As more and more users watch TV on non traditional devices, they are also time-shifting, place-shifting, and also choosing what to watch. There are new original content options from Netflix and Amazon that may even rival cable companies' content.

1. Augustine Fou- 1 -
Content Continuum
Network
TV
Cable
TV
YouTube
(custom)
Netflix/
Amazon
Originals
Vimeo
(UGC)
• Mass
audience
• Very high
production
costs
• Niche
audience
• Medium
production
costs
• $100M
celebrity
custom
content
• <$100M
original
content
• Free user
submitted
content
Mass Niche
TREND

2. Augustine Fou- 2 -
Devices Used to Watch
Network
TV
Cable
TV
YouTube
(custom)
Netflix/
Amazon
Originals
Vimeo
(UGC)
TV TV
Centrally controlled access Distributed access
TREND
Computer
Mobile
(tablet/smart
phone)
Computer
Mobile
(tablet/smart
phone)
Mobile
(tablet/smart
phone)

3. Augustine Fou- 3 -
Network Access
Network
TV
Cable
TV
YouTube
(custom)
Netflix/
Amazon
Originals
Vimeo
(UGC)
Broadcast Cable
Access OTT/Internet/Data
Wired
Broadband
Wireless
Broadband
Centrally controlled access Distributed access
TREND

4. Augustine Fou- 4 -
Revenue Model
Network
TV
Cable
TV
YouTube
(custom)
Netflix/
Amazon
Originals
Vimeo
(UGC)
Advertising Ads
Subscription
$40B
Video Ads
$30B $4B
User
subscriptions
Display ads
Video ads
$1B free
TREND

5. Augustine Fou- 5 -
Millennials Watching TV On..
Source: Deloitte via Engadget March 2014

6. Augustine Fou- 6 -
It turns out that cord-cutting isn’t the only threat facing cable channels.
Several of the big ad-supported online video outlets, including Google Inc’s
YouTube, AOL and others, plan this upfront season to target some of the ad
dollars that currently flow to cable channels, industry executives say.
The web video outlets see a vulnerability in second tier cable networks, and to a
lesser extend in the local TV-station market, executives say.
According to multiple media buyers and ad sellers in the Web video industry,
digital media companies are looking to draw direct comparisons between their
audiences and cable TV networks, a match-up Web video outlets think they can
win.
Buyers say Google is likely to be the most aggressive on this front, given
YouTube’s massive size and its young demographics that don’t necessarily
watch a lot of TV. The company has been selling directly against cable
networks, with pitches like “X YouTube net reaches more women than E! or
Awesomeness TV reaches more tweens than ABC Family.”
In one pitch, for instance, YouTube cited Nielsen data from November showing
that it reached 49% of all 18 to 34 year olds, versus 45% for FX, 44% for TBS’
comedies, 41% for Comedy Central and 40% for AMC.
YouTube also thinks it can capture more local broadcast and cable ad dollars
from national advertisers looking to boost spending in certain markets. The
company is targeting automotive and wireless advertisers in particularly, said
executives with direct knowledge of YouTube’s plans.
Loss of Ad Dollars to YouTube
Source: WSJ
March 2014
Don’t forget about
Facebook video ads
which debut at $1 -
$2.5 million a day.
Source: Business
Insider, March 2014

7. Augustine Fou- 7 -
Hiding The Cord-Cutting Truth
-3% +14%
Cable companies lost 1.7 million paid subs,
most of them (1.4 million) went to telephone
companies and purchased data packages to
access content they actually wanted.

8. Augustine Fou- 8 -
Dr. Augustine Fou – Digital Consigliere
“I advise clients on optimizing advertising
across all channels. As TV watching gets
more distributed, it will be harder and more
expensive for advertisers to find their human
audiences.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou

9. Augustine Fou- 9 -
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