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Ci E2E Vid S L Ti Cisco E2E Video Solutions Cisco E2E Vid eo So lu tions Assuring Successful SP Transformation - Jan Bogaert Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 1 Video Solutions – Today and Tomorrow Traditional Sources Community Sources Then Now Broadcast Personalized, On Demand Limited content Unlim ite d con ten t Single video device Multiple devices One national line-up Real time Mash-ups Scheduled viewing RidlhRapidly chang ing con tttent popularity Social community, user generated IP bridges the Consumer Driven Experience gap: What They Want. When They Want It. Where They Want It. How They Want It. 2 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Internet Streaming - Pervasive Offeri ng “O ver-the-T”CTop” Consumer VidSVideo Serv ices OTT Providers Offering spectrum of UGC & Premium VoD with Advanced Navigation Service Providers can Partner with OTT Providers to Generate Delivery Revenue 3 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential The logical questions to ensure a competitive advantage for an SP are… Which services do consumers want and when? Which services will drive both customer retention as well as profitable growth? How will the consumer experience be managed? Which service strategies will competitors pursue to differentiate their platforms? 4 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Video services of Today..... and Tomorrow Table Stakes Differentiation Future Services My Content Anywhere Video-presence Targeted Advertising tion aa Bundle Services Caller ID Unified Communications on TV 3rd Party Data Voice Start Over Home Services Value Cre Value EPG Nanny Cam SitSecurity Digital Long-tail Content Cable Family One Voicemail Calendar Video Niche TV today time 5 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential In Europe SPs could increase satisfaction with improved content choices Reasons for Dissatisfaction with Current TV Service (Q3/08) "Q325. Why are you less than fully satisfied with your cable/satellite TV service?" (Among BB HHs unsatisfied with video service) U.K. Italy Spain Germany France (n=73, ±11%) (n=52, ±14%) (n=68, ±12%) (n=102, ±10%) (n=66, ±12%) 100% 80% 66% 60% 50%52% 46% 45% atisfied 42% 41% 38% 40% 37% 35% 40% 33% 33% 29%29% 29% 29% 25% 24% % Uns 22% 23% 19% 19% 19% 17% 17% 20% 13% 9% 10% 8% 0% Cost Lack of certain Service quality Poor customer Faulty equipment Lack of or scarcity channels or service of important content features Source: GDL: Entertainment 2.0 in Europe Slb5069bdbdHHiESample base: 5,069 broadband HHs in Europe © 2008 Parks Associates 6 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Overall, consumers seem to love the “on-demand” entertainment experience Opinions of Those Having Both PVR and on-Demand 1-10 Cable VOD Users Also With a PVR Having a DVR, I don't really 19% need on-demand 37% 44% Having on-demand, I don't really need a DVR 22% 78% My cable service is better because I have both on- 75% 19% 6% demand and DVR 0% 20% 40% 60% 80% 100% 8-10 8-10 – Strongly agree with statement 4-7 4-7 – Somewhat agree with the statement 1-3 1-3 – Do not agree with the statement Source: Leichtman Research Group, 2006 7 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential “Start Over” and similar services shows promise 1. Service lets consumers watch previously aired programs within specified time frames TWC – select networks within programming window Virg in – selthlect shows w ithi7ithin 7 days 2. Attractive to consumer who do not understand time shifted TV Very simple Source: Company web sites 8 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential On-Demand TV growth…typical Video On Demand Usage (Comcast) 1.4Bn+ VOD in 2007 2.130M Hrs each month 3.Customers view On Demand 27X a month on average 4.90% Free VOD Source: Company Web Site 9 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Most countries are seeing an uptick in VOD usage Changes in Video-on-Demand Service Usage (Q3/08) "Q315. How would you characterize the frequency at which your household is watching on- demand programs today compared to two years ago?" (Among broadband HHs with VoD service) 100% 11% 11% 10% 90% 16% Not applicable; I 7% 24% did not have on- 11% 14% 80% 5% demand service two years ago 70% 8% 34% Decreased 31% 30% 60% 41% 50% 41% reakdown Stayed the Same BB 40% % 30% 47% 49% 49% 20% Increased 34% 27% 10% 0% U.K. Italy Spain Germany France (n=156, ±9%) (n=61, ±13%) (n=140, ±8%) (n=41, ±15%) (n=113, ±10%) Source: GDL: Entertainment 2.0 in Europe Sample base: 5 ,069 broadband HHs in Europe © 2008 Parks Associates 10 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Broadband video is emerging as another form of on-demand Source: Parks and Associates 2008 11 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 16.8 Billion Videos Viewed Online in the U.S. In April 2009 alone : 16% increase from March alone 152 Million users 6. 7 Billion video 512 Million- Fox 63. 5- YouTube 107 Million YouTube 78. 6% of US in USA watched views from internet audience 397 Million-Hulu 8.7 – Fox 59 Million- Fox videos YouTube watched videos on 355 Million -Yahoo 7.8 – Yahoo 45 Million -Yahoo internet 315 Million-Viacom 9.9 – Hulu 40 Million - Hulu 272 Million- Turner 555.5 – CBS 37 Million - CBS 202 Million – CBS 9.1 - Viacom 34 Million - Viacom Videos watched Videos per user Users watched 6.4 Hours 2.4% Videos, but 387 Million videos 3.5 Minutes 111 online (385 Minutes) 4.2% of minutes watched by 49 average videos watched ..by Hulu Million viewers at duration of by an average averaggpe per user MySpace online video viewer viewing Hulu emerged as No.2 player in last one year Source : ComScore June 4,200912 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 5B Videos Viewed Online in the U.K. in April 2009 Overall 47% Y/Y Growth ;;g BBC Moving Forward 2. 4 Billion v ideo 79 Million v ideo EhfttEach of top ten 35 M ITV views from views from BBC video properties 31 M Megavideo YouTube with Y/Y double 67% Y/Y growth digit growth 20 M Channel 4 58% Y/Y Growth iPlayer 20 M Dailymotion 50% of UK internet phenomenon users watched 19 M FOX videos on YouTube Videos watched 96% of UK 60% of UK 621 Million online internet users internet users display ads were exposed to exposed to 971 exposed on some form of Million online YouTube display ads display ads on multimedia sites Source : ComScore July 6,200913 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential BBC iPlayer Market Disrupter 1. Launched December 2007 1 million+ programs streamed each day Download and store for up to 30 days 400 hours of new content per week 75TB/day current average 180TB Peak during Beijing Olympics 2. 10% of entire UK Internet traffic Peaked at 20% during Olympics Streaming : Download Usage = 8 : 1 3. ISP Costs +200% since iPlayer Launch iPlayer Features: Increase from 6.1p to 18.3p per user • Catch-Up TV on PC (7 days) • Free (()in the UK) ISP business models broken • Multiple platforms 4. But what would happen if it was • STB, iPhone, iPod Touch, Nintendo Wii, PS3, Mobile phones incl Nokia N95 available on your Television 14 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Consider 20x capacity growth… Hulu Market Disrupter 1. Hulu: A joint venture of NBC Universal and News Corp announced in March 2007 US $100 Million initial investment 2. Built on MySpace’s social networking leadership position 3. Focus on professional content – hit TV shows, movies and clips AOL, Comcast, MSN, MySpace, and Yahoo! 4. Advertising revenue model Top 10 US online video site - 226 Million video views in November 2008 Bundles & sells remnant ads unsold by the content providers. Retains 20%-30% of directly received ad dollars or pays to syndicates As per screen digest analyst, 2008 revenue is US $70 Million as compared to YouTube’s US $100 million and projected to be same as YouTube revenue (US $180 Million) in 2009 15 Presentation_ID © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential Internet Video Opportunity A Global Phenomenon 1. 12 Billi on s treams i n US in May ‘08 – Average 12 minutes 190 Million active viewers in US by 2012 per visit 2. In UK, France and Germany, 8 Billion streams and 80 Million active viewers site Traffic December ‘07 bb We Average under 8 minutes per Opportunity to double TV ‘prime-time’ visit Top 6 Top U.S. 1. Most online video viewed in the home – Video Sites Broadcast Sites online video is incremental to TV viewing Total Revenue: Ad-supported Internet 2. “Prime-time” TV viewing: Weekdays Streaming Video Market (U.S.) 8PM-11PM 7000 6000 3. Peak online viewing: Weekdays 5PM- e ( $M ) 5000 8PM 4000 Business Models 3000 1. Streaming, advertising models dominate 2000 nual Revenu 1000 – >$6B in advertising revenue by 2012 nn A 0 2. Premium video is getting the bulk of the 2007 2008 2009 2010 2011 2012 revenue vs. user generated content Embedded Display ABC’s 2007 revenues almost double YouTube’s Sources: eMarketer, The Pew Internet and American Life Project, 16 Presentation_ID ©(ABC 2008 Cisco is Systems, making Inc. All money) rights reserved. Cisco Confidential Comscore press release – July 08, BBC CDS is Designed to meet All Next Gen Video Services Trends “Infinite” Content, Live and On-Demand 1.
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