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© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1
SHIFT HAPPENS!From Service Provider to Experience Provider
Preben Schack, Sr. Director
Cisco Service Provider Video Technologies
CANITC, Monterrey 29 April 2010
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 2
Who am I...
Name: Preben Schack
Nationality: Denmark
Profession: Sr. Director Cisco Systems
Experience: 18 years Cable-TV industryFocus: Service Provider
Video Technologies
Hobbies: Fishing, Cooking, Bicycling
E-mail: schackp@cisco.com
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 3
Video Changes Everything…
Changing Market Environment…
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 4
The World is Changing
Globalization
Social Networking and Mass
Collaboration
Sustainable Development
Consumerization
Recession
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 5
Driving the Technology Revolution
Delivery Technology Revolution
IP Convergence / IPTV
3
The Future Video Experience
Advanced Advertisingand Targeting
“Infinite” Content (HD, Internet Video, 3-Screen)
All Digital Video
2
Fiber Deep
1
Personalized Video: DVR, VOD, Time-Shift
© 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential
Broadcasters and Media
HuluHulu
27% Owner27%
Owner
12GB/sec.12GB/sec. 2X2XOnlineVideo
BrandVisibilityBrand
Visibility
$$$$
Consumer Electronics
Internet onTV
Internet onTV
Opportunity to Leverage Online Video for Differentiated User ExpOpportunity to Leverage Online Video for Differentiated User ExperienceseriencesOpportunity to Create Revenue Generating Services Using the Opportunity to Create Revenue Generating Services Using the Network as a Platform Network as a Platform
Opportunity to Increase Popularity of the Content and Revenue Opportunity to Increase Popularity of the Content and Revenue Through CollaborationThrough Collaboration
Innovate to Transform Consumer ExperienceInnovate to Transform Consumer Experience
Online Video
Video = 90% of consumer IP traffic by
2012
Cisco VNI StudyCisco VNI Study
100 million100 million100 million
Revenue from $598 million to $3.4 billion annually
By 2014
Web
Unique monthly viewers
In 24 millionHouseholds
By 2014
In 24 millionHouseholds
By 2014
Service Provider
7 million7 million “TV Everywhere”
CDNCDN
ISPISPISPISP
ISPISP
MarketDynamics
MarketDynamics
Shifts Happening ! Fast & All Around
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 7
IPTV - Second WaveOn-net onlyTVExtended User ExperienceBusiness Model: B2C
Evolution to IP Video for unified experience and enhanced monetization
Traditional – First WaveOn-net onlyTVLimited User experienceBusiness Model: B2C
IP Video – Third WaveOn-net or Off-netTV, PC, mobile, etc.WEB like User ExperienceBusiness Model: B2B2C
More Open, More Flexible, More Monetization Opportunities
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 8
Source: Cisco Visual Networking Index – Forecast, 2007-2012
Video to reach 87% of Consumer IP in 2012
Video is driving explosive growth
Other Media
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 9
YouTube and Hulu Generate 2X More Traffic than the Entire Internet Backbone in 2000
0
25
50
Internet Backbone in2000 (U.S.)
Internet Video Sites in2008 (U.S.)
Peta
byte
s pe
r mon
th
Hulu
YouTubeEntire Internet
Backbone
Source: Cisco, 2008
Source: Cisco Visual Networking Index — Forecast, 2007 – 2012
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 10
Video Changes Everything…
Transformation of the Video Value Chain
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 11
Consumers Want Unified Experience Despite Video Ecosystem Fragmentation
Consumer Experience
Content FragmentationBroadcast, Premium, User Generated Content
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity FragmentationLean back, Lean forward, Social
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Business Models
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 12
Source: “Television in Transition”, Accenture, 2008
Younger consumers embrace multiple media devices
Fewer consumers are satisfied with the status quo
Would enjoy watching content on a PCWould enjoy watching content on a mobile deviceHappy with current TV
Non-TV Devices Increasingly Important Relevance is becoming a multi-device proposition
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 13
Profitable Path Is To Turn This Challenge Into Opportunity
Online video seems like replacement of TV experience...killer of content business
But…
Online video can enhance the TV experience….grow the content business models
If…
Carefully done right !
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 14
Expand Reach & Monetization
Expand Reach & Monetization
The Transformation Strategy
Unify Experience & Platform
Unify Experience & Platform
Experience Better TV experience
Experience Better TV experience
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 15
Expand The Audience Reach Demographics, Footprint, Any Screen, Anytime
Expand Reach
Expand Reach
Extend TV Experience To PC & Mobile For Current TV SubscribersEnhance value of current TV services, Higher stickiness, Brand retention
Any device, Anywhere, Anytime online catch-up service
Examples : “TV Everywhere” by Comcast, Time Warner, Verizon & others, USA“Yalp” Online TV services by Telecom Italia, Italy“SKY Play “ online TV service by BSkyB, UK“Canal Plus a la Demande” catch-up online service by Canal Plus, France
Service Providers
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 16
Web 2.0Web 2.0 PersonalPersonal
SocialSocial Rich MediaRich Media
Broadcast & MoreBroadcast & More
Consumer ExperiencesMore Visual, More Social, More Personal
Transforming the End User Experience: Unrestricted by Time, Space, or Device
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 171 7
Cisco Confidential
Age 2+
Age 12-17
Age 18-34
Age 35-54
Age 55-64
Age 65+
30.2%
39.5%
32.7%
30.8%
33.8%
24.8%
May 2009
Source : Nielsen Convergence Summit
Internet Video Simultaneous TV and Internet Use
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 18
Internet Video In Tune With All Generations PC is dominant with all, Young like mobile and gaming consoles too
Total 18-34 Age 35-54 Age 55+ AgeComputer with Internet Access 67% 85% 67% 53%TV with VoD Capabilities 45% 49% 45% 43%TV with DVR/TiVo 60% 65% 60% 55%TV with Video Extender Device 5% 12% 5% 2%TV with Gaming Device 8% 16% 8% 2%Mobile Phone 12% 22% 12% 6%MP3 Player 11% 19% 11% 4%Portable Gaming Device 2% 4% 2% 1%None of above 11% 4% 10% 18%
Source : CBS Entertainment Panel Survey, July 2009
N=3461 N=704 N=1732 N=995
In past 3 Months, Have you used any of the following technologies to watch digital videos?
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 19
Expand Monetization Opportunities Online Video Subscription, Advertising, Transaction, Up Sell
Expand MonetizationExpand Monetization
Offer Subscription Online & Mobile Video ServicesMonetize your video assets beyond your network footprint
Advertising For Online Video PortalTV advertising dollars are shifting to online advertising
Integrated Content Store: Download To Rent Or OwnIntegral part of online video portal & revenue share with content providers
Service Providers
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 20
Video Changes Everything…
The New “Experience Provider”
Strategy
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 21
Provide Viewers with Better TV Experience for Increased Revenue
Leverage Online video to drive viewers back to TVViewers like extended experience on TV Internet viewing drives TV viewing (CBS study)Most viewers watch missed or not available on TV episodes online (CBS study)
Experience TV : Web 2.0 experiences on TVMake TV more social, personal, InteractiveUser generated content and online video integration in TV experience
Experience Better TV experience
Experience Better TV experience
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 22
Have you ever watched an episode of a continuing television series on internet before you watched any of episode of that program on TV?
Total 18-34 age 35-54 age 55+ ageNo 28% 19% 31% 39%Yes 72% 81% 69% 61%
When you watch an episode of a continuing television series on Internet before you watched any episode of that program on TV. Have you then later watched one or more episodes of that shows on TV?
Source : CBS Entertainment Panel Survey, July 2009
N=3495 N=711 N=1742 N=1012
Total 18-34 age 35-54 age 55+ ageNo 78% 64% 79% 88%Yes 22% 36% 21% 12%
N=762 N=254 N=369 N=124
Source : CBS Entertainment Panel Survey, July 2009
Does internet video drive TV viewing? Yes!
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 23
Consumers Watch Mostly Missed Episodes Online
Total 18-34 Age 35-54 Age 55+ AgeMissed episodes of shows I watch on TV 88% 89% 88% 86%
Episodes of TV shows I do NOT watch on TV 27% 36% 26% 20%
Episodes of TV shows I have ALREADY watched on TV
16% 21% 16% 11%
Episodes of past shows that are not on TV now 39% 44% 40% 31%
None of these 4% 2% 4% 7%Source : CBS Entertainment Panel Survey, July 2009
N=2229 N=606 N=1122 N=476
What Kind of TV Programs do you Stream or Download and Watch on a PC?
© 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialC25-452149-02 24
AT&T 2009 Masters Tournament
TV, PC and mobile devices allow use of web elements, tools, and plug-ins
Consumers “create”their own experience
Advanced remote control …unique – or use your iPhone
Access content anytime, anyplace, any device
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 25
Deliver Unified Experiences Using Network As Platform
Unify Experience & Platform
Unify Experience & Platform
Monetize new transaction services Application store for TV and other devices (revenue share)
Monetize new value added services on network platformRetail and wholesale content delivery (CDN) services Network personal video recorder serviceManaged consumer TelePresence service
Unify experiences across devices, content providersCross platform advertising across PC & TV : Measure, Deliver, MonetizeSingle sign-on across services and screensCross platform targeted adverting
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 26
Business Models
Consumer ServicesConsumer Services
Value Added Services
Wholesale Services
B 2 B
B 2 C
B 2 C
Leverage Network and Data AssetsLeverage Network and Data AssetsExperience Provider PlatformExperience Provider Platform
$$$
$$
IP Video: Enabling New Business Modelsand Services
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 27
More HD ChannelsMassive VoD LibrariesTime Shifted TV Internet VideoAny Stream to Any ScreenTargeted AdvertisingNext Generation User InterfacesService Velocity3DTV (impossible to avoid at CES 2010)
“The vision is to give customers the ability to watch ANY movie, television show, user generated content or other video that a producer wants to make available On Demand”
– Brian Roberts, CEO Comcast – CES 2008
“The vision is to give customers the ability to watch ANY movie, television show, user generated content or other video that a producer wants to make available On Demand”
– Brian Roberts, CEO Comcast – CES 2008
Next Generation Video Service Trends Driving network and in-home architectures…
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 28
Expand Reach & Monetization
Expand Reach & Monetization
The Transformation Strategy
Unify Experience & Platform
Unify Experience & Platform
Experience Better TV experience
Experience Better TV experience
© 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialC25-452149-01 29
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 30
BACK-UP
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 31
BSkyB – UK : Monetizing Online TV
SKY Player: Online TV serviceLinear 34 channels simulcast online for PC or MACOn-demand online : 500+ movies, 1000+ hit TV episodes3 picture quality levels to suit broadband connectionCurrent SkyTV subs watch linear online channels free as per their subscribed packageNon Sky-TV subscribers can subscribe online packages – see next slide
Using online service to up-sell its top-tier TV and broadband subscriptions
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 32
Sky Play and Microsoft XBox
Upcoming enhanced online service on Microsoft XBox
Channel line up, pricing, dates to be announced20+ Live Pay TV Channels, On-Demand Content & Interactive Sports Fans can communicate, check news & access fixtures, league tables & other on-demand information
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 33
Sky Player : 4 Online Packages To Address Diverse Demographics
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 34
CanalSat – France: 3 On Demand Services
1. Canal Plus a la Demande catch-up online serviceBundled with Canal Plus' Le Bouquet pay TV package
TV shows, movies (~30 per month) and sports events – including highlights for the major European football leagues and the UEFA Champions League
Currently available on PC, 10 Million VoD streams from March 08 to March 09,
1 million streams/per month run rate. 6000 titles library
2. CanalPlay A transactional online video store with 6,000 videos, including 3,000 movies for XBox
Limited availability with Sony PSP and PC
3. Foot+ Watch Ligue One (8 live per week, 2 delayed) and Champions League matches
Xbox Live party feature allows users to watch matches in a virtual stadium with other Xbox Live members, communicating via voice chat.
Available soon on Microsoft Xbox360
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 35
Starz Plays Wholesale Affiliation Strategy
Subscription based service with Verizon Starz Play$5.99 per month for Verizon FiOS / Internet subscribers-single bill , otherwise $9.992500+ high-quality video selection with 1000 movies -first-run hit, independent films and classicsSpider-Man 3, Ratatouille, Pirates of the Caribbean, Hannah Montana/Miley Cyrus: Best of Both Worlds Concert
Also a live stream of the linear Starz channel
Unlimited downloads, playback and streamingOne membership powers up to 3 devices so for the entire
Recently joined Comcast-TW-Verizon “TV Everywhere” trials with 300 movies and shows
Offered in Netflix $8.99 and above subscription packages ( does not include linear channels)
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 36
MLB.TV Monetized Online TV service for Out of Market Games Successfully
Online TV service for out of market games Preserving exclusivity of its existing TV deals
Supports PC, Roku, Boxee, iPhone
768Kb for MLB.TV, 1.5Mb for MLB.TV Premium, 3.0Mb for MLB.TV Premium with HD
For in-market games, working with MSOs and RSNs to make content onlineYankees, YES Network, and Cablevision deal for in-market online streaming $49.99 for remaining 2009 season, $19.99 per month, similar deal with Cox Communications and the San Diego Padres
In 2008, half a million online subscribers with $120 ARPU
Highly interactive, feature rich online streaming
© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 37
BBC iPlayer Market Disrupter
Interesting Statistics
Hours encoded each week: 400+Servers needed for the job: 60Video formats encoded: 15Minutes taken for shows to appear online: 15Data transfer of an evening: 12.5Gbps
7 petabytes per monthStreaming peak: 10pmiPhone peak: midnightWeekend peak: 8am-10am