The Impact of Technology on the
Media Industry
Andrew M Skinner
Manager. Technology Consulting
Accenture
“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”
Copyright © 2007 Accenture . All Rights Reserved.
Slide 2
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.
Copyright © 2007 Accenture . All Rights Reserved.
Slide 3
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.
Copyright © 2007 Accenture . All Rights Reserved.
Slide 4
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 5
In 2000 were you expecting…
1 2 3
4 5 6
15,000 songs in your pocket, 60
days of continual music while 23.4% of homes time-shifting A search bar as the entry point
awake
60% of TV content
to the internet
Free phone calls globally
Copyright © 2007 Accenture . All Rights Reserved.
An Online Game would be the Never needing to delete files on
77th richest country
your PC to free up space*
* Apart from in your 128 Mb email account
Slide 6
In 2012 will you be expecting…
1 2 3
4 5 6
The internet developing from mainly
Going to the video shop to get “the
movies”, not just one but all of them and No scheduled TV channels, watch text content to a full multi-media
what you want, when you want to.
experience
only paying for those you watch.
Telco’s becoming true media
organisations
Copyright © 2007 Accenture . All Rights Reserved.
People earning a living online in
Virtual communities
Not having to delete anything from
your fridge !!
Slide 7
The Impact of Technology on the
Media Industry
Andrew M Skinner
Manager. Technology Consulting
Accenture
So what media are people actually consuming ?
+3
Computer
Phone
+2
Radio
% change in share
+1
0 Film
Television
-1
Magazine
-2
-3
Source:
Music
0
Books
Newspapers
ZenithOptimedia
Copyright © 2007 Accenture . All Rights Reserved.
10
20
30
40
% of average persons media time
50
60
Slide 9
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 10
Frequency
(Demand)
Media Consumption today
The concept of the long tail
Mass Market Break even
Tail Break even
NicheLong
Market
Copyright © 2007 Accenture . All Rights Reserved.
Products
(Queries, Songs, etc)
Slide 11
0
Source:
BBC 1
CHANNEL 4/S4C
five
Sky Sports 1
ITV 3
UKTV Gold
E4
BBC News 24
Sky Three
Sky Sports News
UKTV History
Sky Movies 1
Hallmark
More4
UKTV Drama
BBC 4
Disney Channel
Five Life
The Hits
Sky Movies 2
Sky Sports 3
Bravo
CITV
Film4 +1
Nickelodeon
Paramount
TMF
Sky Movies 5
Sky Movies 7
Sky Sports Extra
Cartoon Network
Discovery Real Time
FX
Magic TV
Nickelodeon Replay
Paramount 2
TCM
UKTV Style
Sky Cinema 1
Sky Movies 9
Sky Premiership Plus
Animal Planet +1
Bid TV
Challenge TV +1
Crime & Investigation
Discovery Home & Health
Discovery Real Time Extra
Discovery Travel & Living
Disney Cinemagic + 1
Eurosport
FTN
The History Channel
ITV2 + 1
Kerrang!
Men And Motors
MTV Base
MTV Hits
National Geographic +1
Bravo 2
Price Drop TV
Sci-Fi Channel+1
The Biography Channel
Tiny Pop
Trouble
True Movies
UKTV Bright Ideas
UKTV Documentary +1
UKTV Food + 1
UKTV Style +1
Zone Horror
B4
Jetix +1
MTV2
The Vault
Zone Reality+1
Sky Travel +1
Sky Travel Shop
Bliss
Movies 4 Men 2
BBC Parliament
Cartoon Network Too
Channel U
Community Channel
Discovery Kids
Eat Cinema
Extreme Sports Channel
Golf Channel TV
ITV Play
Life Showcase
Motors TV
Rockworld TV
National Geographic Adv.
Bubblehits
Real Estate TV
The Travel Channel
TWC
UKTV G2 +1
MTV Flux
Zone Reality Extra
Demonstration of the long tail in UK
television broadcasting
25
All other Channels
23 %
21 %
20
10 %
5%
15
Copyright © 2007 Accenture . All Rights Reserved.
7%
3%
7%
4%
17 %
4%
10
5
© BARB Ltd 2007
Slide 12
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 13
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 14
Connectivity to the Internet
500,000
Total Internet Hosts
Internet Hosts (000's)
400,000
300,000
200,000
100,000
0
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Source: ISC Domain Survey: Number of Internet Hosts. © ISC, Inc.
Internet User breakdown
2%
1%
21 %
3%
8%
Penetration of geography
Africa
Asia
Europe
North America
69.4 %
53.5 %
Oceania
Europe
38.6 %
Latin America
29 %
36 %
Middle East
North America
Oceania
Latin America
16.0 %
Asia
10.5 %
Middle East
10.0 %
Africa
3.5 %
Source: Copyright © 2007, www.internetworldstats.com
0.00%
Copyright © 2007 Accenture . All Rights Reserved.
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Source: Copyright © 2007, www.internetworldstats.com
Slide 15
Top Global Web Properties
1. Microsoft
2. Google
3. Yahoo
4. Time Warner
5. eBay
740,984
508,659
494,170
260,387
251,423
6. Wikipedia
164,675
7. Amazon
8. Fox Interactive
151,033
135,730
9. CNET Networks
10. Ask Network
114,940
113,881
Source:
Total Unique Visitors (000), Age 15+ * December 2006 Total Worldwide - Home and Work Locations.
comScore World Metrix
Copyright © 2007 Accenture . All Rights Reserved.
Slide 16
Top Ten Web Brand
Average time per user per month
1.
AOL
5:27:46
5.
Yahoo!
Fox Interactive
MSN
eBay
6.
Google
1:04:21
7.
8.
Microsoft
Amazon
0:44:14
0:27:49
2.
3.
4.
9. Ask Network
10. MapQuest
Source:
3:09:41
1:52:54
1:52:06
1:49:13
0:24:51
0:12:11
Nielsen//NetRatings
Copyright © 2007 Accenture . All Rights Reserved.
Slide 17
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 18
Digital Disruptions
Participation
The future is a world where
individuals create content and
share it with each other without
the need for traditional
broadcasters and distribution
channels
Control
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
Copyright © 2007 Accenture . All Rights Reserved.
Mobility
The future is a world where
individuals access information
and services on multiple types of
devices from anywhere
Quality
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 19
The real difference between SD and
HD content
The real difference is more information
Copyright © 2007 Accenture . All Rights Reserved.
Slide 20
So just how much better is a High Definition image than
Standard definition
1920 x 1080P - HDTV
1024 x 768 - XGA
768 x 576 - PAL
720 x 480 – NTSC/VGA
1280 x 720P
HDTV
Total Pixel =
2,073,600
921,600
786,432
442,368
345,600
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 21
Telepresence
3d Holographics
Virtual Reality
5 sec CD download
Multi-channel TV
Video streaming
Multi-channel TV
Low End “Broadband”
Dial-up Service
Indicative application bandwidth demands
Teleconferencing
Basic Surfing
IP Telephony
Email
0
.064
.128
.256
.512
1
Bandwidth Mbps
2
ADSL Max
Multi-player games
Video Conferencing
MP3 Streaming
Online games
Typical Broadband
Video on demand
Video-streaming
Video-streaming(VHS)
(SD)
10
20
100+
•Source: 2010 National Broadband Targets Marketing Australia’s Competitiveness, 31 July 2006, Internet Industry Association
Copyright © 2007 Accenture . All Rights Reserved.
Slide 22
The network is the computer
Text Web Page
File Size..
Network Speed
10KB
Graphical Web
Page
Music File
Movie (2 hrs)
Standard
Definition
(720x486)†
200KB
3MB
High Definition
(1080/60i) ‡
4GB
28GB
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 mins
Never under estimate the bandwidth of a person with an ipod on a train…….
Copyright © 2007 Accenture . All Rights Reserved.
† Assumed compression of 50:1
‡Assumed compression of 40:1
Slide 23
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.
Copyright © 2007 Accenture . All Rights Reserved.
Slide 24
Today’s infrastructures
CONTENT
NETWORKS
TV Studios, Ads,
Movies
Television Networks
Web Servers,
AOL, Yahoo, Advertising
Data Networks
(Internet)
Messaging,
Ring Tones
Phone Networks
Copyright © 2007 Accenture . All Rights Reserved.
Independently designed, with specific content & devices;
closed ecosystems
USERS
Slide 25
It’s time for the next step
Broadcasters
Communications
Networks
Media Production
Broadband Operators
Personal Content
Mobile Operators
Studios
Internet Service Providers
Enterprise Content
MVNOs
Advertisers
Content providers
Device Explosion
The new opportunity is at the
convergence points
Copyright © 2007 Accenture . All Rights Reserved.
Slide 26
The need for edge devices
Content Creation
Output Device
Caching
Broadcast
Streaming
Retail
Controlled
Media
Movement
Distribution
“On demand” services
Wired
Broadcast
Retail
Distribute
License Agreements
Copyright © 2007 Accenture . All Rights Reserved.
Broadcast
Online Stores
Wired
Media Hub
Wireless
Wired
Retail
Slide 27
3 Main issues with Media revenue at present
1.
Ownership of Content
2.
Advertising Revenue
3.
BBC License Fee
Copyright © 2007 Accenture . All Rights Reserved.
•
•
•
•
Subscription based models
Media Storage
Insurance
Format transfer
• Skip advertising through user control
• Broadcaster or producer focused
• Location specific advertising
• What is the role of the BBC ?
• Move to Micro News Production
• Content production or public service
Slide 28
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.
Copyright © 2007 Accenture . All Rights Reserved.
Slide 29
The Future Home Network
Copyright © 2007 Accenture . All Rights Reserved.
Slide 30
An ad spend and media time
imbalance globally
100 %
Online Ad Spend
Online Ad
Growth
Opportunity
80 %
60 %
40 %
Offline Ad
Spend
( Newspapers,
TV, Radio, Direct
Marketing, etc)
Online Time
Growing
Discrepancy:
~$70 Billion (North America)
~$150 - $200 Billion (Global)
Offline Media
Time
20 %
0%
Advertising
Spend
Sources:
Consumer
Media Time
Universal McCann, Google, Accenture Analysis
Copyright © 2007 Accenture . All Rights Reserved.
Slide 31
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
Copyright © 2007 Accenture . All Rights Reserved.
Slide 32
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The Impact of Technology on the Media Industry