Video content distributionNew challenges for the Media industry
DƯƠNG Huy Cảnh2nd VN Telecom Conferences
Paris – 9 May 2008
Agenda
Market trends
Digital Rights Management
Behind the glass
Players
Key challenges
Popular content
• ADSL, Cable, Satellite, Broadband networks• Set-top-box + TV, Internet PC, Portable Multimedia Player (PMP), Mobile
• Home, hotel, hospital, train• Same as DVD market
• Rental: 4.99€ (Premium) / 3,99 € (Catalog) / 1,99€ (Promotion)• Buy: 14.99€ (Premium) / HD: 6.99€
• Cinema, Sport, News, TV Series, Kids, Adult contents• Hollywood productions (+93%) vs. French titles (+20 %) / Foreign (+53%)
Pricing model
Location
Devices
Market trends – On-demand usage
• High Definition (HD); Burn & Go• Mobility: Sony PSP, Archos; TGV / Havas Voyages• Gaming: Xbox, PS3
Innovation
• Streaming / Download / Progressive download• Catch-up TV vs. linear TV; FOD (Free On Demand: 42% on Comcast)• SVOD: 25 000 subscriptions/month
Usage
“C’est quand vous voulez” Anytime, anywhere, in one clic?
Market trends – Key figures 2012
By 2012, 909 million homes will have access to VoD (~78% world's TV households) 12 to 15 billion $ revenues: 50% generated by North America, only 12% by Asia Pacific Europe: UK is leading, followed by France and Germany France: 10 million downloads on 2nd semester 2008
Revenues have doubled (30 million € in 2007 / 60 millions in 2008)
Are TV broadcasters repeating the same mistake as the music industry?
12%
50%
33%
5%
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2006 2012
VoD revenues (billion $)
Rest of the world
Europe
North America
Asia Pacif ic
25
455
45
200
10
70
0
50
100
150
200
250
300
350
400
450
500
2006 2012
Homes with VoD (millions)
Asia Pacif ic
North America
Europe
Rest of the world
Source: Informa Telecom & Media, march 2008
“Companies that do not provide their content online will suffer serious damage from piracy” Adam Thomas, Informa Telecom & Media
A world without DRM?
Legal: Loi HADOPIHaute Autorité pour la Diffusion des Œuvres et la Protection des droits sur Internet
“Trying to make digital files uncopyable is like trying to make water not wet…” Bruce Schnieir, Counterpane Internet Security (Wired 2006)
Compete against the “free”: Strict security vs. user experience
Microsoft’s Windows Media is cracked, Apple’s FairPlay is cracked acceptable amount of “breakage”
P2P and advertising model? (M6 Replay, Joost, 1-Click Media, Kewego) “Better product + Fair price = iTunes” (Steve Jobs, Apple)
2007 Accenture 10 years projection: DRM business model Beware legal « victories »
Interoperable, simpler, faster, « cool », superior search
Lightweight DRM for P2P networks to track usage data (CRM)
Success: Warner Bros DETE (Digital End-To-End) / Vongo (Video on the go) / Canal+ But how many fails ?
Edit & Transform
Behind the glass – The chain value
Improbable profits? 25% of movies have a negative margin Critical size and volumes to invest
2 strategic functions: Availability and access to content rights Control distribution channel and access to final
costumer Technical challenges:
Complex video transformation supply chain Powerfull portal CMS for customized renderings,
advanced multimedia, personalization and profiling
Produce
1.04 €
0.52 €
0.86 €
1.57 €
0.58 €
0.98 €
0.86 €
1.57 €
- €
0.50 €
1.00 €
1.50 €
2.00 €
2.50 €
3.00 €
3.50 €
4.00 €
PC TVIP
Cost breakdown / Rental price: 3.99€
Rights owner royalty
Tax & droits d'auteurs
ISP commission
Distribution cost
Gross margin
Content productionRights acquisitionRoyalty management
EncodingDigital transfo.DRM
Publishing digital contentProvisioning the networkInsure servers performance
Commercialisation & billingDownload/StreamingClient support
Ability to negociate interesting contract deals with major studios
Capacity to master diverse technologies and deliver a high performing platform
Ability to partner with reliable operator and control the (high) cost for best service level
Knowledge of the user, providing good service, capacity to create loyalty
Distribute Consume
No end-to-end packaged solution on the market yet
Source : Media Consulting GroupCNC march 2008
“Content is king, transmission quality must be high,a stable platform is essential” Greg Douglas, Accenture
Key challenges – The players
Disruptive players have engaged in a vast competition to transform the way they do business and take advantage of the opportunities.
Media chronology: trials to test the effects of merging of DVD and VoD release windows
In bad economic times, challenges this industry in seriously challenged
Edit & TransformProduce
Major studiosProducers
TV broadcastersVoD independent platformsDistributors
ISPCableTelecom operators
High tech and software companies
Distribute Consume
“The big issue will be trying to convert the technology to reliable revenue… trying to monetize the network”
The current global financial crisis has pushed many companies into survival mode. Immediate attention to cost control is an urgent imperative. Accenture analysis, media and entertainment companies have the potential to realize
savings of up to 40% of their operational costs by migrating to a fully digital environment.
Now is not the time to go into protectionist mode. Now is the time to reach out to crossindustry Partners for an integrated vision from
high tech, to media to telco operator companies. Previous recessionary periods have seen people turn to entertainment, reading and
other forms of enrichment and diversion more than ever. we’re seeing a tremendous uplift in the number of people going to the box office,
watching movies, spending time in front of the television, downloading video-on-demand films and so forth.
people's needs for entertainment and escape Ad revenue decline the content creation business—predominantly movies and television shows Ressources: senior executives move from one company another, lower staff stay, so
It's one reason why companies are looking for external talent through an outsourcing or managed services provider. It's a way to gain immediate and ongoing access to deep experience and resources.
Key challenges – Digital transformation
How about Vietnam?
TBC
www.officience.com
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