turning web 2.0 into opportunity 2.0

© BNS Ltd, all rights reserved

Jeffrey SoongCEO, BNS Ltd

June 2008

Turning Web 2.0 into Opportunity 2.0

Turning Web 2.0 Turning Web 2.0 Turning Web 2.0 into Opportunity 2.0into Opportunity 2.0into Opportunity 2.0


The leading IPTV content and technology provider in the Asia-Pacific region

BNS Ltd


What’s Web 2.0?


• Increase in technology functionality

• Increase in broadband penetration

• Proliferation of CE devices

DECLINING BANDWIDTH AND

TECHNOLOGY COSTS

DECLINING BANDWIDTH AND

TECHNOLOGY COSTS

Web 2.0Web 2.0

DECLINING EFFECTIVENESS OF TV ADVERTISING

DECLINING EFFECTIVENESS OF TV ADVERTISING

•42.4% watch less television today than a year ago Source: Burst Media

• By 2010, traditional TV advertising will be 1/3rd as effective as it was in 1990 Source: McKinsey & Co

•Online targeting capabilities attractive to advertisers

•Online advertising set to grow 26.7% in 2007, 30% in 2008; total media ad spending to grow only 2.1% Source: Zenith Optimedia, eMarketer

CONTENT OWNERS’ADOPTION OF DIGITAL

PLATFORMS

CONTENT OWNERS’ADOPTION OF DIGITAL

PLATFORMS• Increasingly adopting a

digital strategy by supporting different platforms and release windows

Creating the Web 2.0 “Perfect Storm”


The Impact of Web 2.0

• The internet is evolving into the most ubiquitous video distribution platform ever known

• The market for professionally produced and advertising supported broadband video set to grow nearly 14 times to $5.79 billion in 2011.

• User-generated video (UGV) scored 22.4 billion views in 2007, up 70% over 2006, and is forecast to grow at 52% in 2008 to 34 billion views

• Lifestyles of young adults increasingly drift to online activities

– Since 1998, the amount of time spent with computers has drastically increased, from 8% to 21%.

– The number of young adults going out to the movies has decreased from 13% in 1998 to just 3% in 2008.


Web 2.0 Outlook for the Asia-Pacific

735.9m

2.87bn

2007 2011

Revenue in US$

Asia Pacific set to become the global

leader in online entertainment

23.3%

35%

2007 2011

% of broadband subscribers currently paying for online video

Source: In-Stat


Web 2.0 Drivers and Inhibitors in the Asia-Pacific

Drivers•High broadband penetration

• Increasing purchasing power

•Willingness to pay premium for entertainment

•Social networking

Drivers•High broadband penetration

• Increasing purchasing power

•Willingness to pay premium for entertainment

•Social networking

Inhibitors• Piracy• Other media

platforms• Download

speeds• Quality (visual

and content)• User Interface

Inhibitors• Piracy• Other media

platforms• Download

speeds• Quality (visual

and content)• User Interface


Social Media Trends

• Day of walled garden networks are numbered

• Social media tools to become universallyaccessible

• Social media will be service-independent

• Social networks will be anywhere, everywhere


The Trailblazer: Mobile Social Networking

• 3.3 billion cellphone subs vs 1.4 billion Internet subs

• 2.3% of all mobile users use mobile for social networking

• Penetration set to mushroom to at least 12.5% in five years. Source: informa

• Trend away from simple mobile webbrowsing to Mobile Operator platforms, such as Facebook to increase reliability


Why telcos should embrace Web 2.0

• People want it

• Added revenue source through increased data usage for uploading/ downloading

But...branded social

networks are less about profitability and more

about creating loyal and engaged customers


Example 1: Verizon

•Verizon recently moved its branded social network to Facebook and plans to shut down its Verizon Community

•Move designed to “provide our users with the most dynamic and feature rich community experience.”

Does this mean telcos can’t provide SNS?

Lesson learnt: don’t re-invent the wheel when a way better wheel is available for a whole lot less


Example 2: PCCW’s snaap!

–View/share images and videos across internet, mobile phone, fixed line (to be launched soon) and via a dedicated channel on its IPTV service.

–Free for PCCW customers (100MB of storage capacity) and 20 free photo prints every month.

–Non-customer paid subscription plan(HK$38 per month) for 5GB storage capacity.

–Partners with local photo store to offer print services and print pick up service at both the local photo outlet and any Circle K convenient store.

THE PROS• Offers convenience• Maximises own network

infrastructure and quadruple play services

THE CONS• Platform dependency will limit

expansion and revenue growth

• Limited appeal - value added service for less web savvy customers


How to Capture Opportunity 2.0

1. Own the application− Develop own unique interactive applications with

superior user experience− Control the whole value chain (carriage and

application)2. Remove barriers

− Master seamless convergence of platforms− Create intuitive one-click user interface to encourage

video uploads to increase data usage− Switch from subscription model to advertising

supported model wherever possible3. Multiple Strategic Partnerships

– Partner with key UGC sites to distribute their communities via the default start pages on mobile phone browsers to create instant social networking facilities rather than creating your own (see Verizon…)

4. Make your IPTV service truly Web 2.0– Exploit the interactive potential of IPTV technology –

it’s more than just a Pay TV platform– Explore new trends and technologies that enable

beaming Web content to a TV (e.g. Verismo Networks’ PoD)


Adopting “The Mullet”

“Business upfront – party at the back”Jonah Peretti, co-founder, The Huffington Post

• Keep front end looking slickand professional to greet users and attract advertisers

• Move ‘argue and vent’ user-generated content to secondary pages

Users have control; operators increase traffic and sell advertising


Thank YouThank You

www.bnsltd.comwww.bnsltd.com

turning web 2.0 into opportunity 2.0

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