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Simplifying delivery to TV scale
audiences in the complex online
video market
Charlie Muirhead (CEO, Rightster)
20th November 2014
2
Market Context
o All creators, from the biggest studios to the smallest bloggers to brands need video distribution
o If they can outsource to a highly specialised cloud-based service, as their trusted guide, they will
o Online video advertising spend is expected to surpass $17bn by 2017 in the US alone¹
Proposition
o 360° multi-platform network, which delivers and activates live and VOD audiences in a fully
configurable, self-reinforcing ecosystem of editorial and brand-funded content across a global
network of Creators & Rights Owners, Publishers & Platforms, Brands & Agencies
o Over £9m investment to date in technology platform
o New category: Rightcasting™ - right content, right audience, right place, right time, right price
Execution
o Scale is key determinant of success, and industry is consolidating
o 4 successful acquisitions to date: Preview Networks, Sportsyndicator, Viral Spiral and Base 79
o Only publicly listed company in this space
o Recently secured a position as the largest YouTube multi-channel network (MCN) outside of
North America² and the fourth largest YouTube MCN within the US³
Summary
Rightster is the No.1 MCN outside North America²
1. Jefferies: : The Future of Online Video Advertising (v2.0); A Focused Deep Dive on YouTube, 3 September 2014)
2. According to Comscore September 2014 results : Greatest number of unique viewers across US and Europe from an MCN headquartered outside of North America
3. According to Comscore September 2014 results (before de-duplication of unique users and excluding music MCNs)
3
A High Growth and Valuable Market
Video advertising opportunity worth $17bn by 2017
GROWTH IN VIDEO ADVERTISING 33%
2014
2017
X2 AS FAST AS OVERALL DIGITAL ADS
$17b+ SIZE OF VIDEO ADVERTISING
OPPORTUNITY BY
2017 IN US ALONE
80% YOUTUBE
TRAFFIC
IS FROM
OUTSIDE
OF THE US
AUDIENCE IS KING: YOUTUBE IS A
$26 - 40b+ DIVISION FOR
4
£250bn TV Market is Simple and Well Understood
Television used to be the only way to deliver Brand Friendly Scale
DISTRIBUTED LOCALLY
e.g. UK TV Broadcasters:
Limited number of channels
But brand friendly:
o Audience scale
o Mature market
o Easy to forecast
o Safe
COMMISSIONED CONTENT
e.g. Production Companies:
1. The references to Production Companies and UK TV Broadcasters above are given for illustrative purposes only to indicate participants in the TV
market. Not all of the above are Rightster partners or have any contractual or other relationship with Rightster
Limited number of
production companies
NEW CONTENT TYPES
o Premium Rights:
o Original Programming:
o Branded Entertainment:
5
The New World of Online Video is Highly Complex
Key challenge is replicating TV scale audiences in this fragmented new world
GLOBAL DESTINATIONS
o Owned & Operated Sites:
o Platforms:
o Online Publishers:
YouTube the
biggest:
1M+ Creators
from 30+
countries
Thousands –
from huge
publishers to
mid-tier sites,
and small blogs
1. The references to Content Owners and Online Publishers & Platforms above are given for illustrative purposes only to indicate participants in the online video market. Not
all of the Content Owners and Online Publishers & Platforms above are Rightster partners or have any contractual or other relationship with Rightster
6
Online Video is Hot…and MCNs are in High Demand
Significant valuations accruing to scale winners
May 13, 2014
May 25, 2014
April 2, 2014 Sep 22, 2014
May 15, 2014 March 27, 2014
MCN: A YouTube partner programme for companies managing multiple channels on YouTube
7
April ’14 MCN Ranking (US Comscore)
COMSCORE RANK YOUTUBE MCN TOTAL UNIQUE VIEWERS (MM)
1ST Fullscreen 26
2ND ZEFR 25
3RD Maker Studios 24
4TH BroadbandTV 14
5TH JukinMedia 13
6TH T3Media 13
7TH Base79 12
8TH Defy Media 12
9TH CDS 11
10TH Machinima 10
11TH Rightster 10
12TH AwesomenessTV 9
Source: ComScore YouTube Partners Report April 2014
(excluding music MCNs)
Rightster was previously in 11th position
8
Goal: Unified 360°
Proposition
o Scale
o Premium Advertising
o Independent
o Software Innovation
o Global
o Talent Expertise
o Brand Expertise
o Off YouTube Network
o YouTube Expertise
o Data
Rightster Roll Up To Hit Scale
Goal is to become the number 1 player worldwide
o Iconic Social / Viral
Rights
o Brand / Agency
Relationships
o 1000+ YT Partners
o Established Media Sales
Team
o Technology Platform
o Off YouTube Network
360°
Proposition to
Brands
9
September ‘14 MCN Ranking – (US Comscore)
Rightster is now the 4th largest MCN in the US¹
COMSCORE RANK YOUTUBE MCN TOTAL UNIQUE VIEWERS (MM)
1ST Disney/Maker Studios 40.8
2ND Fullscreen 36.5
3RD Machinima 25.0
4TH Rightster (Post Acquisition) 20.2¹
5TH ZEFR 19.8
6TH BroadbandTV 17.9
8TH The Orchard 16.9
9TH Collective 14.3
10TH Zoomin.TV 13.8
11TH any.TV 12.8
12TH QuizGroup 11.5
1. According to Comscore September 2014 results (before de-duplication of unique users and excluding music MCNs
10
The Largest YT MCN outside of North America¹
Greater scale & expertise improves Rightster service offering
1.2B+ AVERAGE
MONTHLY VIEWS
1,950+ 3,400+ YOUTUBE
CHANNELS
CONTENT
PARTNERS
1. According to Comscore September 2014 results : Greatest number of
unique viewers across US and Europe from an MCN headquartered outside of
North America
Growth in Video Views/Month1
11
Rightster has Proven its Ability to Execute
Key Milestones
oMay-11: Founded . Released 1st generation
platform and Streamed Royal Wedding in
partnership with ITN
oAug-11: Further masthead clients added:
SNTV and British Fashion Council
oFeb-13: AFL leave Perform and partners with
Rightster for subscription service
oMay-14: 850+ content owners, 7,500+
publishers, 100s of advertisers, blue chip
global clientbase
o Jul –14: announced £42m equity raise2 and
acquisitions
1. Internal Data
2. Before Placing Expenses
223% growth in average monthly video views from H1 ‘14 to Q3’ 14
Ave
rag
e M
on
thly
Vid
eo
Vie
w
(milli
on
s)
0
200
400
600
800
1000
1200
1400
H2 2012 H1 2013 H2 2013 H1 2014 Q3 2014
123m
161m
250m
371m
+55%
1.2bn
+223%
+48%
+31%
Q3 Trade Update
1.2bn + average monthly video views
1.2bn | 211% Average monthly video
views (increase on Q2 2014)
53m | 430% Subscribers across our
YouTube network (uplift on June 2014)
113m | 102% Unique users (increase on Q2 2014)
#1 YouTube MCN
outside North
America
(and the 4th largest
within the US)
Confident Rightster will see over
150% growth year on year (from year ending 31
December 2013 to year
ending 31 December
2014)
Recent noteworthy partnerships
include Turkish Airlines for a global YouTube campaign and
Arts Council England (worth £1.8 million over 3.5 years)
12
13
How Big is the Market?
Online video advertising spend expected to surpass $17B+ by 2017 in US alone
$17B+ ONLINE VIDEO ADVERTISING SPEND IS
EXPECTED TO SURPASS
BY 2017 in US alone
DEMAND FOR ONLINE VIDEO IS
GROWING FAST – ACCOUNTS FOR
OVER
1/2 OF MOBILE TRAFFIC TODAY AND LIKELY ½
OF THE GLOBAL INTERNET BY 2016
DIGITAL IS DRIVING
AN EXTRAORDINARY
PERIOD OF GROWTH
TOTAL MEDIA
CONSUMPTION IS UP
25%
DIGITAL VIDEO ESTIMATED
TO BE WORTH
$33B BY 2020 in US alone
14
Example: Rightster Simplifies Video Distribution
Rightster simplifies for content producers, publishers, and brands
Content Owner Needs; e.g.
o Distribution
o Monetisation
o Data & insights
Publisher Needs; e.g.
o Content sourcing
o Monetisation
o Data & insights
Advertisers
Video In
Video
Out
Fragmented
Audience Online
Sites
Rightster’s
Self-Service Software
Data
o Data correlated
across clients
o Forecasting
15
Example: SNTV Select Rightster 360 Over In-House
Integration Fragmented
audience
Content producer Online sites
Dynamic ad-insertion “By working with Rightster,
we’ve built a service that
delivers on our clients’ editorial
and technical needs, while also
allowing us to expand our
potential sales targets.” Martin Kay –
SNTV Managing Director
360 distribution over
Rightster network for a
% share of revenue DATA
The benefits Rightster provided:
o Quick time to market - with no upfront cost charged by Rightster
o Unlocked extra new revenue streams vs. an in-house integration of
individual solutions
o Increased publisher client base
sntv.com
Rightster delivers clients’ editorial and technical needs
AFL TV
Live & VoD
30% YonY sub growth
3 year extension after 2013
season
16
One Platform Supports Multiple Commercial Models
Paid 360 Distribution
with guaranteed 100k Live and
VOD views Delivered across
180 Publishers
Yoga sub-network on YouTube
1m+ views/month
250k+ subscribers
$10bn industry
Rightster has built a technology asset that can serve many different clients
e.g.
Australian Football League
e.g.
Digital Yoga Network
e.g. Michael Kors
New York Fashion Week
PREMIUM RIGHTS
ORIGINAL PROGRAMMING
BRAND FUNDED
o 360° Content Distribution
Rightster distributes to and monetises on all three types of
destination site:
• Platforms (e.g. YouTube);
• Direct to Owned-and-Operated Sites (e.g. ITN.co.uk)
• Network of Pre-Connected Online Publishers (e.g. Guardian)
o Multiple Revenue Models and Centralised Reporting
Supports ad-funding, licensing, B2C subscriptions, bookmaker
distribution, paid placement and other models on each
destination. Previously siloed data collated to one dashboard for
revenue reporting and business insight
o Ability to deliver TV-Scale audiences online
By collecting and comparing audience data across many clients,
Rightster’s pioneering Engage service is designed to allow
content owners and brands to reach targeted, engaged
audiences at TV-scale
17
More than an MCN – The Multi-Platform Network (MPN)
18
£9m+ TECH PLATFORM
o 65+ people in R&D team
(Product and Engineering)
o Service orientated cloud-based
architecture for greater scalability
o Centralised video rights
management and flexible
revenue models
o Automated distribution and
monetisation of live & VoD
o Automated 360 data collection,
reporting and audience
forecasting
9,450 STRONG NETWORK
o 1,950+ content partners and
7,500+ publishers, 100s of
brands & agencies
o Strong network effect
o Multiple genres provides an
audience network with breadth,
depth & diversity
o Global team of partner managers
across news, fashion, sport, film,
music, entertainment, brands
o Partner teams constantly
matching video to the publishers
and platforms
DIGITAL TEAM & TOOLS
o Data, insight and intelligent
automation
o Specialist teams offering range
of optional advanced services
including:
• Audience development on
YouTube, Facebook, Twitter,
etc.
• Direct advertising &
sponsorship sales
• Enhanced support for
enterprise clients
• Content Marketing
• 24/7 support
Three Pillars of Rightster’s MPN
Highly leveraged operating model with significant barriers to entry
Software Innovation Pre-Connected Network Data & Advanced Services
19
What’s next: 2GA Platform
Designed to minimise cost of sale and delivery
o The Company’s second generation
software platform (2GA) is on track
to roll out in Q4 2014, and
substantial development work has
been conducted by Rightster’s
engineering team .
o The 2GA platform will bring many
additional benefits to our clients,
generate further efficiencies to
Rightster’s operations and deliver
new revenue streams.
20
o Unprecedented Disruption - £250bn TV market facing challenges as audiences move online
o New Broadcasters Emerging - YouTube MCNs are hot but only part of the puzzle
o Key challenge - replicating TV-scale audiences in complex online market
o Rightster 360° MPN - More than an MCN, Rightster distributes to and monetises on all three types
of destination site:
• Platforms (e.g. YouTube);
• Direct to Owned-and-Operated Sites (e.g. ITN.co.uk)
• Network of Pre-Connected Online Publishers (e.g. Mail Online)
o M&A Offers Immediate Scale - Two transformative deals have immediately provided the
necessary scale and support our ability to achieve market leadership in online video
• Network now has over 1,950 Content Owners and over 7,500 Publishers
• 1.2 billion average monthly video views
• 113 million unique users and over 53 million subscribers on our YT network
o Goal: To become the number 1 player worldwide
Summary
Goal: To become the No.1 player worldwide
21