the impact of technology on the media industry andrew m skinner manager. technology consulting...

The Impact of Technology on the Media Industry

Andrew M SkinnerManager. Technology Consulting Accenture

Copyright © 2007 Accenture . All Rights Reserved.

Slide 2

“People tend to overestimate what can be done in one year and to underestimate what can be done in five to ten years.”

J. C. R. Licklider, 1965“Grandfather of the Internet”


Slide 3

Some longer term ones just don’t go far enough

Scientists from the RAND Corporation have created this model to illustrate how a “home computer” could look like in the year 2004.

However the needed technology will not be economically feasible for the average home. Also scientists readily admit that the computer will require not yet invented technology to actually work, but 50 years from now scientific progress is expected to solve these problems.

With teletype interfaces and the Fortran language, the computer will be easy to use.

INTERNET FAKE


Slide 4

Some longer term ones just don’t go far enough

“I think there is a world market for about five computers"

Remark attributed to Thomas J. Watson (Chairman of the Board of International Business Machines), 1943.


Slide 5

Some short term statements go a little too far

“This is a revolutionary product that has the chance to really impact people's lives, This is the ultimate digital device.”

Steve Jobs, Apple CEO on iPhone


Slide 6

1 2 34 5 6Never needing to

delete files on your PC to free up

space*

An Online Game would be the 77th richest country

Free phone calls globally

A search bar as the entry point to

the internet

23.4% of homes time-shifting 60%

of TV content

15,000 songs in your pocket, 60

days of continual music while

awake

In 2000 were you expecting…

* Apart from in your 128 Mb email account


Slide 7

1 2 34 5 6Not having to delete

anything from your fridge !!

People earning a living online in Virtual

communities

Telco’s becoming true media

organisations

The internet developing from

mainly text content to a full multi-media

experience

No scheduled TV channels, watch what you want, when you

want to.

Going to the video shop to get “the movies”, not just one but all of them

and only paying for those you watch.

In 2012 will you be expecting…

The Impact of Technology on the Media Industry

Andrew M SkinnerManager. Technology Consulting Accenture


Slide 9

+3

+2

+1

0

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-30 10 20 30 40 50 60

So what media are people actually consuming ?

Television

Radio

MusicFilm

Computer

Newspapers

Magazine Books

Phone

% c

han

ge in s

hare

% of average persons media timeSource: ZenithOptimedia


Slide 10

Households that receive about 60 TV channels usually watch only 15.

Households whose systems can receive 96 TV channels (around the US national average) actually watch ... 15."

Source: Steven Levy, "Television Reloaded", Newsweek, May 30, 2005, p. 55


Slide 11

Media Consumption todayThe concept of the long tail

Fre

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(De

ma

nd

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Products

(Queries, Songs, etc)

Mass Market Break even

Niche Market Break evenLong Tail


Slide 12

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All other Channels

Source: © BARB Ltd 2007

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Slide 13

An estimated 1.08 billion people use the Internet as of September 18th, 2006

The global population of 6.5 billion means that only 16.7% of the worlds population have access to the internet

Source: the Big Picture, 2006


Slide 14

In 1997, Bharat and Broder estimated the size of the indexed Web at 200 million pages

This figure was revise and update to estimated size of the indexable Web to at least 11.5 billion pages as of the end of January 2005

Source: K.Bharat and A.Broder, A technique for measuring the relative size and overlap of public web search engines [WWW1998]

The indexable Web is More than 11.5 billion pages. Gulli & Signorini, 2005


Slide 15

Connectivity to the Internet

Source: Copyright © 2007, www.internetworldstats.com

0

100,000

200,000

300,000

400,000

500,000

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

Inte

rnet

Ho

sts

(000

's)

2 %21 %

8 %

36 %29 %

1 %

3 %

Africa

Asia

Europe

Latin America

Middle East

North America

Oceania

69.4 %

3.5 %

10.0 %

10.5 %

16.0 %

38.6 %

53.5 %

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

North America

Oceania

Europe

Latin America

Asia

Middle East

Africa

Total Internet Hosts

Internet User breakdown Penetration of geographySource: ISC Domain Survey: Number of Internet Hosts. © ISC, Inc.

Source: Copyright © 2007, www.internetworldstats.com


Slide 16

Top Global Web Properties

Source: Total Unique Visitors (000), Age 15+ * December 2006 Total Worldwide - Home and Work Locations.

comScore World Metrix

1.Microsoft740,9842. Google 508,6593. Yahoo 494,1704. Time Warner 260,3875. eBay 251,4236. Wikipedia 164,675

7. Amazon 151,033

8. Fox Interactive 135,730

9. CNET Networks 114,940

10. Ask Network 113,881


Slide 17

1.AOL 5:27:462. Yahoo! 3:09:413. Fox Interactive1:52:544. MSN 1:52:065. eBay 1:49:136. Google 1:04:21

7. Microsoft 0:44:14

8. Amazon 0:27:49

9. Ask Network 0:24:51

10. MapQuest 0:12:11

Top Ten Web Brand Average time per user per month

Source: Nielsen//NetRatings


Slide 18

The light bulb was not invented by the candle industry looking to improve output.

Owners of established technologies tend to focus on making incremental improvements to their own products, avoiding the potential threat to their own businesses.


Slide 19

Digital Disruptions

Participation

Control Quality

Mobility

The future is a world where individuals create content

and share it with each other without the need for

traditional broadcasters and distribution channels

The future is a world where individuals access

information and services on multiple types of devices

from anywhere

The future is a world where the media that people

consume is control by the individual. Scheduling of

media will be driven by the consumer

The future is a world where all the media produced can be cinema quality – where the output from consumer

devices approach that of the professional


Slide 20

The real difference between SD and HD content

The real difference is more information


Slide 21

1920 x 1080P - HDTV

1280 x 720PHDTV

1024 x 768 - XGA

768 x 576 - PAL720 x 480 – NTSC/VGA

So just how much better is a High Definition image than Standard definition

Total Pixel = 345,600442,368786,432921,6002,073,600

It's important to note that a higher resolution format is not necessarily physically larger but it will provide a higher PPI (pixel per inch)/PPCM (pixel per cm) density


Slide 22

0 .064 .128 .256 .512 1 2 10 20 100+

Indicative application bandwidth demands

IP Telephony

Email

Basic Surfing

Teleconferencing

Online games

MP3 Streaming

Video Conferencing

Multi-player games

Video-streaming (VHS)

Video on demand

Multi-channel TV

Video streaming

Multi-channel TV

5 sec CD download

Virtual Reality

3d Holographics

Telepresence

Bandwidth Mbps

•Source: 2010 National Broadband Targets Marketing Australia’s Competitiveness, 31 July 2006, Internet Industry Association

MP3 Streaming

Video-streaming (SD)

Video on demand

Multi-channel TV

Video streaming

Multi-channel TV

5 sec CD download

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Slide 23

The network is the computer

Text Web Page

Graphical Web Page

Music File

Movie (2 hrs)

Standard Definition(720x486)†

High Definition (1080/60i) ‡

File Size.. 10KB 200KB 3MB 4GB 28GBNetwork Speed

GSM 12.2Kbps 6.5 sec 131 sec 32 mins 30 days 212 days

POT 56Kbps 1.43 sec

28.6 sec 7.3 mins 158 hours 46 Days

3G 384Kbps 0.21 sec

4.2 sec 1 min 23 hours 162 hours

ADSL 8Mbps 0.01 sec

0.2 sec 3.1 sec 66 mins 7.5 Hours

802.11b 11Mbps 0.15 sec 2.2 sec 48 mins 5.6 Hours

802.11g 54Mbps 0.03 sec 0.46 sec 10 mins 69 mins

802.11n 540Mbps 0.05 sec 59 sec 7 mins

Gigabit 1000Mbps

0.02 32 sec 4 minsNever under estimate the bandwidth of a person with an ipod on a train…….

† Assumed compression of 50:1 ‡Assumed compression of 40:1


Slide 24

The problem is how to deliver the content to the end user when the size of the content is increasing faster than the bandwidth on the network.

The answer may well be to use the technologies developed to “share” media files. Peer-2-Peer.


Slide 25

Today’s infrastructures

Messaging,

Ring Tones

TV Studios, Ads,

Movies

CONTENT

USERSNETWORKS

Web Servers,AOL, Yahoo, Advertising

Television Networks

Phone Networks

Data Networks(Internet)

Independently designed, with specific content & devices;closed ecosystems


Slide 26

It’s time for the next step

Content providers

Device Explosion

Communications Networks

Enterprise Content

Media Production

Broadcasters

Personal Content

Studios

Advertisers

The new opportunity is at the convergence points

Internet Service Providers

Mobile Operators

MVNOs

Broadband Operators


Slide 27

“On demand” services

Retail

Distribution

BroadcastControlled

Media Movemen

t

Retail

Broadcast

Wired

Broadcast

The need for edge devices

Media Hub

Content Creation Streamin

g

Output DeviceCaching

Wireless

Wired

Wired

RetailOnline Stores

License Agreement

s

Distribute


Slide 28

1.

3 Main issues with Media revenue at present

• Subscription based models

• Media Storage• Insurance• Format transfer

• What is the role of the BBC ?• Move to Micro News Production• Content production or public service

• Skip advertising through user control• Broadcaster or producer focused• Location specific advertising

Ownership of Content

BBC License Fee

Advertising Revenue

2.

3.


Slide 29

The hardware cost of an iPod is insignificant compared to the cost of the media that it holds

An 80GB iPod will today cost you £259. The music to fill the same iPod (20,000 songs) will cost, via the iTunes Store, £15,800.


Slide 30

The Future Home Network

Study

Home Office

Lounge

Child Room

Bedroom

Child Room 2

Kitchen


Slide 31

Online Ad Spend

Online Time Growing

An ad spend and media time imbalance globally

Offline Media Time

Offline Ad Spend

( Newspapers, TV, Radio,

Direct Marketing, etc)

Online Ad Growth

Opportunity

Discrepancy:

~$70 Billion (North America)~$150 - $200 Billion (Global)

Sources: Universal McCann, Google, Accenture Analysis

0 %

100 %

80 %

60 %

40 %

20 %

AdvertisingSpend

Consumer Media Time


Slide 32

Summary

•The long tail of media content becoming more pronounced

• Increased focus from Telco organisation to the delivery of rich media

•Continued problems with “last mile” delivery

•Content size increase providing ongoing need for compression improvement and distributed storage.

•Advertising revenue following viewers from television towards Interactive technologies

the impact of technology on the media industry andrew m skinner manager. technology consulting...

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