Nab14 ca how ott is changing the value chain

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How OTT is Changing the Value Chain and Revenue Opportunities

Patrick Lopez CEO Core Analysis

[email protected]

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Why are we here?

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Ubiquitous fixed and mobile broadband

•70% US households

•100 million LTE subs US

Large screen mobile devices

•150 millions Smartphones (52% penetration)

•35% adults own a tablet

Connected TVs, sticks, consoles

•500 millions connected devices

OTT explosion

TV industry value chain in 2010

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Content Production

Studio 36%

TV Channel 31%

MSO 33%

TV

($166Bn)

TV advertising ($166Bn)

Public

($34BN)

Public Broadcast ($34BN)

Pay TV ($192Bn)

Content Revenue

$30Bn $91Bn

$139Bn $392Bn

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OTT video value chain in 2013

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Content Production

Studio 60%

TV Channel 40%

MSO 0%

Web TV advertising

($4.4Bn)

Public Webcast ($2BN)

Web retail & rental ($3Bn)

Content Revenue

$5.6Bn $9.4Bn

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From value chain… To value circle Traditional TV value chain

• Content is selected, managed and delivered by MSO

OTT value circle

• Consumers select where to source the content from and in which form

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Studio

TV Channel

MSO

Consumers

Devices

Studio

TV Channel

MSO

Consumers

Devices

Business models and strategies

MSO

• Vertical integration

• Multiscreen

• Social TV

• Go OTT

• Own the network

OTT

• Pay per view, rental, on-demand

• Subscription VOD • Free to Air • Content exclusivity • Binge watching • Own the network

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Networks and technology

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Business models and strategies

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Regulatory

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Devices

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Advertising in mobile

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Advertising in mobile

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OTT in mobile

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Conclusions

• OTT is complementary to pay TV model and becomes a threat only if: – Pay TV fails to secure / produce attractive content – Pay TV fails to create the ecosystem for mobile

monetization, notably advertising – Mobile ecosystem is ripe and operators are looking to

partner – MSO / MNO partnership a more natural fit than MSO

/ OTT or MNO/OTT

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Contacts

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