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PwC
Monetizing the multiplatform content portfolio
Blake L. White
1
May 2012
PwC
Agenda
Monetizing the multiplatform content portfolio
• Industry drivers and considerations
• Content Value Management (CVM) leading practices and examples
• Extending the value with TV content analytics
2
May 2012
PwC 3
Industry drivers and considerations Global markets, demographic shifts, and digital technology adoption are driving the Entertainment & Media industry
PwC
Digital technology has changed personal and group communications
4
Now, they are mobile media devices with collaboration capabilities
Remember when computers were about calculations… and phones were about communications?
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The Old
Normal
Traditional business
with a growing
digital element
Digital engagement is changing the overall business landscape
5
The New
Normal
Digital is the central
driver of future
operating models,
consumer
relationships, and
revenue growth
Most industries have
crossed a psychological
and behavioral tipping
point
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Television, Theaters, DVD, CD, Print
The New
Normal
Digital technology disrupts the E&M value chain
6
The Old
Normal
Film Studios, TV Studios, Music Labels, Print Publishers
Bloggers, Citizen Reporters, Independents, App & Game Developers
Broadcasters Linear Networks
Terrestrial Broadcast Cable / Satellite
HD TV, PC/Laptop, Tablet, Smartphone, 3D Game Platforms, Blu-ray, Mobile Media Player
On-Demand services, Mobile App Stores, Websites, Portals, Search Engines, Social Media
Telco, Wireless, Broadband
Content Producers Programmers-
Aggregators Distribution
Systems Consumer
Devices
PwC
Global growth 5.7% global E&M growth: 2011 – 2015, $1.9 trillion…
Asia Pacific 6.5%
Europe, Middle East, Africa (EMEA) 5.2%
Latin America
10.5%
North America 4.7%
7
Source: PwC Outlook 2011-2015
PwC
Global growth …of which, the highest E&M growth is in the developing economies.
US 4.6% France
4.0%
Germany 3.4%
UK 3.7%
Japan 2.5%
China 11.6%
Russia 11.7%
India 13.0%
Brazil 11.4%
Turkey 13.2%
MENA
16.1%
South Africa 9.2%
Indonesia 11.9%
Pakistan 23.7%
Vietnam 17.3%
Columbia 11.2%
Mexico 8.7%
Mature: 3.9% BRIC: 11.7% Developing: 12.7%
8
Source: PwC Outlook 2011-2015
PwC -2 0 2 4 6 8 10 12 14
12.2 13.0
7.8 8.6
8.2 4.6
5.6 7.0
4.9
5.4 5.9
5.4
6.5
5.6
3.5 3.5
4.1 3.5
3.5 2.4
2.1 1.9
1.9 -0.4
-0.4 -1.1
Digital growth 2011 – 2015 % CAGR is led by digitally-enabled segments
Internet Advertising
Internet Access
Video games
TV Subscriptions and license Fees
TV Advertising
Filmed Entertainment
Out-of-Home
Radio
Business-to-business
Consumer Magazine Publishing
Consumer Educational and Book Publishing
Newspaper publishing
Recorded Music
■ US
■ Global
9
Source: PwC Outlook 2015
PwC
Digital growth US market for digitally distributed media will experience double digit growth in all sub segments for the next 4 years The digital market shows promising growth
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2006 2007 2008 2009 2010p 2011 2012 2013 2014 2015
Online Subscription Rentals/Rental Streaming Download-to-Own
Download-to-Own
21.1 %
Online Subscription
Rentals/Rental Streaming
10.8 %
Total Digital
13.0 %Source: PwC Outlook 2015
Mil
lio
ns
($)
US digital market
2011-2015CAGR
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Digital growth Streaming media has even higher growth rates
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
OTT: US
OTT: Global
VOD: US
VOD: Global
Mil
lio
ns
($)
Global OTT
51.6%
US VOD
8.9%
Global VOD
13.6%
US OTT
36.0%
11
Source: PwC Outlook 2015
2011-2015 CAGR
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Changing demographics The net generation grew up with digital…
12
They are
Social
They are
Mobile
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Changing demographics …with high expectations
Norms of net generation
Entertainment
Integrity
Speed
Choice
Freedom
Customisation
13
PwC
Mobile and social media growth Among the main drivers for the growth of digital media is the rapid adoption of internet and smart phones to purchase and consume content
14
19% Web
While traditional online commerce sales growth steadies …
39% Mobile
…The mobile commerce (both advertizing and transactions) projects 39% CAGR…
6
10
14
19
25
0
5
10
15
20
25
30
2011 2012 2013 2014 2015
93% Social
…And social commerce, is projected to grow at 93%, despite a small base
Source: Goldman Sachs Source: Forrester Research Source: Booz & Co
PwC
Direct engagement Consumers are embracing direct digital channels, as seen by major shifts in consumption behaviors and companies’ go to market strategies
15
Behavior Changes
Purchases digital goods
(i.e., songs/music,
eBooks, ringtones,
images, movies, TV
shows, etc.)
47% smart
phone owners
Spends same time
consuming internet
content as watching TV
All US Adults
Uses computers or smart
phones while watching
TV.
60% to 70%
of US
consumers
Americans admitted to
using their smart phones
in the bathroom, with
millennial leading the
charge
75%
Millennial –
91%
91% - companies with
FaceBook fan page
61% - planning custom store on
$38B- Social
Network Marketing
Spend by 2015
$6B – Mobile
Proximity Marketing
Spend by 2015
Source: Forrester Research, Mashable
Go to Market Strategies
PwC
Digital growth’s risks Piracy will likely increase with the growth of digital media
• Customers have grown accustomed to consuming high-quality media via the internet for free.
• As such, people have the expectation to consume their favorite digital programming for free as well.
56% of consumers who said they pirate don’t feel the need to own a physical copy
81% Plan to continue pirating, mainly through online sources
Not paying has become mainstream. More than half agreed that “everyone does it.”
Source: PwC consumer research
PwC
Organizational change Also, the “born digital Net Generation” will start to lead companies and further accelerate digital transformation
17
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Implications of shifting global and technology landscape
Know your Customer
Maximize Content Value
Engage all along the Value Chain
Everyone is an Innovative
New Entrant
Corporate Imperatives for Future Success
18
Global Growth
esp, Developing Economies
Communication
- Mobile
- “Glocal”
- Social
Demographic Change
Organizational Change
Shifting Global Landscape
Multicultural Customer
Engagement
Digital Growth
“Born Digital”
“Net Gen”
Values
“Born Digital”
“Net Gen”
Leadership
Media Industry Trends
PwC 19
Monetizing the multiplatform content portfolio
PwC
Monetizing the multiplatform content portfolio To capture profitable growth and engage customers via digital channels, E&M companies face paradigm shifts
20
From To
Products/
Services Physical goods
Digital goods e.g. streaming
video
Investment
Focus Capital (Capex)
Intensive
Informational and
operational (Opex) intensive
Revenue
Model Licensed
Freemium, free trail, pay per
view, subscriptions,
micropayments
Content Individual titles
Franchise titles exploited
across multiple digital and
physical channels
Customer
Experience Isolated, specific
Cross channel,
interconnected, anytime,
anywhere, gamified
Marketing Traditional
advertising,
promotions etc.
Brand journalism and user
generated content.
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Monetizing the multiplatform content portfolio Digital products are high-growth opportunities but, with lower margins
Source: PwC Global Entertainment and Media Outlook: 2011-2015
Companies need to balance a portfolio of strategic investments in high-growth digital products, while sustaining the profitability of lower-growth traditional content products
Non-Digital
3.3% 11.4%
Digital
34% Non-Digital
66% Digital
Market Share Growth (2011-15 CAGR)
Global 2015 market share (% revenue)
21
PwC
Monetizing the multiplatform content portfolio Requires an integrated view to answer core questions
Content
Process
Organization Systems
Rights Financial
Media
Governance
Decision-support in the digital content era requires the combination of knowing: 1. What content you have,
2. The rights you have to monetize it, and
3. The proper business model for those titles
Digital media enables the provision of content in cross-divisional bundles and in finer slices of a program. This is driving the need for advanced analytics, across BUs, channels, platforms, and geographies.
PwC
Monetizing the multiplatform content portfolio Requires an Integrated view to answer core questions
The difficulty in managing such a content portfolio today, is the stovepipe nature of divisional IT infrastructures.
• A major Hollywood studio has over 75 Media Asset Management (MAM) systems.
• Another studio has 81 different rights repositories • Another had 10 separate BU data warehouses, and could not perform cross-BU analytics
• Yet another cannot report P&Ls by titles.
Publishing
Social media
, e-commerce
Television Brands
Video Games & Licensing
Broadband video, E
nte
rpri
se D
ata
Ware
hous
e
For
Advanced A
naly
tics
Diversified Media Enterprise
PwC
Ownership and Platform Rights
24
Slide and concepts property of Accenture 2007
Slide and concepts property of Accenture 2007
Slide and concepts property of Accenture 2007 Product
As multi-platform strategies emerge, an organization’s ability to execute relies on managing the complexities of rights issues.
For a leading cable network, the process to determine rights clearances takes up to 2 weeks.
A major MSO’s rights are buried in unsearchable contract PDFs.
For a cable MSO, with licensed programming, fines were in the $,$$$,$$$ annually for violating contracts.
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Effectiveness of marketing spend Major Hollywood studio wants to align marketing spend with real-time social buzz, website traffic, mobile apps, and consumer behavioral economics.
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Monetizing the multiplatform content portfolio Agile decisions about content, based on consumer data, within the constraints of contractual rights and privacy laws
Maximize
Content Value
26
Business Model Agility
Content Product
Lifecycle
Rights, Security & IP
Protection
Content Personalization
Multiplatform
Rights/Finance by Geo, BU and Franchise
Alerts
Deal Management
(picture here)
ECPM
ECPM
Self Service reports
Content and Associated Views
Analytics
Content
Process
Organization Systems
Rights Financial
Media Governance
PwC 27
Leading practices Content Value Management (CVM) framework
PwC
Content Value Management (CVM)
CVM is a decision-support framework that aggregates and correlates content, its intellectual property rights and associated financials, across channels and platforms, promoting actionable understanding across business units.
Diversified media enterprise
Enterprise Layer – Finance, Legal, IT systems & infrastructure
Broadcast TV Cable TV Theatrical Syndication & licensing
New media Home entertainment
Content
Process
Organization Systems
Rights Financial
Media Governance
PwC
CVM framework provides the process, structure and tools to support enterprise integration
• Visualization tools to aid definition and requirement gathering
• Defined system maturity model to define opportunities
• Support for advanced analytic integration
• Ecosystem Framework to describe and structure integration
• Operating model to align business function
• Delivery model to accelerate implementation
• CVM tools to reduce risks
Process Architectural
Framework
Tools
Access Layer
Application LayerContent
Creation Publishing Producing
Reporting
Profile
Mngmnt
Unstructured Data
Structured Data
Video
Film
Broacast
Co
nte
nt
Inp
ut
Infrastructure
Storage Servers NetworkSLA
Mngmnt
Service
Assurance
Pro
vid
ers
Network Providers
Mid-Tier Providers
(Social Networking)
Amateur
Advertisers
Content
MngmntSearch
Web Live Stream(Gaming; Video; Sound)
Content Manager
Licensing
Encrypttion
DRM
Encoding
Transcoding
Conversion
Indexing
Catologing
Management
Security
Policies Pricing
Metadata
Taxonomy
Distribution
(Text Msg; VM; Voice)
(Home Grown)
Ingestion
Syndication
Identity Mgmt
Information CommunicationsETL Web Services P2P Messaging
Distribution
Collaboration
Back-Office
Service Delivery
Orchestration
Billing
Event Mngmnt
Process LayerCatalog
Mngmnt
Scheduling
Content Editing
Contact Access
Provider
Mngmnt
Presentation
Mngmnt
Unified
Messaging
Directory
Services
Portal Access
Authentication
PDA; PhoneMultimedia Center ComputerGaming Counsel Web Services
Wireless
Wi-FI
Broadband
Carriers /
MSOs
Film
Studios
Cell
Broadcast
Web
Theaters
Retailers
Social
Networks
Distributors
Merchandize
Sales
ASCAP,
Harry Fox
etc.
Artists and
Talents
Music and
Record
Companies
Mgmt.
Agencies
Rights and Royalty
Functional Capabilities
Reference Model
Online Music
Markets
Venues
Govt.
Agencies
Affiliates
Manage Deals and Contracts
Legal
Taxonomy
Rights Capture &
Clearance
Version Control &
Audit Trail
Alerts
Templates Licensing
Calculation Rules
Engine
Acquisition
Search Document
Management
Royalty and Settlement
Operations
Manage
Formulas
Reprocessing
Manage Payee
Accounts
Currency and
Taxes
Calculate
Royalty
Workflow
Approval
Statements Security
Error Handling Adjustments
Manage Agencies and Partners
Standards Integration
with 3rd Party
Negotiations Manage
Accounts
What-if
Contract
Analysis
Memberships
Info Sharing
Portal
Alliance and
JVs
Customer Service
Customer
Experience
Profiles and
Preferences
Inquiry
Management
Cross and Up Sell
Dispute Resolution Service Level
Agreements
Adjustments and
Credits
Customer
Reporting
Manage Performances and Revenue
Performance &
Usage Records
Online Digital
Distribution
Transaction
Management
Multi Currency
Support
Channel
Management
Aggregation
Digital Rights
Management
Rev. Recognition
Finance, Accounting and Reporting
Ledger Sub Ledger
Mgmt
Financial Analysis
Account Posting Budgeting
Integration with
ERP/Finance
Planning
Management
Reporting
Payment
ECPM infrastructure progressionPlatform centric Content and consumer centric
SOA
based
integration
Rights Mgmt
Asset
Management
Finance
Information
Management
Analytics
Pdf/searchable Document Mgmt Rights Mgmt w/
digital deal info
Enterprise
Stand alone/multiple Enterprise view for
browse
Loosely coupled Enterprise
Consumer insight
Business
optimization
Legacy/Custom
Apps
Multiple ERP
(non-integrated)
Single ERP and MDM EPM
Siloed data Enterprise mashups Conformed data Enterprise EDW
Operational reports Multi-source
multi-dimension
Cross platform OLAP Predictive analytics
Market
segmentation
Market
segmentation
Social analytics Consumer driven
micro of fers
Siloed strategy Goal &
KPI tracking
Content driven
portfolio strategy
Data assisted
decision making
Assessments
PwC
Content Value Management (CVM) Provides an integrated view to answer core questions
• Do we have the content and rights that we think we have?
• Can we do this deal? What rights should we negotiate?
• How well did the content do across platforms?
• Are we paying too much for content? Are we leaving money on the table?
• Are we exploiting our rights fully?
Content
Process
Organization Systems
RightsFinancial
Media
Governance
PwC
Content Value Management (CVM) The CVM user experience presents information to the right people at the right time, in such a way that it is understandable and actionable
Multiplatform
Rights/Finance by Geo, BU and Franchise
Alerts
Deal Management
(picture here)
CVM
CVM
Self Service reports
Content and Associated Views
Analytics
PwC 32
Extending the value with TV content analytics
PwC
Extending CVM value with TV content analytics
Co
mp
lex
ity
High
Low
Prediction What might happen?
Monitoring What’s happening now?
Analysis Why did it happen?
Reporting What happened?
Business value High
Predictive analytics and mining
Query, reporting, data search
OLAP and advanced visualization tools
Dashboards and Scorecards
Agent-based Modeling – Predicted mass behavior from individual actions and interactions.
System Dynamics – Captures complexities such as non-linearity, diffusion and feedback loops.
PwC
Extending CVM value with TV content analytics
Source; Lavalle, Steve, et al. “Analytics: The New Path to Value.” MIT Sloan Management Review (2010).
PwC
Extending CVM value with TV content analytics TV Content Analytics -- What is the overall value (financial and brand) of a
television series, and how can I improve that?
35
The value of content cannot be considered exclusively financial.
Content's brand value should also be considered.
The analytical model allows for a combination of quantitative and qualitative valuation, taking into account both financial and brand
aspects of content value.
PwC
Extending CVM value with TV content analytics Conceptual model
36
• A program's brand equity is a measure of how engaged a consumer is with it, and what opinion he/she has of it.
• Brand equity will have an impact on lead in / lead out effects in program lineup and will also enhance or detract from the overall Network or Enterprise brand value.
• User experience with on demand content is a component of brand equity.
PwC
Extending CVM value with TV content analytics Conceptual model
37
•The impact of a show on the broadcaster's brand equity and viewership
• Test policies, such as marketing costs, to improve the value of an appealing new block of shows
• Assess the potential incremental value new programs could contribute by estimating their appeal
• Stress test new management policies against an array of future scenarios using Monte Carlo simulation techniques.
PwC
CVM – Film Analytics also in development Film Analytics How do I optimize the release windowing, platforms, and distribution strategy for a film to maximize revenue across its lifecycle?
• Do we have the right content in the right windows for the right amount of time?
• What kind of content is right for this new service/platform?
PwC
CVM infrastructure progression Platform centric Content and consumer centric
SOA based integration
Rights Mgmt
Asset Management
Finance
Information Management
Analytics
Pdf/searchable Document Mgmt Rights Mgmt w/ digital deal info
Enterprise
Stand alone/ multiple
Enterprise view for browse Loosely coupled Enterprise
Consumer insight
Business optimization
Legacy / Custom Apps
Multiple ERP (non-integrated
Single ERP and MDM
EPM
Siloed data Enterprise mashups
Conformed data Enterprise EDW
Operational reports
Multi-source multi-dimension
Cross platform OLAP
Predictive analytics
Market segmentation
Market segmentation
Social analytics Consumer driven micro offers
Siloed strategy Goal & KPI tracking
Content driven portfolio strategy
Data assisted decision making
Companies are at different CVM stages of maturity PwC assesses where you are, helps plan where you want to be, and can help implement the journey.
