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STATE OF THE VIDEO MARKETPLACE

Explore how technology shifts are impacting the video industry structure, influencing pricing practices. Insights on bundled pricing, pay TV value chain, and strategies for accelerating change. Contact Todd Juenger for more.

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STATE OF THE VIDEO MARKETPLACE

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  1. STATE OF THE VIDEO MARKETPLACE • Todd Juenger • Senior Analyst • +1-212-823-3157 • todd.juenger@bernstein.com • March 21, 2016

  2. Bundled Pricing Is An Output, Not an Input • We believe bundled pricing didn’t drive the industry structure. • We believe the industry structure drove bundled pricing. • Technology is changing the industry structure (from linear to on-demand). • Therefore we believe pricing practices will have to change as well.

  3. Pay TV Value Chain Sports Leagues Talent & Production Costs $10 Households $45 $17 $82 $10 TV Networks 40% margin +30% ROIC MVPDs 25% margin ~20% ROIC Studios 15% margin High SD/low DD ROIC Source: Wikimedia Commons, Bernstein Estimates & Analysis

  4. 2015 Current Affiliate Fee Breakeven Source: SNL Kagan, Bernstein Estimates & Analysis

  5. 2018 & 2023 Affiliate Fee Hypothetical Breakeven Source: SNL Kagan, Bernstein Estimates & Analysis

  6. If You Want To Accelerate the Change • Sports • Digital Antennas

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