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Satellite Radio 2005

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Satellite Radio 2005 Media Environment Update McMaster University February 9, 2006 CBC Strategy & Planning 2/16/06 Contents • The Macro View • Attitudes Towards Media • Broadband & Connectivity • Audio Business Models • Video Business Models CBC Strategy & Planning 1 The Macro View CBC Strategy & Planning 2 User Experience in the “Old Days” Television Radio Film Magazines Books Newspaper Out-of-Home View moving Participation via or static 2-way images Communication Read Listen to Text Audio User Experience Now Television Magazines Film DVD Talking Books HDTV Interactive TV Newspaper HD-DVD PVR Out-of- Books Console VOD SVOD Podcasting Home Games Portable CDs Internet Blogs Satellite Games Radio DAB Online eMail Games MP3 Players Text Wireless Radio iBiquity Messaging CD-ROM etc… View Utility & Participation via moving or Interactivity 2-way static Communication images Read Listen Text to Audio CBC is Committed to new platforms… Streaming Media 1995 Terrestrial Digital Radio 1999 Legal Downloads 2004 Podcasts 2005 Satellite Radio 2005 CBC Strategy & Planning 5 CBC’s Multiple Platforms Text News & Messaging 2001 Video On Demand 2003 Interactive TV 2003 HDTV 2005 Cellular TV 2005 (Newsworld & RDI) CBC Strategy & Planning 6 CBC’s Multiple Platforms Syndication – screens, screens, 2002 ! screens CBC Strategy & Planning 7 CBC’s Multiple Platforms • 2006 Winter Olympic Coverage !TV: CBC Television !Cable: Newsworld & TSN & Country Canada !Radio: CBC Radio !Internet: CBC.ca !Mobile: Streaming video on Bell !VoD: Rogers On-demand !Content production follows !platform demands CBC Strategy & Planning 8 Attitudes Towards Media CBC Strategy & Planning 9 For North Americans, the PC/Internet has Become the 2nd Most Popular Media Activity Source: Forrester, All North American Consumers CBC Strategy & Planning 10 Canadians are Spending Less Time with Radio and More Time on the Internet 2003 2004 2005 2003 2004 2005 2003 2004 2005 2003 2004 2005 Source: SRG CBC Strategy & Planning 11 This Seems Especially True for Tweens, Teens & Young Adults Average Number Of Hours per Week 9 to 13 14 to 29 Listening to the radio 4.94 5.12 Listening to online radio 0.72 1.25 Listening to satellite radio 0.43 0.30 Total 6.09 6.67 Using the Internet for news and entertainment 5.15 6.48 Using the Internet for work or studies 3.12 8.56 Using the Internet to communicate 4.77 9.48 Using the Internet to blog 0.82 1.45 Total 13.86 25.97 Watching television 13.42 8.85 N=1417, Canadian Youth 9-29, Ping National Survey, October 2005 CBC Strategy & Planning 12 Americans Spend More Time with Media Than They do Sleeping • Americans spend 9 hours hour per day interacting with Media • As much as 1/3 of that usage is multi-tasking (e.g. watching TV and text messaging at the same time ) Source: Pew, Ball State Univ. CBC Strategy & Planning 13 Teen Behaviour is Driven Primarily by Entertainment & Socializing Source: SRG CBC Strategy & Planning 14 Downloading Gets All the Press, but the Real Story is Instant Messaging Source: SRG CBC Strategy & Planning 15 Teenage Girls are More Comfortable with Online Technology Source: Pew Internet & American Life Project, Ratio of participation in online activities by gender CBC Strategy & Planning 16 Broadband & Connectivity CBC Strategy & Planning 17 Internet Use has More Than Doubled in the Last Seven Years Source: SRG CBC Strategy & Planning 18 Canada Ranks No.5 in Broadband Penetration Source: Forrester, Jan 2005 CBC Strategy & Planning 19 Broadband Continues to Grow Source: SRG CBC Strategy & Planning 20 We May See a Surge in Broadband Penetration in Rural Areas • Broadband Satellite (Anikast) !Always on !Uplink & Downlink (No Phone Line) !$54.95 / month !Fully compatible with Broadband Router / home network CBC Strategy & Planning 21 Rogers and Bell Will Launch Inukshuk, a National Wireless Broadband Network by 2008 • Uses WiMax technology !Essentially WiFi with range of up to 50 km !Consumer products should start arriving in late 2006 • Plan to Launch in: !40 Urban Centres !50 Unserved Rural Areas !Need spectrum CBC Strategy & Planning 22 Broadband and Cell Phone Access Coming to the Skies? • December 2006 U.S. Regulators will auction off spectrum allowing Cell Phone & Broadband usage on airplanes !Carlson Wagonlit Survey - 61% of Business Travellers oppose Cell Phone use on planes • Transport Canada Has “No Immediate Plans” to lift bans on Cell Phones or Broadband access CBC Strategy & Planning 23 Cell Phones are Mainstream but Growth may be Starting to Plateau Source: SRG CBC Strategy & Planning 24 Text Messaging on Phones Grew Significantly in the Last Year Source: SRG CBC Strategy & Planning 25 Audio Business Models CBC Strategy & Planning 26 Competing New Audio Delivery Models File Sharing Free but Illegal* User owns and can do whatever they want iTunes Model 99¢ Per Song User owns and can play back on compatible devices Broadcast “Pay” Radio (limited commercials, Satellite Radio $14.99/Month exclusive & niche content) User downloads “radio” programming for free, play PodCasting Free back on compatible devices, amateur & pro content $9.95/Month. Access to 700,000 songs with varying Subscription $9.95/Month rights. User must continue to pay to play Internet streaming of terrestrial & personalized radio, Internet Radio Free access to local markets from anywhere in the world Digital Terrestrial Radio, offers improved sound HD Radio/DAB Free quality plus data and interactivity Audio service over cell phone network. Hybrid of Mobile Music $3 per Song iTunes, Subscription & Satellite Radio type services 6 channels of audio separation, compatible with 5.1 Audio $TBD home theatre/DVD audio playback systems *Technically File Sharing is Currently Legal in Canada, Although the Music Industry is Lobbying to Change This File Sharing Still Dominates Downloads Awareness Usage Source: SRG Fast Forward 2005 CBC Strategy & Planning 28 Many Canadians Don’t Believe File Sharing is Theft Source: SRG Fast Forward 2005 CBC Strategy & Planning 29 Since Its Introduction in 2001, 42 Million iPods Have Been Sold Worldwide Source: Apple Quarterly Financial Reports / Q4 2005 Estimate from Lehman Bros CBC Strategy & Planning 30 In Canada, the iPod Enjoys a 31% Share of the MP3 Player Market • In the U.S., Apple has a 51% share • Measured in dollars, it’s closer to 75% ! This is due to Apple’s dominance in high-end players Source: SRG Fast Forward 2005 & Apple Computer CBC Strategy & Planning 31 Over 30% of Canadians will Own an MP3 Player by Mid 2006 Source: SRG Fast Forward 2005 CBC Strategy & Planning 32 iTunes is the King of Legal Downloads with an 80% Market Share Billionth Song? iTunes Music Store Launches Feb 2006 April 28 ‘03 Oct. 16 ‘03 June 15 ‘04 Oct. - Dec. ‘04 Jan. 6 ‘05 May. 10 ‘05 Nov. 1 ‘05 Source: Apple Computer, Q4 2005 and Billionth song Projected CBC Strategy & Planning 33 The Average iPod Owner has Purchased Less Than 25 Songs • Consumers are likely filling their iPods with Music from their CD collections and through File Sharing • Sharing of purchased Average # songs in multi-iPod of Songs Downloaded households may decrease the number of songs downloaded per iPod Source: Apple Computer CBC Strategy & Planning 34 iPod & iTunes have a Demonstrable Lead in Car Audio Integration • Many Automakers offer factory audio systems which integrate with the iPod • In January, Apple filed a patent for a technology that would wirelessly connect an iPod to a car stereo system ! Seeking to establish an industry standard (e.g. USB) • There is a slew of iPod compatible car audio systems available in the aftermarket ! Although iPod integration leads there is strong demand from the industry to integrate other devices with car audio systems (e.g. Satellite Radios, MP3 players, GPS) CBC Strategy & Planning 35 There is also a HUGE Cottage Industry in iPod Peripherals • Major Consumer Electronics Manufacturers including Harmon Kardon, Denon, Bose, Tivoli and JBL have products which integrate the iPod into home stereo systems • Other peripherals improve on the iPod experience offering benefits like improved battery life, audio recording, digital camera integration and ability to listen under water • Some range from the sublime to the ridiculous (e.g. iPod underwear, Levis iJeans) • This only underscores how much of the iPod’s success is driven by fashion sensibilities CBC Strategy & Planning 36 Potential iPod Killers? SanDisk Sansa e200 SanDisk Sansa e200 • Music • Music • Movies • Photos • Photos • Similar in Size & Price • Similar in Size & Price to the iPod Nano to the iPod Nano • Microsoft PlaysForSure • Interchangeable (Compatible with battery Napster, Rhapsody, • Microsoft PlaysForSure Puretracks, Bonfire, (e.g. Napster, etc.) Rhapsody, Puretracks, • Available Feb 2006 Bonfire, etc.) • Usability & Device Integration still an issue with PlaysForSure group of services CBC Strategy & Planning 37 New Music Services From Bell & Rogers • Bell Full Track Music !$3 per download through mobile service (on top of $5 monthly charge) !Free download to PC within 90 days once purchased on mobile phone !100,000 songs available • Rogers uR Music !$2.99 Download to to mobile phone !$1.25 Download to PC !“Thousands” of tracks CBC Strategy & Planning 38 The Subscription Model Still Struggles to Gain Traction… 7% Up 8 41% Up 2 Source: Nielsen SoundScan CBC Strategy & Planning 39 …While CD Sales Continue to Fall Dow n 8% Source: Nielsen SoundScan CBC Strategy & Planning 40 Digital Music Vending Machines are Coming… • Starbucks is rumoured to be in talks with Apple about adding iTunes Kiosks
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