Prepared & presentedby

ITV Commercial Research &

InsightVOD

Firstly…

“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown

unknowns. There are things we don't know we don't know.” – Donald Rumsfeld

“Statistics are just like mini-skirts, they give you good ideas

but hide the most important thing.” – Ebbe Skovdahl

Defining the parameters

Video On Demand(VOD)

Content that people are going online and offline to find, to catch up with

Video (Not) On Demand(VNOD) Advertising placed around this content

Sky BB launches

Q1

Five D/LLaunches

Q3

4ODLaunches

Q4

BT VisionLaunches

Q4

YouTube launches

Q1

Virginmedia

launches

AppleTV launches

Q1

iPlayerLaunches

Q4

Iplayer BetaQ3

SkyAnytimelaunches

Q1

ITV.com revamp

Q1

5D/L=Demand Five

Q3

ITV.com=ITVplayer

Q4

SKY BB =SkyPlayer

Q2

C4 Catch Uplaunch

Q2

C4 Consolidates CU & Stream

Q1

Youtube launches Shows

Q3

ITVplayerrefresh

Q4

MSN Video

Q3

C4 Catch Upconsolidates

Q2

SeeSaw in Beta & Live

Q1

iPlayer onto PS3

Q4

2005 2006 2007 2008 2009 2010Flux me, there’s a lot been happening

CanvasQ4????

MS VP goes Live

Q1

The VOD nebula

Picture Source: http://antwrp.gsfc.nasa.gov/apod/ap070224.html - The Eagle nebula – Pillars of Creation

TV VOD

PC VOD

PVRs

Mobile

Who watches Video On Demand?

60% of the adult population have used the internet to view video

But…25% have used the internet to watch Television programmes

Source: enders analysis – UK Quarterly Internet trends Q4, 2009

22524: nVision Snapshot: Media Use

Source: nVision Research Base: 1,200 respondents aged 15+, GB, 2008

All

I never watch TVprogrammes as they arefirst broadcast

I only watch TVprogrammes as they arefirst broadcast

Solus use of VOD is small, but it is growing

5%

37%

58%DoBoth

The iPlayer is the largest player

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

Uni

que

Use

rs (0

00's

)ITV Player BBC iPlayer Total iPlayer Radio iPlayer TVChannel 4oD FiveTV Sky Player

Source: Netview Jan 2009- Dec 2009 – Entertainment – Video category/BBC internal Statistics – Jan 2010

Profile of the UK Catch up services

13 9 9 11 8

11 13 10 12 10

17 15 1627

17

2927 31

2431

23 27 25 18 26

7 9 9 9 9

0102030405060708090

100

Active OnlineUniverse

itvplayer iPlayer 4OD catch-up Demand Five

2 to 17 18 to 24 25 to 34 35 to 49 50 to 64 65+

Source: Nielsen Online, home and work, May 2009

Source:

"Communications tools don't get socially interesting until they get technologically boring" Clay Shirkey, Here Comes Everybody

9%

19%

6%

2%

11%

5%

15%

26%

15%

5%

18%

10%

24%

40%

22%

11%

31%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Tota

l

15-3

4

35-5

4

55+

ABC1

C2D

E

Spring 2007 Spring 2008 Spring 2009

VOD use growing fastest amongst the 55+

“Which of the following, if any, have you done on the internet in the last 6 months…? Watched television programme / film (e.g. BBC iPlayer)*”

Source: nVision ResearchBase: 1,200 respondents aged 15+, GB

When are they watching?

Source: Yahoo – Understanding the Drivers to Video Consumption

Online TV builds on, rather than replaces broadcast viewing.

It is a different experience, used for different things.

In our study, online TV added up to 3 hours of viewing per week to linear television.

Online viewing is incremental to broadcast

Catch up viewing is outside of peak

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

06:00 - 0

7:00

08:00 - 0

9:00

10:00 - 1

1:00

12:00 - 1

3:00

14:00 - 1

5:00

16:00 - 1

7:00

18:00 - 1

9:00

20:00 - 2

1:00

22:00 - 2

3:00

24:00 - 2

5:00

26:00 - 2

7:00

28:00 - 2

9:00

ITV1

Ave

rage

000

's

0

5,000

10,000

15,000

20,000

25,000

30,000

ITV

Catc

h U

p Vi

ews

ITV1 Catch Up Views

Can you come back when I have watched Loose Women? Oh no, it’s

ok, I’ll go to the ITV player later

Source: TV Figures – BARB/Ofcom December 2009 - Individuals/Internal ITV.com figures

Viewing Across Multiple Platforms - THE X FACTOR

CATCH UP VIEWING TREND

57%60%

40%

31%

3%9%

0%

10%

20%

30%

40%

50%

60%

70%

Series 5 Series 6

Playback ITV repeats ITV.com

Some people are predicting the death of the schedule

British viewers predict end of traditional TV

“More than three quarters (79%) of British consumers predict that there will be no TV schedules by 2018 and we will instead be able to always watch what we want, when we

want to…”http://www.tiscali.co.uk/presscentre/press_release/2008/january/011608iptvresearch.html

Web TV seen as an extension to broadcast…

80%

49%

30% 28% 25%20% 18% 18%

0%

20%

40%

60%

80%

100%

Watch progs Iwould

otherwisemiss

Mostly watchalone

More selectiveabout

broadcast TVviewing

More engaged Experimentmore with TV

progs

Watch moreprogs in

entirity andzap less

Watch moreTV than I did

before

Watchprogrammes I

would notnormally

watch

…and Catch up is still the main reason for using VOD

0

5

10

15

20

25

30

35

40

45

Catch up onmissedprogs

Follow awholeseries

Watchprogs

especiallyfor yourself

Watchfavourite

progs

Miss out onthe ads

Watchprogs withthe rest ofthe family

Watchwhen

there'snothing else

to do

Watchprogs with

friends

Watchprogs

everyone istalkingabout

PC Vod TV Vod

Source: Kantar Media futurePROOF,2009

The public don’t want to pay for it…?

No, I haven’t and I would

not pay

67%

No, I haven’t been asked

to pay

27%

Yes

4%

Don’t know

2%

Q: have you ever paid to watch Television online?Source: Deloitte State of the media democracy report, July 2009

So, where’s the money in all of this?I would not be

interested if I had to pay or watch

adverts, 32%

Paying for content on a PPV basis through set top

box/red button, 7%

Receiving the content for free but with ads that cannot

be skipped, 28%

Paying a monthly subscription, 24%

Paying a one off fee through a secure

server, 9%

Source: Wiggins Entertainment Media Research 2009

Thinking again about content from the internet that may be available in the future through your TV, if you had to choose which of the following ways of paying for content would most appeal to you?

The predictions are that this won’t be changing soon

Source: Screen Digest

9 out of 10 will accept ads around quality content

Source: Ipsos MediaCT’s MOTION study – Base Digital Video Users (n=939)

0%10%20%30%40%50%60%70%80%90%

100%

Full Length TVShows

Full lengthmovies

Movie/TV showtrailers orpreviews

Amateur orhome made

video cnotent

Very reasonable Somewhat reasonableNot very reasonable Not at all reasonable

Acceptance of Free, Advertising-supported video (April 09)

86% 78%65%

51%

While we are on the subject of time lengths…

We say it’s a mixed bag…

42% 45%

7%8%

6% 6%

40% 34%

0%

10%

20%

30%

40%

50%

60%

30" VOD 20" VOD 30" VOD 20" VOD

Agree Strongly agree

And we have a few more statements about this ad for Duck Fresh Discs. Please highlight the extent to which you agree with each statement

I liked the style of the ad I didn’t really believe it** Figures are based on

Disagree/Strongly Disagree

Please be aware that people can be very unforgiving

4 Out of

5 viewers

leave if a stream buffers once

Source: http://www.tubemogul.com/research/report/23

The benefits from the horses’ mouths

Web alone works well, but together with TV we can rule the world

0

10

20

30

40

50

60

All respondents Women

% A

ll Ag

ree

Unexposed Web Only TV Only TV & Web

For which brand of toilet care product, if any, have you seen or heard any advertising in the last month? Duck Fresh Discs

Source: Survey interactive Consumer Survey – October 2009

Increases in ad awareness

Increases in actual pounds, shillings and pence

Source: Survey interactive Consumer Survey – Oct 2009

9%

48%

9%

54%

17%

63%

21%

69%

0%

10%

20%

30%

40%

50%

60%

70%

80%

All respondents Waitrose Top Up Shoppers

Unexposed Exposed only on ITV.com Exposed only on TV All exposed on ITV.com and on TV

essential Waitrose - Please indicate when you most recently bought something from each of the following own label ranges. (Base: All respondents)

Cumulative for Bought in last week

or last month90% significant for bought in

last month133% uplift

44% uplift

Changing perceptions…we got that too

Source: Survey interactive Consumer Survey – Oct 2009

29%

26%28%

23%

0%

5%

10%

15%

20%

25%

30%

35%

Too expensive

Unexposed Exposed only on ITV.com Exposed only on TV All exposed on ITV.com and on TV

essential Waitrose - Which of the following supermarkets’ own label product ranges do you think are described by each of the statements on the left? (Base: All respondents)

Who is buying & Why?

http://www.webtventerprise.com/static/The_Online_Vi`deo_Advertising_Buyers_Guide_-_March_2010.pdf

TV buyers, 52%

Digital buyers, 48%

41.5%

11.9%

0.0%

46.7%

Deliver incremental reachto TV

Brand Awareness Direct Response Combination of responses

Key barriers to growth

It’s still horses for courses….

The future is TV shaped

0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010 2011 2012 2013

VOD

HH

(m)

Broadband TV Vod Internet VOD only

Source: Enders – VOD edges forward 2009

“TV will remain at the centre of our lives and you will be able to watch what you want where you want” – Justin Rattner, Intel

It’s tinfoil hat time

And of course it will become more social

Obligatory usage of the Gartner Hype Cycle

Source: Gartner/Geek&Poke

To Summarise

Hard to define

Small, but perfectly formed

It’s getting older as we speak

Catch up is king, but not eating into linear

People are getting used to it

Any questions?

Matthew.riches@itv.omor @matriches

Cartoon (@) from Gaping Void

Prepared & presentedby

ITV Commercial Research &

InsightVOD