evolving iroko tv in a multiplatform ecosystem

This document is offered compliments of BSP Media Group. www.bspmediagroup.com

All rights reserved.

http://www.bspmediagroup.com

http://www.bspmediagroup.com

Digital Switchover

Presentation to SABA Digital Infrastructure and Platforms

19 July 2013 • Robert Schumann

About Analysys Mason DSO experience Tanzania case study Risks and challenges The future of TV

Contents 2

Analysys Mason is a global specialist in telecoms, technology and media § Analysys Mason is a global specialist

in telecoms, technology and media (TMT), with offices on four continents

§ We have had a major influence on the industry for more than 25 years: - led the liberalisation of telecoms

across Europe and Asia and mediated in policy issues for operators and regulators

3 About Analysys Mason

Analysys Mason offices Assignments completed

Analysys Masons’ s global presence and experience

- supported several hundred transactions and licence acquisition processes for operators and financial institutions

- provided strategic and operational support to major operators in the roll-out and expansion of businesses across the sector, enhancing enterprise value

§ With over 260 staff in 13 offices, we are respected worldwide for our exceptional quality of work, independence and flexibility in responding to client needs

We are uniquely positioned to provide consulting and research to the TMT sectors

4 About Analysys Mason

§  Our focus is exclusively on telecoms, media and technology (TMT).

§  We support multi-billion dollar investments, advise clients on regulatory matters, provide spectrum valuation and auction support, and advise on operational performance, business planning and strategy.

§  We have developed rigorous methodologies that deliver tangible results for clients around the world.

§  We analyse, track and forecast the different services accessed by consumers and enterprises, as well as the software, infrastructure and technology delivering those services.

§  Research clients benefit from regular and timely intelligence in addition to direct access to our team of expert analysts.

§  Our dedicated Custom Research team undertakes specialised and bespoke projects for clients.

Research

Consulting

Transaction support

Strategy and planning

Operational consulting

Procurement Regulation and policy

Consumer services

Enterprise services

Telecoms software

Regional markets

Network technologies

Our selected media project experience 5 About Analysys Mason

Case study Key capabilities TV advertising in France Understanding of the nature of the TV advertising ecosystem

European media group growth plans

Competitive analysis, benchmarking and business planning for production, channel aggregation and Internet expansion plans

Telecoms operator football rights

Role of premium content, and ways of accessing this content for broadcast

Content rights business and regulatory models

Evolution of media delivery technologies, for possible regulatory intervention in the content market

South American broadcaster DTT strategy

Planning of genre and business model for a broadcaster moving to a digital platform

Irish government DTT planning

Leadership and planning of digital terrestrial television, involving all stakeholders

Broadcaster online content distribution strategy

Costs and strategy for a broadcaster evaluating alternative platforms for delivering content

Asian studio facilities provider business plan

Comprehensive business planning (vision, services, clients, pricing, marketing) for a state-of -the-art movie studio facility


Contents 6

What is TV? 7

TV Proliferation of CONTENT

Proliferation of PLATFORMS

Revenue model?

A framework for DSO 8

Source: Plum Consulting, Farnborough for GSMA

Stakeholder Activities Government 1.  Develop DSO policy and legal framework

2.  Establish and implement staged plan for ASO 3.  Develop funding policy and establish fund 4.  Establish principles for Help Scheme 5.  Establish DSO/ASO Implementation Task Force

Regulator 1.  Decide on technology and standards 2.  Implement licensing framework 3.  Manage radio spectrum and coordination matters

Industry 1.  Develop consumer proposition 2.  Establish DTT branding and conformance regime 3.  Develop communications plan 4.  Plan and deploy DTT network 5.  Establish receiver specifications and costs

Cost of DSO in other countries 9

Source: Digitag

Country Purpose Amount Source UK Help scheme €693m BBC

Marketing activities €230m Digital UK DSO total €4.37b Private + Public

France Marketing activities €255m Government + PSBs Help scheme €142m Government

Italy Help scheme €50 per qualifying HH Government ASO pilots €55m Government DTT rollout €33m Government DTT subsidy €220m Government

Spain DSO projects €75m Government DSO total €12b Public, private, viewers

Sweden Help scheme No special budget Government Marketing activities €5.5m Government

Netherlands DSO § DTT platform launched in 2003 offering limited free‐to‐air

services from the PSB and extensive pay services from Digitenne § Focus on portable and mobile reception: DVB‐H services

launched in June 2008 § ASO completed on a single day on 10 December 2006 § Since then, DTT penetration has increased from 3‐5% to 12% of

the population – and strong growth continuing

10

Source: Digitag

Sweden DSO § Launch of DTT services in 1999 offering a largely pay DTT

platform operated by Boxer § Attractive programme offer combined with competitive pricing has

allowed Boxer to effectively compete with other television operators

§ Five phases to switch‐off starting in September 2005 and completed in October 2007

§ 40% of viewers waiting until last month to purchase DTT receivers

11

Source: Digitag

France DSO § Launch of DTT services in March 2005 offering viewers 18 free‐

to-air and 9 pay‐DTT services § Combination of MPEG‐2 and MPEG‐4 AVC compression formats § Five HD/DTT services launched § France Télé Numérique set up to manage analogue switch‐off § Two DTT pilot projects completed in 2009 § Analogue switch‐off began in February 2010 for completion by 30

November 2011

12


Contents 13

TV viewers in Tanzania 14

19%

21%

7%

53%

Urban - at least weeklyRural - at least weeklyUrban - less frequentRural - less frequent


Contents 15

What are the key risks for DSO, particularly with a short ASO deadline? § Expensive receivers and low engagement from retailers to make

receivers widely available in the market § Cost of meeting roll-out and coverage obligations (e.g. when

country/broadcast specific features are required) § Poor communications campaigns, leading to confusion about

DTT benefits and how to obtain them – this can be particularly damaging in remote communities with poor literacy skills

§ Insufficient co-ordination with adjacent countries increasing the risk of cross border interference (shorter transition periods may make this more complex)

§ Inadequate DTT network planning, which may cause delays to network roll-out and switch-on schedules.

16


Contents 17

Summary of relative impact and degree of complementarity of linear and non-linear TV … at least so far

18

Element Key trends over last 10 years Scheduling / type of service

▪  Complementarity of non-linear and linear TV for popular TV series and programmes – potentially having a significant impact

▪  Importance of new players offering Internet-based non-linear TV

Device / service ▪  Simultaneous growth of HDTV and non-linear TV ▪  Simultaneous growth of traditional and non-traditional non-linear TV

Transmission ▪  Simultaneous growth of traditional transmission TV services (DTT, cable, satellite, IPTV) and broadband/Internet-based networks

Consumption ▪  High growth in non-linear TV viewership needs to be put in line with the current evolution of the overall TV market

Business model ▪  Although growing fast, non-linear TV revenues still make up a very small part of the whole TV market

▪ We expect non-linear TV to continue to grow – but it could grow: –  along with linear TV, i.e. as a complement –  at the expense of linear TV, i.e. as a substitute

Although revenue from online TV is increasing exponentially, it still represents less than 2% of total TV revenues

19

Source: EAO, Analysys Mason

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

Germany Spain France UK Italy

2007 2008 2009 2010

0 20 40 60 80

100 120 140 160 180 200

Pay-TV FTA

Total non-linear revenues by source in larger EU countries, 2008–11 (EUR million)

Non-linear revenues as % of total TV revenues in larger EU countries, 2008–11

Free models seems to be gaining momentum in most countries, but pay-TV models are also growing in relative terms in Germany

Future TV consumption – will connected TV be a complement for linear TV, or a substitute?

20

Connected TV as a complement – traditional TV follows historical trend

Connected TV as a substitute – erosion or decline in traditional TV

Figures illustrative – for discussion only

0

50

100

150

200

250

Con

sum

ptio

n of

onl

ine

vide

o vs

TV

(min

)

TV Online Video

0

50

100

150

200

250

Con

sum

ptio

n of

onl

ine

vide

o vs

TV

(min

)

TV Online Video

Concluding remarks

§ Complexity and uncertainty in short, medium and long term -  tactical approach for short term -  strategic planning for medium to long term

§ Established and new players have different perspectives -  a land of opportunity for new players -  limited ‘losses’ for established players, but a threat in medium

and long term – prepare tactically!

§ You are not observer but KEY PLAYERs § Your actions can change current forecasts!

21

Africa Cast 2013 Evolving iROKOtv in a multi-platform eco-

system Jason Njoku CEO iROKOtv

Africa Cast 2013 / Evolving iROKOtv

NOLLYWOOD IS THE WORLD’S SECOND LARGEST

MOVIE INDUSTRY IN TERMS OF OUTPUT

2


WORLD’S SECOND LARGEST MOVIE INDUSTRY

INTRODUCTION TO NOLLYWOOD

BOLLYWOOD

3,000 MOVIES/YEAR

VALUE

$2.5B / YEAR

NOLLYWOOD

2,000 MOVIES/YEAR

VALUE

$0.3B / YEAR NOLLYWOOD HAS A MASSIVE OPPORTUNITY AHEAD

NOLLYWOOD REVENUE (EXCLUDING PIRACY)

INCREASED FROM $50 MILLION IN 2002 TO ALMOST

$300 MILLION IN 2010 (+18% P.A.).

By comparison Hollywood revenues equaled $50bn and

Bollywood revenues equaled $2.5bn in 2010.

Nollywood films released per year rose from 500 to 2,000

between 2002 and 2010.

Remarkably Nollywood exists as a film industry without any

government support.

IN 2009, THIS WAS HOW YOU WOULD CHOOSE A NEW

NOLLYWOOD FILM TO WATCH. CONFUSING OR WHAT?

5

Before evolution could commence,

the industry required total

disruption

NOLLYWOOD FANS WANTED BETTER ACCESS TO THEIR

SCREEN IDOLS. THEY WANTED A PLATFORM OUTSIDE OF

TV AND VCD

8

The evolution begins


NOLLYWOOD AND THE DIASPORA


We heard that Nollywood was popular in the Diaspora. When we

launched NollywoodLove, this transitioned from anecdote to fact!


NOLLYWOOD AND THE DIASPORA


iROKOtv set the content free and made it available in the US, UK and

around the world, allowing the Diaspora to access home produced

content that resonated with them.


THE BUSINESS MODEL EVOLVES

THE SUCCESS OF iROKOtv

We buy online movie licences

from movie producers.

We stream the movies on irokotv.com

and make money from ad sales and our

subscription service iROKOtv PLUS

Additionally we sell licences to

airlines, tv channels and partners.

WE HAVE SUCCESSFULLY REORGANISED AND STRUCTURED THE

NOLLYWOOD MOVIE DISTRIBUTION PROCESS.

AFRICANS CONSUME MEDIA - ON A DESKTOP, ON A

TABLET BUT THE FUTURE WILL BE MOBILE.

13

Africa Cast 2013 / Evolving iROKOtv 12

5.89% of users in Nigeria

CONSIDERING THE AFRICA ‘CHALLENGE’ AND DEVELOPING THE RIGHT

PLATFORMS

m.irokotv.com - 47% of traffic

comes from Nigeria

www.irokotv.com 5.89% of

traffic comes from Nigeria



THE CONVENIENCE OF MOBILE CONNECTIVITY...

MOBILE IN AFRICA

...HAS REVOLUTIONIZED HOW PEOPLE ARE ENGAGING WITH

DIGITAL CONTENT

With the growth of smartphones, mobile video consumption is on the rise for

entertainment content.

According to Nielsen’s global report of multi-screen media usage, mobile

video is particularly prominent in SSA, where many consumers leapfrog

home Internet altogether in favour of the all-in-one smartphone.

72% of SSA online consumers report

watching video on mobile devices at

least once a month, and almost 40%

say they do so at least once a day.

43% of SSA’s mobile internet users

are aged between 16-24 and spend

more time consuming mobile video

than any other age group.

MOBILE DATA USERS IN NIGERIA

% of population

2007 2008 2009 2010 2011 2015e

14.7%

24.1%

27.7%

32.8%

38.3%

50.8%


WE ARE WAITING FOR AFRICA TO COME ONLINE

THE CHALLENGES

SSA IS THE WORLD’S FASTEST

GROWING INTERNET POPULATION

With a growth from 16 million to 118.8

million Internet user between 2005 and 2011

(+40% p.a.).

By 2015, there will be more than 180 million

internet users in SSA (+13% p.a.). Nigerian

internet users have increased from 4.8

million to 76.7 million between 2005 and

2011 (+59% p.a.).

By 2015, there will be an estimated 110

million Nigerian internet users. Overall,

internet penetration in urban Africa

compares favourably with that in other

emerging markets.

97.9M

118.8M

137.9M

155.5M

169.7M 181.0M

2010 2011 2012 2013e 2014e 2015e

15.6% 18.5% 21.0% 23.3% 24.7% 25.7%

39.0% 47.2% 53.2% 58.0% 60.5% 61.4%

% OF TOTAL POPULATION

TOTAL SSA

TOTAL NIGERIA

TOTAL SSA

OTHER SSA

NIGERIA

36.1M

42.1M

49.3M

56.6M 64.0M

71.3M

61.8M 76.7M

88.6M 98.9M 105.7M 109.7M

SSA IS COMING ONLINE. WE HAVE THE PLATFORM AND

THE CONTENT LIBRARY TO MEET THEIR NEEDS


PAN-AFRICANAVAILABILITY ON ALL PLATFORMS

Our Mission

WE WILL REDEFINE HOW AFRICANS ACCESS CONTENT

ACROSS MULTIPLE PLATFORMS

17

Africa Cast 2013 Thank you


evolving iroko tv in a multiplatform ecosystem

Technology

media analysys mason

media tmt

analysys mason offices

dso policy

analysys masonanalysys

business model

dvbh services

different services