Strategic Considerations for Video Services. DRAFT page 1 SVOD and AVOD: Strategic Considerations (1 of 2) Previous discussions have evaluated the launch.

Slides:



Advertisements
Similar presentations
A Network View of Netflix How Partners, Competition, and Opportunities Dictate Strategy.
Advertisements

Group I Amber Gibler, Mark Mitacek, Tucker Moore, & Katie Yaeger.
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.
1 TeleSoft Partners Annual Venture Capital Ecosystem Meeting Doug Garland SVP Broadband & Mobile Services October 20, 2003.
Privileged and Confidential STRATEGIC CONSIDERATIONS 0.

Bus 111 Austin Tress What is Hulu? Video service that provides users with TV shows, movies, and clips in a simple and convenient.
UFCFX5-15-3Mobile Device Development Commercial Trends and Competitive Initiatives.
Confidential Starz Deal Overview of Benefits for Sony-owned Platforms January 9, 2009.
Confidential Starz Deal Overview of Benefits for Sony-owned Platforms January 9, 2009.
1 1. Executive Summary 2. Networks 3. Distribution & Ad Sales 4. Production 5. Appendix.
Group Strategy Division | 2010 MRP Business Strategy Department Group Strategy Division February 17th, SPE Starz Netflix Current SPE – Starz relationship.
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. | Growing Digital Media Revenues Creating Successful Media Business by Delivering.
Business Models In Media Industries. Definitions (1) A business model is an action methodology for the systematic and routine generation of money or equivalent.
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.
Ennova Business Models A platform for analyzing existing business models and imagining new ones.
Thoughts on Next 3 Slides
2 StupidVideos Overview  The site serves a stable core audience of ~1.5MM visitors a month, who watch more than 8 videos per session. We deliver more.
Digital Distribution – Competitor Landscape October 2007 CONFIDENTIAL DRAFT.
Worldwide Over-the-Top Subscription Video on Demand Market October 2013.
Sony Pictures Entertainment and Sony Network Entertainment: Project Update: Crackle Plus February 13, 2012.
Privileged and Confidential General –What do we most need to be more successful? Clear goals? Clear priorities? Identification of challenges? Organizational.
Privileged and Confidential SNEI and SPE discussion of next steps January 6, 2012.
SONY Online Content Discussion March DRAFT page 1 Executive Summary Type and volume of content selected may vary depending on our goals for a service.
Privileged and Confidential General –What do we most need to be more successful? Clear goals? Clear priorities? Identification of challenges? Organizational.
DRAFT Privileged and Confidential Sony Pictures Entertainment and Sony Network Entertainment: Strengthening and Differentiating the Sony Entertainment.
ATTORNEY / CLIENT PRIVILEGED Confidential Draft Starz / Netflix Considerations FOR SONY INTERNAL USE ONLY December 1, 2008.
The Business Model Canvas The Building Blocks for a Successful Business PCBN Pacific Coast Business Networking June 10, 2015.
CONFIDENTIAL Key Trends, Issues and Opportunities for SPE’s Mid-Range Plan August 27, 2010.
Elevator Pitch According to statistics, one in three people aged 18 to 40 years old interested in computer games. While all players experience some common.
Grouper 3.0 / Crackle Update June Executive Summary From acquisition to-date, SPE has focused on integration and audience expansion –Leveraged.
CONFIDENTIAL SPE Service Opportunities Draft 4. page 1 Traditional Studio Content and Distribution Businesses are Fragmenting Studio User Generated Games.
SPE INTERNAL Channel Acquisition Opportunities September 2008.
Strategic Considerations for Video Services. DRAFT page 1 SVOD and AVOD: Strategic Considerations (1 of 2) Previous discussions have evaluated the launch.
Confidential Starz Deal Overview of Benefits for Sony-owned Platforms January 9, 2009.
1 Objectives Bring Crackle to break-even Continue to build the Crackle brand with quality originals, a meaningful Film and TV business, and broader reach.
Group Strategy Division | 2010 MRP Business Strategy Department Group Strategy Division January 24, Fact Finding: Netflix has acquired 20 million.
CONFIDENTIAL Music Publishing Overview May page 1 Executive Summary SPE has been asked by Nick Oneda to identify non-strategic asset divestitures.
Sony Pictures Entertainment and Sony Network Entertainment: Project Update: Crackle Plus February 13, 2012.
CONFIDENTIAL Digital Services and Distribution Acquisition Strategy: Selected Company Profiles November 28, 2006.
Overview of Sony Pictures Television Networks Materials Presented to Sony Corporation’s Board of Directors July 18, 2011.
Confidential Draft SPT Strategic Initiatives February 1, 2008.
Privileged and Confidential General –What do we most need to be more successful? Mission / purpose? Priorities? Organizational changes? Entertainment Co.
Value ConsiderationsCurrent SPE RelationshipHistory of Success Embassy Row Overview Creator of numerous successful game and reality shows including: –The.
CONFIDENTIAL SPE Service Opportunities Draft. page 1 Traditional Studio Content and Distribution Businesses are Fragmenting Studio User Generated Games.
1 Traditional media players are experimenting with new models for digital distribution –Networks are launching branded online channels and streaming ad-supported.
CONFIDENTIAL Grouper Acquisition Opportunity Financial Overview August 2006.
Confidential Draft SPT Strategic Initiatives February 1, 2008.
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.
Video on Demand (VOD) Market by Solution (Pay TV, OTT, IPTV), by Delivery (TVOD, SVOD, NVOD), by Application (Entertainment, Education and Training, Video.
Leichtman Research Group | © 2016, Leichtman Research Group Inc., All Rights Reserved Evolution of the Video Marketplace and the Future of Television Bruce.
CONFIDENTIAL SPE Service Opportunities Draft. page 1 Traditional Studio Content and Distribution Businesses are Fragmenting Studio User Generated Games.
Impacts of delayed viewing and SVOD on the current television season April 13, 2016.
Executive Summary Until recently, the window for new domestic channels has been closed and existing channels have been prohibitively expensive Now several.
Sherry McCuller Senior Consultant Web: Magellan-Advisors.com.
Digital Services and Distribution Landscape
- Consumer Streaming Options -
DIGITAL ENTERTAINMENT
Subscription Internet Rights to SPE Films:
Subscription Internet Rights to SPE Films:
Get Spotify and Hulu Together. (Here’s guide for you)
Framework – Getting to the Consumer
L02.2 Presented by John O’Bryan
two distinct yet complementary businesses
Strategic Liberty Global Channels
Music Publishing Overview May 2010
Presentation transcript:

Strategic Considerations for Video Services

DRAFT page 1 SVOD and AVOD: Strategic Considerations (1 of 2) Previous discussions have evaluated the launch of a programmed video service as a standalone profit driver, key considerations include: –Investment in content and programming required to compete with leading services –Number of customers likely to be acquired –Revenue per customer –Ongoing relationship with customers If a service is intended to be a standalone profit driver, the SVOD vs. AVOD decision depends partly on appetite for investment and risk –SVOD can be a high risk, high reward proposition Significant investment in content required to given heavy investment by many competitors Harder to secure customers for paid service But SVOD offers the potential for higher revenue per customer and an ongoing relationship –AVOD can be a lower risk model, but with lower revenue per customer Success is possible at a lower level of investment, despite numerous competitors, investment in exclusive content for AVOD services has been more modest Easier to secure customers for AVOD services But revenue per customer is lower, and programming expertise is required to keep customers coming back

DRAFT page 2 SVOD and AVOD: Strategic Considerations (2 of 2) Sony’s existing revenue-generating services and connected device footprint give us the opportunity to evaluate the SVOD vs. AVOD decision differently If a programmed video service is viewed as a customer acquisition tool for other revenue generating services and hardware sales, strategic considerations change –Strategic considerations include: –Creating a compelling and competitive content offering with a reasonable investment –Acquiring the greatest number of customers to the service –Providing those customers a reason to return on a regular basis –Monetizing by cross-selling these customers on paid services (Music Unlimited, Video Unlimited, PlayStation Plus) and hardware –AVOD’s characteristics better satisfy these strategic considerations: –Lower investment in content is required to be competitive –Free-to-consumer positioning makes it easier to acquire customers –A well-programmed service provides a reason for customers to return on a regular basis –Service can be deeply integrated into other paid offerings, encouraging cross-selling and co-promotion

DRAFT page 3 Despite Netflix’s highly publicized subscriber numbers, standalone SVOD services have attracted fewer customers than AVOD services Largest SVOD players accumulated subscriber bases of 5MM – 20MM+ by bundling streaming service with other valuable offerings 21MM subscribers (1) ; until recently digital streaming bundled free with subscription to physical disc rental service 5MM subscribers (2) ; digital streaming bundled free with subscription to Amazon Prime shipping Standalone SVOD services, both pure-play and “de-bundled,” have struggled to accelerate and/or maintain growth Struggled to reach 1MM subscribers (3) in first year Concerns about slowing subscriber growth and defection with recent “de-bundling” of physical and digital subscription tiers Standalone, free-to-consumer services can more easily reach a larger installed base of regular users 10MM+ monthly unique users across all platforms 5MM+ Crackle app downloads in 6 months #1 app on iTunes for 4 weeks “Bundled SVOD” Standalone SVOD AVOD (1)Includes “streaming only” customers and customers that subscribe to both strreaming and physical rental per Q3 investor letter from 10/11. (2)Source: Piper Jaffray research, (3)Source: Hulu Management Blog as of 10/5/11.

DRAFT page 4 And Competition for SVOD Services is Increasing… …but similar lessons are playing out again Gaining traction, but offering is bundled with a full linear channel that customers have already paid for; no incremental charge –4MM+ app downloads with participating distribution partners including Fios, Uverse, Google TV, Cox, Comcast, DirecTV, Dish, Suddenlink and Charter Apps getting traction and buzz, but like HBO Go, they are bundled as an add-on to a full fledged service after authentication Despite content from 3 studios, has had limited success securing distribution and customers for a ~$10 per month service Poor customer acquisition on cable has limited it’s ability to drive growth of the digital offering –Linear pay TV network had only ~4MM subscribers at the end of 2010 TV Everywhere

DRAFT Historically licensed under rev-share only Currently investing up to $100MM to producers as an enticement to launch original content channels, but still less than the SVOD services page 5 SVOD and AVOD: Content Investment While the ability to attract customers to standalone SVOD services at $10 per month is still being tested, the required content investment in these services remains high: Invested $1.2B in content in calendar 2010 (1) with similar levels expected going forward Estimated that Amazon paid $ MM for Lovefilm (2) –Lovefilm investing heavily in rights acquisitions Although values not disclosed, continue to announce high profile content deals with major content providers (e.g., ABC, CBS, Fox, NBC, PBS) Value of network content contributed by owners could be in the “billions” –Media owners include NBCU, News Corp. and Disney (1)Source: company filings dated 2/18/11. (2)Source: company filings and press releases. Note: Specific valuation for Lovefilm not publicly disclosed. By contrast, AVOD services initially drove significant viewership with little to no content cost. Investment is increasing, but still well below investment in SVOD SVOD: “Billions” AVOD: “100MM”