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Entertainment Sell-Through Roadmap
• 1.0 was physical (DVD) distribution
• 2.0 is ubiquitous content availability through cloud services– More ways to acquire and use content– Seamless integration between digital and physical media
(DVD,BD,DECE)
• DECE was formed to develop the standards to enable
Entertainment 2.0.
2Copyright 2009 Digital Entertainment Content Ecosystem LLC
DECE – A Digital Open Market
• New cross industry group of global stakeholders formed to define new industry standard to:– Enable a new consumer experience for digital media
with enhanced digital flexibility and content accessibility
– Establish a framework and deploy a back-end service that facilitates compatibility across multiple digital distribution services and devices
• DECE intends to make online sell-through of film, TV and other digital content as ubiquitous and compatible as DVD.
Copyright 2009 Digital Entertainment Content Ecosystem LLC
DECE Confidential 4
Why DECE?
• First digital platform designed for scale
• Open platform enabling 3rd-party innovation
• Lowers barrier to entry for devices and services
• Achieves “better-than-free” goal
• Next-generation EST usage model designed for Millennials
• Preserves sell-thru business model
Consumer Benefits – EST Lift
DECE Confidential
0%2%4%6%8%
10%12%14%16%18%20%
$8 $13 $18 $23
EST WITH Interoperable Digital Locker
Baseline: EST WITHOUT Digital Locker
% Increase in Units / $ Sales if Interoperable Digital Locker ONLY Offered
EST Price
At range of potential price points, Digital Locker increases unit demand and $ sales by 15% or more
Low High
Source: Oliver Wyman “Future of Home Entertainment” Demand Simulation Research, November 2007
Consumer Benefits – Segments
DECE Confidential
14%
32%
7%
0%
5%
10%
15%
20%
25%
30%
35%
Total Population Under 35 Over 35
Impact of Interoperable Digital Locker Rights (subset of usage model)(% ∆ in total revenue by age group)
Source: Oliver Wyman “Future of Home Entertainment” Demand Simulation Research, November 2007
The Adult Millennial Value Pyramid: Cell Phones, Laptops, And Desktops Already Surpass TV
Can’t live
without
Lower value
Cell phone, Laptop, & Desktop
TV, Game console & Smartphone
Digital music player, DVR, & Digital video player
Satellite radio & Handheld Gaming Device
Millennial Strategy Program®How would you rate the value of the devices you use? (1= It has no value to me at all; 5=I cannot live without it)
Value placed on devices used by Adult Millennials
2004
2006
2008
2010
2012
201436 64
7 36 57
13 36 50
20 36 43
27 36 37
33 36 30
0% 20% 40% 60% 80% 100%
Boomers Generation X Millennials
A Plurality Today … A Majority by 2010 … 18-49 Domination By 2014 And Beyond Percentage of 18-49 age group
Based on U.S. Census population projections
41 million
Number of Millennials
50 million
59 million
68 million
77 million
86 million
Boomers Gen X’ers Milllennials
Participating Members (No Class Designation)
Extend MediaDTS
Liberty GlobalMod SystemsMacrovisionMovie Labs
RIAA
DECE Confidentialo 9
MembershipLevel
Content Providers
Service Providers Client Implementers
Mgmt CommitteeMembers
FoxNBC/UWBParamount
ComcastMicrosoftThomsonNokiaVerisign
IntelPanasonicSonyHPSamsungToshiba
FoundingMembers
Lions Gate Best BuyDeluxe Digital
CiscoLucentPhilips
AdobeAscent Media
Blueprint DigitalCable Labs
CoxDolby Labs
Sonic SolutionsSwitch Communications
TescoVerimatrixWidevine
Zoran
DECE Organization & Participants
What if DVD Rolled Out This Way?
People would think we were crazy
Copyright 2009 Digital Entertainment Content Ecosystem LLC
The Problems with EST Today
• Silo services limit consumers into a single device platform and a single retailer for purchasing content.
• Every additional service silo further fragments the market.• It is another format war, but with online services.• Content delivered from a single network service to a single device
platform lowers the consumer’s perceived value of ecosystem
11Copyright 2009 Digital Entertainment Content Ecosystem LLC
12
The Open Marketplace for DVD
• Defined Standard with a choice of storefronts and devices– Approved format– Single usage model providing consistent experience
Retailer Retailer Retailer Retailer
Copyright 2009 Digital Entertainment Content Ecosystem LLC
DECE’s New Digital Media Product
13
DECE
• Defined Standard with a choice of storefronts and devices– Approved format– Single usage model providing consistent experience
DECERetailer
DECERetailer
DECERetailer
DECERetailer
Copyright 2009 Digital Entertainment Content Ecosystem LLC
Key Content Attributes
14
• Domain usage model• Rights locker • Multi-format support
• Remote access• Sharing within a family• Export to DVD
DECERetailer
DECERetailer
DECERetailer
DECERetailer
DECE
Copyright 2009 Digital Entertainment Content Ecosystem LLC
Defining a New Digital Media Product
Product/Format
ResolutionDistribution
ChannelBusiness
Model
Standard Def Physical• Sell-thru• Rental• Subscription
High Def Physical• Sell-thru• Rental• Subscription
Multi-Def Digital• Sell-thru• Rental• Subscription
Copyright 2009 Digital Entertainment Content Ecosystem LLC15
• DVD & Blu-ray established standards for SD and HD physical media
DECE
Defining a New Digital Media Product
Product/Format
ResolutionDistribution
ChannelBusiness
Model
Standard Def Physical• Sell-thru• Rental• Subscription
High Def Physical• Sell-thru• Rental• Subscription
Multi-Def Digital• Sell-thru• Rental• Subscription
16
• DECE will define a new open standard for digital distribution
DECEBrand
Copyright 2009 Digital Entertainment Content Ecosystem LLC
System Overview
17Copyright 2009 Digital Entertainment Content Ecosystem LLC
DECE’s Ecosystem RolesContent
Providers
DigitalService
Providers
Online Retailers
Device Makers
DECECoordinator
Licenses content to Retailers
Interfaces to DECE Coordinator Provides content fulfillment services
Customer-facing storefront serviceSells DECE content
Manufacturer of compliant devicesPlays ecosystem content
Manages DECE Locker Accounts/DomainsFacilitates cross-service and device compatibility
Locker AccessService
Providers
Consumer-facing streaming serviceSells DECE content access service
18Copyright 2009 Digital Entertainment Content Ecosystem LLC
DD
DECE’s Ecosystem Roles
Digital Service Provider A / CDN
Retailer A
DomainDevice
A
DECECoordinator
LASPA
Domain Device
B
Domain Device
C
Digital Service Provider B / CDN
Retailer B
LASPB
DECE Domain/Account
19
StreamingDevice
Copyright 2009 Digital Entertainment Content Ecosystem LLC
Digital Library
Linking Retailers Accounts to DECE
DECERetailer
DECERetailer
DECERetailer
DECERetailer DECE
Retailer DECERetailer
20Copyright 2009 Digital Entertainment Content Ecosystem LLC
Setting Standards
• All content will have the same standard usage model.• All services will follow UI guidelines when providing
interoperable features to simplify consumer experience.• All content will be available in all of the approved
standard formats from all Retailers.• All content will be branded.• All services and devices will follow standard compliance
rules.• All interactions between Retailers/DSP and Central
Coordinator are standardized.
21Copyright 2009 Digital Entertainment Content Ecosystem LLC
What We All Gain
Content Owners Digital Retailers CE/IT Companies
• Enhanced value of content• Supply chain optimization• Competitive marketplace• Tool against piracy• Solution to interoperability• Mass market for digital content
• Enhanced value of service • Lower barrier to entry • Competitive marketplace • Increased device reach• Solution to interoperability• Mass market for digital content
• Enhanced value of devices • Lower barrier to entry• Competitive marketplace • Greater access to content• Solution to interoperability • Mass market for devices
A new standard for digital distribution will enable consumer choice resulting in a mass market for digital content,
devices and services
Copyright 2009 Digital Entertainment Content Ecosystem LLC
Service Perspective: Scalability
• A retail service in an open marketplace is not limited to a single device platform and can reach a mass market of devices
SiloRetailer
SiloDevice
DECERetailer
DECEDevice
DECEDevice
DECEDevice
DECEDevice
Copyright 2009 Digital Entertainment Content Ecosystem LLC
Device Perspective: Scalability
• A device in an open marketplace is not limited to a single service silo and can receive content from a mass market of retail services
SiloRetailer
SiloDevice
DECEDevice
DECERetailer
DECERetailer
DECERetailer
DECERetailer
Copyright 2009 Digital Entertainment Content Ecosystem LLC
What the Consumer Gains
Consumers
• Purchasing an experience, not a format • New ways to acquire and access content• Authorized content sharing within household• Greater choice of interoperable devices• Choice of service providers (Retailers)
Copyright 2009 Digital Entertainment Content Ecosystem LLC
Summary
• Enable a new consumer experience for digital media with enhanced digital flexibility and content accessibility
• Establish a framework and deploy a back-end service that facilitates compatibility across multiple digital distribution services and devices
Copyright 2009 Digital Entertainment Content Ecosystem LLC