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New Media, New Business Models & New New Media, New Business Models & New OpportunitiesOpportunities
Campbell CowieCampbell CowieDirector, Public PolicyDirector, Public Policy
Time Warner EuropeTime Warner Europe
OECD London 2OECD London 2ndnd June 2005June 2005
DISCLAIMER: The views expressed in this presentation are solely DISCLAIMER: The views expressed in this presentation are solely those of the author.those of the author.
Traditional case for intervention in content & Traditional case for intervention in content & conduit markets linked to market powerconduit markets linked to market power
•• Competition policy issues: crossCompetition policy issues: cross--media ownership, media ownership, integrationintegration
•• Political issue: media pluralityPolitical issue: media plurality
•• Market power: network, intermediary services and contentMarket power: network, intermediary services and content
•• Consumer preference is (as always) keyConsumer preference is (as always) key
Market definition issuesMarket definition issues
Technology evolves quickly in the media industryTechnology evolves quickly in the media industry
New markets are still in their infancyNew markets are still in their infancy
These are innovative markets where products are differentiated These are innovative markets where products are differentiated and success is still highly unpredictableand success is still highly unpredictable
Convergence and fastConvergence and fast--changing technology make market changing technology make market definition, assessment of demand substitutability and of market definition, assessment of demand substitutability and of market power challengingpower challenging
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Market power at the network levelMarket power at the network level
Need to assess each market structure in its own specific contextNeed to assess each market structure in its own specific context::Distribution via traditional platforms and new media (mobile, ISDistribution via traditional platforms and new media (mobile, ISPs, Ps, telecoms)telecoms)Emerging new services for consumersEmerging new services for consumers
Market power requires a case specific assessmentMarket power requires a case specific assessmentPay TV: competition Pay TV: competition vsvs monopolymonopolyDSL: effective wholesale competition is rare DSL: effective wholesale competition is rare
Key question is to what extent (Key question is to what extent (if at allif at all) new media content deals ) new media content deals impact on:impact on:
InterInter--platform competitionplatform competitionIntraIntra--platform competitionplatform competition
Differentiated product problem: consumer choice and new Differentiated product problem: consumer choice and new technology hold the keytechnology hold the key
What do we expect of DRM technologies?What do we expect of DRM technologies?
Welfare enhancing pricing models & market expansionProvides a bright line between legitimate and illegitimate consumer actions
Watch OnceHave for a WeekAdd to LibraryLoad on Portable PlayerBurn DVDBuy extra material
Select one: Your Technology D-TicketYour Technology D-Ticket
DRM transforms intermediary economicsDRM transforms intermediary economics
Intermediation central to content business modelIntermediation central to content business modelAggregationAggregationTrustTrustMarket makingMarket makingMatchingMatching
Platform operators fulfil intermediary functions Platform operators fulfil intermediary functions –– source of source of market powermarket power
DRM (and broadband) may lower entry barriers in intermediary DRM (and broadband) may lower entry barriers in intermediary marketsmarkets
Conditional Access, search and billingConditional Access, search and billingA charge towards disintermediation?A charge towards disintermediation?
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Considerable uncertainty exists around Considerable uncertainty exists around content business modelscontent business models
Drivers behind transition from generalist freeDrivers behind transition from generalist free--toto--air to thematic air to thematic pay TV likely to be different from those driving the transition pay TV likely to be different from those driving the transition to to the next generationthe next generationTechnology supports access to a wider range of attractive contenTechnology supports access to a wider range of attractive content t for new media platformsfor new media platformsA significant number of content providers, with lower entry A significant number of content providers, with lower entry barriers and lower switching costsbarriers and lower switching costsThe content markets are very competitive at every stageThe content markets are very competitive at every stage
Evidence suggests a more varied content diet Evidence suggests a more varied content diet in the new media environmentin the new media environment
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5
10
15
20
25
Software
downlo
ads
Digital
photo
servi
ce
Music
downlo
ads
Media
playe
r soft
ware
Intern
et rad
io
Movie/
film do
wnload
s
Music
video
s
Movie
traile
rs/pre
views
Live m
usic
conc
erts a
nd fe
stiva
ls
News h
eadli
ne cl
ips fro
m TV
Video c
hat
Live c
once
rt cov
erage
Online
trave
l guid
e vide
os
Live s
ports
cove
rage
Intera
ctive
educ
ation
al pro
grammes
Weathe
r clip
s from
tv
Intera
ctive
onlin
e gam
ing
Digital
conte
nt sto
rage s
oftware
Sports
high
lights
Tv high
lights
Hobby
show
s (eg
. Anti
ques
)
Cartoo
ns
Garden
ing sh
ows
Cooke
ry sh
ows
Avatar
chat
rooms
Interv
iews w
ith ce
lebriti
es
Source: CCS Study 2004.; Base: Home Internet users :
28.7 million. Sample: 2936 Fieldwork: June 2004
Movies
Live sport
Warner Bros. New Content Deals in EuropeWarner Bros. New Content Deals in Europe
VoD VoD –– Telecom Italia Telecom Italia (Italy)(Italy)
VoD VoD –– SF Anytime SF Anytime (Denmark, Finland, Norway, Sweden)(Denmark, Finland, Norway, Sweden)
VoD VoD –– LyseLyse (Norway)(Norway)
SVoDSVoD –– VNL/Home Choice VNL/Home Choice (U.K.)(U.K.)
PayPay--perper--view to PVR view to PVR –– BSkyB BSkyB (U.K.)(U.K.)
PayPay--perper--view view –– Premiere Premiere (Germany)(Germany)
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Some ConclusionsSome Conclusions
Ultimate Goal: Greater consumer choice, more diversity and Ultimate Goal: Greater consumer choice, more diversity and improved visual and audio qualityimproved visual and audio quality..Market delineations are a moving target.Market delineations are a moving target.New business models are emerging and are currently under New business models are emerging and are currently under review.review.It is important to recognise the need to protect valuable It is important to recognise the need to protect valuable IPRsIPRs so so as not to reduce incentives to invest and innovate.as not to reduce incentives to invest and innovate.It really is simply a matter of time!It really is simply a matter of time!Who will ultimately drive development of new media markets in Who will ultimately drive development of new media markets in a convergent world? Consumer demand!a convergent world? Consumer demand!
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