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Slide 1 - The Impact of Technology on the Media Industry Andrew M Skinner Manager. Technology Consulting Accenture
Slide 2 - Copyright © 2007 Accenture . All Rights Reserved. Slide 2 “People tend to overestimate what can be done in one year and to underestimate what can be done in five to ten years.” J. C. R. Licklider, 1965 “Grandfather of the Internet”
Slide 3 - Copyright © 2007 Accenture . All Rights Reserved. Slide 3 Some longer term ones just don’t go far enough Scientists from the RAND Corporation have created this model to illustrate how a “home computer” could look like in the year 2004. However the needed technology will not be economically feasible for the average home. Also scientists readily admit that the computer will require not yet invented technology to actually work, but 50 years from now scientific progress is expected to solve these problems. With teletype interfaces and the Fortran language, the computer will be easy to use. INTERNET FAKE
Slide 4 - Copyright © 2007 Accenture . All Rights Reserved. Slide 4 Some longer term ones just don’t go far enough “I think there is a world market for about five computers" Remark attributed to Thomas J. Watson (Chairman of the Board of International Business Machines), 1943.
Slide 5 - Copyright © 2007 Accenture . All Rights Reserved. Slide 5 Some short term statements go a little too far “This is a revolutionary product that has the chance to really impact people's lives, This is the ultimate digital device.” Steve Jobs, Apple CEO on iPhone
Slide 6 - Copyright © 2007 Accenture . All Rights Reserved. Slide 6 Never needing to delete files on your PC to free up space* An Online Game would be the 77th richest country Free phone calls globally A search bar as the entry point to the internet 23.4% of homes time-shifting 60% of TV content 15,000 songs in your pocket, 60 days of continual music while awake In 2000 were you expecting… * Apart from in your 128 Mb email account
Slide 7 - Copyright © 2007 Accenture . All Rights Reserved. Slide 7 Not having to delete anything from your fridge !! People earning a living online in Virtual communities Telco’s becoming true media organisations The internet developing from mainly text content to a full multi-media experience No scheduled TV channels, watch what you want, when you want to. Going to the video shop to get “the movies”, not just one but all of them and only paying for those you watch. In 2012 will you be expecting…
Slide 8 - The Impact of Technology on the Media Industry Andrew M Skinner Manager. Technology Consulting Accenture
Slide 9 - Copyright © 2007 Accenture . All Rights Reserved. Slide 9 So what media are people actually consuming ? Television Radio Music Film Computer Newspapers Magazine Books Phone % change in share % of average persons media time Source: ZenithOptimedia
Slide 10 - Copyright © 2007 Accenture . All Rights Reserved. Slide 10 Households that receive about 60 TV channels usually watch only 15.  Households whose systems can receive 96 TV channels (around the US national average) actually watch ... 15." Source: Steven Levy, "Television Reloaded", Newsweek, May 30, 2005, p. 55
Slide 11 - Copyright © 2007 Accenture . All Rights Reserved. Slide 11 Media Consumption todayThe concept of the long tail Frequency (Demand) Products (Queries, Songs, etc) Mass Market Break even Niche Market Break even Long Tail
Slide 12 - Copyright © 2007 Accenture . All Rights Reserved. Slide 12 Demonstration of the long tail in UK television broadcasting All other Channels Source: © BARB Ltd 2007
Slide 13 - Copyright © 2007 Accenture . All Rights Reserved. Slide 13 An estimated 1.08 billion people use the Internet as of September 18th, 2006 The global population of 6.5 billion means that only 16.7% of the worlds population have access to the internet Source: the Big Picture, 2006
Slide 14 - Copyright © 2007 Accenture . All Rights Reserved. Slide 14 In 1997, Bharat and Broder estimated the size of the indexed Web at 200 million pages This figure was revise and update to estimated size of the indexable Web to at least 11.5 billion pages as of the end of January 2005 Source: K.Bharat and A.Broder, A technique for measuring the relative size and overlap of public web search engines [WWW1998] The indexable Web is More than 11.5 billion pages. Gulli & Signorini, 2005
Slide 15 - Copyright © 2007 Accenture . All Rights Reserved. Slide 15 Connectivity to the Internet Source: Copyright © 2007, www.internetworldstats.com Total Internet Hosts Internet User breakdown Penetration of geography Source: ISC Domain Survey: Number of Internet Hosts. © ISC, Inc. Source: Copyright © 2007, www.internetworldstats.com
Slide 16 - Copyright © 2007 Accenture . All Rights Reserved. Slide 16 Top Global Web Properties Source: Total Unique Visitors (000), Age 15+ * December 2006 Total Worldwide - Home and Work Locations. comScore World Metrix 1. Microsoft 740,984 2. Google 508,659 3. Yahoo 494,170 4. Time Warner 260,387 5. eBay 251,423 6. Wikipedia 164,675 7. Amazon 151,033 8. Fox Interactive 135,730 9. CNET Networks 114,940 10. Ask Network 113,881
Slide 17 - Copyright © 2007 Accenture . All Rights Reserved. Slide 17 1. AOL 5:27:46 2. Yahoo! 3:09:41 3. Fox Interactive 1:52:54 4. MSN 1:52:06 5. eBay 1:49:13 6. Google 1:04:21 7. Microsoft 0:44:14 8. Amazon 0:27:49 9. Ask Network 0:24:51 10. MapQuest 0:12:11 Top Ten Web Brand Average time per user per month Source: Nielsen//NetRatings
Slide 18 - Copyright © 2007 Accenture . All Rights Reserved. Slide 18 The light bulb was not invented by the candle industry looking to improve output. Owners of established technologies tend to focus on making incremental improvements to their own products, avoiding the potential threat to their own businesses.
Slide 19 - Copyright © 2007 Accenture . All Rights Reserved. Slide 19 Digital Disruptions Participation Control Quality Mobility The future is a world where individuals create content and share it with each other without the need for traditional broadcasters and distribution channels The future is a world where individuals access information and services on multiple types of devices from anywhere The future is a world where the media that people consume is control by the individual. Scheduling of media will be driven by the consumer The future is a world where all the media produced can be cinema quality – where the output from consumer devices approach that of the professional
Slide 20 - Copyright © 2007 Accenture . All Rights Reserved. Slide 20 The real difference between SD and HD content The real difference is more information
Slide 21 - Copyright © 2007 Accenture . All Rights Reserved. Slide 21 1920 x 1080P - HDTV 1280 x 720P HDTV 1024 x 768 - XGA 768 x 576 - PAL 720 x 480 – NTSC/VGA So just how much better is a High Definition image than Standard definition 345,600 442,368 786,432 921,600 2,073,600 It's important to note that a higher resolution format is not necessarily physically larger but it will provide a higher PPI (pixel per inch)/PPCM (pixel per cm) density
Slide 22 - Copyright © 2007 Accenture . All Rights Reserved. Slide 22 0 .064 .128 .256 .512 1 2 10 20 100+ Indicative application bandwidth demands IP Telephony Email Basic Surfing Teleconferencing Online games MP3 Streaming Video Conferencing Multi-player games Video-streaming (VHS) Video on demand Multi-channel TV Video streaming Multi-channel TV 5 sec CD download Virtual Reality 3d Holographics Telepresence Bandwidth Mbps Source: 2010 National Broadband Targets Marketing Australia’s Competitiveness, 31 July 2006, Internet Industry Association
Slide 23 - Copyright © 2007 Accenture . All Rights Reserved. Slide 23 The network is the computer Never under estimate the bandwidth of a person with an ipod on a train……. † Assumed compression of 50:1 ‡Assumed compression of 40:1
Slide 24 - Copyright © 2007 Accenture . All Rights Reserved. Slide 24 The problem is how to deliver the content to the end user when the size of the content is increasing faster than the bandwidth on the network. The answer may well be to use the technologies developed to “share” media files. Peer-2-Peer.
Slide 25 - Copyright © 2007 Accenture . All Rights Reserved. Slide 25 Today’s infrastructures Messaging, Ring Tones TV Studios, Ads, Movies CONTENT USERS NETWORKS Web Servers, AOL, Yahoo, Advertising Television Networks Phone Networks Data Networks (Internet) Independently designed, with specific content & devices; closed ecosystems
Slide 26 - Copyright © 2007 Accenture . All Rights Reserved. Slide 26 It’s time for the next step Content providers Device Explosion Communications Networks Enterprise Content Media Production Broadcasters Personal Content Studios Advertisers The new opportunity is at the convergence points Internet Service Providers Mobile Operators MVNOs Broadband Operators
Slide 27 - Copyright © 2007 Accenture . All Rights Reserved. Slide 27 “On demand” services Retail Distribution Broadcast Controlled Media Movement Retail Broadcast Wired Broadcast The need for edge devices Media Hub Content Creation Streaming Output Device Caching Wireless Wired Wired Retail Online Stores License Agreements Distribute
Slide 28 - Copyright © 2007 Accenture . All Rights Reserved. Slide 28 1. 3 Main issues with Media revenue at present Subscription based models Media Storage Insurance Format transfer What is the role of the BBC ? Move to Micro News Production Content production or public service Skip advertising through user control Broadcaster or producer focused Location specific advertising Ownership of Content BBC License Fee Advertising Revenue 2. 3.
Slide 29 - Copyright © 2007 Accenture . All Rights Reserved. Slide 29 The hardware cost of an iPod is insignificant compared to the cost of the media that it holds An 80GB iPod will today cost you £259. The music to fill the same iPod (20,000 songs) will cost, via the iTunes Store, £15,800.
Slide 30 - Copyright © 2007 Accenture . All Rights Reserved. Slide 30 The Future Home Network Study Home Office Lounge Child Room Bedroom Child Room 2 Kitchen
Slide 31 - Copyright © 2007 Accenture . All Rights Reserved. Slide 31 Online Ad Spend Online Time Growing An ad spend and media time imbalance globally Offline Media Time Offline Ad Spend ( Newspapers, TV, Radio, Direct Marketing, etc) Online Ad Growth Opportunity Discrepancy: ~$70 Billion (North America) ~$150 - $200 Billion (Global) Sources: Universal McCann, Google, Accenture Analysis 0 % 100 % 80 % 60 % 40 % 20 % Advertising Spend Consumer Media Time
Slide 32 - Copyright © 2007 Accenture . All Rights Reserved. Slide 32 Summary The long tail of media content becoming more pronounced Increased focus from Telco organisation to the delivery of rich media Continued problems with “last mile” delivery Content size increase providing ongoing need for compression improvement and distributed storage. Advertising revenue following viewers from television towards Interactive technologies
 

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