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How to Win from OTT Disruption

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How to Win from OTT Disruption Content Aggregation for Operators December 10th, 2019 About Tara Tara Neal is the Executive Editor and Telecom Strategist at The Fast Mode. She has more than 20 years of experience in research, analysis and strategy planning. She has written extensively on various topics relating to networking, SDN/NFV, 5G, OSS/BSS, digital services innovations, operator strategies, market trends and growth and development of various emerging sectors. Tara holds a First Class Honours in BSc Accounting and Finance from The London School of Economics, UK and is a CFA charterholder from the CFA Institute, United States. Tara Neal Executive Editor, The Fast Mode 2 Agenda • Market overview: PayTV in APAC and South East Asia • OTT disruption: Technology, UX/CX, Content • The new goal for Operators and the strategies to reach it • Let’s get practical • Summary 3 About Marco Head of Operator Products for Vewd, leading the development of all pay TV operator products and defining new product areas for the pay TV industry. 18+ years in the TV industry: Zenterio, ADB, Pirelli Broadband, Telsey. Marco Frattolin Senior Product Manager, Vewd 4 Vewd is a Global Technology Company The Leading Provider of OTT and Hybrid TV Solutions 230+ EMPLOYEES 300 WORLDWIDE MILLION COUNTRIES WITH DEVICES DEPLOYED 9 VEWD OFFICES WORLDWIDE United States New York & San Francisco Norway Oslo Sweden Gothenburg & Linkoping 60+ Poland Warsaw & Wroclaw GLOBAL China Beijing South Korea Seoul CUSTOMERS Japan Tokyo Taiwan Taipei Brazil São Paulo 5 Why Vewd for Pay TV Operators Pioneering TV and OTT for the past 17 years ▪ Powering 10+ leading Pay TV Operators around the world Ships on ~40M devices per year, over 300M in total ▪ Working with 4 of the top 5 STB manufacturers ▪ Integrated on all major silicon platforms Most deployed HTML5 and hybrid TV SDK in the industry ▪ Available on all STBs: Linux, AOSP, Android TV and RDK Compatible with all major premium OTT TV Apps OPERATORS TV PLATFORMS STB VENDORS OS’s 6 The Big Picture in APAC The impact of IP 450 400 350 300 250 200 150 Subs (Millions) Subs 100 50 0 2014 2015 2016 2017 2018 Cable IPTV Satellite OTT Source: IHS Markit 7 Indonesia Pay TV Trends Subscriber growth and penetration rate development Revenue growth 8 000 16% 14,0% 13,5% 7 000 14% 659 6 942 6 000 12% 543 9,6% 5 944 Penetration Rate 5 000 10% 4 000 8% 366 3 000 3 694 6% USD Millions 2 000 4% Subscribers (Thousands) 1 000 2% - 0% 2014 2019 2024 2014 2019 2024 Source: Media Partners Asia “Asia Pacific Pay-TV Distribution 2020” 8 India Pay TV Trends Subscriber growth and penetration rate development Revenue growth 180 81,2% 82% 16 000 160 81% 14 000 14 881 140 153,12 80% 12 000 137,04 120 79% Penetration Rate 10 000 11 122 118,64 100 77,4% 78% 8 000 80 77% 75,8% 6 000 60 76% USD Millions 6 813 Subscribers (Millions) 4 000 40 75% 20 74% 2 000 0 73% - 2014 2019 2024 2014 2019 2024 Source: Media Partners Asia “Asia Pacific Pay-TV Distribution 2020” 9 Philippines Pay TV Trends Subscriber growth and penetration rate development Revenue growth 7 000 30% 25,6% 500 450 6 000 23,7% 6 470 25% 400 432 400 5 000 Penetration Rate 350 5 096 20% 300 4 000 14,1% 320 15% 250 3 000 200 2 652 10% USD Millions 2 000 150 Subscribers (Thousands) 100 5% 1 000 50 - 0% - 2014 2019 2024 2014 2019 2024 Source: Media Partners Asia “Asia Pacific Pay-TV Distribution 2020” 10 Vietnam Pay TV Trends Subscriber growth and penetration rate development Revenue growth 16 000 70% 1 200 59,0% 14 000 60% 54,4% 1 000 1 054 13 429 12 000 50% Penetration Rate 11 653 800 866 10 000 34,8% 40% 8 000 600 30% 6 000 6 940 USD Millions 400 488 20% 4 000 Subscribers (Thousands) 200 2 000 10% - 0% - 2014 2019 2024 2014 2019 2024 Source: Media Partners Asia “Asia Pacific Pay-TV Distribution 2020” 11 OTT Disruption Continues Key aspects Technology UX and CX Content All trademarks are property of their respective owners. 12 OTT Transforms Operator Services Industry moving away from traditional broadcast technology OTT TECHNOLOGY MORE & BETTER SERVICES • IP architectures • VoD, PVR vs. traditional broadcast transmission • Personalization / addressable • Adaptive bitrate protocols and DRM • Linear and Live vs. broadcast, multicast and CA WHAT DRIVES ADOPTION • Cloud-based shared workflows • Broadband availability, fixed or mobile Impacts on ways of working vs. siloed and on-prem • OTT technology is now sufficiently mature • Agile and DevOps vs. waterfall • Open networks, public clouds, CDNs • Cloud capacity is proven vs. closed managed networks • Makes economic sense in more cases 13 OTT Traffic Outpaces Managed IP Asia Pacific video traffic set for exponential growth, but not through traditional TV connections 120 17,13 100 97 80 60 15,26 Exabytes 40 47 10,8 20 22 0 2018 2020 2022 CDN traffic (mostly video streaming) TV services on managed network Sources: Cisco 14 OTT Impacts UI and UX Engaging interfaces inspired by the web OPTIMIZED TO DRIVE USAGE AND ENGAGEMENT • Content-centric • Context-sensitive • Always evolving • Data-driven and personalized • Based on intuitive spatial navigation • Voice control All trademarks are property of their respective owners. 15 OTT Impacts Consumer Experience Net Promoter Score face-off (low, mean, high) TV and Internet Service Providers (-16, 0, 19) Streaming Media (24, 39, 49) Source: Qualtrics XM Institute (US-only) 16 OTT Impacts Content Choice More services compete for share-of-wallet DAZN Youku Disney+ Tudou Hotstar HOOQ NHL.TV HBO Max Eros iFlix Viu Fandango AppleTV+ Now Now Line TV Showtime CBS Sports Peacock MLB.TV Iqiyi OTT NBC HQ WWE Sports OONA AMZN YouTube tonton Network HBO Now Gold B/R Live Freedrive Viki Tencent Philo Crunchy- Hulu Plus Video Pluto TV Sony PS VRV WatchTV WarnerMedia Roll Netflix Vue Paramount HBO Go Google Catchplay CBS All- DirecTV + Fox Nation CMCSA Amazon Vudu Play Access Sling TV Now Prime Watch- Fox Sports YouTube NBC DISCA Video Crackle Hulu ESPN Twitch Go CBSN fubo TV Apple TV TV WatchBack Pre-2007 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019+ Source: Barclays, Vewd internal 17 Content, Not Price, Drives Subscriptions Percent who cite content versus price when purchasing multiple OTT subscriptions 36% Vietnam 64% 34% Thailand 66% 31% Singapore 69% 28% Philippines 72% 36% Malaysia 64% 30% Indonesia 70% 29% India 71% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Brightcove Price Content 18 New Operator Strategies 19 The Goal: An Integrated Operator Experience Overcoming platform and content fragmentation Explore The problem is not only how to deliver Consumer content, but also how to improve the whole consumer journey and process of finding, Consume Pay consuming and paying for content. OPERATOR EXPERIENCE 20 “The maximum upside is likely to accrue to distributors who can create product bundles rather than price bundles.” 21 Operator Strategies 22 st 1 Screen is Important Modern Time spent watching TV in Asia Pac by country TV UX Hours per week 0 5 10 15 20 25 30 35 Indonesia Taiwan Vietnam New Zealand Australia India Thailand South Korea Singapore China Hong Kong Source: Statista 23 Modern TV UX Modern From technology-centric to content-centric TV UX PREVIOUS TV UX DESIGN MODERN TV UX DESIGN • Driven by technology • Content takes prime position with video, pictures, metadata • Based on how the content is packaged and delivered • Context and relevance drive discovery • Based on when the content is available • Personalization algorithmic + editorial • Complex remote control • Technology used seamlessly to access any content anytime • Intuitive navigation with minimal remote control All trademarks are property of their respective owners. 24 Multiple Device Options Required TV Client Need a portfolio approach to reach customers Device strategy Home hub STB Dongle Audio Operator TV BYOD Retail form factors Media player Smart TV Multimedia Hybrid Small box, Soundbar Co-branded, co- Pay TV app on Pay TV app on gateway, smart HDMI stick, Smart speaker marketed smart device app store Smart TV home IP-only TV Provided by Operator Partially subsidized Purchased by End User Higher Capex Lower Capex Customized features Standard features OTT technology More control, walled garden Less control, open to competition Bundling opportunities Commoditization New Operator formats Broader demographic target Expand reach off-network 25 The Search for the Perfect Mix The perfect content mix • Exclusive content Premium content • Partner / own production The anchor of the bundle • Early-to-market OTT apps • Complete line-up of linear TV channels Global and local content • Must-have global OTT apps Complete the offer • Focus on local content • Relevant longtail content New categories, longtail, niche • Personalization Enrich and differentiate • New categories: gaming, short form, niche 26 Let’s get practical Creating an integrated operator experience 27 Leverage Full Hybrid Technology • Use IP/OTT to enrich broadcast • Broadcast and OTT channels in one list • Present OTT services as channels • Don’t confuse users who want a traditional zapping experience All trademarks are property of their respective owners. 28 Rethink Apps as Content Sources • Remove friction caused by download & install • Simplify customer journey to video • Use deep links All trademarks are property of their respective owners. 29 Offer New Content: Gaming • Make it easy for subscribers • Gaming-as-a-service / Cloud gaming All trademarks are property of their respective owners. 30 Thematic Aggregation • Combined offer based on relevance • Sport and live events drive interest for non-premium content All trademarks are property of their respective owners.
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