Professional Documents
Culture Documents
Foreword
As Media & Entertainment industry lead,
it is my pleasure to release the latest issue
of our Bringing TV to Life series.
Bringing TV to Life was established in 2010
as an annual commentary over the nascent
Video over IP industry brought to you by
the Accenture Media & Entertainment
practice and AccentureDigital Video. Over
the last six years, the OTT-TV market has
become more mature and has begun to
confirm much of its incredible potential,
evolving to become a mass-market
phenomenon with great penetration across
virtually all industrialized economies.
During this period, we have looked at the
Francesco Venturini
Global Media & Entertainment Lead
310
2016
314
2017
325
2018
338
2019
348
Telco: 9.2% CAGR
2015
2016
2017
2018
36
2015
40
2016
44
51
2015
97
2018
2016
101
104
2019
Key trends
This growth has been propelled by both
advances in technology and changes in
consumer behavior and expectations:
Technology trends
Continued infrastructure upgrades, in
particular fiber-based high-speed
broadband, have made OTT propositions a
reality. Faster broadband (in January 2015
the Federal Communications Commission
upgraded its definition from 4Mbps to
25Mbps1) has reduced barriers to entry
for new players, who are able to optimize
delivery of video on unmanaged
networks. HD (and ultimately 4K) have
also raised customer expectations,
enabling businesses to differentiate
between quality and freemium content.
At the same time, cloud technology and
big data have provided businesses with
1 The Verge. The FCC has changed the definition of broadband. Retrieved March 2016.
http://www.theverge.com/2015/1/29/7932653/fcc-changed-definition-broadband-25mbps
| Bringing TV To Life, Issue VI
94
2017
48
2019
108
2017
2018
2019
23
27
31
36
42
Consumer trends
Consumers can buy ever cheaper yet
more sophisticated devices and now
expect constant connectivity and
immediate video provisioning across all
their gadgets. The portability of devices
is changing content consumption trends,
both for long-form and short-form video
audiences. Another trend sees video
services that have sprung from the
internet rather than broadcasting tending
to offer more free content or lower-cost
subscriptions. To an extent, this has set
the bar for consumer expectations and
influenced their willingness to pay
subscription fees. The proliferation of
OTT services is popular with consumers,
but the increased competition it brings
challenges the value of existing carriage
agreement deals.
Creation
Content
Producers
Rights Holders,
Studios
Providers
Broadcasters
Web-based
Providers (OTT)
Aggregation
Cable and
IPTV
Consumption
Online Video
Platforms
Device
Manufacturers
Platform
Providers
FIGURE 3 | Tomorrows transformed digital video industry value chaina virtuous circle
Source: Accenture
Distribution rights
Channels
Rightsof
fees
Carriage
fees
While a simplified view
the relationship between traditional
Providers
and Aggregators may look Subscription
like this: fees
Creators
Programmers
Distribution rights
Creators
Operators
Channels
Rights fees
Programmers
Carriage fees
Audience
Operators
Audience
the relationship between DCPs and DCAs, with supporting capabilities, could evolve into something like this:
Da
ta,
pla
tfo
rm
DCPs
Digital
Content Providers
Multi-business-model
platforms
Creators
Creators
Multi-distributionEvolved
product development
capabilities:
i
i
er
er
p
x
xp
hi
de
hi
de
ers
ran
ers
ran
b
iew
t, b
iew ent,
dv
ten
d v ont
C
an
Con
an
ce
ce
ien
ien
Aud
Aud
Segmentation-informed curation
Integrated multi-channel engagement
Direct marketing (content)
Multi-business-model platforms
Multi-channel content repurposing
Multi-distribution product development
Digital ad- and content-optimization
Segmentation-informed curation
Interactive and innovative
Direct marketing (content)
content experience
Multi-channel content repurposing
DCAs
ices
ices
serv
serv
iven
iven
-dr
-dr
ork
ork
etw
etw
dn
dn
an
an
DCPs
Da
ta,
pla
tfo
rm
DCAs
Digital Content
Multi-channel
quality ofAggregators
service/experience
Audience
Contentsubscriber-optimization services
Evolved and
capabilities:
Cross-DCP care services
Distribution products and services
Package and ad targeting
Multi-channel quality of service/experience
Direct marketing enablement
Content- and subscriber-optimization services
Content optimization enablement
Cross-DCP care services
Cross-DCP targeting
Package and ad targeting
Audience
en
Digital
ce ad- and content-optimization
,p
Direct marketing enablement
me
rod
and innovative
ucInteractive
as
ts a
ure
Content optimization enablement
nd content experience
me
cura
nt,
t
i
o
dat
n
Cross-DCP targeting
a an
alyti
en
cs, bil
ce
ling, and customer support
,p
p
me
rod
uct
as
ure
sa
nd
me
cura
nt,
tion
datConsequently,
the role of traditional
DCPs and DCAs have the most to win
a an
alyti
cs, bil is also changing as
more
Aggregators
DCAs
and the most to losein this changing
t
r
ling, and customer suppo
Comcast Cable: Expenses as a percentage of video revenue. Source: Accenture analysis, company data
Traditional Content Aggregator (Comcast Cable): Expenses as a percentage of video revenue
2013
2014
2013
2015
2014
Programming
Technical &
Product of
Support
Traditional Content Aggregator (Comcast Cable): Expenses as a percentage
video revenue
Advertising,
Marketing &
Promotions
Other
Programming
44%
Other
15%
27%
27%
Advertising,
14%
Marketing &
Promotions
15%
14%
16%
15%
27%
16%
47%
44%
49%
47%
Technical
&
26%
Product Support
26%
49%
2015 Digital Content Provider (Netix): Expenses as a percentage of revenue
27%
2014
2013
2015
2014
2015
8%
11%
8%
General &
Administrative
Cost
71%of Revenues
Technology
& Marketing
9%
11%
Development
Other
General
&
4% 5%
Administrative
68%
71%
68%
68%
9%
11%
9%
10%
9%
11%
12%
11%
68%
10%
DirecTV
Aggregator consolidation
Merger and acquisition activity has been
driven by traditional Aggregators wanting
to grow their subscriber base, helping
them to diversify offerings and drive
up ARPU. A recent example in the US
is AT&Ts $49-billion acquisition of
DirecTV.2 In March 2016 AT&T
announced it would be launching
three digital-only streaming services,
which dont require an annual contract,
a satellite dish or set-top box.3
2 New York Times. F.C.C. Approves AT&T-DirecTV Deal. Retrieved March 2016.
http://www.nytimes.com/2015/07/25/business/media/fcc-approves-att-directv-deal.html?_r=0
3 Wired. AT&T Will Let You Get Cable TV Without Having CableOr a TV. Retrieved March 2016.
http://www.wired.com/2016/03/att-will-let-get-cable-tv-without-cable-tv/
4 Advertising Age. Dish Remakes Sling TV App to Vie With Hulu, Netflix in On-Demand. Retrieved March 2016.
http://adage.com/article/special-report-consumer-electronics-show/dish-tweaks-sling-tv-app-vie-hulu-netflixdemand/302013/
11%
Cost of Revenues
Netflix:
Expenses as a percentage of revenue. Source: Accenture analysis, company data
Digital Content Provider (Netix): Expenses as a percentage of revenue
2013
15%
7%Other
4% 5%
6%
3%
5%
7%
5%
12%
6%
3%
SLING TELEVISION
From Aggregator to DCA
Some aggregators are starting the
transition to a DCA model. DISH, with
its Sling TV offering, is an example of
an aggregator moving in this direction.
Sling TV is targeted at millennials and
consumers who dont have a pay TV
subscription. Launched in 2015, in its
first year it acquired around 500,000
subscribers.4
NOW TV
From Aggregator to D2C DCP
Some Aggregators are looking for
different ways to leverage their content
relationships to attack the OTT market
and capture a new audience. An example
is Skys D2C Now TV service, which
acquires rights and acts as a DCP, while
its parent, Sky, continues to operate as
a traditional Aggregator.
HBO NOW
The rush to OTT
Traditional Providers are beginning to
expand their OTT offerings into directto-consumer (D2C) services. HBO Now,
Showtime, CBS All Access and Hotstar
are examples of stand-alone streaming
services that were launched in 2015.
YOUTUBE RED
From DCA to DCP
Googles move into subscription video on
demand (SVOD) is an ad-free subscription
service in the US, launched in October
2015.5 Its YouTubes first significant
move to becoming a rights holder.
NETFLIX
From DCP to global DCP
Netflix recently announced expansion
into 130 countries, bringing their total
reach to 190 countries.6 The firm already
has more than 69 million subscribers in
more than 50 countries.
AMAZON PRIME
From DCP to DCA
Amazon launched a new initiative
called Streaming Partners Program
that allows Prime members to add
subscription programming to their
Prime video service. For instance, users
can add video content from Starz and
Showtime to their membership for
an additional monthly fee.7
Staying ahead
of disruption
Traditional Providers still need to grow
audience scale by working with as many
traditional Aggregators as possible;
exclusive vertical integration with a single
Aggregator without global scale has rarely
proved to be a winning strategy. And the
pressure to own the consumer relationship
(and, consequently, subscription revenues)
as digital becomes ever more important,
5 YouTube. Meet YouTube Red, the ultimate YouTube experience. Retrieved March 2016.
http://youtube-global.blogspot.co.uk/2015/10/red.html
6 TechCrunch. Netflix Launches In 130 New Countries, Including India But Not China. Retrieved March 2016.
http://techcrunch.com/2016/01/06/netflix-finally-goes-global/
7 Re/code. Amazon Starts Building Its Own Bundle by Selling Showtime, Starz and More With Amazon Prime.
Retrieved March 2016. http://recode.net/2015/12/08/amazon-starts-building-its-own-bundle-by-selling-showtime-starz-and-more-with-amazon-prime/
Bringing TV To Life, Issue VI |
10
DCPs
DCAs
11
Integration with
Digital Content
Aggregators (DCAs)
Digital business-to-business
(B2B) model is a straightforward
12
Traditional Content
Provider Capabilities
PROGRAMMING
& PLANNING
Multi-platform
planning
Multi-platform
format creation
Linear
VOD
New DCP
Capabilities Required
Challenges
Reaching
Integrated
Retaining
Multi-distribution
hallmarks
the brands
Managing
customer
relationship across platform
multi-channel
engagement and scheduling
development
Segmentation-informed
and commissioning
Digital
Content
RIGHTS
MANAGEMENT
CONTENT
PROCESSING
Market
Distribution
Content
control
Content
management
Archive
management
Content
processing
Broadcast
CONTENT &
SERVICE DELIVERY
Service
Real-time
News
planning
production
Program
Sport
content management
protection
Resource
Branding
CUSTOMER
PROPOSITIONS
delivery
Content
CONTENT
PRODUCTION
and licensing
Content
Digital
sales
Digital
customer service
mixed business
models to increase average
revenue per user
Supplying
and managing
multiple content and metadata
variants
Support
curation and
recommendation tools
Delivering
rights across a
multi-platform environment
Commissioning
effective
content with good return
on investment
Engaging
audiences with
compelling propositions
Personalizing
offerings
Maintaining
Customer
experience design
Customer
Social
Managing
interaction
one-on-one
customer relationships
Rapidly
iterating products
Retaining
customers with
engaging products
Multi-business-model
ADVERTISING
Traditional
Digital
ad operations
ad operations
Delivering
scale propositions
cost-effectively across digital
and linear
Managing
commercial customer
relationships and optimizing
inventory
platforms
Multi-channel
content
repurposing and supply chain
Multi-business-model
platforms
Multi-channel
content
repurposing and supply chain
Multi-business-model
platforms
Multi-channel
content
repurposing and supply chain
Segmentation-informed curation
and commissioning
Interactive and innovative content
experience
Integrated
development
platforms
product
Segmentation-informed
and commissioning
experience
Multimedia
curation
content optimization
Interactive
Marketing
product
Direct
scale
Digital
curation
13
Move fast
14
Get noticed
15
Its increasingly clear that services based on one-toone relationships between business and consumer are
best placed to return future revenues.
For a DCP this can mean diversifying into
a D2C model to boost scale and reach,
enhancing its ability to monetize assets.
In those D2C models, DCPs will need
evolved capabilities including digital
content optimization and interactive
and innovative content experience,
as they strive to increase loyalty while
balancing their portfolio of content
investments.
For many traditional Providers, this
movefrom a broadcasting to a retail
modelis the most radical change in
their history. Digital technologies have
made this an affordable ambition, and
most DCPs have little legacy in this
area to act as a brake. However, few are
already equipped to handle the customer
16
A strong alliance
with DCPs.
Beyond negotiating carriage agreements
to bring compelling content packages
to consumers, the DCA must create
additional value for the DCP, to better
cement its position in the value chain.
The DCP should come to see the DCA
as an enabling collaborator rather than
a potential competitor.
18
A healthy relationship
with consumers.
DCAs must build on their enviable
position as owners of the customer
relationship, to become the single
interface for consumers, offering an
array of additional content and
services that keep pace with viewers
ever-changing tastes.
Traditional Content
Aggregator Capabilities
SALES &
MARKETING
Customer
service
Customer
experience design
Customer / audience
Social
analytics
interaction
Challenges
New DCA
Capabilities Required
Increased
customer
segmentation
Distribution
Simple
Data-driven
ad targeting
package and
consumer product
offerings with complex
constructs
Increased
competition from
digital service providers
Content
OFFERING
MANAGEMENT
Distribution
Content
and licensing
Balance
SERVICE DELIVERY/
NETWORK
delivery
protection
Distributor
enablement
targeting
Importance
AD SALES/
AD ENABLEMENT
Traditional
Digital
ad operations
ad operations
and subscriber
optimization services
Data-driven
Content
optimization enablement
Cross-DCP
SERVICE
MANAGEMENT
OPERATIONS
Network
engineering and
operations
Service
Field
monitoring
force
targeting
Effective
Data-driven
enablement
direct marketing
partner ecosystem
management
Multi-channel
and experience
quality of service
Content
and subscriber
optimization services
Cost
pressures on advertising
without measurement
Data-driven
package and ad
Provider
Data-driven
direct marketing
vs Aggregator revenue
share imbalance
targeting
enablement
Targeted
Cross-DCP
Application
package and ad
Distribution
across a number of
different devices and services
Multimedia
quality of service /
of coherent
multi-platform distribution
QoS / QoE
Marketing
experience
Skinny
bundles economics
while maintaining breadth
of content offerings
care services
Multi-channel
Content
packages with
content inflation
Content
package optimization
Cross-DCP
between customer
demand and ecosystem
commercials
Optimizing
Service
Digital
targeting
Multi-service
Multi-channel
Ubiquitous
network
management
Content
Disconnect
Cross-DCP
offerings
QoS
across service
experience
services
quality of service/
DevOps-driven
platform
development models
19
Scale up to succeed
20
21
22
23
Aggregate insights
6
Leverage the living room
advantage
Competition to own the living roomstill the core
space for viewers despite changing consumption habits
has never been fiercer.
DCAs do however have a clear advantage
over other industry players in the battle
for the living room. Most own consumer
premises equipment (CPEs) like set-top
boxes andby seeing this as an asset
rather than a liabilitythey can take
control of the living room. Leveraging the
CPE, and building a coherent, consistent
multi-device offering around it, is well
understood andfor the most partwell
implemented by the market leaders. But
where are the future offerings that will
allow leading companies to further
differentiate themselves?
9 Digital Spy. Sky AdSmart launches, bringing targeted advertising to TV. Retrieved March 2016.
http://www.digitalspy.com/tech/satellite/news/a544298/sky-adsmart-launches-bringing-targeted-advertising-to-tv/
Bringing TV To Life, Issue VI |
23
Build trust
Source: AccentuRe Digital Consumer Survey, 2015 (Sample base, TV owners who access digital content)
Overall
North America
Western Europe
Asia Pacic
Middle East
Latin America
24
TV Broadcaster /
Satellite Operator
Cable TV
Company
Telecommunication/
Broadband Provider
Internet Video
Provider
31%
26%
22%
15%
21%
37%
14%
24%
33%
39%
27%
30%
2%
15%
26%
15%
3%
6%
13%
13%
23%
15%
5%
26%
25%
23%
32%
Social
Media
Service
Provider
24%
10%
4%
25
26
27
Authors
About Accenture
Sef Tuma
Chief Strategy Officer
Accenture Digital Video
youssef.d.tuma@accenture.com
James Weeks
Accenture Digital Video
Bikash Mishra
Accenture Strategy:
Communications, Media & Technology
Anthony Mullally
Accenture Digital Video
Laura Chittick
Accenture Video Marketing
& Monetization Services
John Maguire
Managing Director
Accenture CPE Evolution
Copyright
2016
spreads
file Accenture.
Facing Pages
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.