Biz model for augmented reality

MT5016 – Business Models for Hi-tech Products

Business Model for

Augmented Reality Technology

Group Members

Aryoko Wibowo S. A0082149A

Jerico Juico A0091472E

Lim Shoa Siong A0068312L

Mun Kek Chian A0090745B

Yeo Lian Sheng A0081976N

Scope

• Technology Description

• Product Overview

• Market Segment

• Value Proposition

• Value Capture

• Scope of Activities

• Strategic Control

• Aurasma Demo

Technology

Forms of AR Implementation

• Head-up Display (HUD)

– Sensics Smartgoggle

• Adv: Include sound with 3D

capability; allows interactions

• Dis: Not mobile; primarily in-

home experience like

entertainment,

communication and egaming

– Google Glasses

• Adv: Data display floats in

virtual field; utilizes mono-

vision correction

• Dis: Not truly immerse; loses

depth perception

– Innovega iOptik

• Adv: Fully immerse

• Dis: Not completely wear and

use, require contact lens

Forms of AR Implementation

• Smartphones

– In the form of AR browsers and apps

– Data tagging readers that look for data tags placed on specific

items, images or locations

– Not continuous and automatic

– Has to be started, selected and managed to obtain information

AR Applications

• Marketing & Advertising

• Tourism & Navigation

• Translation & Instruction

• Gaming & Magazines

• And more … …

Frost & Sullivan, “Emerging Technologies in the European Mobile Space”, June 2011

AR Market Potential

Stratecast, “Augmented Reality: The Virtual World Gets Real”, June 2012

• Global AR Market projected to increase significantly

Drivers for AR in Smartphone

Frost & Sullivan, “Mobile Augmented Reality”, January 2011

Frost & Sullivan, “The Race of Smartphones, What Next”, June 2012

Frost & Sullivan, “Exploring the Evolution of Smartphone Vendors”, August 2012

In particular, AR in smartphones has great potential for growth!

Product

Leveraging its industry-leading pattern-recognition

technology, Autonomy introduce Aurasma

Augmented Reality platform.

Aurasma App uses location or the

camera to translate the image

into data and recognise it with the

associated content

Once the location or image is

recognised, it will seamlessly

overlays multimedia content into the

viewer to create a unique and

engaging experience for the user

Product

Free

Access

Apply for

Skinned Apps

and Download

Kernel into

Existing Apps

Free

Free Through Partnership

Product

(Content

Browser)

(Content

Creation)

Video – http://www.youtube.com/watch?v=tl4ic-UrtHk

Customer Market Segment


• Printed Magazine Publishers

– General Interest Content

– Niche Interest Content


Juha Saukkonen, “Technologies for the Future - Value System Analysis as a Tool for (Media) Convergence Assessment”,

EU-US Seminar: New Technology Foresight, Forecasting & Assessment Methods, Seville 13-14 May 2004


– Value Chain

Content

Creation

Content

Consumer

Content

Distribution

Content

Aggregation

Content

Management

Slide 17

• Consumers believe that traditional media is still the best

sources for advertising!

• Magazine advertising influenced the

customers decision on purchasing

Advertising segment is important for

magazine publisher


http://www.marketingcharts.com/category/magazines/

Slide 18

Consumers expect more life content from advertisement


http://www.marketingcharts.com/wp/television/consumers-agree-ads-should-tell-unique-stories-24304/


Print version of magazines continue to be the preferred mode of reading

http://www.magazinescanada.ca/uploads/File/AdServices/Research/Trends/Trends2011July2012.pdf


Although consumers still prefers print version of magazine, they see digital content as complementary

Consumers think that videos and photos greatly enhanced their magazine reading experience

http://www.magazinescanada.ca/uploads/File/AdServices/Research/Trends/Trends2011July2012.pdf

Slide 21

Trends in Print Magazine -

QR Code

Magazines’ QR Codes

Said Delivering Strong

Response, Engagement

Rates

Mobile barcode (or QR Code)

scans by consumers were up

157% in Q1 2012 over Q1 2011 http://www.marketingcharts.com/topics/demographics/consumer-qr-code-scans-up-157-22145/scanlifeqrdemos585jpg/

Slide 22

Trends in Print Magazine -

QR Code

Magazine advertisers’ use of QR codes grew to new heights

http://www.marketingcharts.com/direct/magazine-advertisers-use-of-mobile-action-codes-reaches-new-heights-

23075/nellymoser-mag-ad-pages-mobile-action-code-mar2011-mar2012-jun20120-aug2012png/

Comparison of AR vs QR


• Integrating AR into magazines – AR industry is set to grow rapidly

– Magazine publishers are looking for new innovative solutions to capture readership and attract advertisement

– Readers are looking to complement print magazines with digital content (esp. video and photos)

• Potential for AR to be integrated into print magazines! – AR can replace QR Code

Video – http://www.youtube.com/watch?v=kvEisDAsu8w

Slide 26

Potential Applications of AR in

Magazine

AR

Additional digital content for printed

magazine

Enhance readers experience, more

information, more fun

Boost sales of Magazine by more appealing content

Enhance advertisement

content

Readers gain better visual experience out of attractive

ads

Publishers can attract more advertiser

Access to E-commerce site

Direct readers to online shopping site easily

New revenue stream for publisher by refer readers

to commercial site

Enhance interaction between readers & publisher

Publisher can integrate AR to social platform to

attract more readers

What AR can

do for

Magazine?

How would it

benefit

readers /

publisher?

Value Proposition

Value Proposition

• Expand Magazine Contents

– Convergence of print and digital content

– Hybrid media as a new product service

• Open Potential Revenue Stream in Mobile Advertising for

Magazine Publishers

– Extract benefits from increasing digital connection trend

• Enhance the Appeal of Magazine

– Increase readership

– Attract advertisement

• Increase Revenue

– Magazine Sale Revenue

– Advertising Revenue

Slide 29

AR Digital Content + Magazine

Magazine comes to life with additional digital content!

Slide 30

Makes the magazine more appealing to the readers!

AR Digital Content + Magazine

Slide 31

AR + Magazine Advertisement

Enhance advertisement effect by incorporating audio/video into print!


• Potential Revenue Stream from Mobile Advertising

for Magazine Publishers

– Defined as advertising activity delivered via mobile devices (e.g.

smart-phones, tablets) to target audiences

– Including mobile display and video advertising

Stratecast, “Mobile Advertising Building Blocks”, February 2012

Mobile Advertising Ecosystem


Frost & Sullivan, “Asia Pacific Mobile Advertising Markets 2010”, February 2011

Frost & Sullivan, “US Mobile Advertising and Search Market”, February 2012

Frost & Sullivan, “The Status of the Mobile Advertising Market in Europe - The Perspective of the Ad-Technology

Enablers”, April 2011

Magazine Publishers Can Capture the Growing Revenue in Mobile Advertising

Value Capture

Value Capture




– Value Chain

Magazine Publisher

Advertiser

Reader

Value Capture



Magazine Publisher

Advertiser

Reader

Mobile Advertiser

Modified Value Chain for Magazine Publishing Market

AR Platform Manager

Value Capture


– Money Flow & Revenue Stream

Magazine

Publisher Reader

Advertiser Brand

Company

Printing

House

Sales &

Marketing

Distributor

Outsourced

Content

Value Capture

Magazine

Publisher Reader

Printing

House

Sales &

Marketing

Distributor

Outsourced

Content

Mobile

Advertiser

Modified Revenue Stream

Advertiser Brand

Company

NEW Increased

• Increase revenue from existing stream • Generate new revenue stream

Publisher

Advertiser

Advertiser pays Publisher for Printed Ads

Informed by the product/content,

Consumer

Slide 40

& System Publisher

AURAsma experience

Publisher develops content to create the Aura

Advertiser

Advertiser pays Publisher for Printed Ads

Seeks the product/content, Delighted by the

Aurasma experience

Publisher Pays per click

Aurasma Charges per click

Publisher Charges

Advertiser for Aura

Consumer

AURA

Scope of Activities

Scope of Activities

• Continous Improvement on Image Recognition Technology

• Increase ability on recognizing real world objects

• Fast response of the image recognition

• Speed connection detection to adjust content quality

• Adding more features on Aurasma Studio that will benefit

content creator in creating interactive Auras

• Participate in Augmented Reality Events and Conferences to

benefit from industry experience

Scope of Activities

• Partnership with Magazine Publishers

• Starting from Technology Related Magazines into all categories of magazines

• Educate Magazine Publishers and also 3rd party involved on Magazine publishing

especially Magazines Advertisers by conducting free training on adding Auras

using Aurasma Studio

• Collaborate with Magazine Publishers on defining the best user experience for

the customer in order to enhance it

• Develop a platform for personalized user experience of the magazines

customers

Scope of Activities

• Due to the Indirect Network Effects between Aurasma Lite and

Aurasma Pro, both sides of users should grow sustainably.

• Make Aurasma Lite available in dominant Mobile OS platform

• Collaborate with Mobile Devices Manufacturers to make Aurasma Lite as Pre-

Installed Apps

• Distribute Aurasma Pro to prospective partners such as Content Developers,

Advertisers, etc.

Strategic Control

Strategic Control Overview

IP Protection Complementary

Assets

Network Effects R&D

Strategic Control

IP Protection

• Increase IP protection in major countries of target

markets

– Patent

– Copyright

– Trademark

• However, even with IP protection, it is difficult to

enforce against infringements

• Need to have strong control over complementary

assets

Complementary Assets

Complementary Assets

Distribution channels

Marketing capabilities

Strategic alliances

Customer relationships

Aura browser

Aura development

tools

Aura development

training

Strong control over key complementary assets is required

Network Effects

• Focus on building strong base of magazine

publishers and readers using Aurasma through free

distribution of Aurasma Lite and Aurasma Pro

• Leverage on network effects to make Aurasma the

defacto standard for AR in magazines

Content Browser Content Creation

Browser growth drives

demand for Aura creation

Aura growth drives

demand for Aura Browsers

Magazine readers Magazine publishers

Research & Development

• Continued improvement in core AR technology

• Enhancement of Browser App and Aura

Development tools

• Push the frontier of magazine reader experience

Summary

Business Model

Component

Description

Product • Aurasma Lite (Content Browser)

• Aurasma Pro (Content Creation)

Customer Segment • Print magazine publisher

Value Proposition • Expand magazine contents

• Enhance magazine appeal

• Increase sales & advertising revenue

Value Capture • Charge per-click on content & advertisement accessed thru

Aurasma

Scope of Activities • R&D in image recognition technology

• Partnership with print magazine publisher, mobile OS

developer, mobile device manufacturer and Aura developers

Strategic Control • IP protection thru patent, copyright & trademark

• Tight control of key complementary assets

• Leverage on network effects between Aurasma Lite and Pro

• R&D to maintain technology leadership

Aurasma Demo

References

• Bernados, A., & Casar, J. (2011). Analyzing business models for mobile augmented reality.

15th International Conference on Intelligence in Next Generation Networks (ICIN), (pp. 97-

102).

• Frost&Sullivan. (2010). The race of smartphones, what next?

• Frost&Sullivan. (2011). Emerging technologies in the European mobile space.

• Frost&Sullivan. (2011). Futuretech Alert.

• Frost&Sullivan. (2011). The status of the mobile advertising market in Europe - the

perspective of the ad-technology enablers.

• Frost&Sullivan. (2012). Exploring the evolution of smartphone vendors.

• Frost&Sullivan. (2012). U.S. mobile advertising and search market.

• Jude, M. (2012). Augmented reality: the virtual world gets real. Frost & Sullivan.

• Lee, I. (2009). Towards augmented reality a review of its enabling technologies.

International Symposium on Ubiquitous Virtual Reality, ISUVR '09, (pp. 25-28).

• Lopez, H., Navarro, A., & Relano, J. (2010). An analysis of augmented reality systems. Fifth

International Multi-conference on Computing in the Global Information Technology (ICCGI),

(pp. 245-250).

• MagazinesCanada. (2012). Magazine trends 2011. Retrieved 2012, from

http://www.magazinescanada.ca/uploads/File/AdServices/Research/Trends/Trends2011July

2012.pdf

• Saukkonen, J. (2004). Technologies for the future - value system analysis as a tool for

(media) convergence assessment. EU-US Seminar: New Technology Foresight,

Forecasting & Assessment Methods. Seville.

References

• Scocco, D. (2006). The Teece Model. Retrieved 2012, from

http://innovationzen.com/blog/2006/08/24/innovation-management-theory-part-5/

• Stratecast. (2011). Mobile advertising building blocks: subscribers, networks and

platforms. Frost & Sullivan.

• Sullivan, F. &. (2011). Asia Pacific mobile advertising markets 2010.

• Teece, D. (1986). Profiting from technological innovation: implications for integration,

collaboration, licensing and public policy.

• Aurasma. (2012). Retrieved 2012, from Aurasma: http://www.aurasma.com/

• Autonomy. (2012). Autonomy: Aurasma. Retrieved 2012, from

http://promote.autonomy.com/promote/products/aurasma.page

• Consumer QR Code Scans up 157%. (2012). Retrieved 2012, from

http://www.marketingcharts.com/topics/demographics/consumer-qr-code-scans-up-157-

22145/scanlifeqrdemos585jpg/

• Consumers agree: ads should tell unique stories. (2012). Retrieved 2012, from

http://www.marketingcharts.com/wp/television/consumers-agree-ads-should-tell-unique-

stories-24304/

• Magazine advertisers' use of Mobile Action Codes reaches new heights. (2012). Retrieved

2012, from http://www.marketingcharts.com/direct/magazine-advertisers-use-of-mobile-

action-codes-reaches-new-heights-23075/nellymoser-mag-ad-pages-mobile-action-code-

mar2011-mar2012-jun20120-aug2012png/

• Magazines' QR Codes Said Delivering Strong Response, Engagement Rates. (2012).

Retrieved 2012, from http://www.marketingcharts.com/wp/direct/magazine-action-codes-

said-delivering-strong-response-engagement-rates-23698/

References

• Marketing Charts: Magazines. (2012). Retrieved 2012, from

http://www.marketingcharts.com/category/magazines/

• (n.d.). Retrieved 2012, from We are organized chaos (WAOC):

http://weareorganizedchaos.com/index.php/category/mobile/

Biz model for augmented reality

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