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This document is offered compliments of BSP Media Group. www.bspmediagroup.com
All rights reserved.
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
About Analysys Mason DSO experience Tanzania case study Risks and challenges The future of TV
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
About Analysys Mason DSO experience Tanzania case study Risks and challenges The future of TV
Contents 13
TV viewers in Tanzania 14
19%
21%
7%
53%
Urban - at least weeklyRural - at least weeklyUrban - less frequentRural - less frequent
About Analysys Mason DSO experience Tanzania case study Risks and challenges The future of TV
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
About Analysys Mason DSO experience Tanzania case study Risks and challenges The future of TV
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
Africa Cast 2013 / Evolving iROKOtv
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
Africa Cast 2013 / Evolving iROKOtv
NOLLYWOOD AND THE DIASPORA
INTRODUCTION TO NOLLYWOOD
We heard that Nollywood was popular in the Diaspora. When we
launched NollywoodLove, this transitioned from anecdote to fact!
Africa Cast 2013 / Evolving iROKOtv
NOLLYWOOD AND THE DIASPORA
INTRODUCTION TO NOLLYWOOD
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.
Africa Cast 2013 / Evolving iROKOtv
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
Africa Cast 2013 / Evolving iROKOtv
Africa Cast 2013 / Evolving iROKOtv
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%
Africa Cast 2013 / Evolving iROKOtv
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
Africa Cast 2013 / Evolving iROKOtv
PAN-AFRICANAVAILABILITY ON ALL PLATFORMS
Our Mission
WE WILL REDEFINE HOW AFRICANS ACCESS CONTENT
ACROSS MULTIPLE PLATFORMS
17
Africa Cast 2013 Thank you
Africa Cast 2013 / Evolving iROKOtv