Evolution of the Value Chain Adaptation for Digital Content
Total Page:16
File Type:pdf, Size:1020Kb
Evolution of the Value Chain Adaptation for Digital Content Delivery in a Broadband World OECD Working Party of the Information Economy Digital Broadband Content Panel Paris, 3rd June 2004 Dennis Weller OECD WPIE Broadband Content Panel 3 June 2004 ICT Development and Market Structure Demand side: Adoption of ICTs leads to changes in structure among business users ÊNew internal organization, skills ÊNew patterns of outsourcing Supply side: New generations of ICTs lead to changes in market structure of telecom, information firms ÊShifting roles, complex interactions among firms in supply chain 2 Broadband As a Driver of Change Network operators How to generate revenue to support investment in next- generation networks? Replace loss of traditional business What can you do with 100 MBPS that you can’t do with 3? Content providers Old distribution methods are fading Need to find new business models Intermediaries Existing players reinvent themselves, as new ones emerge 3 Content Offers Over Broadband – Roles of the Players Management publishing offer Content Provider Supply of Supply connection access and CONTENT-SERVICE CONTENT- SERVICE TLC OperatorTLC FINAL USER CONTENT -SERVICE CONTENT CONTENT-SERVICE Management of access to content Manager Technol, authorization Technol, Manager Payment Management Management of the transaction 4 Basic Activities in the Value Chain 1. Rights acquisition / manag. 2. Content protection. Management publishing offer 3. Content production. Content Provider 4. Sale of adevert space. 5. Packaging & distrib. Content. Supply of connection and access CONTENT- SERVICE 6. Marketing of publishing offer. OperatorTLC 7. Management of emerging FINAL publishing services. USER 8. Profiling user. 9. Billing management. -SERVICE CONTENT Management of access to content to access of Management 10. Payment management. authorization Technol, Manager 11. Customer relation manag. Payment Management 12. Security/control offer. 13. Access management. Management of the transaction 14. Other activities. 5 Adaptation of Online Providers IndustryIndustry ShakeShake-ups-ups Fall of the Wall Flat-Rate Pricing Commoditization Birth of Broadband The End of Free Spam & Viruses 1994-1995: The “walled Flat-rate pricing strictly Internet access Broadband reaches July, 2001: ISP Planet An increase in spam garden” is opened to limits ISPs’ expected becomes 5 percent of declares the free ISP email and computer the Internet, and ARPUs and causes a commoditized with an households, dead viruses decrease previously exclusive spike in usage, increasing number of threatening to make email’s usefulness & content providers threatening to providers competing dial-up providers reliability, with online migrate to the Web, undermine the user on price only, obsolete subscribers churning potentially reducing the experience and drive squeezing ISPs’ away from unprotected, value of OSPs customers away already thin margins cluttered ISP accounts 1992 1994 1996 1998 2000 2002 2004 In response to content Larger ISPs transition ISPs shed their •AOL, EarthLink& NetZero survives the Spam filtering and QOS migration to the Web, to an advertising- physical networks, United Online use transition from a free become prime ISPs strengthen their based revenue leasing modem banks compression ISP to a paid service marketing & competition proprietary interfaces, strategy and build out & network access technology to provider by points for ISPs category organization their networks to from others to focus accelerate dialup maintaining a limited (e.g., AOL’s graphical support increased on customer service & by “up to 5x faster” free product and interface) & basic traffic differentiation offering significantly • ISPs offer applications to retain lower prices for broadband subscribers unlimited access wireless Internet access through Wi- Fi ISPISP ResponsesResponses 6 Evolution of Roles, Alliances for AOL In Broadband Era, AOL has outsourced network functions, focused on content and applications through alliances with others FunctionsFunctions 19941994 19971997 20002000 20032003 AOL, Time Content AOL, various AOL, various AOL, various Warner, et al. AOL, Amazon.com, E-commerce AOL eBay Netscape LoudCloud ApplicationApplication KeyKey AOL, Sprinks, Advertising AOL AOL AOL Google •• Provided Provided byby AOLAOL onlyonly Search AOL AOL Overture Google •• Provided Provided byby AOLAOL inin conjunctionconjunction withwith Netscape, partnerpartner Web browsing AOL Microsoft Microsoft Microsoft •• Outsourced Outsourced completelycompletely toto Chat/IM AOL AOL AOL AOL partnerpartner Providers Over Time Providers Over Time Email AOL AOL AOL AOL Time “AOL for MSDW reports that Broadband Customer Access AOL/LEC AOL/LEC Genuity Warner, BYOA customers Level3 ” customers make up 9.3% of MCI provide total AOL members Tier 1 ISP Access AOL AOL MCI (UUNet) (UUNet), their own Akamai network in 2003 7 Current Evolution of AOL – Customer Perspective Content by: CNN, ABC, AP, Digital Technology by: Google Content by: The Weather Channel City, et. al. Technology by: AOL Technology by: AOL, Dolby; Content by: Time Warner, Sony, radio stations, et. al. Content by: Digital City Technology by: Technology by: AOL EA.com Technology by: Sprinks Content by: Digital Technology by: Content and Technology by: Content by: Business 2.0 (Time, City, Inc. Amazon.com Mapquest.com, Inc. Content and Technology by: Inc) Zap2It.com Source: AOL for Broadband Welcome page, AOL Press Releases 8 Business Models for Digital Delivery Elfenbein and Lerner (2003) examine a large sample of contracts for distribution Between web portals and content owners Contracts are complex, idiosynchratic Allocation of revenues Exclusivity ÊFor portal ÊFor content owner Contingency provisions 9 BT Click&buy Communication / acquisition Delivery payment $ subscription $ affiliation account service Telephone bill Telephone licence Click&Buy Telephone bill charge payment $ 10 BT Click & Buy -Activities 1. Rights acquisition / manag. Management publishing offer 2. Content protection. 3. Content production. Content Provider 4. Sale of advert space. Gestione offerta editoriale Supply of connection and access 5. Packaging & distrib. Content. CONTENT- SERVICE TLC OperatorTLC 6. Marketing of publishing offer. 7. Management of advanced FINAL publishing” services. USER 8. Profiling user. 9. Billing management. -SERVICE CONTENT Management of access to content to access of Management 10. Payment management. authorization Technol, Manager 11. Customer relation Payment Management management. 12. Security/control offer. Management of the transaction 13. Accesso mangement. 14. Other activities. 11 BT Yahoo! Broadband BT Broadband online gaming: Ê Customer receives ADSL connection – BT Broadband or BT Yahoo! Broadband Ê Compatible PS2 or Xbox console From btyahoo.com/ps2 and btyahoo.com/xboxlive users can access to: Ê multiplayer online games; Ê voice communication; Ê Downloading of new games The roles are subdivided as follows: Ê The video games are supplied by Microsoft and Sony Ê Yahoo! UK supplies services and Internet content to BT Yahoo! Broadband subscribers Ê BT Openworld supplies DSL connection 12 BT Yahoo! Broadband 1. Rights acquisition / manag. Management publishing offer 2. Content protection. 3. Content production. Content Provider 4. Sale of adevert space. Supply of connection and access CONTENT- SERVICE 5. Packaging & distrib. Content. OperatorTLC 6. Marketing of publishing offer. FINAL 7. Management of emerging USER publishing services. 8. Profiling user. CONTENT -SERVICE CONTENT 9. Billing management. content to access of Management Manager Technol, authorization Technol, Manager 10. Payment management. Payment Management 11. Customer relation manag. 12. Security/control offer. Management of the transaction 13. Access management. 14. Other activities. 13 Imagenio Content providers: ÊTV operators and pay tv (Sogecable); ÊTV and cinema producers and distributors; ÊTelefónica is publisher/aggregator of content and final distributor of the service TLC Operator : ÊTelefónica Billing Management ÊTelefónica takes care of payment in its telephone bill 14 Imagenio 1. Rights acquisition / Manag. 2. Content Protection Management publishing offer 3. Content Production Content Provider 4. Sale of Advert space Supply of connection and access 5. Packaging & distrib. content CONTENT- SERVICE TLC OperatorTLC 6. Marketing of publishing offer 7. Management of emerging FINAL publishing services USER 8. Profiling user CONTENT -SERVICE CONTENT 9. Billing Management Management of access to content to access of Management Manager Technol, authorization Technol, Manager 10. Payment Management 11. Customer Relation Manag. Payment Management 12. Security/control offer Management of the transaction 13. Access Management 14. Other activities 15 Service Control Outlook IM iobi Broadsoft SMS End User Application Conferencing Messaging Portal Server And L1 Gateway VM Alert Collaboration EPG VM Retrieval Web Sharing Addr book Calendar PSTN/VoIP Content Call Control Directories Internet ISCP™ISCP™ MSC MGC SIP Proxy SSP MSC VMVM SSP TG 16 Upstream/downstream Coordination of Network Functions y b r S e O n Local rt Allows network providers to monitor and Q a P Admission control network resources based on user and Policy identification, security considerations, time Control of day/week, etc. Bandwidth Service providers can maximize the use of Management network bandwidth according to types of services Bandwidth Bandwidth Management QOS by