Get Real The Economics of Convergence

1
Get RealThe Economics of Convergence

• For Oxford Media Convention
• January 18th 2007
• Tess Alps CEO Thinkbox

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I cant believe what you say, cos I see what
you do

• Aretha Franklin

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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

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The resilience of broadcast TV
Source BARB/Infosys
5
And commercial broadcasts share will continue to
grow
Source BARB/Infosys
6
TV ad viewing historic highs in 2006 but
revenue still weak
Impacts (Millions)
Source BARB/DDS
7
Pricing the long-tail targeted TV still
discounted
Premium
Discounted
35
47
Remaining 53
Source BARB/Infosys
8
Broadcast still dominates the media day
Source IPA Touchpoints Hub Survey
9
Internet a technology not a medium

• New TV distribution technologies are mostly
  incremental to broadcast TV and displacing other
  activities

Source IPA Touchpoints Hub Survey
10
Human beings havent changed
Needs States
Entertain Me Linear Broadcasting Streamed Mobile
TV Streamed Broadband TV 85 of fixed viewing
time?
Play/Buy IPTV Interactive TV TV Gaming
Me-TV PVR Recorded Retail and Rental DVDs VOD
NVOD Downloads Finite consumer spend?
11
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

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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