1 What Impact Will Over-the-Top Video Have On Cable Operators? Minnesota Telecom Alliance (“MTA”) Annual Convention and Trade Show March 26-27, 2012 Brian.

Slides:



Advertisements
Similar presentations
Residential Broadband Group A John Chuang Tushar Dani Ilin Tsai Ilya Bagrak Alexandra Fedyukova.
Advertisements

Video Cord-cutting: Much ado about nothing? Consulting. Research. DigiWorld Institute 20 th November 2013 Contact Florence LE BORGNE Head of TV & Digital.
A Network View of Netflix How Partners, Competition, and Opportunities Dictate Strategy.
DIGITAL QUICK FACTS. DIGITAL QUICK FACTS $328m was spent in the digital category in 2011 in New Zealand, this is up 28% YOY* The digital category now.
© 2009 IBM Corporation1 Telco, media, entertainment and consumer electronics companies face an overlapping set of challenges and opportunities Companies.
Analysis of Netflix presented by Vince Wang
AOL TIME WARNER A Failure of Synergy?. Reasons for the Merger in 2000 Concentration of value: Value of merger: $300bn when announced, $ bn in Jan.
Telekom Srbija IPTV insights and perspectives New Media Summit, Digital Agenda Belgrade, September 2011.
B2E: Marketing Plan Mid-point Meeting
1 Customer Service Standards Washington Association of Telecommunications Officers and Advisors Spring Conference – Chelan, WA May 1-2, 2014 Brian T. Grogan,
Do We Really Need Denise Huang. Agenda ITV: What’s new Industry overview Consumers’ attitudes and usage patterns What are the demands? Challenges from.
By Liz Goncalves and Katie Murphy. Our Goals: Background of the Comcast company Its monopolistic tendencies To discuss limited involvement in the communities.
1 End of Regulation? Jerry Hausman Professor of Economics MIT July 2005
Local Broadcast TV Advertising Outlook Steve Lanzano, TVB President & CEO Goldman Sachs 23 rd Annual Communacopia Conference September 11,
1 Cable, Satellite, and Internet Television Chapter 11 © 2009, The McGraw-Hill Companies, Inc. All rights reserved.
IS 485 Clyde Barnett Adrienne Braganza Chris Capozzi Pamela Gustavson Brody Milne Will Ruiz Clyde Barnett Adrienne Braganza Chris Capozzi Pamela Gustavson.

CenturyLink Cable Television Franchise
IPTV Internet Protocol Television Chris Hall. Two Major Providers Of IPTV.
1 © 2012 Cisco and/or its affiliates. All rights reserved. February, 2012.
Alex McCollough Deregulation of the local cable market.
The Merger of Comcast & Time Warner Cable Andy Neff, Bradon Fennell, Clint Monsen, & Kyle Borne.
Information Systems workshop Is TV as we know it gone? Role: CBS Team 1: Cristian, David G., Fabio B., Fabio P., Manuel, Roseane Professors Sandra Sieber.
Cable & Multichannel Business Operations. Getting Started Franchising Cable systems must be franchised through local authority Access to right of ways.
Highly competitive market, with new entrants Evolving customer behavior Changing Technologies.
Information and Communications Technologies in Australia Joanne Jacobs Brisbane Graduate School of Business.
How much has the way we watch film and TV changed.
1 Welcomes. 2 CBS Vision Presentation To CABA David F. Poltrack Chief Research Officer, CBS Corporation President, CBS Vision.
Digital Television. Learning Objectives: By the end of this topic you should be able to: discuss the range of services offered by digital television networks;
Worldwide Over-the-Top Subscription Video on Demand Market October 2013.
By: Vileta Pinkham & Kelley Hamrick Kelley Hamrick.
Chapter 15 Electronic Media.
Robert C. Atkinson Ivy E. Schultz December 10, 2009 Broadband in America Where It Is and Where It Is Going (According to Broadband Service Providers)
Telecommunications Expenditures by Cable MSOs Supporting the “Holy Grail” “In order to provide the “Holy Grail” of voice, high-speed data, and content,
1  2005 Level 3 Communications, Inc. All Rights Reserved. Industry At The Bottom? Kevin O’Hara President & COO Level 3 Communications.
P 1 confidential/proprietaryp 1p 1 confidential/proprietary Leap Wireless International, Inc. October 2009.
©2013 The McGraw-Hill Companies, Inc. All rights reserved MCOM 01, Spring 2014 February 24, 2014.
Cable Pioneers 1948: John Walson, small appliance store PA: builds an antenna on nearby mountain and strings wire down to his store Helps him sell more.
Cable and Satellite Industries. Lil Context Cable + Satellite= –Multi-Channel Television Industries 87-90% of U.S. TV households get programming. 60%
You always WIN when you PLACE & SHOW ads with ONTrack
Haewook Lee CIS /18/2009  Founded by Hughes Electronics in 1994  Renamed the DirecTV group as DirecTV was sold to News Corporation and Fox.
Digital TV Interactive TV T-Commerce Convergence of Internet, Broadband, and Television Technology DEFINITIONS.
Basic facts - Source: Statistical Office of the Republic of Serbia & RATEL.
Emily Mikesell.  Started in 1875  Founder Alexander Graham Bell's invention of the telephone.  AT&T became the parent company of the Bell System ›
Confidential Challenges of Internet Streaming Sloan Media Tech February 8, 2001.
1 Broadband in California and the Digital Infrastructure Video Competition Act of 2006 Michael Morris Program Supervisor Video Franchising and Broadband.
Understanding Cable By: Marla Gaspard Research Associate Radio Advertising Bureau Dallas, Texas.
©2013 The McGraw-Hill Companies, Inc. All rights reserved TWELFTH EDITION JOSEPH R. DOMINICK.
Television Bureau of Advertising Video Advertising in a Multi-Screen World 1.
 Summary of Hulu.com  Hulu.com’s Competitive Edge  Competing Cable Providers › Hulu’s impact › Response Tactics  Future of the Industry 9/29/2009.
Eric Van Horn Cosc 380. Overview of Google Fiber Provided services History of project Comparisons with current internet speeds Pros and cons Conclusion.
Television in the Digital Age Chapter 5 part 2 Economics of TV & Cable Television in a Democratic Society.
The Wurl TV Network Multi-Channel Streaming Video programming on Pay TV 1.
ACN Product Overview – nbn™ 1 April What is the nbn™? The national broadband network (nbn™) is an Australian Government initiative designed to upgrade.
Leichtman Research Group | © 2016, Leichtman Research Group Inc., All Rights Reserved Evolution of the Video Marketplace and the Future of Television Bruce.
1 The Wurl TV Network Multi-Channel Streaming Video programming on Pay TV.
HTEFUTUREDECODED emerging markets online security new product development consumer uptake new technology b2c unknown customer base niche market analysis.
EVENT DISTRIBUTION Sports Entertainment and Recreation Marketing.
Pay TV Market in the US Published: September 2015 No. of Pages: 52 Single User PDF: US$ 2500 Order this report by calling or.
Investing in the IETF is an Investment in our Future.
Shanyu Yi Section /27/2008 What Is Comcast About  Comcast Corporation, together with its subsidiaries, operates as a cable operator in the United.
Sherry McCuller Senior Consultant Web: Magellan-Advisors.com.
The Rural Customer Speaks
Broadcast Television Industry Review
Merrier Carriers According to CTIA – The Wireless Association, total wireless industry revenues at the end of 2015 were $191.9 billion, or a 2.2% increase.
Almost Good News Subscribers of cable, satellite and telco video services declined 430,000 during Q3 2016, and 1.3 million year-to-date, which is the largest.
The Wireless World According to CTIA, The Wireless Association, total annual industry revenues for wireless services at the end of 2016 were $
Comcast/Midwest Cable Transfer of Franchise
“Session 1: 2015 OTT Industry Scan- Assessment of Latest Deals, Strategies, and New OTT Services”
L02.2 Presented by John O’Bryan
Presentation transcript:

1 What Impact Will Over-the-Top Video Have On Cable Operators? Minnesota Telecom Alliance (“MTA”) Annual Convention and Trade Show March 26-27, 2012 Brian T. Grogan, Esq

Nothing May Change It is possible that cable TV as we know it will: –Remain available primarily via cable and DBS –People will continue to pay for bundled services –Young adults will come back to Cable TV But it is also possible that change will occur –Perhaps not overnight – but slowly over time Better to be prepared –Ahead of the change –Rather than reacting after the fact 2

What is Happening Now? Subscribers are disconnecting from cable –Growth of DBS has been significant –“Over the Top” cable is having an impact Wireless devices (iPad, Smart Phones) Netflix Hulu, YouTube –Economy – high cost New generation not dependant on cable –Few college students subscribe to cable –All college students have broadband service 3

Top 15 Cable Operators Subscribers 1.Comcast Corporation 22,363,000 2.Direct TV19,760,000 3.Dish Network Corporation13,945,000 4.Time Warner Cable, Inc.12,109,000 5.Cox Communications, Inc. 4,789,000 6.Charter Communications, Inc. 4,371,000 7.Verizon Communications, Inc. 3,979,000 8.AT&T, Inc. 3,583,000 9.Cablevision Sys. Corp. 3,264, Bright House Networks, LLC 2,109, Suddenlink Communications 1,268, Mediacom 1,100, Insight Communications 670, CableOne, Inc. 628, WideOpenWest Networks, LLC 432,000 Source: NCTA website – September 2011

Goldman Sach's Media Conference in NY Verizon Communications CEO Ivan Seidenberg –future generations of consumers won't have any interest in buying service bundles, which can include Internet, pay TV, and telephone –"Young people are pretty smart. They're not going to pay for something they don't need to.” Credit Suisse, financial services company –downgraded media stocks –upgraded Netflix (Pre-Starz termination) –saying its studies show that young adults are now turning to Netflix to acquire film and TV shows. 5

Netflix – North America 6

Basic Cable Subs ’95- ‘10 7

8 DBS Subscribers ,240, ,360, ,160, ,120, ,973, ,500,000+ Source: Jan 2009 FCC report on Competition

Has Cable Lost Subscribers? Multichannel Video Service Customers Incumbent cable operators –58.3 Million basic cable subs –2001 total = 66.9 million subs September 2011 NCTA website Non-Incumbent –42.9 Million basic cable subs –Includes DBS, Verizon, AT&T and others September 2011 – NCTA website 9

10 High Speed Internet Customers

Basic Cable Phone Subs Year / SubsYear / Subs SNL Kagan – NCTA website 11

Cable Industry Data Homes Passed M Basic Video subs 58.3 M Basic Cable Penetration 45.0 % Homes Passed by Internet M High Speed Internet subs 46.4 M Cable Phone subs 25.0 M Source: SNL Kagan – NCTA website (as of September 2011) 12

13 Cable Industry Revenue (,000s) YearRes VideoOther RevTotal Rev 1996 $24,136 $2,984 $27, $26,270 $3,532 $29, $27,626 $6,152 $33, $30,050 $7,341 $37, $32,541 $9,575 $42, $35,734 $9,743 $45, $36,738 $11,160 $47, $39,338 $15,056 $54, $41,813 $18,212 $60, $43,832 $21,846 $65, $46,518 $25,354 $71, $49,105$29,719 $78, $51,467$34,470 $86, $53,040$36,861$89, $55,470$38,310$93, $56,938$40,660$97,598 Source: SNL Kagan – NCTA website (in millions)

Cable Statistics National Cable Programming Networks –565 (2006) Price per viewing hr of digital video service –21.1¢ in 2010 Cable advertising revenue –$27.2 B (2010) Franchise Fees Paid by Cable Operators –$2.7 B (2010 est.) Source = NCTA website September

How Do You Watch TV? 2007 Nielsen Co. study –the average TV household has over 118 channels –but watches just 16 of them... –around 13% What would you pay to watch your 16 channels? Is Cable over the Top the answer? 15

Cable Over the Top Models Advertising –$30-$60 per every 1000 viewers Internet views (about the same as TV rates) Cost of an average show = $2-5 million –Excludes reality shows – lower budget –$60 x 5 6 million viewers = $1.8 million –CSI Miami = 13 million viewers –Mad Men – maybe 3 million viewers Source = David Colarusso March telev_b_ htmlhttp:// telev_b_ html 16

Cable Over the Top Models Pay-per-view via: –micro payments; –Subscriptions – monthly payment - all you can eat –standard pay-per-view - $5 per movie $1.99 (e.g. iTunes rate) –for every hour of television watched online –for every show downloaded –Will 1.5 million people pay to view each show? If you pay to view – will you accept ads? 17

Online Advertising Revenues 18

2010 Internet Ad Revenues U.S. Internet advertising revenues –2010 $26 Billion –2011 revenue up 22% since Q Q $7.88 billion Search-related ads – 11.6% revenue growth Display-related ads - 15% revenue jump Digital video ad revenues up 31% Source - Interactive Advertising Report and PricewaterhouseCoopers. 19

Conclusion Charles H. Duell, Director of the U.S. Patent Office 1899 –Everything that can be invented has already been invented. –Charles was wrong! –Every day a new threat to cable TV is developed What options are available? –Be careful regarding retransmission/programming agreements –Sports programming Can’t live without it – Can’t afford it NFL programming about to get very expensive –Will subscribers pay you for programming that is offered for free over the web? –Carefully consider how system capacity is utilized –Listen to subscribers – Program packaging, bundled options, value 20

21 Thank You! Brian T. Grogan, Esq. Moss & Barnett 4800 Wells Fargo Center 90 South Seventh Street Minneapolis, MN Phone: Facsimile: