broad cast asia 2012 rob van den dam 20 june 12

© 2012 IBM Corporation

IBM Institute for Business Value

The ‘Connected Consumer Era’ has Arrived

Rob van den Dam

Global Communications Sector Leader IBV



2

Agenda

Challenges presented by the changing

media landscape

2

Looking ahead

Go beyond digital to deliver customized

experiences

Global digital behavioral trends of

consumers



3

IBM questioned close to 17,000 consumers in 25 countries to evaluate

global behavioral trends in the age of consumerism

2 types of surveys conducted in 25 countries mid 2011 (2011 Global Telecom Consumer Survey & 2011 Digital Consumer Survey)

Japan

South Korea

India

China



4%

-3%

-6%

-10%

-14%

-16%

-18%

-19%

-19%

-23%

-32%

-24%

Utilities

Food & drinks

Transportation

Mobile

broadband

Mobile Telepony

Pay television

Sports

Fixed Telephony

Clothing

Holiday/vacation

Electrical

appliances

Going out

Mobile Telephony

Mobile Broadband

Transportation

Pay television

Utilities

Elect. Appliances

Fixed Telephony

Holidays

Food & drinks

Clothing

Going out

Sports

40%

36%

33%

33%

32%

28%

27%

27%

20%

16%

16%

5%

M obileTelephony

M obile broadband

Transportat ion

Fixed Telephony

Holidays/vacat ions

Clothing

Electric/Gas Utilit ies

Food & drinks

Going out

Electrical appliances

Pay television

Sports

Mobile Telephony

Mobile Broadband

Transportation

Pay television

Utilities

Elect. Appliances

Fixed Telephony.

Source: 2011 IBM Global Telecom Consumer Survey,

Question: Compared to previous years, are you likely to spend less, the same or more on the following products / services in the next 2-3 years?

Consumers in Asian emerging countries expect to increase spending

on almost everything, including Pay TV and communication services Net Increase/Decrease Net Increase/Decrease

Holidays

Food & drinks

Clothing

Going out

Sports

Mature markets

4

average

-15%

average +26%

China



Source: 2011 IBM Global Telecom Consumer Survey,; S08 How often do you access the following media/content services over the Internet?

User Generated Video

Online Audio Content

Online Music Video

Full Length Movie

Live Video Broadcast

Online news Video

40%

40%

35%

32%

24%

36%

Daily

Usage

21%

22%

18%

16%

11%

16%

1

2

3

4

5

6

1

2

3

4

5

6

5 5

User Generated Video

Online Audio Content

Online Music Video

Full Length Movie

Live Video Broadcast

Online news Video

Mature markets

Internet users in these emerging markets access media/ content

services more frequently than their counterparts in mature markets, …

Access to

media/content

services

40% of Internet users in

emerging countries

listen to online

audio content daily

40% of Internet users in

emerging markets

access user

generated

video daily



45% 48% 50% 47% 49% 52%

22%22% 22%

22%23% 23%

9%

8% 8% 9%8% 7%5%

5% 5% 5%4% 6%7%

6% 6%6%3%

9% 6% 6% 7%

6%5%

4%3% 4%4%3%

4%6%

0%

20%

40%

60%

80%

100%

Online

audio

content

Live video

broadcast

User

generated

video

Online

Music

video clips

Online

News

video clips

Full movie

Other smart phone

Android device

Blackberry

Tablet PC

iPhone

Laptop/Netbook viaMobile Broadband

Laptop/ PC via FixedBroadband

Q08. Which of the following do you use to access the media/content services in the last question

Daily users

…and around half of the heavy content/media users claim to do that

via a mobile device

Source: 2011 IBM Global Telecom Consumer Survey, 6

Devices to access media/content services



Source: 2011 IBM Global Telecom Consumer Survey,; S06 How often do you use the following communications services – Social networking sites ?

7 7

Mature markets

In the emerging markets 60% of consumers with (fixed and/or mobile)

internet access use social network sites to communicate

60% 60%53%

68%

26%32%

35%

24%

14%8% 12% 8%

0%

20%

40%

60%

80%

100%

Emerging

Markets

China South

Korea

India

45% 44% 46% 41%

28% 26% 24% 33%

27% 30% 30% 27%

0%

20%

40%

60%

80%

100%

Mature

Markets

US UK Germany

Daily WeeklyOccasionally

Usage of

Social Networking Sites



70%

64%

51%

45%

31%

22%

19%

17%

66%

51%

28%

35%

19%

13%

23%

8%

Internet search

Recommendations from friends/family

Social media

Web sites of providers

Traditional advertising

Emails/ promotional offers

Retail stores

Shopping portals/ auctions

Emerging markets

Mature markets

Source: IBM Institute for Business value Global Telecom Consumer Survey 2011,

Question: What are you preferred sources of information when you are looking for communication products and services?

Internet Search, Family/Friends and Social Media have become

the preferred sources of information

8 8

Preferred Sources of Information



The “Connected Consumer” era has arrived

9 9

Media and Entertainment

evolutionary eras



Today’s connected consumers are empowered, demanding instant

access to personalized content, wherever they are

I want access to

content tailored

to the device I

am using

I want access to

content

whenever I am

ready for it

I only want to pay

for content I access

I want content

choices based on

my past

consumption

behaviors

I want content

options based on

my preferences

I want access to

content relevant to my current

location

I want to choose

whether I immerse

myself socially in

selected content

10 10



11

Rampant adoption of digital devices has fueled the growth of digital

content consumption behaviors globally

Source: IBM’s 2011 Digital Consumer Survey

Global Content

Consumption

Behaviors Viewing on demand

“I’ll Catch You

Later”

Viewing on the run

“Do you want that

to go?”

Distracted Viewing

“THIS I have to check

out right now”

Social Viewing

“How YOU doin’?”



12

The new behaviors of connected consumers have greatly impacted

M&E providers in both mature and emerging markets

Viewing on demand

91%81%

95% 97%

68%62%

71%

82%

US UK Japan China

Video on Demand

On Home TVs

Distracted Viewing

94% 91%100% 97%

85%78%81%

90%

US UK Japan China

Surfing the Web While Watching TV

Social Viewing

55% 58%

76% 76%71%

46%

31%

52%

US UK Japan China

Uploading Photos On Social Media Sites

Early adopters (12 % of global sample)

Mainstream consumers (35% of global sample)

Source: I

IBM’s 2011 Digital Consumer Survey

87% 88%95% 99%

91%

73%65%

55%

US UK Japan China

Viewing on the run

Search/Email

On Mobile Phones



Address content

cannibalization Consumers are already

reducing their existing level of

pay TV service, or even

canceling it entirely

To be able to meet demand for connected content it is critical to

understand the key challenges

$

Get in tune with todays

digital consumers Consumers now wield

unprecedented power over how

brands are perceived

Serve a splintered

mass audience Age is far less meaningful than

before in differentiating micro-

segments

Finding new digital

revenue models Digital revenue models are

weaker than traditional revenue

streams

13 13

Challenges



Content cannibalization is real

Traditional media and devices are in decline

14 14

Mobile video use

Reduction in TV viewing

23%

35%

73%

23% 28%

41%

United

States

Japan

China

Respondents in China, Japan and

the U.S. watch substantial less

regular TV as their use of

mobile video increases

Source: IBM’s 2011 Digital Consumer Survey: Q13: Please indicate

how watching television shows through online or mobile/portable

devices has impacted your “regular” television consumption (watching

on your television set as the regularly scheduled time).



15

Providers need to recognize that consumers are in control and

conducting conversations in which they may not be included

Blogs

Tweets

Peer

Reviews

Social

Networks

In the connected world, consumers have

unprecedented power to build and

demolish brand strength as they

blog, text and comment via social media

about their various consumer experiences

Customer Analytics can be

used to mine digital channels, such

as blogs, tweets, social networks and

peer reviews

RTL Nederland analyses social

media buzz to optimise its

product offering 4 May 2011. RTL Nederland is a trend-setting

multimedia and entertainment company with a

leading position in the Dutch broadcasting market. It

owns five television channels, two ……….



45%47% 47%

48% 48%48%

52% 52%53%

52%

60%61%

60%

56%

59%

Movie on Tablet Newspaper on

Website

Video Games on

Smartphone

Magazine on

Tablet

TV Shows on

Website

All consumers Late Adopters Stragglers

Source: IBM’s 2011 Digital Consumer Survey, Q14: What is your preferred way to pay for the following types of media content?

Lack of Willingness to Pay for Digital Media Content By type of content and device, globally

% o

f R

espondents

16 16

With weaker revenue streams, digital revenue models have

yet to deliver value comparable to traditional models $



Age-based segmentation NO longer suffice – adoption

distinctions between younger and older audiences have closed

Source: IBM’s 2011 Digital Consumer Survey; Q5: How would you categorize your adoption of consumer electronics devices?

>65

2%

55-64

5%

45-54

12%

18-24

14%

35-44

29%

25-34

38%

Global Digital

Adoption Leaders

by age, 2011

17 17

94%

64%

85% 86%

96%

75%

90%87%

96%

69%

86% 86%

93%

72%

82%76%

100%

82%79%

74%

China Japan US UK

18-24 25-34 35-44 45-54 55-64

88%

95%

58%

73%

90% 88%

67% 66%

91%86%

53% 52%

79% 78%

37% 35%

80%

71%

30% 31%

China Japan US UK

Willingness to Adopt New Consumer Electronic Devices, 2011 By Age and Country

Internet on Mobile Phone, 2011 By Age and Country

Q6: How often do you use the following digital content services?



Behavior-based segmentation is now essential to delivering compelling

consumer experiences

Digital Consumer Segmentation Analysis, 2011

Source: IBM’s 2011 Digital Consumer Survey; IBV analysis

Lo

w

Hig

h

Ac

ce

ss

to

Co

nte

nt

Low Low High

Intensity of Interaction

Note: * of respondents

Efficiency

Experts

Content

Kings

41%*

9%*

Social

Butterflies

Connected

Maestros

35%*

15%*

18 18



Lo

w

Hig

h

Acc

es

s t

o C

on

ten

t

Low High

Intensity of Interaction 19 19

“All Access Pass”

Smart

“Always On”

Immersive

“Path of Least Resistance”

Convenient

“We Gotta Talk”

Social

Content providers need to deliver experiences tailored to their digital

consumers’ personalities

Example Digital Consumer Experience Models



For example, sports programmers should consider how their fans

segment and the resulting differentiated services they require

Illustrative Future Sports Fan Experience Models

Instrumentation and gaming blur

the lines between “spectating”

and “participating”

Advanced analytics enable

tailored, “smart” sports

entertainment experiences

The ability to connect socially

matters more than the

production quality

Experiences largely driven by

enhancements to the broadcast

model

Smart

Social Convenient

Immersive

Sports stats available

simultaneously with action Virtually play with

professionals or other fans

Experiences created and

controlled by consumers

“Traditional” viewing with added

convenience of instant availability

Lo

w

Hig

h

Access t

o C

on

ten

t

Low High

Intensity of Interaction 20 20



A critical mass of global consumers embrace the ability to interact

more personally with content

Source: IBM’s 2011 Digital Consumer Survey, Q18: As content becomes more digital, we as consumers will have the opportunity to experience

various forms of content in new ways. Please rank on a scale of 1-5 (5 being very appealing) how appealing the following types of

experiences would be for you.

Appeal of Interacting More Personally With Content By Country

48%

26%

42%

24%

37%

23%

74%78%

40%

49%

Control Replay, Angle of Scene Play Alongside a Sporting Event

% o

f R

espondents

UK

US

China

Japan

Germany

21 21



Content is still king – BUT must be augmented with the three other key

attributes of the Connected Consumer Era

Connected Consumer Era Key Attributes

Content

More video is updated to

YouTube in 60 days than

the three major US

networks created in 60

years

22 22

Distribution

Seamless, integrated

experiences across

devices

+

Social

Social - embedded into

the content experience,

and Immersive - lines

blur between “spectating”

and “participating”

+

Analytics

Smart: personal,

insightful, relevant,

contextual analytics

+



23 23

Providers Must Move Beyond Digital To Deliver Tailored Experiences

Target consumers based on their “digital personalities”

Deliver individualized experiences, not just content

Act like a B2C company, no matter where you are in the

industry value chain

Connect consumers, content, and monetization



Recent IBV Publications

24



Thank you

Rob van den Dam

Global Telecom Industry Lead


[email protected] www.ibm.com/iibv

25 25

broad cast asia 2012 rob van den dam 20 june 12

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