An executive briefing on the future of Television including Internet enabled Smart TVs, TV Apps, mobile, and social media integration.

1. TV the Internet
and Social Media
Stuar t W. Volkow
Xtropia Par tners
svolkow@ucla.edu
www.stuar tvolkow.com
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3. Traditional TV Business Models
1. Advertising:
Vimeo,Youtube, Crackle, Hulu, Blip TV, Funny or Die etc
2. Pay TV (CATV, Satellite Subs)
3. Pay Per View or rental:
Red Box,Youtube,Vudu (Wallmart)
4. Pay to Own: DVD, Downloads: iTunes, Amazon
5. Subscription: Netflix, Amazon Prime, Hulu+
6. Transactions / Direct Sales
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4. Emerging TV Business Models
1. Brand / Product Integration:
VuGuru, Electus, Revision 3,Youtube, Crackle, Hulu, Blip
TV, Funny or Die, L-Studio, Xfaxtor, American Idol etc.
2. Online Content Networks/Ad
Networks(Revision3, Machinima,Outrigger)
3. Direct to Audience Subscription:
HBO GO, ABC, Xfinity
4. Pay to Own: DVD, Downloads: iTunes, Amazon
5. Transactions / Direct Sales
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5. TV is Changing in Fundamental Ways
•From one-way to two-way
•From one-to-many to Multi-Modal
•From Scheduled to On-Demand
•From Sequential “Windows” to Simultaneous
•From Broadcast to Variable Quality
(exponential growth in UGC)
•From Channels to Markets
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6. TV is Changing in Fundamental Ways
• Reality is here to stay worldwide and in more
forms
• Networks struggle to find niches and ID
• Edgy, dark, fantasy, stylized, ?
• More complex distribution deals all-around
• Gobalization: Where the growth is.
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7. FAC T S
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8. The US Broadcast Networks
Copyright 2008, Stuart W. Volkow TV Reborn 8
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10. Global Advertising 2011=$500 Billion at 4.5% CAGR*
$70 Billion / YR
U.S. TV Advertising
Revenue Google’s Ad
Revenue 2010
>20 Billion to $29 Billion**
major Networks
(CPG and Auto are largest)
Global Online Advertising 2011=$80 Billion at 17.2% CAGR*
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12. Copyright 2009, Stuart W. Volkow Media Marketplace
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13. 2006-2011
Wild Ride!
Disney
News Corp
Comcast
Time Warner
CBS
Copyright 2008, Stuart W. Volkow TV Reborn 13
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14. Copyright 2008, Stuart W. Volkow TV Reborn 14
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15. Copyright 2008, Stuart W. Volkow TV Reborn 15
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17. Nielsen 3 Screen Report Vol #8 Q1 2010 Highlights:
• The amount of time spent watching television is still increasing:
viewers watched two more hours of TV per month in Q1 2010
than in Q1 2009
• Average time spent simultaneously using TV and Internet in the
home grew 9.8%, to 3 hours and 41 minutes per month
• The number of people who are timeshifting has grown 18%
since last year to 94 million, with the average user now
timeshifting 9 hours and 36 minutes per month
• The mobile video audience grew 51.2% year-over- year,
surpassing 20 million users for the first time
• 52.7% of US homes now have HDTVs and receive HDTV
signals
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18. Time Warner CEO Jeff Bewkes:
Growth Coming From Overseas
And TV Everywhere
expects to see a doubling of his overseas business that now generates
about $2.5B a year in revenue and $500M in operating profit. Most of
the increase will come as the company’s pay TV networks and shows
become more broadly distributed, generating higher ratings and ad
sales. “The value of American-produced content is going up pretty fast
around the world,”
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19. Connected Devices and TVs
• Apple TV
• Samsung
• Google TV • PS3
• LG
• Roku • XBOX
• Panasonic
• Vudu
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20. Internet Enabled TVs
Internet-Enabled iSuppli estimates
Televisions that by 2014
(IETVs) set to some 148 million
rise by a factor televisions with
of six by 2013, Internet
according to connectivity will
iSuppli Corp. be sold annually.
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25. Copyright 2009 Stuart Wayne Volkow
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26. Revue just wasn't hitting the sales targets Logitech
originally set; after the company dropped the Revue down
to $199 in May, they decided to drop another $100 off this
week. Engadget, 7/28/2011
FAIL
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27. Google TV 2.0 ?
http://www.google.com/tv/
http://www.google.com/tv/apps.html
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28. Movies start at $2.99 to rent and $9.99 to
own, and you can download TV series for
even less. And don’t worry about filling up
your hard drive and not having room for
games. The PlayStation®3 system is the only
console that lets you save all your movies and
TV to an external drive.
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31. “Absolutely, it is a
guaranteed product
for Apple,” I was
told by one “prototypes for
individual. “Steve a mass-market
thinks the industry television set
is totally broken.” that would
Nick Bolton NYT allow users to
access all their
media through
iCloud and
could reach the
market in late
2012 or 2013.”
SJMN
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32. The Big Worry for Pay TV
Cord Cutting
Reed Hastings - Netflix - CEO - Q3 2010 Earnings
Report
...on cord cutting we still see no evidence that our subs
cut cords at greater rates than the general population, and
it's something we survey now and then on. On your
personal experience, you know, it is all over the map. We
have tons of anecdotes of people who -- the streaming
stimulates the uses of other formats for, like you said
streaming meets most of their entertainment needs. So,
quite a lot of variety with 17 million members.
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33. Cost of Traditional TV Cost to Replace Traditional TV
Digital antenna (over-the-air local channels and
✦ Comcast Digital Premier sports) $50
Hulu Plus, per year ($9.99/month) $119.88
Package: $136.93 per month, Joost, YouTube, TV.com,
network Web sites (ABC, NBC, CBS, FOX)free
1,632 per year. Netflix Instant, per year: ($8.99/month) $107.88
Includes 200 digital cable channels, with Cost for Roku box, $79.99
premium movie channels, a sports package, on- (free if you have an Xbox, TiVo, Wii, or PS3)
demand movies and shows, local programming, Apple TV: Cost for box $229
and DVR service. $1.99 Cost for one premium show per weeknight
for a year = $517.40
✦ Satellite TV, per year: OR
Amazon Video on Demand: Standard-def episodes
$1,463.88 $1.99 Cost for one show per weeknight for a year
DirecTV Premier Package: $121.99 per $517.40
month. Includes 285-plus digital channels,
with premium movie channels plus HD First year (includes equipment costs) $1,104.15
channels and HD DVR with service. Beats cable by $539.01
Beats satellite by $359.73
Cable, per year $1,643.16
Second year (no equipment costs)
$745.16
Really beats cable and satellite ($898.00;
$718.72)
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34. Strategy Questiosn
✦ What TVContent Should be Made Available
Over The Internet (fixed/mobile)?
✦ Under What Terms?
✦ Pricing?
✦ WhatContent Should Be Kept Exclusive for
Broadcast?
✦ WhatNew Business Models Will Work With
Which Audience?
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35. Conflicting Business Models
Networks Block Web Programs From Being
Viewed on Google TV
Sam Schechner, Amir Eefrati, WSJ, 10/22/10
• ABC, CBS and NBC are blocking TV programming on their
websites from being viewable on Google TV service
• Hulu, whose owners include Disney, NBC Universal
and News Corp., also blocks its video
• Time Warner Inc.'s HBO and Turner Broadcasting
networks agreed to be onboard as well as FOX and MTV
http://online.wsj.com/video/digits-networks-block-web-programs-from-google-tv/F6EB2E6F-DF74-4F1E-8CA6-62C5B814428A.html
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36. Time Warner VOD plans could threaten movie
theaters, Netflix and Redbox
Jon Swartz, USA TODAY, Nov 3, 2010
• "will help lead the (film) industry" to show brand new
flicks -- ones that are still playing in theaters -- on VOD by
mid-2011, Bewkes told Wall Street analysts in a
conference call.
• Under the plan, called premium VOD, studios would
charge $50 or so to give cable or satellite customers the
opportunity to gather family or friends and watch a new
movie from the comfort of the living room instead of a
theater
• Warner Bros. might lengthen the delay period before it
offers new DVDs to Netflix and Redbox. The studio
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37. TV Over the Internet
• Hulu / Hulu+
• Netflix
• Vudu (Wallmart)
• Amazon Prime
• iTunes
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Stuart W.Volkow 2007
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41. ✦ 23 million Subscribers
✦> 20,000 Instant Streaming Films and TV Shows
✦ Releases often before Blu-Ray
✦ $2 Billion on Movie Rights by 2011
✦ Epix
✦ Trouble with STARZ and other Producers
✦ 200 plus Netflix enabled products that will result in
60 million plus devices sold in 2010
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42. This isn’t a subscription
service. It’s on-demand with
rentals available from $1 to
$5.99 and purchases starting
at $4.99.
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43. new pricing, variations on old models
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44. iTunes
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46. Amazon
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48. YouTube: Movies, TV, Store
http://www.youtube.com/shows
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49. US Networks Hedge The Internet
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51. ?
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53. Internet Direct
• New Platforms
• Content Networks
• Youtube Channels
• Youtube Stars
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54. TV (STB) Software
F A I L
1.2 million users (CEO Avner Ronen)
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56. Internet Content Networks
Copyright 2011 Stuart Wayne Volkow. Xtropia Partners
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58. http://blip.tv/
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59. Copyright 2011, Stuart W.Volkow. Xtropia Partners
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60. T V S P O RT S O V E R T H E I N T E R N E T
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61. http://www.nba.com/leaguepass/broadband/index.html
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63. Subscriptions
Advertising
Stuart W.Volkow 2007 63
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64. Commerce
Stuart W.Volkow 2007 64
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65. Youtube Stars
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66. Creators of LG15
Mesh Flinders
Miles Beckett
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68. Br and Integr ation and
Brand Channels
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71. Branded Channels
www.myxenergy.com
Stuart W. Volkow, Copyright 2011 71
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72. iTV - Commerce
Copyright, Stuart W.Volkow 2011
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73. TV A p p s /Widgets
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75. VUDU Apps - The
applications platform
for connected TVs and
Blu-ray players
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77. Google TV Apps
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78. http://connectedtv.yahoo.com/services/tv-widgets/
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79. Mobile
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81. Personalization and
Recommendation
Sifting Through Endless Choice
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84. Jim Lanzone, Founder-CEO Clicker
"We were looking at the next 50
years of television, and how it was
merging with the Internet," says
Lanzone, Clicker's CEO and co-
founder. "How would you navigate
all of that? A daily calendar
wouldn't cut it anymore, which is
what programming guides were in
the previous 50 years. ... It would
need to be a lot more like a search
engine."
1 million TV episodes and 2
million monthly visitors.
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87. http://www.youtube.com/watch?v=-P0tkjkSO20&feature=player_embedded
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89. Social TV
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90. Over 66 million US consumers are simultaneously
using a PC while watching TV.
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91. “Already more than half of Americans are
watching TV and surfing the Web
simultaneously. But another trend--giving
connectivity to the device itself--is going to
fundamentally change the business models
around television and the way we consume
and interact with content.”
Adam Ostrow, 10.12.10
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92. According to Nielsen, over 70% of
tablet owners and 68% of
Smartphone owners say they use
their devices while watching TV –
much of the time to look up content
about a show, piece of news, that
they are watching.
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94. IntoNow
Social Checkin
http://youtu.be/GmEiE4qcV3k
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95. Real time or near real
time two screen or
three screen
interaction
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103. http://twitter.com/
betty_draper
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105. Social Games
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106. Conclusions
• TV Business Models Must Change
• Ad Sales will get tougher - Slow or No Growth
• More competition for audience
• Growth is international
• Internet integration necessary
• Make all programming social and interactive
• Work harder to make less $$ in the near term
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