Multi-Screen Video: A Requirement in Today s Digital World

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1 WhitePaper Multi-Screen Video: A Requirement in Today s Digital World Part 1: Today s Digital Content Value Chain and Its Opportunities video. personal. everywhere.

2 White Paper In today s continually evolving digital content marketplace, participants have been affected by a major shift in technology advancements that has caused a ripple effect throughout the traditional model. These changes have brought forth a new approach for the market s major players, augmenting the way they operate. Compared with the manner in which people consumed content 30 years ago, in today s world of digital entertainment, the role of the operator is now more important than ever. Operators are working hard to innovate and offer advanced technology features in order to better satisfy their subscribers viewing needs. To appeal more to their consumers, operators are making it easier for subscribers to get the content they want no matter where they are. Given their current position, operators including telecom, cable, satellite, and mobile providers remain a significant player in the digital content value chain. This paper is the first of two and will discuss today s digital content value chain, the opportunities that exist for operators and the importance of seizing these opportunities while driving innovation and warding off new emerging competitors. The paper will also affirm operators need for a unified back office deployment that supports multiple screens in a consistent and integrated manner. Snapshot of the Current Digital Content Value Chain In today s digital content value chain, operators are strategically positioned between content providers, advertisers, and consumers. In this model: Content providers supply high quality content that consumers wish to watch and are prepared to pay for Advertisers pay to reach an audience of consumers in order to promote their brands and increase their sales Consumers drive the market through their ability to pay subscriptions to receive content and the value they represent to advertisers Operators act as the intermediary that connects advertisers to consumers as well as consumers to content providers.

3 Today, the model s major contributors are finding ways to avoid operators. For example, advertisers are now seeking alternate ways to reach consumers through different channels that don t involve service providers (i.e. Over-the- Top [OTT]). With the increase in new emerging video technologies, consumers are also finding ways to view their content by establishing connections directly with their content providers. Even with these new alternatives, operators are still positioned as the most significant player in the value chain due to their ability to aggregate services, introduce value-added functionality for consumers and advertisers, and provide a single service and billing relationship with the consumer. However, they must quickly innovate to keep ahead of emerging competitors. Content Provider Service Provider $$$ Consumer Advertiser Operator Opportunities While operators face new and emerging threats, they remain in a strong position within the value chain and there are numerous opportunities that exist to increase market share, address non-traditional competition, differentiate product lines and protect and grow revenues. The new and emerging technologies entering the market not only serve as a threat, but also as an opportunity to re-evaluate current business models. Operators should focus heavily on innovation, offering low cost solutions and becoming consumer-centric. They need to work to become the consumer s retailer of choice for video content by providing a personalized experience which allows them to watch content anywhere on any device with a tailored user interface and advertising experience. Additional opportunities include aggregating content with OTT sources and exploring recommendation engines, online search tools and other ways to make relevant content easy for consumers to find. Lastly, operators should explore purchase options that appeal to consumers whether it s through subscription, advertising supported, a la carte rental or purchase. While many opportunities exist for operators, implementing change and developing ways to take advantage of these opportunities can be a challenge. In some cases, divisions within operators have explored and implemented value-added entertainment services, but they had limited effects due to their inability to reach a broad market of subscribers. Operators should work to improve efficiencies and platform integrations as a way to break down the silo walls. It is also important that operators determine ways to integrate and consolidate processes as a way to improve their overall product proposition.

4 White Paper Industry Advancements Over the last few years, technology advancements have paved the way for new entrants into the digital content value chain, such as Apple s itunes, YouTube, and OTT content streaming via in-home devices like Xbox, PS3, Wii and others. Changes made by operators, broadcasters and the emergence of OTT content distributors have drastically shifted the landscape. Some broadcasters have created personal player applications and in doing so, developed closer relationships with consumers allowing them to view content without going through an operator s network. For example, the BBC iplayer had a significant impact on the industry, connecting customers with their BBC content directly. It now gets over 100 million streams per month. The iplayer content flows from the BBC broadcast through any non- QoS IP Network such as a generic fixed broadband line or a third-party mobile network. BBC content can then be accessed by OTT STB/CPE (Hybrid DVB/IP STB smart Blu-ray player PS3, Xbox) or an Open IP Browsing Device (PC, mobile). The emergence of OTT providers has allowed consumers to reach a variety of popular content without having to go through their operators. OTT is gaining popularity as more people purchase in-home access devices (Xbox, PS3, Roku) and the number of viewers is growing at a rapid rate the 5 million current users is expected grow to ~20 million by Now, consumers can reach OTT aggregators such as YouTube, blip.tv, Hulu, AppleTV, NetFlix, Google TV, etc. through any non-qos IP network, OTT STB or an open IP browsing device. However, OTT providers have not yet figured out how to provide a compelling user experience across multiple devices with compelling content for a compelling price. This undetermined business model for OTT providers has therefore left operators with an edge over their emerging competition. Operators have also made significant strides by providing syndicated Internet content in a multi-screen environment and in doing so expanded the accessibility of content to their subscribers. Operators are now offering premium content over multiple networks their SP (service provider) video network, SP fixed line IP network and the SP mobile network. As a result, subscribers are able to access content through a wide array of devices which include SP-provisioned On-Net STB, SP-Provisioned off-net STB, SPprovisioned mobile and open IP browsing devices.

5 Content Providers Networks Access Devices SP (Service Provider) Content Pay TV channels SVOD TVOD Walled garden apps Broadcasters Linear channels Catch Up VOD Player applications SP Video Network Cable QoS Fixed line IP (Fttx, xdsl) SP Fixed Line IP Network Docsis non-qos Off-net non-qos SP Mobile Network SP Provisioned On-Net STB Cable Pure IPTV Hybrid DVB/IP SP Provisioned Off-Net STB IPTV Hybrid DVB/IP SP Provisioned Mobile OTT Aggregators YouTube, blip.tv Hulu, AppleTV Netflix, Google TV Any non-qos IP Network Generic fixed line broadband Third party mobile network OTT STB/CPE Hybrid DVB/IP STB Smart Blu-Ray Player PS3, Xbox, etc. Open IP Browsing Device PC Mobile In order for operators to take advantage of their current position, it is important for them to partner with a system integrator that has experience deploying multi-screen solutions. SeaChange International is the global leader in multi-screen video and is one of the largest software companies in the world. SeaChange provides the integration of world-leading market-proven technologies for mobile, PC and television back office and monetization solutions. Last year, SeaChange delivered 6 billion TV streams as well as content to 43 million mobile and PC subscribers. The SeaChange Adrenalin multi-screen video back office solution helps operators manage, monetize, and deliver a robust multi-screen experience to their subscribers. SeaChange Adrenalin is the fourth generation back office in SeaChange s comprehensive Intelligent Media Platform and provides a fully integrated back office serving linear, on-demand and time-shifted video content. Adrenalin offers a flexible and Internet-centric architecture with open standard-based interfaces (HTTP/REST, ADI, TVA, XML). It is also device- and format-agnostic and is therefore ready for new and advanced consumer electronics including netbooks, smartphones and the iphone, ipad, PS3 and Android. The Adrenalin solution provides opportunities to add incremental revenue via new business models, innovative offer management campaigns, and targeted advertising opportunities. Adrenalin ensures that all content, services and applications meet the high quality standards of the subscriber.

6 White Paper Conclusion In today s competitive market, a single back office multi-screen offering has become mandatory for operators and offers the potential to provide additional revenue streams. Given their position in the digital content value chain, operators are well positioned to gain ground if they shift their focus to fulfilling subscriber needs and delivering quality content to multiple screens. SeaChange International has the proven expertise necessary to deliver video to multiple screens, allowing operators to unlock new revenue streams while delivering the wherever I go user experience subscribers crave. The Adrenalin solution enables a seamless multi-screen experience to subscribers all from a fully integrated back office infrastructure. Operators who make the decision to implement a unified back office solution that supports multiple screens can create the necessary edge over competitors and should be seen as a requirement for all operators going forward. This is the first of a two white papers focused on Multi-Screen Video: A Requirement in Today s Digital World. Please look for Part 2: The Challenges Operators Face and How to Address Them

7 Last year, SeaChange delivered 6 billion TV streams as well as content to 43 million mobile and PC subscribers.

8 About SeaChange International Ranked among the top 250 software companies in the world, SeaChange International (NASDAQ: SEAC) enables transformative multi-screen video services through an open, cloud-based, intelligent software platform trusted by cable, IPTV and mobile operators globally. Personalized and fully monetized video experiences anytime on any device, in the home and everywhere, are the product of the Company s superior back office, advertising and in-home offerings. SeaChange s hundreds of customers are many of the world s most powerful media brands including all major cable operators in the Americas and Europe, and the largest telecom companies in the world. Headquartered in Acton, Massachusetts, SeaChange is TL 9000 certified and has product development, support and sales offices around the world. Visit SeaChange International, Inc. 50 Nagog Park, Acton, MA USA T F _ SeaChange International, Inc. SeaChange Adrenalin is a trademark and SeaChange is a registered trademark of SeaChange International, Inc. All other trademarks and registrations are property of their respective companies. While every effort is made to ensure the information given is accurate, SeaChange does not accept liability for any errors or mistakes which may arise. All features,specifications, system requirements and/or compatibility with third party products described herein are subject to change at any time without notice.

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