The Future of Television

Mark Suster

PaidContent – November 2011

@msuster

So Interactive, Digital TV is Right Around the Corner?

Nobody Believes it Because We’ve Cried Wolf for 20 Years

This Has Led Our Industry to Become Frogs Boiling in Water

Metaphor: put a frog into boiling water and it jumps out, put it in cold water & slowly turn up temperature and it boils to death

“We Overestimate the Impact of Tech on 3-year Horizon & Underestimate on 10-

year” - Bill Gates

I Would Argue That the Massive Change in Television Will Accelerate in 2012

1. Massive decrease in costs of capturing & processing video

2. Significant penetration in broadband, increases in Wi-Fi

3. Huge advances in compression

4. Massively distributed advertising market

5. Decreasing traditional paychecks to creative talent

6. Consumer behavior has made Internet video a reality

Bundled TV Will be the Album of the Future

And The Same Forces that Killed the Album Will Kill “The Bundle”

1. Disruptive technology that breaks the distribution strangle hold of content

2. Massive costs reductions in capture, process & distribute

3. Consumer choice

YouTube is the New Comcast … And Notice the Change in Branding

And My Bet is that The Future Distributors Are Not Who Most TV

Execs Think

So Why Now?

Americans watch 5.3 hours of TV / Day

TVReading

< 1 Hour

5.3 Hours

Media Patterns

Online

3 Hours

It’s Not Just Dogs on Skateboards Anymore

A Disruptive Breed of Digital Content Producer Has Emerged

UGC Network TVYouTube TV

Pro

du

cti

on

C

osts

/

Min

ute

$100-400

$6,000-8,000

$50-100k

These 4 Companies Alone Doing > 3 Billion Video Views / Month

YouTube TV

Costs

/

Min

ute

With YouTube Content Distribution is Much More Predictable and Content

Producers Have a Direct Relationship with Viewers

ViewerViewer

Subscribers

Email Lists

Facebook Connect

YouTubeYouTubeProducerProducer

Youth Demo Already 1/3rd of Time Online Watching Video

Streaming Video

Other Surfing

And Revenue Becoming Substantive

How Mainstream? 86% of All Internet Watch Online Video

Aug 11

42 billion views

185 million viewers

228 videos / person

17 hours

91% of Households Still Pay for TV (91%)

This Market Disruption Will Be Enormous –

And It’s Accelerating Now

Don’t Be a Frog. Get Ahead of the Curve.

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Thank you