Shift Happens: From Value Destruction to Value Creation
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Transcript of Shift Happens: From Value Destruction to Value Creation
Murali Nemani, Service Provider Marketing, Cisco
Shift HappensFrom Value Destruction to Value Creation
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential & NDA Required 2
History is No Predictor of the FuturePredictions that Flopped
1916 1916
Charlie Chaplin, the actor, producer, director and studio founder, stated:
“The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.”
It has been proved that audience is more interested towards love stories
Charlie Chaplin, the actor, producer, director and studio founder, stated:
“The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.”
It has been proved that audience is more interested towards love stories
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential & NDA Required 3
“[Television] won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.”
— Darryl Zanuck, Movie Producer, 20th Century Fox, 1946
“[Television] won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.”
— Darryl Zanuck, Movie Producer, 20th Century Fox, 1946
History is No Predictor of the FuturePredictions that Flopped
1946 1946
1916 1916
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential & NDA Required 4
History is No Predictor of the FuturePredictions that Flopped
1948 1948
1946 1946
1916 1916
“Television won’t last. It’s a flash in the pan.”
— Mary Somerville, Pioneer of radio educational broadcasts, 1948
“Television won’t last. It’s a flash in the pan.”
— Mary Somerville, Pioneer of radio educational broadcasts, 1948
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential & NDA Required 5
History is No Predictor of the FuturePredictions that Flopped
197719771948 1948
1946 1946
1916 1916
“There is no reason anyone would want a computer in their home.”
— Ken Olson, President, Chairman and Founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977.
“There is no reason anyone would want a computer in their home.”
— Ken Olson, President, Chairman and Founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977.
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential & NDA Required 6
History is No Predictor of the FuturePredictions that Flopped
19951995
197719771948 1948
1946 1946
1916 1916
In February 1995, just over 15 years ago, Astronomer Clifford Stoll penned an essay for Newsweek under the incriminating title:
"The Internet? Bah! Hype alert: Why cyberspace isn't, and will never be, nirvana.”
In February 1995, just over 15 years ago, Astronomer Clifford Stoll penned an essay for Newsweek under the incriminating title:
"The Internet? Bah! Hype alert: Why cyberspace isn't, and will never be, nirvana.”
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential & NDA Required 7
History is No Predictor of the FuturePredictions that Flopped
2005 2005 19951995
197719771948 1948
1946 1946
1916 1916
"Next Christmas the iPod will be dead, finished, gone, kaput…"
— Sir Alan Sugar, British Entrepreneur, 2005
"Next Christmas the iPod will be dead, finished, gone, kaput…"
— Sir Alan Sugar, British Entrepreneur, 2005
© 2010 Cisco Systems, Inc. All rights reserved. 8
But Sometimes, Someone Gets it RightThe Prediction that was Right on the Money
1996 1996
“In 10 years, our television set will be large and flat and will hang on the wall much like a large painting. It will be a digital, high definition model with clarity approaching that of a movie screen. This TV will be much more than just an entertainment device - it will also be used as a computer monitor capable of networking with other computers as an interactive, videoconferencing device.”
— Stephen M. Millett, Battelle Technology Intelligence
“In 10 years, our television set will be large and flat and will hang on the wall much like a large painting. It will be a digital, high definition model with clarity approaching that of a movie screen. This TV will be much more than just an entertainment device - it will also be used as a computer monitor capable of networking with other computers as an interactive, videoconferencing device.”
— Stephen M. Millett, Battelle Technology Intelligence
© 2010 Cisco Systems, Inc. All rights reserved. 9
Opportunity to Leverage Online Video for Differentiated User Opportunity to Leverage Online Video for Differentiated User ExperiencesExperiences
Reshaping of the Video EcosystemDominated by Online Video Growth
Online VideoOnline Video
Video = 90% of consumer IP traffic
by 2012
Video = 90% of consumer IP traffic
by 2012
Cisco VNI StudyCisco VNI Study
Consumer viewing of movies and TV shows online doubles in 2009
Consumer viewing of movies and TV shows online doubles in 2009
Web
In 24 millionHouseholds
By 2014
In 24 millionHouseholds
By 2014
44%44%
5 billion5 billion
5B Videos Viewed Online in UK in April 2009
5B Videos Viewed Online in UK in April 2009
MarketDynamic
s
MarketDynamic
s
© 2010 Cisco Systems, Inc. All rights reserved. 10
Opportunity to Create Revenue Generating Services Using the Opportunity to Create Revenue Generating Services Using the Network as a Platform Network as a Platform
Reshaping of the Video EcosystemDominated by Online Video Growth
Online VideoOnline Video
Video = 90% of consumer IP traffic
by 2012
Video = 90% of consumer IP traffic
by 2012
Cisco VNI StudyCisco VNI Study
Consumer viewing of movies and TV shows online doubles in 2009
Consumer viewing of movies and TV shows online doubles in 2009
Web
In 24 millionHouseholds
By 2014
In 24 millionHouseholds
By 2014
44%44%
5 billion5 billion
5B Videos Viewed Online in UK in April 2009
5B Videos Viewed Online in UK in April 2009
Service ProviderService Provider
11.3 million unique visitors – Nov 2009
“TV Everywhere”
CDNCDN
ISPISP
ISP
Online Film Rentals?
MarketDynamic
s
MarketDynamic
s
© 2010 Cisco Systems, Inc. All rights reserved. 11
Reshaping of the Video EcosystemDominated by Online Video Growth
Online VideoOnline Video
Video = 90% of consumer IP traffic
by 2012
Video = 90% of consumer IP traffic
by 2012
Cisco VNI StudyCisco VNI Study
Consumer viewing of movies and TV shows online doubles in 2009
Consumer viewing of movies and TV shows online doubles in 2009
Web
In 24 millionHouseholds
By 2014
In 24 millionHouseholds
By 2014
44%44%
5 billion5 billion
5B Videos Viewed Online in UK in April 2009
5B Videos Viewed Online in UK in April 2009
Broadcasters and MediaBroadcasters and Media
27% Owner
44 million unique visitors – Nov 2009
2XOnlineVideo
BrandVisibility
$$
Sony’s On-Demand
Movie Service 2010
Opportunity to Increase Popularity of the Content and Revenue Opportunity to Increase Popularity of the Content and Revenue Through CollaborationThrough Collaboration
Service ProviderService Provider
11.3 million unique visitors – Nov 2009
“TV Everywhere”
CDNCDN
ISPISP
ISP
Online Film Rentals?
MarketDynamic
s
MarketDynamic
s
© 2010 Cisco Systems, Inc. All rights reserved. 12
Innovate to Transform Consumer ExperienceInnovate to Transform Consumer Experience
Consumer ElectronicsConsumer Electronics
Walmart Buys Vudu Movie Service
Walmart Buys Vudu Movie Service
Reshaping of the Video EcosystemDominated by Online Video Growth
Online VideoOnline Video
Video = 90% of consumer IP traffic
by 2012
Video = 90% of consumer IP traffic
by 2012
Cisco VNI StudyCisco VNI Study
Consumer viewing of movies and TV shows online doubles in 2009
Consumer viewing of movies and TV shows online doubles in 2009
Web
In 24 millionHouseholds
By 2014
In 24 millionHouseholds
By 2014
44%44%
5 billion5 billion
5B Videos Viewed Online in UK in April 2009
5B Videos Viewed Online in UK in April 2009
Broadcasters and MediaBroadcasters and Media
27% Owner
44 million unique visitors – Nov 2009
2XOnlineVideo
BrandVisibility
$$
Sony’s On-Demand
Movie Service 2010
Service ProviderService Provider
11.3 million unique visitors – Nov 2009
“TV Everywhere”
CDNCDN
ISPISP
ISP
Online Film Rentals?
MarketDynamic
s
MarketDynamic
s
© 2010 Cisco Systems, Inc. All rights reserved. 13
Content FragmentationBroadcast, Premium, UGC
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Lean back, Lean forward, Social
Content FragmentationBroadcast, Premium, UGC
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Lean back, Lean forward, Social
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Fragmentation Takes Hold
Consumer Experience Business Models
© 2010 Cisco Systems, Inc. All rights reserved. 14
Content FragmentationBroadcast, Premium, UGC
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Lean back, Lean forward, Social
Content FragmentationBroadcast, Premium, UGC
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Lean back, Lean forward, Social
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Fragmentation Takes Hold
Consumer Experience Business Models
© 2010 Cisco Systems, Inc. All rights reserved. 15
Content FragmentationBroadcast, Premium, UGC
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Lean back, Lean forward, Social
Content FragmentationBroadcast, Premium, UGC
Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Lean back, Lean forward, Social
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars FragmentationTransition from linear TV to online
Fragmentation Takes Hold
Consumer Experience Business Models
© 2010 Cisco Systems, Inc. All rights reserved. 16
2nd Wave2nd Wave
1st Wave1st Wave
3rd Wave3rd Wave
IP Video On-net or Off-net
TV, PC, Mobile
Highest Service Velocity
Business Model: B2B2C
IP Video On-net or Off-net
TV, PC, Mobile
Highest Service Velocity
Business Model: B2B2C
IPTV On-net only
TV
Higher Service Velocity
Business Model: B2C
IPTV On-net only
TV
Higher Service Velocity
Business Model: B2C
Traditional Cable On-net only
TV
Limited Service Velocity
Business Model: B2C
Traditional Cable On-net only
TV
Limited Service Velocity
Business Model: B2C
More Open, More Flexible, More Monetization OpportunitiesMore Open, More Flexible, More Monetization Opportunities
The Quest for Value Creation Propels a 3rd Wave: IP Video
© 2010 Cisco Systems, Inc. All rights reserved. 17
Next Generation Platform Built on Web Services Protocols
Accelerates universal reach and 3rd party innovation
Next Generation Platform Built on Web Services Protocols
Accelerates universal reach and 3rd party innovation
How do we get there?Key Architectural Tenets for IP Video
Next Generation PlatformNext Generation Platform
© 2010 Cisco Systems, Inc. All rights reserved. 18
How do we get there?Key Architectural Tenets for IP Video
Large-scale Unicast Large-scale Unicast
Next Generation PlatformNext Generation Platform
Content networks scale exponentially for large-scale unicast services
Leveraging multicast technologies for efficient distribution
Content networks scale exponentially for large-scale unicast services
Leveraging multicast technologies for efficient distribution
© 2010 Cisco Systems, Inc. All rights reserved. 19
How do we get there?Key Architectural Tenets for IP Video
Large-scale Unicast Large-scale Unicast
Video Intelligence Video Intelligence
Next Generation PlatformNext Generation Platform
Video intelligence propagates deep into the network edge
Providing media, device, and network awareness
Video intelligence propagates deep into the network edge
Providing media, device, and network awareness
© 2010 Cisco Systems, Inc. All rights reserved. 20
How do we get there?Key Architectural Tenets for IP Video
Large-scale Unicast Large-scale Unicast
Video Intelligence Video Intelligence
Common Client ArchitectureCommon Client Architecture
Next Generation PlatformNext Generation Platform
Common Client Architecture
Multi-device support – for PCs, set-tops, gaming consoles, mobile devices, etc.
Common Client Architecture
Multi-device support – for PCs, set-tops, gaming consoles, mobile devices, etc.
© 2010 Cisco Systems, Inc. All rights reserved. 21
How do we get there?Key Architectural Tenets for IP Video
Large-scale Unicast Large-scale Unicast
Video Intelligence Video Intelligence
Common Client ArchitectureCommon Client Architecture
Managed / UnmanagedManaged / Unmanaged
Next Generation PlatformNext Generation Platform
Services Across Managed and Unmanaged Networks
Common experience no matter where the user connects
Services Across Managed and Unmanaged Networks
Common experience no matter where the user connects
© 2010 Cisco Systems, Inc. All rights reserved. 22
MedianetThe Architectural Blueprint for Delivering Next Gen IP Video Services
Content Providers
Contribution
Core IPNetwork
News Gathering
Production
Sport Events
Studio to Studio
Ingest
Media Data Center
Post Production
UCS
Real-timeTranscoding
Storage
Data CenterSwitch
Media Data Center
Tighter Linkages Between Core, Data Center and EdgeTighter Linkages Between Core, Data Center and Edge
© 2010 Cisco Systems, Inc. All rights reserved. 23
MedianetThe Architectural Blueprint for Delivering Next Gen IP Video Services
Content Providers Service ProvidersService Providers
Contribution
Core IPNetwork
News Gathering
Production
Sport Events
Studio to Studio
Headend
Primary SecondaryDistribution
Headend
Headend
Direct To Home
Telco
Cable
Mobile
IP
IP
IP
IP
Ingest
Media Data Center
Post Production
Proximity Routing
Core + E-MSE
Core + E-MSE
Aggregation Router
Aggregation Router
Storage
Storage
Storage
Aggregation Router
Aggregation Router
Distribution Router
DistributionRouter
Storage
Tighter Linkages Between Core, Data Center and EdgeTighter Linkages Between Core, Data Center and Edge
© 2010 Cisco Systems, Inc. All rights reserved. 24
Medianet
Consumption
The Architectural Blueprint for Delivering Next Gen IP Video Services
ConsumersContent Providers Service ProvidersService Providers
Contribution
Core IPNetwork
News Gathering
Production
Sport Events
Studio to Studio
Headend
Primary SecondaryDistribution
Headend
Headend
Direct To Home
Telco
Cable
Mobile
IP
IP
IP
IP
Ingest
Media Data Center
Post Production
Tighter Linkages Between Core, Data Center and EdgeTighter Linkages Between Core, Data Center and Edge
© 2010 Cisco Systems, Inc. All rights reserved. 25
Shift Happens: Will SPs Lead an Ecosystem Searching for Value Creation?
© 2010 Cisco Systems, Inc. All rights reserved. 26