© 2009 ibm corporation1 telco, media, entertainment and consumer electronics companies face an...
TRANSCRIPT
© 2009 IBM Corporation1
Telco, media, entertainment and consumer electronics companies face an overlapping set of challenges and opportunities
Companies have strategic alternatives to
consider through
innovation, collaboration and insight
Growth in new services will continue to
have unexpected
consequences
Value shifts continue to be
significant among content,
distribution, and device industries
© 2009 IBM Corporation2
Media and Telecommunications industries continue to fragment with winning and losing segments becoming clearer
Sources: Veronis Suhler Communications Forecast, PwC Global Media Outlook 2009 – 2013, IBM Analysis
US Media Projected Audience and Revenue Growth
Size of bubble = 2008 revenues
Industry Challenges
• Ad-supported new distribution platforms not offsetting analog losses
• Consumer behavior outpaces suppliers
• Contention between audience fragmentation and quality programming
• Value shifts to device manufacturers as connected services become the norm
Home Video
Newspaper
Pay TV
Online Advertising
Video Gaming
Radio
Magazine
ConsumerBook
Box Office
Broadcast TV
Music
-15%
-10%
-5%
0%
5%
10%
15%
-15% -10% -5% 5% 10% 15%
2008 – 2012 (E) Revenue Growth
200
8 –
20
12 (
E)
Tim
e /
Use
r G
row
th
25%
Mobile Advertising
Pay TV Advertising
© 2009 IBM Corporation3
Media and Telecommunications industries continue to fragment with winning and losing segments becoming clearer
Global Telecommunications Projected Penetration and Revenue Growth
Mobile Content
Mobile Broadband
Fixed Broadband
M2M
Fixed Voice
-10%
10%
20%
30%
-5% 0% 5% 10% 15% 20% 35%
2008 - 2012 (E) Revenue Growth
200
8 –
20
12 (
E)
Pen
etr
ati
on
Gro
wth
Mobile Voiceand SMS
IPTV
Size of bubble = 2008 revenuesSources: iDATE, PwC Global Media Outlook 2009 – 2013, IBM Analysis
Industry Challenges
Service/device saturation and competition from low cost or free alternatives
Maintaining wireless ARPU while growing broadband, adjacent, and vertical services
Investments seem to undervalue the threat of IP players
© 2009 IBM Corporation4
Unique monthly visitors grew from 475,000 to 55 million in the last 18 months
Twitter Revenue to date = $0
“Twitter has had the single greatest impact on making or breaking a movie since the adventof television.”
Michael Lynton, CEO Sony Pictures
Growth of new services are creating some unexpected consequences
Sources: Economist Media Convergence, MPAA Movie Analysis, web site searches, IBM Analysis
Traffic is exploding….
Revenue is minimal….
The impact is real….
© 2009 IBM Corporation5
Hulu has more monthly unique viewers than the top two largest US cable operators combined
Traffic is exploding….
Online revenues/thousand viewers estimated at 1/10th of Broadcast
Revenue is minimal….
“An entire generation is growing up, if we don’t figure out how to change their behavior so it respects copyright and subscription revenue on the part of distributors, we’re going to wake up and see cord cutting.“
Steve Burke, COO Comcast
Source: D7 summit, CTAM 2009 Summit, UBS Pay TV analysis, LA Times, IBM analysis
Growth of new services are creating some unexpected consequences
The impact is real….
© 2009 IBM Corporation6
Traffic is exploding….
Skype 2008 revenues ~ $550MSkype has 8% volume share, but less than 1% of revenue
The impact is real….
In 2008, Skype, Ltd. became the world’s largest provider of international voice, with 33 Billion minutes
Source: TeleGeography, Financial Times, Wired Magazine, IBM analysis
“Google is saying it wants to be the world’s communication hub, and hundreds of companies — ranging from mobile phone operators to Skype to Microsoft better be listening.”
Wired Magazine
Growth of new services are creating some unexpected consequences
Revenue is minimal….
© 2009 IBM Corporation
We will discuss alternative strategies around innovation, collaboration and insight during the next two days
7
Innovation InsightCollaboration
Develop programming content to align costs with consumer willingness to pay
Acquire content to protectexisting distribution assets
Create flexible pricing and distribution models to match consumer preferences
Source: IBM analysis
Succeeding in the new economic environment
© 2009 IBM Corporation
We will discuss alternative strategies around innovation, collaboration and insight during the next two days
8
Innovation InsightCollaboration
Create product/ service exclusivity
Create apps platform for innovation and value creation
Incorporate use of shared services within and across an organization
Enable cross-device content portability DECE
Source: IBM analysis
Succeeding in the new economic environment
© 2009 IBM Corporation
We will discuss alternative strategies around innovation, collaboration and insight during the next two days
9
Succeeding in the new economic environment
Innovation InsightCollaboration
Maximize transactionintelligence
Focus on personalized,self programmed experience
Outsource idea generation
Source: IBM analysis