Market Drivers Influencing Broadcast

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1 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. Page 1

2 Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Television Value Chain is Evolving Over the Top (OTT) Content Creators Specialty Networks Television Distribution Providers National Networks Local Broadcasters Creation Aggregation Delivery Consumers Page 2

3 Where are the Bobos in the ecosystem? Trouble Spots in The Model Over the Top (OTT) Who`s Owns This Pipe? Specialty Networks Will they impose Bandwidth Caps? Television Distribution Providers Content Creators National Networks Local Broadcasters Creation Aggregation Delivery Consumers Page 3

4 Trouble Spots in The Model Over the Top (OTT) In the USA the the battle over retransmission fees is causing friction Content between Local Creators Broadcasters and Cable Operators National Networks Specialty Networks Local Broadcasters Television Distribution Providers Creation Aggregation Delivery Consumers Trouble Spots in The Model More and more viewers use Personal Video Recorders (PVRs) to watch prime time and skip the comercials Over the Top (OTT) Specialty Networks Television Distribution Providers Content In canada 40% use Creators PVRs and the % is increasing every year. National Networks Local Broadcasters Creation Aggregation Delivery Consumers Page 4

5 In Mature Markets ConsolidaGon Happens Television Value Chain is Evolving Over the Top (OTT) Consolidation Phase 1: Content Creators Buy Broadcasters Content Disney + ABC & ESPN Creators Viacom + CBS National Networks Specialty Networks Local Broadcasters Television Distribution Providers Creation Aggregation Delivery Page 5

6 Television Value Chain is Evolving Over the Top (OTT) Content Creators Consolidation Phase 2: Specialty Networks Distributors buy Broadcasters & Content Comcast + NBCU Videotron + TVA Bell + CTV Shaw + Global National Networks Local Broadcasters Television Distribution Providers Creation Aggregation Delivery Where is the biggest DisrupGon in the ecosystem today? Page 6

7 Television Value Chain is Evolving Over the Top (OTT) Content Creators Specialty Networks Television Distribution Providers National Networks Local Broadcasters Creation Aggregation Delivery Consumers Some OTT Numbers to Consider Number of Countries Operating Number of Streaming Video Subscribers YOY Subscriber Growth M 42% 30 M (Incl. Affiliates) Capped by regulation 16 Page 7

8 Recent Content Deals Announced by Netflix March 2013 Various Shows from Various Turner Networks March Various old Walt Disney, Pixar, programs form Marvel animated movies February 2013 Warner catalog House of Cards Original Programming 18 (It s about the content ) Page 8

9 Television Value Chain is Evolving Over the Top (OTT) Studios Broadcasters Television Service Providers Creation Aggregation Delivery Consumers Lets follow the $$$$$ s Page 9

10 Television Value Chain is Evolving Emerging Advertising on Video $2 bn ~35% CAGR Over the Top (OTT) Revenue? Studios Carriage Fees Broadcasters 37bn$ 10% CAGR Television Service Providers Advertising Creation Aggregation Delivery Advertising Consumers $68 bn Revenue? $6 bn ~4% CAGR ~5% CAGR An Real Example of Targeted Advertising Today Commercials Targeted Commercials web Confirmed View Sky+ Box includes 160 Gbytes storage Estimated 120 Hrs SD or 40 hrs HD Assume 5% allocated to commercials: 350 Minutes of SD Commercials or 130 Minutes of HD Commercials Product Consumption Information Page 10

11 Balance of Power in Advertizing is Key.! Advertizing has long been the fuel of the broadcast industry! Measured and Targeted advertizing represents the premium fuel of the industry going forward! While internet Click Ads have sunk to $0.35 per 1000 views, analysts estimate targeted Ads on TV content could generate $35 per 1000 views Where Could or Should This Go Over the Top (OTT) Targeted Advertising partnership Studios Traditional Television Broadcasters Advertising Targeted partnership Service (regular & specialty) Advertising Providers Creation Aggregation Delivery Consumers Page 11

12 Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing / HD Transi1on More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Page 12

13 Broadcasters Increasing Channel Count Increasing Channel Count Over the Top (OTT) Studios Broadcasters Television Service Providers Creation Aggregation Delivery Consumers Pay/Subscription TV By Region 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% NA EMEA ASIA APAC LATAM WW PAC Penetration of subscription TV set to grow in key markets Page 13

14 HD Transition Acting as A Wave Across The World MX CA US WE EE ME IN CH SA SEA A NZ HDTV is Mature Transition started but not complete HDTV Just Starting HDTV and Pay TV Penetration Increasing in Emerging markets Channel Count US & W. Europe Specialty Channels Linked to Pay TV Penetration US & W. Europe HD Channels Emerging Markets Specialty Channels follow increasing Pay TV Penetration (HD from Day 1) Page 14

15 Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers HD and Live TV Require Broadcasters to Expand Capabilities Live HD Over the Top (OTT) Studios Broadcasters Television Service Providers Creation Aggregation Delivery Consumers Page 15

16 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies Live Events Drive More Broadcast TV Viewing 18% of primetime TV is Live programs on major US networks 20% of ratings delivered by the Top 100 US TV shows were for Live programs 40 Source: TV Guide, Nielsen TV ratings are from the week of 10/17-10/ Broadcasters Need More Complex Infrastructure to Support Live HD More complex studio produc1ons with more cameras and more remote feeds More demand for Miranda infrastructure and monitoring solu1ons Central Switching Center 41 ABC Network Operation Center, New York Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. Page 16

17 Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Sports broadcasters turning to remote producgon to reduce costs Instead of sending truck to sports venues, bringing cameras back to central producgon facility Leveraging cheaper telecom infrastructure to lower OB van and travel costs. 43 Page 17

18 Application - Remote Production Today Event Venue Event Venue Event Venue Event Venue Feed Output Feed Output Feed Receive Event Venue Master Ctl Broadcast / ProducGon 44 Center The Production Pyramid Major Sports and Entertainment Events, Na1onal News Local News, Regional US College Sports Large producgon studios and mulgple large trucks Smaller producgon studios and trucks More ProducGons but Less Budget Seek Lower Cost SoluGons Number of ProducGons Religious Broadcasters, Tier 2 College Sports, High School Sports (US) TV for Web Only e.g. Onion News, Twit TV Mini studio / Truck Studio in a box Page 18

19 Objective - Simplify Operations at Venue Event Venue Event Venue Venue Node Event Venue Event Venue Venue Node WAN ring (IP) Event Venue Event Venue Venue Node Cameras and some On- Air Talent Remain at Venue Dozens of feeds from each venue sent via telecom Studio Node Studio Node Facility Node Feed Processing LAN Ring (IP) Event Venue Studio Node ProducGon Studio infrastructure centralized MCR at large Master producgon Node centers Ctl Broadcast / ProducGon Center Integrated Solutions will move Up Pyramid Major Sports and Entertainment Events, Na1onal News Local News, Regional US College Sports Large producgon studios and mulgple large trucks Smaller producgon studios and trucks Remote ProducGon Number of ProducGons Religious Broadcasters, Tier 2 College Sports, High School Sports (US) TV for Web Only e.g. Onion News, Twit TV Mini studio / Truck Studio in a box Page 19

20 New Product Category: Integrated Productions Systems All In One SoluGon Switcher DVE Virtual Set Graphics / CG Playback / Slo- Mo Streaming Encoding Integrated Solutions will move Up Pyramid Major Sports and Entertainment Events, Na1onal News Local News, Regional US College Sports Religious Broadcasters, Tier 2 College Sports, Large producgon studios and mulgple large trucks Smaller producgon studios and trucks Mini studio / Truck High School Sports (US) TV for Web Only e.g. Onion News, Twit TV Studio in a box Number of ProducGons Page 20

21 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Watching Anytime and Anywhere % Americans who viewed television content on alternate devices % 35% 53% 51 Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. Source: emarketer Page 21

22 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies Meet Renée, A Typical 12 Year Old!! Born in the 1992 at the dawn of the digital television age TV Viewing History:!!! Age 1-4: Disney and PBS tapes Age 4-6: Interactive CDs (no TV) Age 7-11: PVR Paradigm Shift towards Non Linear Non-Linear TV VOD Content categories Random Access Controlled by viewer Linear TV PVR Channel Grid Scheduled content Controlled by provider Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. Page 22

23 Broadcasters Distributing Content Through Traditional & Over the Top Methods Over the Top (OTT) Over the Top Studios NON LINEAR (Catch Up TV) Broadcasters Television Service Providers Video on Demand LINEAR (TV By Appointment) Creation Aggregation Delivery Consumers Broadcasters Publishing More Non Linear Content Number of VOD Assets Published Per Month Other itunes Cable VOD WEB E 55 Source: US Based Multi-Channel Broadcaster Page 23

24 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies Broadcasters Expanding for Non- Linear September 2011 HBO adds 50,000 Sq ft HBO s original playout and uplink facility in Happauge NY New space dedicated to automated publishing of non-linear TV content for HBO GO TV 65,000 Sq Ft Building + Satellite Dish Farm 30 Linear Channels 800 hours of new TV content per month Source: Google Maps Number of Platforms / Delivery Formats Has Exploded. 41 Different Platforms Conversion and Delivery 30 Different File Formats Each NonLinear Asset Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. Page 24

25 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies Situation Today: Broadcasters Overwhelemed by Non Linear Other 8000 itunes 6000 Cable VOD 4000 WEB Broadcasters are overwhelmed by the number of VOD assets and the number of plagorms Producing Just Aired VOD is too costly and a drain on broadcaster resources 2011E Channel Branding Is Key. During original broadcast channel branding creates schedule awareness, keeps audience tuned in. Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. When program airs on VOD / Catch up the embedded graphics promote the channel brand and send audience to the linear channel. Page 25

26 Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Typical Television Broadcast Facility and Workflow Automation Pre- Produced Content and Ads Ingest and Quality Control Live Production Editing and Content Prep Playout and Graphics Non Linear Publishing Linear Channels WAN Media Management and Storage WAN Non Linear Delivery Page 26

27 Broadcast Facilities Have Been Hardware Centric Automation Pre- Produced Content and Ads Live Broadcast Production Industry Linear Feeds Ingest and Specific SDI Infrastructure Quality Control Editing and Content Prep Tape (Linear WAN Medium) Playout and Graphics Linear Streams Non Linear Publishing Isolated Islands of IT / File Based Media Management Infrastructure and Storage WAN Linear Channels Non Linear Delivery Today Facilities Becoming Increasingly Generic IT or File Based Automation Pre- Produced Content and Ads Linear Feeds Tape (Linear Media WAN Medium) Files Broadcast Live Industry Specific Broadcast SDI Production Infrastructure Industry Ingest and Specific SDI Infrastructure Quality Control Editing and Content Prep Playout and Graphics Linear Streams Non Linear Publishing Isolated IT / File Islands Base of IT Infrastructure / File Based Media Management Infrastructure and Storage Media Files WAN Linear Channels Non Linear Delivery Page 27

28 Transition to File Based is the Digitization of the Broadcast Facility Pre- Produced Content and Ads Linear Feeds Media WAN Files SDI/Stream Centric Broadcast Live Industry Specific SDI Production Infrastructure Ingest and Quality Control Editing and Content Prep IT / File Base Infrastructure Media Management and Storage IT/File Centric Automation Playout and Graphics Linear Streams Non Linear Publishing Media Files WAN Linear Channels Non Linear Delivery Transition to File Based is the Digitization of the Broadcast Facility Pre- Produced Content and Ads Linear Feeds WAN LIVE Broadcast Live Industry Specific SDI Production Infrastructure Ingest and Quality Control Editing and Content Prep IT / File Base Infrastructure Media Management and Storage Automation Playout and Graphics Linear Streams Non Linear Publishing WAN Linear Channels Non Linear Delivery Page 28

29 Archive 62% have archive that are more than 50% file Based 100% file based % file based Playout 84% have playout that is more than 50% file/server based 50-74% file based 25-49% file based Production 82% have production that is more than 50% file based 1-25% file based 0% file based News 76% have News that is more than 50% file based 0% 20% 40% 60% 80% 100% Market Drivers Influencing Broadcast Introduc1on: Important changes in the TV Ecosystem Channel Count Increasing More Live TV Produc1ons Driving TradiGonal Viewing More Remote Produc1on for Tier 2 Live Events Increasing Over the Top & VOD Non- Linear Content Delivery TransiGon to File / IT Based at Broadcaster FaciliGes System Complexity Growing at Television Service Providers Page 29

30 Major Trends in Television Broadcas1ng Prepared and Presented by Michel Proulx for Miranda Technologies System Complexity Grows for Television Service Providers Over the Top (OTT) System Complexity Studios Broadcasters Television Service Providers Creation Aggregation Delivery 70 Consumers 70 Yesterday. Simple. 30 Analog Channels Today. Complex Video Streams + Phone Calls + Internet Connections 71 Copyright Miranda Technologies January 2013 Do not duplicate or distribute without consent from Miranda Technologies. Page 30

31 Simplified Cable System End to End Path Master/Super Head End (2) Local Head End (10s and rationalizing) HUB (100s) Node (1000s & growing) Customer Prem DVB to IP Trans Code / Trans rate DVB to IP Trans rate / Splice DPI CA Ad Insert VOD CA SDV Edge QAMs Edge QAMs OTN OTN STB STB STB Homes Passed STB Process stream Process and Replace Program Replace Program Switch Program IP Switches MPEG2/4 over IP MPEG2/4 over RF IP in / out Device The cost to process a customer call relating to a fault The cost to cable operator if a technician is sent to a customer home to repair problem Of subscribers to competitive TV Service Options 73 Page 31

32 FIN Page 32

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