key success factors …….beyond iptv...tv set top box customer’s tv platform 6 mbit/s adsl to...

ITU-T

ITU-T IPTV Global Technical WorkshopSeoul, Korea, 12-13 October 2006

Key Success FactorsKey Success Factors………….Beyond IPTV.Beyond IPTV

Paul Berriman PCCW12th October 2006

International Telecommunication Union

ITU-T


now TV – Introduction

Performance to date

The Future: Interactivity and Home Networking

The Platform and capabilities

Content and Marketing

Strategy and Integrated Services

ITU-T


7M population, multi-lingual, mainly Chinese speaking

World’s 2nd most developed broadband market with more than 1.6m accounts – about 60% household penetration

Mobile penetration over 100% with 3G launched in 2003

3.8 million telephone lines

4 pay TV operators, 5 fixed operators, 5 mobile operators

Hong KongHong Konga Leader in a Leader in TechnologyTechnology and and CompetitionCompetition

2 free to air broadcasters with 4 channels (2 Eng + 2 Chi)

Over 50% pay-TV penetration

ITU-T


650k+ installed customer base in 3 years

25% of Households

High quality platform

Innovative pro-active marketing

CASBAA Chairman’s Award 2004

IntroductionIntroduction

Significant benefits to broadband businessBroadband Churn halved to <1%

Over 110 TV and audio channels

Growing array of new Interactive services

ITU-T


Sustained MomentumSustained Momentum

Pay Channel Customers & ARPU

Pay channel customers as % of total installed (HK$/ month)

2003 2004 2005

Steadily rising ARPU as new content introduced

2006

73%71%61%

53%39%

20%

118114110105

7057

0%

100%

H2 H1 H2 H1 H2 H10

30

60

90

120

Mini Packs launched

Strong Demand for

InstalledPay channel customers

Residential

CommercialInstalled pay channel services

2003 2004

29106

147

269

H2 H1 H2

361

182

10

10

192

441

H1

254

17

17

271

H2

2005

549

369

39122

22

(’000)

+38% y-o-y

+38% y-o-y608

444

2006H1

26

26

418

Reached 654,000

at end of August

Reached 654,000

at end of August

ITU-T


Growing penetration rate of among consumer NETVIGATOR

Maintained low churn rate of consumer NETVIGATOR since launch

Dropped by half

Jun-05Before launch

H2’03 H1’04 H2’04 H1’05

Strategy is WorkingStrategy is Working

28%

48%

59%53%

68%

Broadband Lines Continue to Grow

460

5863

68

8894

840

517558

660715

798

8074

H1 H2 H1 H2 H1 H2 H1

629703

753 796

2003 2004 2005

857

WholesaleBusinessConsumer

953+16% y-o-y

+16% y-o-y(’000)

998

2006

ITU-T


Expanding the Pay TV Market by More than 60%Bringing Quality Entertainment to More ConsumersBringing Quality Entertainment to More Consumers

Expanding the Pay TV MarketExpanding the Pay TV Market

Expanding Pay TV Market

HK Cable TV

13 YearsCustomers 740K

@20% Piracy3 Years

Customers > 650KZero Piracy

ITU-T



Performance to date





ITU-T


now TV – Platform

TV Headend

Hong Kong Head-End

Production

Satellite, or Fibre Optic feed

Content feed

Tape

Hong Kong LocalTelecommunications ExchangesLinked by Fiber Optic Cables

Local exchanges

EncodeMPEG 2

Subscriber Management SystemBilling SystemRating Database

DSLAMCAU

ConditionalAccess Unit in DSLAM in Local Exchange

Decryption

Encryption

Hong KongCustomer’s Home

Modem ->TV SetTop Box

Customer’s TV

PLATFORMPLATFORM6 Mbit/s ADSL to over

93% of Households overexisting copper

Custom Network Based Conditional Access Unit

in DSLAM

Low Cost Digital Decoder Based on DVD Chipset

End to End Dynamic Key encryptionWith/Without DVD

Auto Software Upgrades

Web Browser & Web Server Based EPG

with On-line SubscriptionManagement & Billing Enquiry

ITU-T


High quality picture with NICAM digital soundAbility to offer multiple language channels

Digitial encryptionNo geographic overspillFirewalled from internet

Installation easy and targets feasibleGrowing interactivity and integrated services

>990,000 Broadband Customers to Upsell

Scaleable Network with Large Channel Capacity and “Add-Ons”

HDTV in commercial service by end 2006

Viewer reporting – time of day viewingABC Asia Pacific - Reach Rate - Sep-Nov 2005

0.000%

0.020%

0.040%

0.060%

0.080%

0.100%

0.120%

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05

Mon-Fri

Sat-Sun

Overall

Secure platform – network based CAU

PlatformPlatform

Zero Piracy – Revenue Assurance

ITU-T



Performance to date





ITU-T


Flexible Pricing OptionsFlexible Pricing Options

14NAMinipack (choice of 8 pay channels with selected genre mix)- Larger packs available

1 – 8 each1.5 – 10 eachPay TV content (per channel)10**NABroadband plus pay TV only20*NABroadband plus Internet plus pay TV2030Broadband plus Internet access

12 Month Contract

(approx.US$)

Monthly(approx.US$)

Service

•Installation and STB charges waived plus 17 free channels** Customer must have minimum pay channels

ITU-T


Pay TV is about watching great TV content…

All genres:

Local / localisation

ContentContent

Mass & niche Some great exclusiveness

Travel & documentary,Movies & drama,

電影預告頻道

Foreign language, AdultTVB Pay Vision,Sports,Entertainment & Music,Kids,News & Information,

ITU-T


The Movie HouseThe Movie House

Long term exclusive arrangements – 2011

& 2014 with STAR and HBO

Continue to strengthen local content

including exclusive Mei Ah Movies & STAR

Chinese Movies

ITU-T


Easy to use EPG, parental control, bill viewing, previews, barker…

“Arm chair” proposition… buy on screen, check bills on screen

Flexible “a-la-carte” channel / “a-la-carte” pack pricing structure

Recognition that content providers have fantastic brands

Mass / CRM based marketing - internal: shops, call-centre, EDMs, promos / barker channel and external: road shows, TV, radio, print, bill-boards, busses, door-to-door…

Comprehensive channel proposition with high quality picture

now TV Marketing ….. Maintaining Momentum!

MarketingMarketing

ITU-T


A la carte proposition – low entry pointUnique flexible pricing

Unique flexible pricing

From 23 to 90+ channels in just over 24 monthsEnrich content

Enrich content

More exclusive

deals

More exclusive

deals

Jan-06Mar-04 Nov-04Sept-03 Oct-05

Marketing Strategic RoadmapMarketing Strategic Roadmap

Mass market

packages

Mass market

packagesChinese Content Platform

Mini-packs drive up ARPUDrive ARPU

Drive ARPU

$388 Super Value Pack

Ticketing, now SelectInter-activity

Inter-activity

Marketing …. Maintaining Momentum !

ITU-T



Performance to date





ITU-T


AccessConduit (POTS, Basic

Broadband)

Own content (e.g phone calls)

Separate networks and billing

PCCW Business TransformationPCCW Business Transformation

Unlocking CapabilitiesSecure third party contentManaged high bandwidth

Network and BillingTrusted partner

Increased stickiness

Extending Value Chain

ContentApplicationTransactions

ITU-T


Customers Access Integrated Services through Customers Access Integrated Services through Quadruple Play on an All IP Core NetworkQuadruple Play on an All IP Core Network

Access to valuable content and transaction revenues will be via multiple access technologies for a number of customer situations, devices and

experiences, fixed, wireless and mobile

Mobile Cellular2G/3GBroadband

WirelessWireless

Home/OfficeWired

Broadband

Wireline

Content Applications & Transactional Services

Access Layer

Content Applications & Transactional

ServicesIP Core Network

Telephone MobileTV PC

ITU-T


PCCWPCCW GroupGroup

Fixed LinePay-TV

Broadband&

ISP

Mobile

ITU-T


Quadruple Play Quadruple Play Complete Platform for Integrated Services

Pay TV

654k subscribers, up 38% y-o-y

HDTV in trial

Fixed-line

Continued line gain

Market share returned to 68%

998k lines, up 16% y-o-y

music library launched

Broadband

Mobile

Migrating PCCW 3G trial users

Launched Mobile TV

Plus: TV Content + ISP Portal Content + Mobile Content

ITU-T


now.com.hk

Video clips of all 125 games

Content includes preview, match highlights, etc. from

Broadcasting 77 games live

Simultaneous broadcast up to 4 games

All 125 games on demand on

Broadcasting all 125 games live

/ jointly developed UEFA Champions League on-line Challenge Games

On All Platforms Began September 13

Content on Multiple Platforms:Content on Multiple Platforms:UEFA Champions League SoccerUEFA Champions League Soccer

ITU-T


onon

• Exclusive content made available to customers

• Utilizing CMB technology, content can be broadcast more efficiently and to a large group of users

• Initial programming will include local & international news, finance & sports:

• Other entertainment and infotainment will be available soon:

ITU-T



Performance to date





ITU-T

ITU-T IPTV Global Technical WorkshopSeoul, Korea, 12-13 October 2006 Time

HDTV

MPEG4Home networkingMultiple TVs

Evolution from Basic Evolution from Basic Broadband to HD IPTVBroadband to HD IPTV

AdvancedInteractivity

Media serverNetwork based personal video recorderReplay/ timeshiftOn-demandInteractive advertisingTransactional services (e.g. Movie Trailers/Cinema Ticketing)Casual games“Side” Channels including ESPN Plus and HBO UncutMOBILE TV

BasicInteractivity

Electronic program guideOnline subscriptionOnline billingTraffic & weather channels95 channels (ESPN, ATV, drama)Mini-packages 23 channels

a la carte modelMPEG2Broadband

InternetToday

2006 STB with H.264 for HD @ 8 Mbit/s

plus MPEG2 for SD

IP TV

ITU-T


Broadband AccessBroadband AccessDevelopmentDevelopment

Early ramp up of fiber to the building/ kerb

Early ramp up of fiber to the building/ kerb

6Mbps6Mbps

8Mbps8Mbps

18 - 25Mbps18 - 25Mbps

85%

93%

Per

cent

age

of T

errit

oria

l Rea

ch (%

)

50%

ADSL to 8MbpsTo 50% from

exchange

ADSL to 8MbpsTo 50% from

exchange

Via FTTB + ADSL2+ and

VDSL

Via FTTB + ADSL2+ and

VDSL

Dedicated Managed

Bandwidth with Q.o.S.

NOT SHARED!

Dedicated Managed

Bandwidth with Q.o.S.

NOT SHARED!

introducedintroduced

TimeToday

ITU-T


now HD

New Interactive ServicesNew Interactive Services

ITU-T


Movie Trailer ChannelMovie Trailer ChannelOnOn--Line Ticket Booking via IPTVLine Ticket Booking via IPTV

Hong Kong’s first-ever instant box office on TV through partnership with UA Cinemas and Cityline

Customers can preview theatrical trailers then pick the seats and purchase tickets from UA Cinemas by clicking on the buttons on their remote controlMore customers using Movie Ticketing than Cityline on Internet

ITU-T


New Interactive ServicesNew Interactive Services

A selection of casual games for the whole family

Currently 8 games on free trial for high ARPU customers

Major enhancement by November ’06

the place to shop

Interactive shopping mall

DVDs/Books, Kids/Sports, Leisure, PCCW Products, Bargain Corner & more

Stock Market Express – Real Time Quotes

Stock quotes, FX spot rates and gold prices

Transactional capabilities to come

Mall out of the box!!

ITU-T


Experience Gained:Experience Gained:Some Key Success FactorsSome Key Success Factors

• Start with large Broadband Customer Base enabled by Bandwidth everywhere and low cost STB decoder

• Award winning customer relationship management with proactive outbound call centre telesales. Cross Selling-Upselling. Not Bundling

• A La Carte as competitive entry strategy, migrating to “mini packs”retaining choice

• Wide choice of content, some “killers”, some exclusives

• Constant progress monitoring and marketing initiatives which evolve to keep up the momentum.

• Protect Content Providers Rights – Zero Piracy, Revenue Assurance– Become Trusted Partner – for customer and content provider

• Quality Picture, better than Cable and Easy to use Customer Interface with phased introduction of interactive services

• Strong “in-house” capabilities for network/systems development and Installation

ITU-T


PAUL BERRIMANPAUL BERRIMANHead of Strategic Market DevelopmentHead of Strategic Market Development

PCCW PCCW LimtedLimted40F PCCW Tower40F PCCW Tower

TaikooTaikoo PlacePlaceQuarry BayQuarry Bay

HONG KONGHONG KONGTel +852 90241312Tel +852 90241312

Email: [email protected]: [email protected]

International Telecommunication Union

key success factors …….beyond iptv...tv set top box customer’s tv platform 6 mbit/s adsl to...

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