brokerage 2007 keynote keith baker

Overview of business models andmarket analysis of IP-TV

Author: Keith BakerDivision: Appied Technologies Eindhoven

Date: May 2007

2Philips Applied Technologies, Keith Baker, <2005-07-22>, <DSE-050002I>

Overview

Where and how can IP-TV get into the market?

Who will pay for it?


Definition

• ADSL : Common form of broadbandconnection in retail, but asymmetric

• BD : Blu-Ray Disc• BD-Live : Online BD media with

MHP (java) interactivity• Bittorrent : Social protocol on

internet used for video files transfer• DOCIS : Cable Modem standard• FTTH : Fibre To The Home

e.g. Nuenen Net• iMP : a broadband service the BBC

gave demos of in 2006, but hassince run into problems.

• Non-Linear TVOn-demand video services

• Peering : Virtual zero costs accessto bandwidth for ISPs and other bulkusers: e.g. BBC only pays 0.1 centsper MB/s per year

• P2P : File sharing network that usesbroadband internet

• TV without FrontiersLegal Framework for European

broadcasting.• VDSL : Future DSL technology


IPTV definitions of Philips

• IP-TV–Managed Network–Minimal Walled Garden–QOS, DRM and services–Most managed network are propriety technology

• ISV Internet Video Services–Open internet protocols–Google Youtube, Pirate Bay,……–Streaming, P2P progressive down-load, pod-cast


Media was (and still is) important

• Media still has impact–Not 1930/1940 “War of Worlds” radio broadcast:nor the Nazi radio propaganda in WWII

–Populations are hardened and very very cynical• Look at major industries such as Sport

–Position of the monopoly is most important:• Sky and the English Football Monopoly• Plan used of DVB technology by News Corp

• Political influence is still important at EU level–“TV without Frontiers”–Non-linear content : Battle EU v Nations State


What do people actually pay for: Football

“War with 22 men and a ball”


What Media do we pay for ?

Wal*Mart = 1/3


Content is Not King : ANDREW ODLYZKO

0.0001

0.001

0.01

0.1

1

10

100

1000

10000

Monthly cost Price $ per MB

Cable TV

Internet

Phone

Dial-up Internet

Mobile

SMS

The Evolution of Price Discriminationin Transportation and its Implicationsfor the Internet. 2004

$

Economics confused the Telcos


EU-National Communication Authorities Interest in IP-TV

http://www.ofcom.org.uk/research/tv/reports/videoregulation/videoregulation.pdf


Aggregation

TelevisionRoadblocks – 1. New media rights issues

Production Distributioncontent

sales TV channels

Platforms

Cable/DTH

IPTV

Internet

Mobile

content content

On-demand

content

Producer/studio

Viewer

Producers placehigh value on new

media rights

Distributorswant all mediarights to protecttheir traditional

value chain.

Aggregators see newmedia as a platformby-pass and want

mobile, Internet andother new media

rights.

Platforms askaggregators to

organise new mediarights and

independently act asaggregators in new

media space

Viewer currentlydenied anytime,

anywhere access

Power struggle

Platforms and broadcastersstill hold market power

in most content negotiationsContent owners juggle

Deal-or-no-deal economicsLibrary contentneeds newcontracts


TelevisionRoadblocks – 4. Reluctance to license

Production content content

Viewer

On-demand

€

Cable/DTH

mobileInternet

IPTV

stakeholders

Businessmodels

Broadcasters

DVD Dist.

Video

€€€€

DVD Dist.

Internet

Cinema

€€

Theatres

Pay TV

€€€

Cable/DTH

mobile

Internet

IPTV

DVD Dist.

Free TV

€€

mobileInternet

Broadcasters

Exhibition

retail

rental subscriptionrental

retail

subscription

Advertising

Advertising

PPV

PPVPPV

Stakeholdersexpanding into

all areas ofvalue chain

Similarexpansion of

business models

Licensing bytechnology/businessmodel is increasingly

irrelevant

T3>T2>T1> T4> T5>

All media rights for giventime window seen as one

solution, but economicbarriers currently too great

TV LOG JAM!

download

New mediawindowsgeneratelowest

revenue

Unwillingness to damage existing Unwillingness to damage existing revenue streams holding back revenue streams holding back new media exploitationnew media exploitation


Aggregation

TV channels

Platforms

Cable/DTH

IPTV

Internet

Mobile

content

On-demand

content

Viewer

Traditional players subject tobroadcast, cable & satellite

directives with relevantcontent and advertising

restrictions

New entrants toplatform market

operate under moreliberal telecoms

regimes

Viewer protection inmobile and Internet

space and lack of leveladvertising playing-field

are concerns

New and ‘old’ media platformsoffered aggregated content on

different terms (eg. ‘must carry’)

TelevisionRoadblocks – 3. Regulation of new media TVdistribution


Can’t Pay Won’t Pay for IPTV managednetworks

• What is the way forward

• Who will pay?

• Short-cut to the answer!

• Not an Economic issue anymore:but a Social issue.


Social Issues

• Openness to Media : Participation (Another slide)–Youtube–Blindness to “unlawful” use of Copyrighted media

• Multi-Task–Multi-screened room

• PVR and Advertising–Needs creativity and market influence

• Viewing information–IPTV specific problem–Turn very nasty if distributors think they owncustomer information: see RFID!


Generation Gap : < 20 year old : broadband hit thefamilies

Passives>20 years

Gagetteers>30 years

Cohort - Young< 20 years

Net-aware and LiveCouch PotatoesOpen

LimitedPassive

Involved+$$$

-$


If IP-TV can’t make it alone then Team-up

• Game platforms–XBOX360–PS3

• PC : ISV Google and Yahoo–Maybe unavoidable

• Disaggregation by Retailers : Wal*mart– E-Bay : Skype and Joost or Zattoo

• Traditional Media : Hollywood– DVD download or BD-Live


Can’t Pay Won’t Pay for VOD : P2P

• P2P network use Internet friendly protocols for the virtual zerocost distribution of large files.

• Disputed P2P networks popular since 2004–such as Bittorrent are already by over 600,000 users

Europe to receive US HDTV content: e.g. 24, Battlestar-Galactica, Enterprise, Desperate Housewives. etc.

• Bittorrent protocol in inherently scalable:–could be used any infinite number of users; provide they are

social minded, and have internet bandwidth to share• P2P video streaming is effective for “Flash Crowds”

–New canalizing trick for broadcasters–Hunt for the crowd not hang on the channel number


Pirate Bay : P2P : Bittorrent Technology

Download and burn : DIVX

Capture and upload

P2P Distribution


P2P Killer Broadband Applications


BBC iMP player : Mis-fired P2P network

Killed by Flag-ship Channel owners

Based on Kontiki’s OMN


Taming of P2P happening fast in 2006/7

• Bittorrent accepted by some Studios

• E-bay Skype launch : The Venice Project

• Fastweb Owner move to BabelGum

• Many of the P2P technology vendors doing deals


Wal*Mart ?

• Walton’s one of most influential families in the World–Influence the Clinton’s

• Wal*Mart has power and influence–Changed the DVD content market in 2004–Even Apple fears Wal*Mart for iTV product

• Wal*Mart sent mail to Apple in Oct. after iTV• Where is the gain to Wal-Mart?

–Loyalty lock on the customer: coupons e.g. Sam’sClub, own TV channel

–Disaggregation of advertising costs–Cornering of traditional broadcast network to“Senior market”


BD Eco-system + IP-TV


Media Player Option

Create a HDTV P2P Network for Wal-Mart

P2P Distribution

PeeringNetwork

Retailer Driven :Wal-Mart

Media PC OptionBlu-Ray Option

4-6 Mb/s

Massive network bandwidth

paid by retailers

Invest morefor faster download


IP-TV Future• If you can’t beat them join them : i.e. another network• There are many options?

–EU Media Policy : Subsidy income for friendly panEuropean channel

–Wal*mart : Disaggregation process• Loyality cards• Marketing information : Product• Focussed + Controlled advertising

–E-Bay with Skype + Paypal : Micropayment–Zattoo :

• But forget the simple Triple play to the customer


Vision of Future

• Packaging of Content for Multi-Display HomeViewing

• Move away from Linear content: Channels and EPG

• Scenario : Maxima Report–From film Minority Report plus BD Technology :BD-Live MHP like for interactivity


An Empathic automotive product “Theory of Mind”

Empathic Internet: a New “Soccer” monopoly

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