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Get Real The Economics of Convergence

Get Real The Economics of Convergence. For Oxford Media Convention January 18 th 2007 Tess Alps CEO Thinkbox. “I can’t believe what you say, ‘cos I see what you do”. Aretha Franklin. Predicting the future. It’s important - but using what supporting data?

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Get Real The Economics of Convergence

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  1. Get RealThe Economics of Convergence For Oxford Media Convention January 18th 2007 Tess Alps CEO Thinkbox

  2. “I can’t believe what you say, ‘cos I see what you do” Aretha Franklin

  3. Predicting the future • It’s important - but using what supporting data? • Research relying on claimed behaviour is dangerous • Better by far to examine real behaviours eg London Business School/ACB research into PVR usage • Be sceptical: who, how and why

  4. The resilience of broadcast TV Source: BARB/Infosys

  5. And commercial broadcast’s share will continue to grow Source: BARB/Infosys

  6. TV ad viewing : historic highs in 2006 but revenue still weak Impacts (Millions) Source: BARB/DDS

  7. Pricing the long-tail: targeted TV still discounted Premium Discounted 35% 47% Remaining 53% Source: BARB/Infosys

  8. Broadcast still dominates the media day Source: IPA Touchpoints Hub Survey

  9. Internet :a technology not a medium • New TV distribution technologies are mostly incremental to broadcast TV and displacing other activities Source: IPA Touchpoints Hub Survey

  10. Human beings haven’t changed Needs States Entertain Me Linear Broadcasting Streamed Mobile TV Streamed Broadband TV 85%+ of fixed viewing time? Play/Buy IPTV Interactive TV TV Gaming Me-TV PVR Recorded Retail and Rental DVDs VOD & NVOD Downloads Finite consumer spend?

  11. Different economic cultures • Internet content rarely paid for • Greater expectations of paying for mobile phone services. Vodaphone state TV services make more £ than ring-tones now. • The power of free/cheap eg C4 Celebrity Big Brother mobile downloads 10 fold increase now free. • Cinema model may emerge viz shop window of premium broadcast made at a loss because it promotes secondary pay windows • Payment by response possible from brands (IPTV, iTV, etc) at a premium but requires a return path

  12. Bigger economic threats • Short-termism in marketing • Retail pressures on brands • Loss of confidence in broadcast TV – the industry can help itself • Over-regulation • Inescapable fact : public-service, high-end content will need subsidy/support

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