Get Real The Economics of Convergence For Oxford

Get Real The Economics of Convergence For Oxford

Get Real The Economics of Convergence For Oxford Media Convention January 18th 2007 Tess Alps CEO Thinkbox I cant believe what you say, cos I see what you do Aretha Franklin Predicting the future Its important - but using what supporting data? Research relying on claimed behaviour is dangerous Better by far to examine real behaviours eg London Business School/ACB research into PVR usage Be sceptical: who, how and why The resilience of broadcast TV 30 HW CH indivs 25 ABC1s Total number of hours per week

20 16-24s 15 10 5 0 1998 Source: BARB/Infosys 1999 2000 2001 2002 2003 2004 2005 2006 Year

And commercial broadcasts share will continue to grow 90 80 inds 70 16-24s 60 abc1s 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 Source: BARB/Infosys 2012 TV ad viewing : historic highs in 2006 but revenue still weak

900 800 2003 Impacts (Millions) 700 2004 600 2005 500 2006 400 300 200 100 0 Indivs Source: BARB/DDS ABC1s 16-24s Pricing the long-tail: targeted TV still discounted 20

18 Premium Commercial Share % 16 Discounted 14 12 10 8 6 4 2 0 35% 47% Remaining 53% Channels Source: BARB/Infosys 0000-0030 0030-0100 0100-0130 0130-0200 0200-0230 0230-0300

0300-0330 0330-0400 0400-0430 0430-0500 0500-0530 0530-0600 0600-0630 0630-0700 0700-0730 0730-0800 0800-0830 0830-0900 0900-0930 0930-1000 1000-1030 1030-1100 1100-1130 1130-1200 1200-1230 1230-1300 1300-1330 1330-1400 1400-1430 1430-1500 1500-1530 1530-1600 1600-1630 1630-1700 1700-1730 1730-1800 1800-1830 1830-1900

1900-1930 1930-2000 2000-2030 2030-2100 1200-2130 2130-2200 2200-2230 2230-2300 2300-2330 2330-2400 Population (millions) Broadcast still dominates the media day 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000

5,000 0 Time TV Source: IPA Touchpoints Hub Survey Radio Newspaper Internet 00:00-00:30 00:30-01:00 01:00-01:30 01:30-02:00 02:00-02:30 02:30-03:00 03:00-03:30 03:30-04:00 04:00-04:30 04:30-05:00 05:00-05:30 05:30-06:00 06:00-06:30 06:30-07:00 07:00-07:30 07:30-08:00 08:00-08:30 08:30-09:00

09:00-09:30 09:30-10:00 10:00-10:30 10:30-11:00 11:00-11:30 11:30-12:00 12:00-12:30 12:30-13:00 13:00-13:30 13:30-13:00 14:00-14:30 14:30-15:00 15:00-15:30 15:30-16:00 16:00-16:30 16:30-17:00 17:00-17:30 17:30-18:00 18:00-18:30 18:30-19:00 19:00-19:30 19:30-20:00 20:00-20:30 20:30-21:00 21:00-21:30 21:30-22:00 22:00-22:30 22:30-23:00 23:00-23:30 23:30-00:00 Population (millions)

Internet :a technology not a medium 7,000 New TV distribution technologies are mostly incremental to broadcast TV and displacing other activities 6,000 5,000 4,000 3,000 2,000 1,000 0 Time Banking online Buying Groceries Buying products/services Seeking info on products/services Seeking info on News/Sports Music/Film/Entertainment

Using Email Using the Internet for work Source: IPA Touchpoints Hub Survey Human beings havent changed Needs States Entertain Me Play/Buy Me-TV Linear Broadcasting IPTV PVR Recorded Streamed Mobile TV Interactive TV Retail and Rental DVDs Streamed Broadband TV TV Gaming VOD & NVOD Downloads

85%+ of fixed viewing time? Finite consumer spend? Different economic cultures Internet content rarely paid for Greater expectations of paying for mobile phone services. Vodaphone state TV services make more than ring-tones now. The power of free/cheap eg C4 Celebrity Big Brother mobile downloads 10 fold increase now free. Cinema model may emerge viz shop window of premium broadcast made at a loss because it promotes secondary pay windows Payment by response possible from brands (IPTV, iTV, etc) at a premium but requires a return path Bigger economic threats Short-termism in marketing Retail pressures on brands Loss of confidence in broadcast TV the industry can help itself Over-regulation Inescapable fact : public-service, high-end content will need subsidy/support

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