2. TERRESTRIAL TV SATELLITE TV CABLE TV
Over-the-air (OTA) Direct-broadcast satellite Radio Frequency (RF)
TV ?
Over-the-top (OTT)
+ +
Linearchannels
Linearchannels
Linear channels Movies & Games TV series
PRODUCT DIFFERENTIATION
3. OTT VS IPTV
OTT IPTV
CONTENT DELIVERY: Uses open internet Uses dedicated network
QUALITY: Not guaranteed Guaranteed
EXAMPLES:
YouTube
Netflix
Hulu
AT&T
PrismTV
CONTENT CATALOG:
Widely used for freemium and
economical VOD delivery models
Used primarily for premium content
and real time content delivery like
broadcasting TV
CATEGORY: Complementary service Parallel service
KEY CALLENGES:
Low quality and price
Non premium content and no live
broadcast
Unicast model
High quality and price
Competition from cable or DTH
industry
Bandwidth and infrastructure
KEY BENEFITS:
Flexibility of content consumption
across devices
Quality of service and quality of
experience
6. ‟03 Games
PRODUCTHISTORY BLOCKBUSTER OVERVIEW
1985 20141997 2007
NETPROFITCONTENT
„85
Started
‟85 Physical video rental
„93
Acquisition by Viacom
($8.4 billion)
(in000,000)
‟03 GameRush Store
‟90 Global expansion
‟10 Bankruptcy issue
‟85 Movies
Games
Started
The Golden Age
Physical Video Rental Industry
*Total 21 countries by 2008
‟04 Online rental
‟04 Blockbuster Total Access
Physical games rental „03
DVD-by-mail Era Started Online Streaming Era
‟11 Acquisition by Dish
Network ($320 m)
‟08 Watch Movie Online
Online streaming ‟08 Video-on-demand „13
Blockbuster on Demand „13
‟04 Blockbuster Total Access:
Movies
Games
‟08 Movie Online
„01
$(238.8)
„02
$(1,621.1)
„03
$(978.7) ‟04
$(1,248.8)
‟05
$(588.1)
‟07
$(103.8)
‟06
$54.7
„00
$(81.1)
Off: Blockbuster Total Access„13
‟10
$(623.0)
7. PRODUCTHISTORY NETFLIX OVERVIEW
1997 20142002 2012
FIGURESCONTENT
„97
Started
‟99 Online monthly subsription
‟97 Online pay-per-rental
„02
IPO
(5.5 million shares; $15/share)
‟00 Personalized movie recommendation
„02
0.8
„03
1.4
(in000,000)
„05
4.2
„06
6.3
„07
7.5
‟07 Video-on-demand
The Golden Age
DVD-by-mail Rental Started
„08
9.4
„09
12.3
„10
20.0
„12
30.0
„13
40.0
Online Streaming Era
‟08 Streaming: Other device
‟07
Video-on-demand
‟10 Online streaming
Global expansion ‟10
‟08 Xbox 360, PS3, Wii, Blu-ray
disc players, TV, set-top
boxes, Apple product
„00 Off: Online pay-per-rental
‟13 Original TV series
‟13 TV series:
House of Cards
+88%
+74%
+76% +60%
+51% +18%
+26%
+31%
+63%
+50%
+75%
2007
TV series: (SD & HD)
Film: (SD & HD)
Miniseries: (SD & HD)
Specials: Documentary and
Stand-up comedy
Games: Online rental
Region + Adjectives + Noun Genre + Based On... + Set In...
+ From the... + About... + For Age X to Y
Netflix micro-genres formula:
*Total 41 countries by 2013
Winners:
Members:
Net Income:
‟11
Launch: Qwikster
‟11 Online games rental
„12
$17
„13
$112
„06
$49
„07
$67
„08
$83
„11
$226
„09
$116
„10
$161
„05
$42
„04
$21
„04
2.6
8. PRODUCTHISTORY HULU OVERVIEW
2007 20142009
FIGURESCONTENT
„07
Joint
Venture
(in000,000)
Online Streaming Era
2011
Comcast
21st Century Fox
The Walt Disney
Company
‟07 NBCUniversal:
TV shows
Movies
Adv. campaign
‟10 Hulu Plus
„10
Online streaming:
Full runs TV shows
‟10 TV shows
Movies
Revolutionary ad-supported
„09
Music
Partnership
„09
Music video
Concert
‟09
Partnership with:
EMI
Warner Music
‟12
Original TV
program
„12
Total:
7 original TV program
„09
±$108
„10
±$260
„11
±$420
„12
±$700
„13
±$1,000
„11
1.5
„12
3.2
„13
5.3
„08
±$25
„11
Global
expansion:
Hulu Japan
„14
Sells off:
Hulu Japan
„10
0.29
Members:
Revenue:
9. SUMMARY ANALYSIS
BLOCKBUSTER NETFLIX HULU
HISTORY 1985 - Now 1997 - Now 2007 - Now
PRODUCT
Physical video rental
Physical games rental
DVD-by-mail
Online streaming
Video-on-demand
DVD-by-mail
Video-on-demand
Online streaming
Online games rental
Online streaming
FREE PRODUCT No No Yes
PAID PRODUCT Yes Yes Yes
CONTENT
Movies
Games
Movies
TV series
Games
Stand-up comedy
TV series
Movies
Music video
Ads
CONTENT FOCUS Movies Movies TV show
GLOBAL EXPANSION Yes Yes No
ORIGINAL PROGRAM No Yes Yes
SUBSCRIBERS
± 0.8 million (Online rental) in
2007
± 40 million (Online streaming) in
2013
± 5.3 million (Online streaming) in
2013
SUBCRIBER PRICE (2013)
$2.99-$3.99 per-title; $10.99 VOD
purchases
$7.99 $7.99
REVENUE (2013) N/A N/A ± $1 billion
NET INCOME (2013) N/A ± $112 million N/A
NET PROFIT (2013) ± $(623.0) N/A N/A
10. RECOMMENDATION: “MOVIE IN THE BOX”
via
Satellite
Montly subscription (Max. 5 movies/month)
If a customer wants to get a new movie, they have to return the old movie first
No time limit to returns the movies
Choose
movie
Return
movie
Search…
K VISION micro-genres search
11. MICRO-GENRE SEARCH RECOMMENDATION
Netflix had an absurdly large number of genres,
an order of magnitude or two more than I had
thought,
It was organized in a way that I didn't
understand, and
There was no way I could go through all those
genres by hand.
"We're gonna tag how much romance is in a movie.
We're not gonna tell you how much romance is in it,
but we're gonna recommend it."
“The vexing conclusion is that when human and
machine intelligences combine, some things
happen that we cannot understand.”