31% 31% 24% 20% 0% 18 - 24 25 - 34 35 - 44 45 + Source: 2008 IBM Digital Consumer Survey. Total responses = 2800 across six countries: Australia, Germany, India, Japan, UK, US. IBM 2007 digital © 2010 IBM Corporation consumer survey: Total responses = 2800 across five countries: Australia, Germany, Japan, UK, US
- 22. Because of thespeed in which social media enables communication, ‘word of mouth’ now becomes ‘world of mouth’ If Facebook were a country it would be the world’s fourth largest between the US and Indonesia > 1.5 million pieces of content (Web links, news stories, blog posts, etc.) are shared on Facebook daily Currently YouTube has more than 2 billion views per day There are over 200.000.000 blogs. 54% of bloggers post content of tweet daily Twitter has nearly 100 million users who send on average of 600 tweets per second People continue to spend more time on SN and blog sites than ever before , with total minutes increasing 82% year-over-year the average time per person increasing 67 % year-over-year © 2010 IBM Corporation
- 23. Social Media isredefining what broadcasting really means Citizen Journalism Egypt 2011 Haiti 2010 Iran 2009 China Earthquake 2008 Fast and viral distribution on large scale © 2010 IBM Corporation
- 24. Subject to thisdisruptive force of changing human communication behaviour, the option of doing nothing is a luxury few can afford OLD MEDIA MINDSET + NEW MEDIA CONSUMER = DISINTERMEDIATION © 2010 IBM Corporation
- 25. IBM Institute forBusiness Value for Telco and Media industries www.ibm.com/iibv Rob van den Dam Global Telecom Industry Lead, Thank you! IBM Institute for Business Value [email protected] © 2010 IBM Corporation