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These slides summarize a business model for Google TV as part of a course on business models taught by Jeff Funk
Citation preview
Karthik Leong Kong Fee Duan Jinglong Qing JinJian
Business Model
Outline
1. Introduction : What is Google TV
2. Customers / Value Proposition • Television • Applications and Games
3. Strategic Alliances & Complementary Services
• YouTube Channels • Google TV Ads
4. Value Capture
5. Strategic Control / Network Effects
What is Google TV
• Platform with Android OS integrated with Chrome browser to create web-enabled, interactive TV overlay on top of existing TV
• Can switch between TV (cable and satellite) and web
• co-developed by Google, Intel, Sony and Logitech.
• incorporated into set-top box eg. Logitech to connect to existing TV or built-in directly to TV eg. Sony TV
• NBC, ABC, CBS and Hulu blocked Google TV from accessing their content
Logitech - Revue
Sony TV
Remote Control
Existing TV Value Chain
TV Networks Over The Top (OTT)
Aggregator (Quality of Service not
Guaranteed – depends on Broadband Connection)
Cable, Satellite, Telcos
Movie Studios
TV Subscribers Pay TV / Premium Channels
- A la carte
Basic Package
Pay Per View
Accessed online
(30% of US households)
Accessed on TV
(91% of US households)
New Google TV Value Chain/Network
Google TV: Contents Convergence (Web Search) • Search both internet, TV programming and Android
TV apps installed on Google TV to find shows
TV Customers
Online Contents
TV Contents
Value Proposition Television
Types of Customers
Google TV Device Customers • Customers who purchased Google TV from device
manufacturers eg. Logitech or Sony • Search and watch internet or TV contents • Run applications and games on Android
Advertisers • Advertisers for Web Search on Google TV (AdWords) – in
future; keep interface simple for early adopters now • Google TV Ad (New Complementary Service; AdWords
platform) Google TV Device Manufacturers • consoles and TV manufacturers with built-in Google TV
Apps and Games Developers on Google TV
Value Propositions Google TV Device Customers
• Bundles contents from TV and web – Choose from program listing or search for entertainment on demand
• search algorithms profile behaviour based on keywords to predict relevant contents (Personalized Contents)
• Android Applications / Games eg. Social applications for live discussions on the program
• Access to free contents online eg. YouTube or low cost online subscription (eg. Netflix - $7.99 per month compared to $60 per month for cable / satellite subscription) on the big TV Screen
Value Proposition Applications & Games
Google TV
Value Proposition (Game players)
• Flash support inbuilt – Existing HTML5 and Flash games requires no change to run on Google TV (Network Externality)
• Touch screen consoles for games.
• Familiar platform attracts more developers • More creative games
• Platform also supports API for • D-pad
• HD Graphics
• Sound Support
Games with better graphics and
Sound quality
More interesting social games
Better living room entertainment
Google TV
Value Proposition (App Users)
• More free apps in android compared
to apple IOS.
• User friendly and need of the hour
apps supported – NBA scores,
news feeds
• Support for social networking apps
like facebook and twitter
• Affordable price of the device (99$) compared to tablets and smart phones Typically for early adopters who just want to try new apps.
• Specialized apps -> Optimized only for google TV.
Google TV
Value Proposition (Games & Apps
Developers)
• The brand name Google
• Android Platform – Ease of use and
familiarity
• Google TV gaining momentum recently.
• Familiarity of the development platform and availability of the development kit.
• Reduced time to learn and
master the technology.
(Android Programming)
Strategic Alliances Complementary Services
Strategic Alliances – Complementary Services
[1] YouTube Channels (Partners with Media / Production Co.) Google TV blocked by: Major TV Networks: NBC, ABC, CBS Online Content Co. : Hulu -> Limits effectiveness of Google TV Search Google partners with media / production co. -> create original programming
on YouTube channels - alternative to cable TV on internet - initially 100 channels but eventually targeting millions of channels
(compared to 100s for cable / satellite TV) on Web
- wide variety of interests -> Infinite contents (Long Tail in TV programming) [2] Google TV Ad (Partners with Satellite / Cable / TV Service Co.) Create in-roads to TV advertising - Broker placement of advertisements on TV and online programs
Partnerships with Media Co. – YouTube Channels
• Channels will receive programming from dozens
of media / production co. and online video creators
• each channel will contain hrs of programming
• Channels are free for users supported by advertisers
• Media / Production Co. receive as much as 55% of ad revenues after cost paid to producers
Partnerships with Content Aggregators – Google TV Ad
Steps: 1. Logon to Google TV Ad Self Service
Portal: Choose Network, Day/Time, Program for Ad to appear (local or national)
2. Set Maximum Budget 3. Highest bid will be shown (Auction
Model) 4. Pay by Cost Per Thousand
Impressions (CPM) 5. Google provide report on cable TV set
top box impressions and audience tuning behaviour
Google Ad Creation Marketplace - industry professionals provide script writing, editing, production, and
voice-over at affordable package cost
Network Program Day/Time
Guidance on target audience (demographics)
Value Proposition – Advertisers Google TV Ad
• Google Analytics - guidance on audience demographics - stats of the impressions / tuning behaviour
• Google Ad Creation Marketplace – caters to all budgets
• Advertisers set maximum budget - transparent bidding mechanism
• Only pay when advertisements are watched
• For online + TV programs
Value Proposition – Content Aggregators Google TV Ad
• Partnerships with Dish Network,
DirectTV, Verizon FiOS TV, EchoStar and Astound Cable for Google TV Ads
• Auction model ensures they get
the most advertising dollars for their programs
• monetize more programming (transparent bidding mechanism -> more bids for all programs advertising space)
Value Capture
Industry Architectures
- Value Chain
Content Creation
Content Packaging
Content Distribution
User Interface
End User
Hollywood
Studios
Independent
Producers
Broadcast
Networks
Cable
Networks
Broadcast TV
Stations
Cable
MSO’s
TV Viewers/
Consumers
User
Generated
Content
Google TV Google TV
The Internet
TV
PC
Viewers/
Consumers
Traditional
Changes/Additions
Industry Architectures
- Value Network
Internet Value Network
Multisided
Market Search Users Advertisers
(e.g., Online Store)
Search Advertising - AdWords
1
3 5
Industry Architectures
- Value Network
Internet Value Network
Website visitors Online Stores
AdWords/AdSense
Content Providers
Multisided
Market
Industry Architectures
- Value Network
Today’s Model
Subscribers
(End-user)
Cable operators
(Comcast, Time Warner)
Satellite
Content Providers
(HBO, ESPN)
TV Broadcasters
(NBC, CBS)
Advertisers
Internet TV’s Model
Subscribers
(End-user)
Internet TV
(Google TV)
Cable operators
(Comcast, Time
Warner)
Content Providers
(HBO, ESPN)
TV Broadcasters
(CNBC, CBS)
Advertisers
Video Service Provider
(Netflix, Youtube)
Application/Game
Providers
Internet
Service
Providers
TV or Set‐top
Manufacturers
Both TV
and Web
sites.
(Except:
NBC,
CBS,
ABC
Web Sites)
Movie/ Video
Makers
Movie/ Video
Makers
Money Flow within the Architecture
Subscribers
(End-user)
Cable / Satellite
operators
(Comcast, Time
Warner)
Premium Content
Providers
(HBO, ESPN)
TV Broadcasters
(NBC, CBS)
Online Video Service
(Netflix, Youtube)
Application/ Game
Developers
Internet
Service
Providers
(AT&T,
Comcast)
TV or Set‐top
Manufacturers
A
D
V
E
R
T
I
S
E
R
S
Movie/ Video
Producers
Google TV/
Google TV
Ad
Value Capture
Google TV/
Google TV Ad
Advertising
Advertising Revenue from Google TV Ad
Commission from the sale of
applications
Movie/ Video
Producers
Sale of Products
Advertising
TV Broadcasters & Content providers
Advertising
Subscription
Video Service
Providers
Advertising
Subscription
Application/
Game providers
Advertising
Sale of applications
TV/
Set-top Manufactures
Sale of products
Strategic Control
Google TV
(Android OS)
TV/Set-top box
(Sony, Logitec)
Apps/games S/W
(apps/games developers)
Peripherals
(remote control)
• Control key interface standards
• Create network effects
• Develop complementary assets
Multi-sided Platform
Content providers
Advertisers
End-users
• TV/Set-top box manufacturers – Android Open ADK (Accessory
Development Kit)
• Apps/Games developers – Android Open API (Application
Programming Interface)
– Chrome Web Store & Android Market
• Peripherals – Remote control by Android
Phones & Tablets
• Users – OS upgrades, Chrome Web
Store & Android Market
Control Interface Standards
Google TV
(Android OS)
TV/Set-top box
(Sony, Logitec)
Apps/games S/W (apps /games developers)
Peripherals
(remote control)
ADK
API, Chrome Web Store, Android Market
Android Ecosystem
End-users
Upgrades, Chrome Web Store, Android Market
• Partnership with – Cable Co.
– Satellite Providers
– TV networks
– OTT aggregators
• Draw on pool of – Advertisers (Adword
platform)
– App/game developers
• Device manufacturer – Free license for Google TV
Create Network Effects
Cable Co.
Satellite providers
TV networks
OTT aggregators
Advertisers
App/game developers
End-users
• Complements produced by complementors
– Contents, Ads, Apps/games
• Complements developed within Google
– data centers – servers and network
– Google TV Ad for both online and TV contents (pending patent application): analytics for tracking and reporting impressions of ads
– YouTube Channels: millions channels available online
– Brand name & reputation
Develop Complementary Assets
Summary
Google TV • searches contents online and on TV • Android market and Chrome Web Store – Apps and Games
Complementary Services through Strategic Alliances • Google TV Ads brokers placements of ads on online and TV programs • YouTube Channels generate millions of channels online
Value Capture • Advertising – Google TV Search (Adwords platform) – in future • Advertising – Google TV Ad (Adwords platform) • Advertising – YouTube Channels • Revenue from Apps and Games
Strategic Control / Network Effects • Interface Standards • Network Effects – users, apps / games developers, advertisers, partners,
device manufacturers • Complementary Assets
What Google could do
Value Proposition to TV consumers: • User Interface – Explore more user friendly ways of searching apart
from keyboard eg. Android voice search Strategic Alliances: • More partnerships eg. with movies studios to make contents available
on the web to coincide with DVD release
Value Capture: • Enough advertising dollars to fund millions of YouTube Channels? -> monetize contents of minority interest directly ie. paid service Network Effects: • Merge Android and Chrome Web Store into one single platform -> more network effects from apps and games developers and
advertisers
The End Q&A
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