IPTV Benchmark the 3rd: The Future of Broadband Video

This years edition of IPTV Benchmark Study: The Future of Broadband Video is about to be published.

Congrats to the colleagues of thebrainbehind. It’s an comprehensive update to IPTV Benchmark Study. This years edition was again published in cooperation with Nokia Siemens networks and is assesing relevant IPTV rollouts around the globe as well as a number of the most interesting video streaming websites. In both cases business models have been analysed in terms of product offer, ease of use and the range of content that is available as well as the usability of the services.

The following chapters have been contributed by eyetag media engineers network

  • WebTV: Reassessing Potential for Value Creation
  • Top-tier type of content:
    Positioning in a platform driven environment
  • Second-tier type of content:
    Growing maturity for business designs
  • Independent, Niche and Prosumer content:
    Platforms coming of age

Following up some snippets out of it:

WebTV: Reassessing Potential for Value Creation

It took no longer than a bat of an eyelid to change the arena of web entertainment forever. Yet, despite all large and small moves by industry majors, there is still a staggering amount of trial and error going on. But with content owners embracing the opportunities arising from a growing focus on relationship-driven business, a number of underlying strategic trends can be observed.
Again, this year saw transactions from investors towards online video services and software companies of $461m in the pioneering market for the industry, the US (Dow Jones VentureSource). In web video, growth is expected to triple by 2011, as can be seen in the diagram below.

[chart removed]
Despite video ads being a relatively new form of advertising, they generated revenues of about $1bn last year in the US alone. It will increase to $2.9 billion by 2011 at an average annual growth rate of 48%, according to Strategy Analytics. As such it will be the growth factor No 1 for the segment. Worldwide and for all online video business models researcher InStat predicts a growth from $1.2 billion in 2007 to $4.5 billion in 2012 (CAGR at 39%).

In the meantime social web, still a major factor for internet usage of geek dimensions (and WebTV’s structural complementor), will capture some $3.8billion until 2011 in advertising.

The tremendous uptake of pull media is also shown in that more than a third of all US TV households are forecast to subscribe to or regularly use VoD on various platforms by 2011 (Informa), generating revenues of more than $11.4 billion.
But besides all this progress being made on networked media, one should not forget that DVD usage is a well embedded habit. DVDs have been used by consumers for years. And to most the format is just perfect. This behaviour will only change gradually, usecase by usecase. Plus, despite the raw numbers of growth and usage, social networks are still trying to come up with successful ad models. It will certainly remain a key question in coming years how profits can be made from the massive amount of users’ time spent on MySpace, Facebook and Co.
As the following ranking of online properties in the US suggests, traditional media is still lagging behind the internet world’s incumbents.

Another aspect, the widespread fear of converting analog dollars into digital pennies, has some considerable truth in it. As Will Richnond of the TDG Group stated recently as an example, NBC would earn a loss in value of up to 80% for one episode of ‘Heroes’ placed on hulu.com, instead of pouring it out via their network outlets. This might even be higher, if sales fail to harvest a double CPM for the piece.

On the other hand such assumptions only become reality if conversion from push to pull media would evidently cause linear loss on traditional outlets. Except for younger audiences, which may never have been as connected as the old measurement model was suggesting, the decay remains yet hard to prove. And of course broadcasters here are great in proving the strength and vitality of connectedness with their audiences. Efforts to establish an integrated measurement system for the multi-screen landscape suggest that many players are hoping for more transparency on such questions soon.
Summarising trends, it can be noted that an increasingly mature pull media is now a cornerstone in strategic decision-making. Video works as driving force behind the internet’s popularity and, accordingly, for advertising revenue growth and migration.

[...]

Independent, Niche and Prosumer content:
Platforms coming of age

This class still counts for the largest amount of content deployed throughout the web.
It is these new platforms that are putting enormous disruptive pressure on traditional content owners. In an ongoing “tsunami of self expression” (New York Times), people are looking for ways to share their life and to draw attention to themselves. One of the most striking figures is without doubt the 10 hours of video being uploaded to Youtube every minute.
The following chart underlines the stellar advance of Youtube in this domain.

Top 10 Video and Multimedia Websites (US), Source: Hitwise marketingcharts.com

Myspace is expected to generate $1bn this fiscal year (ending June 2009). WebTV platform provider Brightcove has closed deals with hundreds of independent content owners and is reaching out to attain a global presence with their increasingly mature SaaS services.
Mainstream media’s alignment to aggregation platforms is of course a primary measure for meeting fragmentation tendencies. As content opportunities proliferate, capabilities in connecting audiences with highly relevant contents will become a source of growth, even if this leads users outside the former product’s boundaries. The task must be to absorb the consumer’s involvement and to create complementary assets around it. Mashups of user generated content are one way of achieving this. Hulu, for example, lets users compile their own rough edits of episodes of their favourite shows. In addition, Youtube has just recently launched an annotation tool where users can add notes and comments to videos. Not long ago, these features could only be found on specialised platforms features list – another indicator for the growing maturity of the segment.
By introducing more and more of such features, prosumer communities and independent fan bases are changing not only entertainment from bottom-up, but brand communication as a whole. Whereas top-tier contents are attracting users in the first place and second-tier contents are setting the pace for community engagement, prosumer and other highly vertical platforms will continue to drive buzz and lead to a real pervasiveness of the magic of a video enhanced web 2.0.

Social Software als Segment

Interactive,Knowledge,Motionpicture,Studies — Nikolaus Reinelt @ 13:44

Das gro?e Interesse an sozialen Netzwerken und Video im Internet best?tigt das hohe Potential, dass das soziale Web mit sich bringt. Andererseits lenkt es jedoch ab von dem M?glichkeiten, das in sozialen Anwendungen f?r den Bereich der Unternehmensprozesse und Unternehmenskommunikation steckt. So merkte bereits 2006 Ray Lane von Oracle an
“All these things that are thought to be consumer services are coming into the enterprise”.

In den USA vollziehen Unternehmen bereits diesen Schritt. Laut dem Dartmouth Center for Marketing Research, MA, weist Inc. 500 Index der schnellst wachsenden Unternehmen wei?t dort einen Anteil von 39% Unternehmensblogs (2007: 19%) aus. Selbst wenn ein dort zu beobachtendes Wachstum um 20% beim Einsatz von Video innerhalb der Unternehmensabläufe auf 45% dieser Unternehmen nicht direkt übertragbar auf hiesige Marktverh?ltnisse sein muss, sehen wir zumindest einen deutlichen Indikator f?r das Gesamtpotential. So prognostiziert Forrester zb. für das Jahr 2013 einen Weltmarkt von 4.6 Mrd US$ f?r Unternehmensanwendungen basierend auf Web 2.0 Technologien.
Der Hype-Zyklus neuer Technologien

Gartner beschäftigt sich in einer Studie mit dem Hype-Zyklus neuer Technologien. Hier heisst es, die Einf?hrung von Web 2.0-Anwendungen ist nicht gleichzustellen mit der Zufriedenheit.

Das Papier sagt 27 Technolgietrends voraus, die sich mittelfristig in Unternehmen etablieren werden. Acht davon sollen sich besonders stark auf Unternehmen auswirken. Dazu geh?ren vor allem: Green IT, Web 2.0, Soziale Netzwerke, Cloud Computing, Virtuelle Welten, Videoconferencing und Microblogging.

Viele der Technologien m?ssen allerdings erst von den Endkonsumenten erlernt werden, bevor sie im Unternehmen angewendet werden. Firmen sammeln Erfahrung im Einsatz der Technologien, bevor sie den Erfolg und die kulturellen Auswirkungen sp?hren werden. Jackie Fenn von Gartner meint:

Later — in between two and five years — cloud computing and service-oriented architecture (SOA), which is moving up the Slope of Enlightenment, will deliver transformation in terms of driving deep changes in the role and capabilities of IT. Finally, public virtual worlds, which are suffering from disillusionment after their peak of hype in 2007, will in the long term represent an important media channel to support and build broader communities of interest.

Strategical Options for Webvideo

Broadcast,Interactive,Knowledge,Motionpicture — Nikolaus Reinelt @ 8:00

THe following comes in cooperation with Bertram of gugelproductions. It is adapted to our findings in the IPTV Benchmarking Study “IPTV vs. WebTV”.
Today, producers of motionpicture and TV contents can choose from an array of platforms to provide their work to a broader audience. Conversely, platform providers in most cases can pick from a multitude of contents to offer. In times of announcements of new video sites coming in almost by the hour, VoD or streaming offers both have to stay focussed in order to asses arising opportunities. Increasingly, a seperation between Internet TV as “Over-the-top” distribution and telco IPTV as a new “institutionalized” mean of distribution becomes hard to make.
To provide a basic methodic famework for producers and platform owners, we assembled the following matrix, showing options for both sides.

Distribution_Matrix
To segment platforms we then used three criteria:
  • Linearity of program and on demand availability
  • Channel Control
  • Programming Control

By differentiating on these criteria, one can distinguish between the following delivery mechanisms:

  • TV: Regardless of which transmission technology used – cable, terrestrial, satelite or closed, IP-based networks – programing pursued by TV always is being characterised by linearity. This delivery mechanism commands a high level of control by excluding all other forms of usage and signal only can be received and decoded by standardized end-devices. Access to this form of program supply is even being regulated by the government due to limited capacity fro transmission. TV alltogther is the most closed system.
  • Broadband Offerings: They are determined by an on demand provisioning of contents. However, channel control is still very present on this delivery type. In this case it is not being excerted by dedicated network structures, but by specific technologies as DRM or special types of application, which exclusively are being able to receive and display these proprietary signals. Access to Broadband Offerings is not being subject to authoreties regulation. Neverthenless platform owners issue certain requirements and rules for incorporating contents to their platforms. Examples: Joost, Babelgum, German Telekom’s T-Onlinevision, iTMS.
  • Web TV: Web TV contents are being deployed on Demand, but always embody a highly serial character. Providers in this segment are clearly commanding formatting and type of contents over here, in order to not diminish the serial qualities of the program. Often, producers become platform owners in this class. In opposite to Broadband Offerings, control on the conduit is being controlled less tight. Contents are available free on the net and can be spreaded in many cases without constraints. Examples: Rocketboom, Ask a Ninja, mobuzz.tv
  • Videoclips: On the bottom end videoclips or webclips make up for the most free abailable form of video content. In this class neither control of contents nor of their distribution exist. Producers and consumers enjoy both maximum freedom of choice. This leads to consumers becoming producers. Of course on demand accesibility is fully prevalent in this case. Examples are: YouTube, myVideo, Metacafe.

Looking on the horizointal axis, contents can also be divided into four categories:
Top-Tier and Second-Tier contents, Indy- and Niche contents and Prosumer- or User-Generated-Content.

  • Top-tier: Expensive, valuable assets that carry the maximum possible returns . These Blockbuster-type of assets are being produced and exploited on enormous financial expenses.
  • Second-Tier: Library titles and older shows, in most cases passed already all stages of the value chain.
  • Indy- and Niche Contents: Include a broad array, reaching from semi-prodessional amateur movies all the way up to professionaly produced contents originating from many sources outside big, network media entities
  • User-Generated-Content (UGC): All type of material produced by consumers or prosumers

This classification resulted into 16 combinations of which platform owners and producers can choose from.

In a next step stress on particular combinations of distribution and type of contents and describe related strategies. But first we look at the overall recouping opportunity of production costs via webvideo.
Production_Costs_Web_Revenue
This figure illustrates production costs and obtainable returns from distributing video or film on the internet.
The curve progressions in this illustration are ideal an rely on an educated guess. The curves shape there is depending significantly on factors quality/relevance, community, and succesfull management/marketing power on producers site. Following the occurence of those factors revenues can be siginficantly higher or lower.
Next we selected four major generic strategies, the other 12 product/market combinations will be listed in short form only.
Selected_Offerings
  • Top-Tier Contents are increasingly offered as microchunked webclips. Perhaps the most known example in this field is “Saturday Night Live”. In the meantime there are not many premiers of shows or films left that haven’t been promoted on video platforms beforehands. Primary goal behind a Top-Tier videoclips strategy should always be to generate and increase demand on complementary platforms.
  • We have witnessed various efforts to merge UGC and regular TV progaming before. Discussion on a YouTube TV channel are still going on and by its Ziddio portal Comcast setup a site aiming to move UGC videos straight onto the TV screen. Even ABC announced such a show recently with the i-Cought show, planned to be based completely on UGC.
  • Rocketboom is the poster child of another combination. They are positioned around a sweet spot, being made up by a high fit to typical demand and the internets very own characteristics of a match between Indy- and Prosumer contents.
  • Broadband Offerings combined with Second-Tier contents have gone large latest since movie download offerings appeared. Second-Tier is repeatedly being used for trialing platforms and asses opportunities. Joost is one example here, although they are (as many others in this lively market) a hybrid between Indy and Second-Tier distribution.

Lastly, here are the other strategic options at a glance:

  • TV+Top-Tier: Focus on exclusivity- and quality
  • TV+Second-Tier: Windowing, Exploitation of Evergreens
  • TV+Indycontent: Aggregation und Formatting
  • Broadband Offering+Top-Tier: Premium Strategy
  • Broadband Offering+Indy Content: Specialinterest- und Niche Strategies
  • Broadband Offering+User Generated Content: Aggregation and Packaging
  • Web TV+Top-Tier: Promotion, Communitybuilding and Premium Advertising
  • Web TV+Second-Tier: Formatting and Windowing, Adaption
  • Web TV+UGC: Packaging
  • Videoclips+Second-Tier: Platform Business
  • Videoclips+Indy Content: Enabler
  • Videoclips+UGC: Aggregator, Destinationsite
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