Appetite for Disruption: realigning digital video business models (From the Bringing TV to Life Series)

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1 Appetite for Disruption: realigning digital video business models (From the Bringing TV to Life Series) Copyright 2016 Accenture. All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture

2 A wave of disruptive innovation is now engulfing the video industry. Trends that until recently have held sway are becoming unsustainable. As the industry transforms itself, the stakes are high. > $500 billion The value of the global video market.

3 All change: an industry in flux Total Pay TV Revenue, c, $US billions. Source: PWC and SNL Kagan

This growth has been propelled by advances in technology and changes in consumer demands The advent of highly optimised software-driven solutions have made OTT propositions more portable, scalable,

4 This growth has been propelled by advances in technology and changes in consumer demands The advent of highly optimised software-driven solutions have made OTT propositions more portable, scalable, and accessible Technologies driving QoE is enabling businesses to differentiate between quality and freemium content. Cloud technology and big data provide an affordable way to launch and optimise product Consumers expect constant connectivity and immediate video provisioning across all their gadgets Portability of devices is changing content consumption trends and driving requirements for one-to-one digital relationships Proliferating OTT services with unique content propositions challenge the value of existing carriage agreement deals as they gain popularity. 4

5 Traditional Providers and Aggregators need to take three fundamental decisions: What type of digital video business do you want to be? How are you going to build the capabilities needed to be successful? In the event you need to collaborate, how can you do so in a way that helps maximize leverage and profitability in your business transactions? 5

6 Two new capability models to consider: Digital Content Providers Digital Content Aggregators 6

7 While a simplified view of the relationship between traditional Providers and Aggregators may look like this 7

8 An evolving value chain 8

9 Traditional Providers and Aggregators are already responding DirecTV Aggregator consolidation SLING TELEVISION From Aggregator to DCA SKY and NOW TV From Aggregator to D2C DCP HBO NOW The rush to D2C OTT 9

10 Digital natives are also assessing how best to position themselves YOUTUBE RED From DCA to DCP NETFLIX From DCP to global DCP AMAZON PRIME From DCP to DCA 10

11 Tomorrow s transformed digital video industry value chain a virtuous circle 11

13 Five key strategies to become a Digital Content Provider Digital Content Providers 1. Work together with platforms and devices. 2. Move fast. 3. Stay close to the customer. 4. Get noticed. 5. Support multiple business models. 13

14 Winning Capabilities of Digital Content Providers Traditional Content Provider Capabilities New DCP Capabilities Required PROGRAMMING & PLANNING Multi-platform planning Multi-platform format creation Linear scheduling & programming VOD catalogue planning & management Integrated multi-channel engagement & scheduling Multi-distribution product development Segmentation-informed curation & commissioning Digital content optimization RIGHTS MANAGEMENT Content financial & budget Market screening & sourcing Distribution & licensing Content performance & analytics Multi-business-model platforms Multi-channel content repurposing / supply chain CONTENT PROCESSING Content acquisition & QC Content management Archive management Content processing Multi-business-model platforms Multi-channel content repurposing / supply chain CONTENT/SERVICE DELIVERY Broadcast play-out & control Service delivery Real-time content management Content protection Multi-business-model platforms Multi-channel content repurposing / supply chain CONTENT PRODUCTION Resource planning News production Program & promo production Sport & live event production Segmentation-informed curation & commissioning Interactive and innovative content experience CUSTOMER PROPOSITIONS Branding & digital marketing Digital sales Digital customer service Customer experience design Customer / audience analytics Social interaction Integrated multi-channel engagement, scheduling Multi-business-model platforms Multi-distribution product development Segmentation-informed curation & commissioning Interactive and innovative content experience ADVERTISING Marketing & commercial offer Multimedia ad sales & billing Traditional ad Operations Digital ad operations Direct marketing (content) to drive scale Digital ad optimization 14

Seven key strategies to become a Digital Content Aggregator Digital Content Aggregators 1. Allow content to remain king. 2. Scale up to succeed. 3.

16 Seven key strategies to become a Digital Content Aggregator Digital Content Aggregators 1. Allow content to remain king. 2. Scale up to succeed. 3. Differentiate through quality of service and experience. 4. Accelerate new digital capabilities to support the ecosystem. 5. Aggregate insights. 6. Leverage the living room advantage. 7. Build trust. 16

Winning Capabilities of Digital Content Aggregators Traditional Aggregator Capabilities New DCA Capabilities Required SALES & MARKETING Customer service Customer experience design Customer / audience

17 Winning Capabilities of Digital Content Aggregators Traditional Aggregator Capabilities New DCA Capabilities Required SALES & MARKETING Customer service Customer experience design Customer / audience analytics Social interaction Distribution products and services Data-driven package and ad targeting Digital package optimization Cross-DCP care services Multi-channel quality of service / experience OFFERING MANAGEMENT Content financial & budget Distribution & licensing Content performance & analytics Content and subscriber optimization services Data-driven package and ad targeting Content optimization enablement Cross-DCP targeting SERVICE DELIVERY/NETWORK Service delivery Content protection Distributor enablement Distribution products and services Data-driven direct marketing enablement Multi-channel quality of service / experience Content and subscriber optimization services AD SALES/ AD ENABLEMENT Marketing & commercial offer Multimedia ad sales & Billing Traditional ad operations Digital ad operations Data-driven package and ad targeting Data-driven direct marketing enablement Targeted and dynamic ad services Cross-DCP targeting SERVICE MANAGEMENT OPERATIONS Application & infrastructure ops Network engineering & operations Service monitoring Field force Multi-channel quality of service / experience Content and subscriber optimization services Cross-DCP care services DevOps-driven platform development models 17

18 Become a Digital Video Business today or pay the price tomorrow. Future winners will be determined by the choices they make today. Read the full report here

19 About Accenture Digital Video Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at About this series Accenture s Bringing TV to Life series aims to build an understanding of the technology and business trends and market drivers that are radically reshaping the video industry. Our perspective reflects our experience with players across the ecosystem and makes use of Accenture s primary industry surveys. Our series aims to help all the players in this rapidly evolving space to accelerate their journey as high performance businesses. To learn more, please visit Contact Sef Tuma Chief Strategy Officer Accenture Digital Video youssef.d.tuma@accenture.com youssef.d.tuma@accenture.com Copyright 2016 Accenture. All rights reserved. This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks 19

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