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© 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential Presentation_ID 1 SHIFT HAPPENS! From Service Provider to Experience Provider Preben Schack, Sr. Director Cisco Service Provider Video Technologies CANITC, Monterrey 29 April 2010

Expo Canitec 2010, Shift Happens, Cisco

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Page 1: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1

SHIFT HAPPENS!From Service Provider to Experience Provider

Preben Schack, Sr. Director

Cisco Service Provider Video Technologies

CANITC, Monterrey 29 April 2010

Page 2: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 2

Who am I...

Name: Preben Schack

Nationality: Denmark

Profession: Sr. Director Cisco Systems

Experience: 18 years Cable-TV industryFocus: Service Provider

Video Technologies

Hobbies: Fishing, Cooking, Bicycling

E-mail: [email protected]

Page 3: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 3

Video Changes Everything…

Changing Market Environment…

Page 4: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 4

The World is Changing

Globalization

Social Networking and Mass

Collaboration

Sustainable Development

Consumerization

Recession

Page 5: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 5

Driving the Technology Revolution

Delivery Technology Revolution

IP Convergence / IPTV

3

The Future Video Experience

Advanced Advertisingand Targeting

“Infinite” Content (HD, Internet Video, 3-Screen)

All Digital Video

2

Fiber Deep

1

Personalized Video: DVR, VOD, Time-Shift

Page 6: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential

Broadcasters and Media

HuluHulu

27% Owner27%

Owner

12GB/sec.12GB/sec. 2X2XOnlineVideo

BrandVisibilityBrand

Visibility

$$$$

Consumer Electronics

Internet onTV

Internet onTV

Opportunity to Leverage Online Video for Differentiated User ExpOpportunity to Leverage Online Video for Differentiated User ExperienceseriencesOpportunity to Create Revenue Generating Services Using the Opportunity to Create Revenue Generating Services Using the Network as a Platform Network as a Platform

Opportunity to Increase Popularity of the Content and Revenue Opportunity to Increase Popularity of the Content and Revenue Through CollaborationThrough Collaboration

Innovate to Transform Consumer ExperienceInnovate to Transform Consumer Experience

Online Video

Video = 90% of consumer IP traffic by

2012

Cisco VNI StudyCisco VNI Study

100 million100 million100 million

Revenue from $598 million to $3.4 billion annually

By 2014

Web

Unique monthly viewers

In 24 millionHouseholds

By 2014

In 24 millionHouseholds

By 2014

Service Provider

7 million7 million “TV Everywhere”

CDNCDN

ISPISPISPISP

ISPISP

MarketDynamics

MarketDynamics

Shifts Happening ! Fast & All Around

Page 7: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 7

IPTV - Second WaveOn-net onlyTVExtended User ExperienceBusiness Model: B2C

Evolution to IP Video for unified experience and enhanced monetization

Traditional – First WaveOn-net onlyTVLimited User experienceBusiness Model: B2C

IP Video – Third WaveOn-net or Off-netTV, PC, mobile, etc.WEB like User ExperienceBusiness Model: B2B2C

More Open, More Flexible, More Monetization Opportunities

Page 8: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 8

Source: Cisco Visual Networking Index – Forecast, 2007-2012

Video to reach 87% of Consumer IP in 2012

Video is driving explosive growth

Other Media

Page 9: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 9

YouTube and Hulu Generate 2X More Traffic than the Entire Internet Backbone in 2000

0

25

50

Internet Backbone in2000 (U.S.)

Internet Video Sites in2008 (U.S.)

Peta

byte

s pe

r mon

th

Hulu

YouTubeEntire Internet

Backbone

Source: Cisco, 2008

Source: Cisco Visual Networking Index — Forecast, 2007 – 2012

Page 10: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 10

Video Changes Everything…

Transformation of the Video Value Chain

Page 11: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 11

Consumers Want Unified Experience Despite Video Ecosystem Fragmentation

Consumer Experience

Content FragmentationBroadcast, Premium, User Generated Content

Device & Screen FragmentationTV, PC, Mobile, Gaming, PDA

Interactivity FragmentationLean back, Lean forward, Social

Subscription FragmentationBroadband, TV, Mobile, Movie rentals, OTT

Free vs. Paid

Ad Dollars FragmentationTransition from linear TV to online

Business Models

Page 12: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 12

Source: “Television in Transition”, Accenture, 2008

Younger consumers embrace multiple media devices

Fewer consumers are satisfied with the status quo

Would enjoy watching content on a PCWould enjoy watching content on a mobile deviceHappy with current TV

Non-TV Devices Increasingly Important Relevance is becoming a multi-device proposition

Page 13: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 13

Profitable Path Is To Turn This Challenge Into Opportunity

Online video seems like replacement of TV experience...killer of content business

But…

Online video can enhance the TV experience….grow the content business models

If…

Carefully done right !

Page 14: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 14

Expand Reach & Monetization

Expand Reach & Monetization

The Transformation Strategy

Unify Experience & Platform

Unify Experience & Platform

Experience Better TV experience

Experience Better TV experience

Page 15: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 15

Expand The Audience Reach Demographics, Footprint, Any Screen, Anytime

Expand Reach

Expand Reach

Extend TV Experience To PC & Mobile For Current TV SubscribersEnhance value of current TV services, Higher stickiness, Brand retention

Any device, Anywhere, Anytime online catch-up service

Examples : “TV Everywhere” by Comcast, Time Warner, Verizon & others, USA“Yalp” Online TV services by Telecom Italia, Italy“SKY Play “ online TV service by BSkyB, UK“Canal Plus a la Demande” catch-up online service by Canal Plus, France

Service Providers

Page 16: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 16

Web 2.0Web 2.0 PersonalPersonal

SocialSocial Rich MediaRich Media

Broadcast & MoreBroadcast & More

Consumer ExperiencesMore Visual, More Social, More Personal

Transforming the End User Experience: Unrestricted by Time, Space, or Device

Page 17: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 171 7

Cisco Confidential

Age 2+

Age 12-17

Age 18-34

Age 35-54

Age 55-64

Age 65+

30.2%

39.5%

32.7%

30.8%

33.8%

24.8%

May 2009

Source : Nielsen Convergence Summit

Internet Video Simultaneous TV and Internet Use

Page 18: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 18

Internet Video In Tune With All Generations PC is dominant with all, Young like mobile and gaming consoles too

Total 18-34 Age 35-54 Age 55+ AgeComputer with Internet Access 67% 85% 67% 53%TV with VoD Capabilities 45% 49% 45% 43%TV with DVR/TiVo 60% 65% 60% 55%TV with Video Extender Device 5% 12% 5% 2%TV with Gaming Device 8% 16% 8% 2%Mobile Phone 12% 22% 12% 6%MP3 Player 11% 19% 11% 4%Portable Gaming Device 2% 4% 2% 1%None of above 11% 4% 10% 18%

Source : CBS Entertainment Panel Survey, July 2009

N=3461 N=704 N=1732 N=995

In past 3 Months, Have you used any of the following technologies to watch digital videos?

Page 19: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 19

Expand Monetization Opportunities Online Video Subscription, Advertising, Transaction, Up Sell

Expand MonetizationExpand Monetization

Offer Subscription Online & Mobile Video ServicesMonetize your video assets beyond your network footprint

Advertising For Online Video PortalTV advertising dollars are shifting to online advertising

Integrated Content Store: Download To Rent Or OwnIntegral part of online video portal & revenue share with content providers

Service Providers

Page 20: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 20

Video Changes Everything…

The New “Experience Provider”

Strategy

Page 21: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 21

Provide Viewers with Better TV Experience for Increased Revenue

Leverage Online video to drive viewers back to TVViewers like extended experience on TV Internet viewing drives TV viewing (CBS study)Most viewers watch missed or not available on TV episodes online (CBS study)

Experience TV : Web 2.0 experiences on TVMake TV more social, personal, InteractiveUser generated content and online video integration in TV experience

Experience Better TV experience

Experience Better TV experience

Page 22: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 22

Have you ever watched an episode of a continuing television series on internet before you watched any of episode of that program on TV?

Total 18-34 age 35-54 age 55+ ageNo 28% 19% 31% 39%Yes 72% 81% 69% 61%

When you watch an episode of a continuing television series on Internet before you watched any episode of that program on TV. Have you then later watched one or more episodes of that shows on TV?

Source : CBS Entertainment Panel Survey, July 2009

N=3495 N=711 N=1742 N=1012

Total 18-34 age 35-54 age 55+ ageNo 78% 64% 79% 88%Yes 22% 36% 21% 12%

N=762 N=254 N=369 N=124

Source : CBS Entertainment Panel Survey, July 2009

Does internet video drive TV viewing? Yes!

Page 23: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 23

Consumers Watch Mostly Missed Episodes Online

Total 18-34 Age 35-54 Age 55+ AgeMissed episodes of shows I watch on TV 88% 89% 88% 86%

Episodes of TV shows I do NOT watch on TV 27% 36% 26% 20%

Episodes of TV shows I have ALREADY watched on TV

16% 21% 16% 11%

Episodes of past shows that are not on TV now 39% 44% 40% 31%

None of these 4% 2% 4% 7%Source : CBS Entertainment Panel Survey, July 2009

N=2229 N=606 N=1122 N=476

What Kind of TV Programs do you Stream or Download and Watch on a PC?

Page 24: Expo Canitec 2010, Shift Happens, Cisco

© 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialC25-452149-02 24

AT&T 2009 Masters Tournament

TV, PC and mobile devices allow use of web elements, tools, and plug-ins

Consumers “create”their own experience

Advanced remote control …unique – or use your iPhone

Access content anytime, anyplace, any device

Page 25: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 25

Deliver Unified Experiences Using Network As Platform

Unify Experience & Platform

Unify Experience & Platform

Monetize new transaction services Application store for TV and other devices (revenue share)

Monetize new value added services on network platformRetail and wholesale content delivery (CDN) services Network personal video recorder serviceManaged consumer TelePresence service

Unify experiences across devices, content providersCross platform advertising across PC & TV : Measure, Deliver, MonetizeSingle sign-on across services and screensCross platform targeted adverting

Page 26: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 26

Business Models

Consumer ServicesConsumer Services

Value Added Services

Wholesale Services

B 2 B

B 2 C

B 2 C

Leverage Network and Data AssetsLeverage Network and Data AssetsExperience Provider PlatformExperience Provider Platform

$$$

$$

IP Video: Enabling New Business Modelsand Services

Page 27: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 27

More HD ChannelsMassive VoD LibrariesTime Shifted TV Internet VideoAny Stream to Any ScreenTargeted AdvertisingNext Generation User InterfacesService Velocity3DTV (impossible to avoid at CES 2010)

“The vision is to give customers the ability to watch ANY movie, television show, user generated content or other video that a producer wants to make available On Demand”

– Brian Roberts, CEO Comcast – CES 2008

“The vision is to give customers the ability to watch ANY movie, television show, user generated content or other video that a producer wants to make available On Demand”

– Brian Roberts, CEO Comcast – CES 2008

Next Generation Video Service Trends Driving network and in-home architectures…

Page 28: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 28

Expand Reach & Monetization

Expand Reach & Monetization

The Transformation Strategy

Unify Experience & Platform

Unify Experience & Platform

Experience Better TV experience

Experience Better TV experience

Page 29: Expo Canitec 2010, Shift Happens, Cisco

© 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialC25-452149-01 29

Page 30: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 30

BACK-UP

Page 31: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 31

BSkyB – UK : Monetizing Online TV

SKY Player: Online TV serviceLinear 34 channels simulcast online for PC or MACOn-demand online : 500+ movies, 1000+ hit TV episodes3 picture quality levels to suit broadband connectionCurrent SkyTV subs watch linear online channels free as per their subscribed packageNon Sky-TV subscribers can subscribe online packages – see next slide

Using online service to up-sell its top-tier TV and broadband subscriptions

Page 32: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 32

Sky Play and Microsoft XBox

Upcoming enhanced online service on Microsoft XBox

Channel line up, pricing, dates to be announced20+ Live Pay TV Channels, On-Demand Content & Interactive Sports Fans can communicate, check news & access fixtures, league tables & other on-demand information

Page 33: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 33

Sky Player : 4 Online Packages To Address Diverse Demographics

Page 34: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 34

CanalSat – France: 3 On Demand Services

1. Canal Plus a la Demande catch-up online serviceBundled with Canal Plus' Le Bouquet pay TV package

TV shows, movies (~30 per month) and sports events – including highlights for the major European football leagues and the UEFA Champions League

Currently available on PC, 10 Million VoD streams from March 08 to March 09,

1 million streams/per month run rate. 6000 titles library

2. CanalPlay A transactional online video store with 6,000 videos, including 3,000 movies for XBox

Limited availability with Sony PSP and PC

3. Foot+ Watch Ligue One (8 live per week, 2 delayed) and Champions League matches

Xbox Live party feature allows users to watch matches in a virtual stadium with other Xbox Live members, communicating via voice chat.

Available soon on Microsoft Xbox360

Page 35: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 35

Starz Plays Wholesale Affiliation Strategy

Subscription based service with Verizon Starz Play$5.99 per month for Verizon FiOS / Internet subscribers-single bill , otherwise $9.992500+ high-quality video selection with 1000 movies -first-run hit, independent films and classicsSpider-Man 3, Ratatouille, Pirates of the Caribbean, Hannah Montana/Miley Cyrus: Best of Both Worlds Concert

Also a live stream of the linear Starz channel

Unlimited downloads, playback and streamingOne membership powers up to 3 devices so for the entire

Recently joined Comcast-TW-Verizon “TV Everywhere” trials with 300 movies and shows

Offered in Netflix $8.99 and above subscription packages ( does not include linear channels)

Page 36: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 36

MLB.TV Monetized Online TV service for Out of Market Games Successfully

Online TV service for out of market games Preserving exclusivity of its existing TV deals

Supports PC, Roku, Boxee, iPhone

768Kb for MLB.TV, 1.5Mb for MLB.TV Premium, 3.0Mb for MLB.TV Premium with HD

For in-market games, working with MSOs and RSNs to make content onlineYankees, YES Network, and Cablevision deal for in-market online streaming $49.99 for remaining 2009 season, $19.99 per month, similar deal with Cox Communications and the San Diego Padres

In 2008, half a million online subscribers with $120 ARPU

Highly interactive, feature rich online streaming

Page 37: Expo Canitec 2010, Shift Happens, Cisco

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 37

BBC iPlayer Market Disrupter

Interesting Statistics

Hours encoded each week: 400+Servers needed for the job: 60Video formats encoded: 15Minutes taken for shows to appear online: 15Data transfer of an evening: 12.5Gbps

7 petabytes per monthStreaming peak: 10pmiPhone peak: midnightWeekend peak: 8am-10am