Vision of the future – ROADIBROM Summit Beijing Convergence Digital Broadcasting-Mobile Philips...

Vision of the future – ROADIBROM Summit Beijing

Convergence Digital Broadcasting-

Mobile

Philips’ perspective on critical challenges

regardingFuture Value ChainsArthur Weyns

VP Global Affairs

2Vision of the future – ROADIBROM Summit Beijing

11

What does the future look like?

End-user needs

Technology trends

FUTURE

Disruptive

events


End-user Needs & Trends

• People are increasingly looking for:– Personal empowerment ( freedom, control,

simplicity)– Engaging in experiences (multi-sensorial)– Creating experimentation & discovery (creativity)– Fluid & open social grouping (sharing, belonging)– Personal care & well being (monitoring, security)– Environmental neutral footprint (sustainable

planet)


What does this mean for convergence of dig broadcasting and mobile?

Lessons from past: Convergence of dig. telecom and mobile

Communication Wired Phone (POT)

Type of owner family

Marketsize (pcs) 100 mln /y

Place of usage home

Price of device low

Device lifetime 5-10 years

Price of services low (zero for IP communication)

Price of infrastructure

very high (esp digging in cables)

# Infrastructure providers

1/country

Type of services

communication

Cordless Phone

family

10 mln/y

home

medium

3-5 years

low (zero for in-house& IP comm.)

zero (oprators)low (end-user)

1/countryISPs

communication

Car/Sattelite Phone

professional`

100K - 1 mln/y

car/away from home

high

3-5 years

high

high

1/country

communication

Mobile/personal Phone

individual

1 bln/y

everywhere

zero-medim

0.5 years

medium

Medium/high

few /country

communication, SMS/MMS, games,

ring tones, …


What does this mean for convergence of dig broadcasting and mobile?

Will Mobile TV become Personal TV/Personal Access Device?

TV- Device Home TV

Type of owner family

Market (pcs) 100-200 mln /y

Place of usage home

Price of device low - high

Device lifetime 10 years

Price of services low (public)medium ( pay)

Price of infrastructure

high (esp. cable)

# Infrastructure providers

many

Type of services

passive TV entertainment

Portable TV

family

1 mln/y

away

low

5-10 years

zero (public)low (satellite)

zero

few

passive TVentertainment

Mobile TV

mobile freak?

1 - 10 mln/y

everywhere if signal

medium

1-2 years

low-medium

zero

few

(passive) TVentertainment

Personal TV

individual

100-500 mln/y?

everywhere

zero-medium

0.5-1 year?

low?

low-medium

many?

interactive info/TV entertainment

communication


Managing Content ecosystem becomes paramount in the mobile TV/personal TV era

Content Creation

Content Distribution

Content Aggregation

Content Content Access Consumption

Content

Accessdevice

manufacturers

+Ambientsolution

providers

AccessIntermediaries

Currentcontent creators

+“Consumer

reporter”

Current content

aggregators

+ISPs

“Consumer reporter”

User communities

BroadcastersTelecom operatorsSatellite operators

+ISPs

(one –to-many+

one-to-one)

Family /consumerat home

+Individual anywhere

NOW

FUTURE

Changes will be disruptive - outcome very unclear


Value chain (R)evolution

• Traditional business models and value chains will change drastically:– Media/Content value chain: consumer-reporter, from mass to individual

focus, largely internet based– Advertisement business model: from mass to individual targeting – Key brands: Service & Solution providers iso Device manufacturers

• Major disruptive events will influence people behaviour :– Global warming – High price of energy– People Migration– Cyber crime– Economic power shifts – - …


Uncertainty of Future Use

- Currently 50% of mobile TV is done @ home* so Personalization is more important than Mobility

- Will mobile TV business evolve into personal TV or even into a “Personal access anywhere to my preferred content and community” business ?

- Interactivity, individual consumer targeting and seamless easy access services may become the most important new value spaces

- “Content/infrastructure is already paid for”

* Source: Nokia & Mobile TV operators


Uncertainty of Future Business

- Can broadcasters and telecom operators remain?- What is the fundamental distinction that would allow

both to co-exist?- Will it be a media value chain or a value web?- Infrastructure investments and web-related services have a

fundamental different pace.- Product & service life cycles are shortening fast (from

years to months) leaving less time for ROI- Degree of penetration largely influenced by price of access

and services for the consumer- Industry and media value chains are redefined and de-

verticalised


Internet & Digital Content exploit these trends more

More content leads to highneed for personalization

Explore & LocateSelect / PlaylistsAcquireChangeShare

Content Personalization

Internet Content & Services

Conventional Content & services

More Content Available

Personalize and give me my content so I can enjoy and share it where & when I want

Per

s on

al i

zed

Co

nte

nt

Anywhere, Anytime

7


Advertising Industry will pass through most fundamental change in its history

from towards

Brand Product based Storytelling based

Channel Top down broadcast Interactive network

Mechanism Push, preach, persuade, seduce

Pull, teach, co-create, Identity-transformation

Offer Consumption Long term support in lifestyle

Attraction & interaction

Mass media segmented message

Invited unique participation

Communication & seduction

Artificial slice of lifeIdealised/homogeneous

consumerCustomer of product

Co-creative reality & truthMaintained relation

Heterogeneous consumerPartner


Where is the money?• What are consumers willing to pay for?

– The type of access service?• Fast access – wireless access – anywhere access – easy/seamless access

– The content?• Pay and download content/ Pay less and stream content• Pay and get high quality• Pay and avoid advertisements• DRM expected to disappear due to consumer preference for free content Artists

more willing to prefer large audiences above royalties to increase their market value thereby generating more income

– Nothing?• Highly targeted advertisements focused on engaging individuals and/or

regional/global coverage could do the trick

• What is the value of (content) quality?– Lower quality in audio (MP3 vs CD) was accepted to get it fast/more/free– Lower quality in video (YouTube) seems acceptable (when it is free)– Pay for fast high quality could be acceptable


Conditions for a bright future

• Mobile communication created a tremendous new products and services market ( larger than consumer electronics and IT products and services markets combined).

… but success was built on a paradigm shift in the traditional telecom market

• Personal TV could represent an even larger business opportunity but seems to require a paradigm shift in the broadcast, media and advertising industry.


Conclusions• One thing is sure: a lot will become even more unsure in the coming

years• Different scenarios for the value chain need to be explored• Flexibility is key:

– Rapidly switching roadmaps /business models

– Willingness to leave old paradigms• Ultimately the user will define the direction …

to understand and know what he prefers : extensive consumer insight research and experimenting in the market will be needed

The ROADIBROM research themes give a good first direction …


Let’s do this

Consumer Research and

Market Experiments

TOGETHER

Thanks!

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