Second episode of the Operator's Survival Guide, entitled "Show Me the Money". Presented by Viaccess-Orca's Deputy CEO, Haggai Barel, at the OTT TV Summit 2013. Watch his presentation here: http://www.youtube.com/watch?v=LloorkPAFbk

1. Operators Survival Guide, Episode two:
Show Me the Money
Haggai Barel @haggaibb
Deputy CEO @ViaccessOrca

2. The Marketplace
Non - Traditional
Traditional
Pay TV Providers
Broadcasters
CE Makers
Technology Enablers
Retention /
Competition
Maximize Exposure
CE Sales / Margins
Technology
Advances
OTT Service Providers
Content
Creators
Social Networks
Retailers
Expansion
Security / Max.
Revenue
Maximize Reach
Ongoing Sales

3. Users’ Behavior and Expectations

4. Users’ Behavior and Expectations

5. Users’ Behavior and Expectations

6. Operator Challenges in Today’s Market
•
•
•
•
•
•
Subscriber churn / retention
Service adoption
Premium services
Content costs / licensing
Business models
Changing competitive environment

7. Tour Guide

8. Engagement Model
Business Rules
CAS / DRM
Anti-Piracy Services

9. Engagement Model
EPG, PVR
VOD / Catchup
Self Service
Business Rules
CAS / DRM
Anti-Piracy Services

10. Engagement Model
Social
Profiles
EPG, PVR
VOD / Catchup
Self Service
Business Rules
CAS / DRM
Anti-Piracy Services

11. Engagement Model
Cognitive Exploration
Next Gen. Metadata
Full Engagement
Social
Profiles
EPG, PVR
VOD / Catchup
Self Service
Business Rules
CAS / DRM
Anti-Piracy Services

12. Engagement Model

13. Engagement and Revenues
User’s perspective
Business perspective

14. Monetization Strategies

15. While in the US majority of spending is on SVOD services,
ad-supported services dominate OTT revenue in Europe
OTT Forecast: Share of OTT spending by Business Model- 2011-2013
100%
0.31%
0.24%
0.24%
3%
3%
4%
6%
7%
7%
4%
4%
5%
3%
5%
3%
90%
Public Broadcast
38%
80%
38%
42%
50%
40%
41%
37%
33%
70%
39%
41%
52%
50%
14%
19%
41%
12%
19%
15%
Advertising Revenue
SVOD Revenue
15%
22%
12%
11%
23%
8%
19%
1%
17%
25%
10%
22%
11%
20%
21%
43%
30%
10%
56%
64%
60%
40%
55%
55%
16%
16%
13%
2013
27%
24%
21%
20%
11%
2012
29%
17%
18%
2013
2011
18%
TVOD Revenue
22%
21%
EST Revenue
2012
2013
19%
13%
13%
7%
0.36%
2%
11%
14%
12%
2012
2013
17%
0%
2011
US
2011
2012
UK
2013
2011
2012
Germany
France
2011
Italy
Source: Strategy Analytics' Digital Media Strategies -OTT Video Forecast

16. Change in Penetration of TV Everywhere
% of Pay TV Subscribers with Access to TV Everywhere or
Multiscreen Services through their Pay TV Operator
Availability of Multiscreen / TV Everywhere Services
100%
86%
90% 92%
July 2011
January 2012
July 2012
January 2013 (Est)
81%
80%
72%
66%
60%
53%
40%
40%
21%
20%
12%
25%
18%
16%
10%
7% 9%
3%
2%
5%
0%
North America
© 2013 Parks Associates
Western Europe Eastern Europe
Asia / Pacific
ROW
21%

17. Changes in Awareness
Awareness of TV Everywhere Service
(Among BB HHs With Pay-TV Service)
30%
26%
% Aware of a TV Everywhere Service
from their Pay TV Provider
25%
20%
17%
18%
December 2010
November 2011
15%
10%
5%
0%
Parks Associates Consumer Analytics
© 2013 Parks Associates
November 2012

18. Western Europe OTT video spending is still a small fraction
compared to US OTT video market
OTT Forecast: Total OTT Video Spending- 2011-2013
$8,000
$7,000
2011
2012
2013
$6,000
$5,000
$M
$4,000
$3,000
$2,000
$1,000
$0
US
UK
DEU
FRA
ITA
Source: Strategy Analytics' Digital Media Strategies -OTT Video Forecast

19. A Look at TV Everywhere Users

20. TV Everywhere User vs. Average Subscriber: Video Spending
• Higher overall ARPU (for triple-play bundles)
• Likelihood to cancel service is not notably higher than for overall
subscribers
• More likely to have reduced part of their pay TV subscription
• Higher overall spending on:
•
•
•
•
•
•
DVD rentals and purchases (1.7x)
Blu-ray rentals and purchases (1.7x)
Video rental downloads (4x)
Video purchase downloads (4x)
Theater tickets (1.5x)
OTT subscriptions (2x)
20

21. TV Everywhere User vs. Average Subscriber: Demographics
TV Everywhere Users
Average age
Primary generations
Children at home
Average Pay TV
Subscribers
38.5
44.7
Gen X (42%)
Mil. / Gen Y (33%)
Boomers (36%)
Gen X (35%)
56%
36%
Similar in:
• Gender
• Home ownership
• Income
• Number of adults per HH
• Education
• Number of kids per HH (among HH with kids)
• Marital status

22. TV Everywhere User vs. Average Subscriber:
Subscriptions to Premium Features
Premium TV Subscriptions
"Which of the following do you have with your TV service?"
(Among BB HHs With Pay-TV Service)
TV Everywhere User
Avg. Pay-TV Subscriber
HD Channels
DVR
Premium movie
channels
Premium sports
package
0%
30%
60%
% Subscribing to Service
Parks Associates Consumer Analytics
© 2013 Parks Associates
90%

23. TV Everywhere User vs. Average Subscriber: Viewing Quantity
• Compared to average subscribers, TV Everywhere users spend
fewer hours watching:
• Broadcast TV
• DVR recordings
• OTT services are second to broadcast TV as most often used
source of content (followed by DVR recordings)
• TV Everywhere users spend more hours watching:
•
•
•
•
DVDs
Video-on-demand on TV
Pay-per-view
Video from online sources

24. TV Everywhere User vs. Average Subscriber: CE Environment
•
•
•
•
•
Average 2.6 more Internet-connected devices per household
More likely to use a portable device for e-mail
Twice as likely to update Facebook with a tablet
50% more likely to catch up on news and blogs via smartphone
Over 85% use a device other than a TV to watch full length
movies

25. Trends Impacting Monetization
•
•
•
•
Availability / cost of content
Personalization of the experience
Content discovery
Second screen experiences

26. Monetization Opportunities

27. Monetization Opportunities
Bundling with existing packages

28. Conclusions
•
•
•
•
•
New landscape / new options
Most lucrative customers
Spill-over into paid video
Shift to more personal experiences
Tight link between personalized offering and increased
revenues
• Be prepared for some trial and error
• Step up and start experimenting

29. Thank you
Haggai Barel @haggaibb
Deputy CEO @ViaccessOrca