broadband and digital media kermode
DESCRIPTION
Presentation made at the Australian Broadband Summit April 28th 2008TRANSCRIPT
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Broadband and Digital MediaAustralian Broadband Conference
Grace HotelApril 29th – May 1st, 2008
Roger Kermode
CTO/COO iPrime
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Individuals’ Behaviour will drive broadband not technology
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Online Media Spending Growth Outstrips Traditional Media Spending
Media Consumption (Net Nielsen March 2008)• Internet 13.7 hrs/week• TV 13.3 hrs/week
Media Consumption (Net Nielsen March 2008)• Internet 13.7 hrs/week• TV 13.3 hrs/week
Source: BRW
Advertising accounts for 5% of US GDPAdvertising accounts for 5% of US GDP
50% of all ICs production is used by Consumer Electronics devices50% of all ICs production is used by Consumer Electronics devices
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Targeting Increasingly Drives Advertiser Buying Behaviour
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3 Takeaways from this Talk
1. Technology Enable & Accelerate Existing Behaviours
2. The Long Tail increasingly drives Media Innovation
3. Net Neutrality is Essential for Growth
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1) Technology Enables & Accelerates Existing Behaviours
TQuestion: Which of these is technology? Refrigerator Motor Car Computer Mobile Phone iPhone
Technology isn’t technology for those under 30
Each generation adopts / exploits what is available
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2) The Long Tail Increasingly Drives Media Innovation
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BroadcastMass Media
InternetMe/We Media
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3) Net Neutrality is Essential for Growth
Net Neutrality (def’n) "Network neutrality is best defined as a network design principle. The idea is that a maximally useful public information network aspires to treat all content, sites, and platforms equally” – Prof Tim Wu. Columbia Law School
In other words Network operators allow all comers to deliver content Users decide which content is important Internet returns to what it was designed to be
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Technologies Enable & Accelerate Existing
Behaviours
Ask not what things are
but what they mean
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Anyone can now be a content creator…
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… and Media Fragmentation means consumption takes place anywhere, anytime…Gen X & Y spend less time with traditional media
Multi tasking has increased.. Internet & TV – 58% Internet & Radio – 48%
Key factor engagement
IPTV
iPods
Mobile TV
Digital still /video cameras
Social internet sites12
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…which then changeshow we navigate through the web.
• Most users (up to 75%) bypass a home page completely.
• Means any page is a “home” page.
• Search, social networks, blogs, and RSS driving more and more
users deep into sites directly.
• Every page accessed in any manner & conceivable order. Can’t
design properties to control user flow anymore.
• Users increasingly willing to embrace multiple devices.
• Unwilling to make compromises with an all-in-one device.
• Users expect seamless transitions from offline to online.
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Thus, Video Releases happen faster…
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..and Online Video becomes about the Now
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Social Networking is how big?The latest fad?
Broad Adoption Many Networks
• MySpace – Music• Facebook – College • LinkedIn – Business • Bebo – Social • Open Social….
Perhaps not….
An increasing driver of traffic
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MySpace is all about ME
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Facebook is all about “US”
• Opened its network for developers to build & sell new applications.
• 20 weeks, hundreds of developers launched more than 6,000 + new applications, 392 m installs
• 192 sponsored groups
• Largest app = 19m users
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Sportsplay is all about our local stories
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The Long Tail increasingly Drives Media Innovation
How and why data-centric online media is driving Internet usage
and Media in general
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The Conversation has Changed
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So what does the Long Tail mean?
US portals lost 5% online revenue in 2007 lost 5% online revenue in 2007 to narrower content sites & search engines as spending followed consumers down the tail across a more fragmented Web
22Business of Content
BroadcastMass Media
InternetMe/We Media
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How the Internet Enables “New” Media
Broadcast Media
Choices made for you by taste makers
Mass Consumption / Hits
Hundreds of markets of Millions
Concentration of smarts in the Core
Interactive Media
Choices made by you
Niches everywhere
Millions of markets of Hundreds
Shift of smarts to the Edge in Access Devices
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Why Online Ads threaten the TV ModelPrice to reach 1000 consumersTV
Highest Rate ~$30 Lowest Rate ~$10 Ratio ~3 times
Online Highest Rate $160.00+$160.00+ Lowest Rate $0.50 Ratio 300 times300 times Same inventory can be sold many ways Aim is to maximise yield via better targeting
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Targeting vs. Reach: The Big Picture
commercial in confidence 25
Reach
Targeting
1,000,000s
100,000s
1,000s
10,000s
1
10s
10,000,000s
BillionsMillionsThousands
100s
Smallest individually Addressable Market in
terms of Unique Browsers
Aggregated Total Addressable Market in
terms of Unique Browsers
Too Small To SellUnless Content is
Highly Unique
Site Traffic needs to be Aggregated
within a Publisher Network
Too Small To SellUnless Content is
Highly Unique
Site Traffic needs to be Aggregated
within a Publisher Network
Massive Reachbut little targeting
Run of Network Salesat lower CPMs
Massive Reachbut little targeting
Run of Network Salesat lower CPMs
Critical Mass ReachAND Highly Targeted
Very high CPMsBut Requires High Technology
for scale
Critical Mass ReachAND Highly Targeted
Very high CPMsBut Requires High Technology
for scale
Medium to Large ReachAND Some Targeting
Variable CPMs depending onTarget Parameters and Advertiser Interest
But Requires Medium Technology for scale
Medium to Large ReachAND Some Targeting
Variable CPMs depending onTarget Parameters and Advertiser Interest
But Requires Medium Technology for scale
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Targeting vs. Reach: Where the Players Fit
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Reach
Targeting
1,000,000s
100,000s
1,000s
10,000s
1
10s
10,000,000s
BillionsMillionsThousands
100s
Smallest individually Addressable Market in
terms of Unique Browsers
Aggregated Total Addressable Market in
terms of Unique Browsers
NicheIndividualPublishers
NicheIndividualPublishersVariable Variable
CPMsCPMs
Tier 2 /PerformanceAd Networks
Tier 2 /PerformanceAd Networks
Low CPMsLow CPMsHighly AutomatedHighly AutomatedMinimal Human SalesMinimal Human Sales
Tier 1 /Full ServiceAd Networks
Tier 1 /Full ServiceAd Networks
High CPMsHigh CPMsDedicated Sales Dedicated Sales TeamTeamPopular
VerticalIndividualPublishers
Variable Variable CPMsCPMs
Major PortalsMajor Portals
Variable CPMs
Variable CPMs
CustomisedAggregation Sites
CustomisedAggregation Sites
Variable Variable CPMsCPMs
“Hundreds of markets of Millions”
“Millions of markets of Hundreds”
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Where the money is…
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Winners and losers
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Source: IBM
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Value of Targeting has Increased2007 saw the Biggest media boom ever
$12 billion invested in 120 days Microsoft buys aQuantive for $6 bn, up 11,000% from 2001 WPP Group buys 24/7 Real Media for USD$649 million AOL buys Adtech AG Publicis buys Digitas for $1.3 billion Yahoo buys ad exchange Right Media Inc. for USD$680m Google buys DoubleClick Inc. for $3.1 billion News Corp buys Strategic Data Corporation Hitwise bought by Experian for $USD240m NBC sets up USD$250m tech fund
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So… what does this all mean?Platform and Content must be Integrated
TV and Online media experience will become increasingly intertwined IP delivery will eventually supplant broadcast…. but not just yet
Content must be Organised Relevant Easy to access / share across multiple platforms
Advertising must be Targeted (personal, relevant, anticipated, timely) Increasingly Integrated Cross Platform (follow the consumer) Easy to buy
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iPrime (Hyperlocal)Content
Custom filtered Multi source aggregation Bespoke additional content Focus on conversation
Advertising Integrated placement with
offline media TV / Radio Deep Quant Analytics Hyper Targeted Accessible
Markets for advertisers
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Net Neutrality
Why this is important for continued economic prosperity
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Implications of Net NeutralityNet Neutrality (def’n)
"Network neutrality is best defined as a network design principle. The idea is that a maximally useful public information network aspires to treat all content, sites, and platforms equally” – Prof Tim Wu. Columbia Law School
Implications Open Access for all Content and Service providers Reasonable and fair access costs to consumer Increased Global Competition….
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Not All Bits are Created Equal Media Unit Size Cost Cost/Mbyte
SMS 160 bytes 20c $1,250.00 Email (Text) 500 – 2000 bytes $0.002 Banner Ad 20 – 40 Kbytes $0.002 Web Page 200 – 600 Kbytes $0.002 MP3 Song (3 mins) 2 – 4 Mbytes $0.002 You Tube Video (2mins) 5 Mbytes $0.002 SD Movie 300 Mbytes / hr $0.002 DVD Movie 2.2 Gbytes / hr $10 (90mins) $0.003 Blu Ray HD Movie 5.6 Gbytes / hr $45 (90mins) $0.005
$129.95 Bband Plan60 Gbyte/ Month limit17 Mbps
5
1.5Mbps
10Mbps
30 4020 50
512kbps
256kbps
17Mbps
Cable Modem / DSL2+Cable Modem / DSL2+
10 Mbps
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Broadband has enabled many Web2.0 Businesses…
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…that have created a lot of value
Source: esnips.com 36
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.. But Broadband Isn’t Just About the Bits
Broadband Creates Channels for Conversation… Rich Media (video, audio) Two Way Communication
…Web 2.0 Adds Smarts to Manage Them…. Timely, Relevant, Engaging Group communication
…the Result: What once were Functions now become Emotions When this happens
• Communication Frequency Accelerates• Social Capital Growth accelerates• Value Creation Accelerates
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Global Trends Drive IT Services
Source: rs.resialliance.org
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The Next Wave of OpportunitiesConsumer
(Yet More) Convergence• Integrated Cross Platform Media• Content and Advertising blur
Mobile Applications Emerge• Predominantly Social Focus• Increasing use of hi-res screens and rich media
Search Dominates (Still)• Until Semantic Web takes off…
BusinessSocial Networking / Enterprise2.0 takes off
• Group Communication within business processes
Right Sourcing Continues• Increased use of internationally remote teams / skilled labour
Software As A Service (SAAS)• Increasing use of externally administered applications
Immersive Interfaces Appear• Increasing use of Larger Screens and Touch in Business
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