#mati-marketing & ad:tech israel_feb 11, 2014_the future of ad supported media

Marketing and Ad:Tech SummitTel Aviv February 2014

My Digital Odyssey, Lessons Learned, & the Future of Ad-Supported Streaming Media

Vickie Nauman

Pre-Digital• 10 years in marketing & US terrestrial radio

Traditional and physical media defined by:Distinct channels into a finite potential audienceProgramming and ads for a targeted demographic

Limited by: Printing capabilitiesBroadcast signal reachRetail inventoryScarcity of content

But all that changed….

NETWORK

My Digital Odyssey• 1999 Napster 1.0

My Digital Odyssey• 1999 Napster 1.0

My Digital Odyssey• 1999 Napster 1.0

The Disappearance of Scarcity

My Digital Odyssey• 1999 Napster 1.0• 2000-2004 early legal digital services

My Digital Odyssey• 1999 Napster 1.0• 2000-2004 early legal digital services

Legal battle lines drawn

Geographic limits lifted from media marketplace

Power shifted from distributor to the consumer

My Digital Odyssey• 1999 Napster 1.0• 2000-2004 early legal digital services • 2004-2007 global digital landscape

Digital licensing and partnerships in Europe, Asia, US

Each country varied:Cell phone adoptionPayment methods Network standards (ie GSM)Importance of local culture on media appealIntellectual property rights

My Digital Odyssey• 1999 Napster 1.0• 2000-2004 early legal digital services • 2004-2007 global digital landscape

“Global digital” actually patchwork of country-specific laws, standards, devices and gatekeepers

Resulting in country-specific user behavior in digital media

My Digital Odyssey• 1999 Napster 1.0• 2000-2004 early legal digital services • 2004-2007 global digital landscape • 2007-2014 connected devices

proliferation of “smart” everything watches, glasses, phones, tablets, etcemergence of platformsexplosion of content

My Digital Odyssey• 1999 Napster 1.0• 2000-2004 early legal digital services • 2004-2007 global digital landscape • 2007-2014 connected devices

Hardware, software, and content must integrate elegantly

…but services have still not reached sustainability

The Future of Digital Media?• DEVICES AND PLATFORMS: will continue to evolve rapidly – table stakes

In 2009, 2.5B connected devices – 2013 10B – projected 30B by 2020(1)

• CONSUMERS: fragmented mind / wallet share in digital media “firehose”

• GLOBAL: countries’ media consumption patterns developing differently48% of Swedes streamed music in 2013; Japan only 4%(2)

• LEGAL: copyright / usage laws lag behind technological innovation

• SERVICES: emergence of new models & price points, mobile ad-supportedThe MASS MARKET model for media remains- low threshold for consumers- simple to use and understand- advertising based

(1) Gartner Oct 2013(2) IFPI 2013

The Future of Digital Media?• Betting Big on Mobile Ad-Supported

Users want it:

70% cite terrestrial radio as top music discovery in 2013 (3)

15% of total radio listening in the top 5 US markets is now online (5)

70% of digital listening is on mobile – 30% desktop(5)

Mass consumer adoption to digital media is largely free ad-supported(3)

72% of listeners prefer ad-supported rather than subscription(5)

Advertisers are joining the party: US mobile ad spend doubled to $9.6B in 2013(4)

$35B in annual revenue in audio advertising globally, $18B is US alone(5)

API and tech-enabled ad engines launching (3) Midia Cons Dec 2013(4) eMarketer Dec 2013(5) Triton Digital 2014

Thank you!

Vickie.Nauman@7digital.com

Vickie NaumanPresident 7digital USLos Angeles, CA