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Cinema and VOD in Italy (and elsewhere)

Cinema and VOD in Italy (and elsewhere)

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Cinema and VOD in Italy (and elsewhere)

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  1. Cinema and VOD in Italy (and elsewhere) Peter Estoril, 21 November 2008 EUROPA DISTRIBUTION 2nd ANNUAL CONFERENCE

  2. Talking about convergence? The Italian convergence environment 2007 2 Bn € 80 e-content Cinema? It is squeezed between very large forces undergoing strong and widespread transformation Video IT 60 8 Bn € TLC 40 Investigating the future of the movie industry (and more broadly the media industry) implies understanding the future of the whole convergence pile 20 Bn € 20 44 Bn € - VoD Italy 21 November 2008

  3. ? Business users X-Y-Z… generations Media Customization Aging Nomadic The media industry is just a subset still at odds with the transformation occurring Major forces in action The whole ecosystem of communications is undergoing a wide transformation with the user/consumer/individual as the main force driving such huge change Globalization The future ofCommunication Regulatory & Public Policy YOU(me, he?) Technology Literally a Complex System: very hard to make any accurate forecast - VoD Italy 21 November 2008

  4. Video over IP • streaming • video download • progressive download • file sharing • peer-to-peer (P2P) • User generated content (UGC) • webcast • multicast • simulcast • webTv • IPTV • VOD • catch-up Tv • P2PTV • Videoconferencing • Destraeming • Webisode • Screencast • Vodcast • Swarming • Broadcatching • Peercast • Vlog In the long run all video will go IP - VoD Italy 21 November 2008

  5. Video over IP in Italy The Video over IP world is basically split in two very distinct environments. Technology enables to centralize many management processes buth such distinction should always be very carefully remembered • On line video - Employing the open nature of the Web to break barriers • The web (and its affiliates) is already a huge entertainment arena with audiences comparables to traditional media. Still, as far as video is concerned, no clear successful model of monetization has so far emerged • The entertainment business is dominated primarily by large portals-aggregators offering marketing opportunities to rights holders and developing ad placement • IPTV – Employing the flexibility of IP to bring “traditional” digital interactive tv to the consumer • It is enabling TLCs to enter the broadcast industry • The business comes from very well defined models: VoD, nVoD, PVR, nPVR, EPG • So far this is the only environment where VoD generates sound revenue • Other. But let’s not forget about mobile and public display (not only d-cinema) - VoD Italy 21 November 2008

  6. Broadband development • Broadband development in Italy lags behind most of Europe and is experiencing very strong slow done in 2008. • 10.7M HH by mid 2008 (2% growth) - 8.7M families (37%) • 11M families with no PC • 14M families with no BB • 70% families say no interest • (Beetween 2008) • Very good news from the broadband mobile evolution with over 22M 3G users by ed 2007 and rapid growth of 3G VAS ARPU non voice VAS (Y € / user) 15.4% 22.8% - VoD Italy 21 November 2008

  7. IPTV VOD in Italy • IPTV adoption is beating most expectations • 650K HH by mid 2008 (Between 2008) • Up ca. 100% in only 6 months • Four major offers: Fastweb, Telecom Italia, Tiscali, Wind • VoD/user grows fast • The bad news: • piracy of course! • P2P of course, but just not as bad as often portraied • regulatory dead lock (with repeated attempts to introducerules against P2P) • the typical Italian issues: concentration in the media vs. weakness of independent players  no strength/incentives to move digital • VOD users watch movies but not as much as would be expected (prices plunge)  - VoD Italy 21 November 2008

  8. On line VOD in Italy So far the only realistic model of monetization of video is on line ADV (though still to be proven) The Italian on line environment is developing slower than in other major EU countries Bad news: Strong slow down of on line ad growth (35%  15% in 2008) Confindustria 2008 - VoD Italy 21 November 2008

  9. The broadcast media picture - VoD Italy 21 November 2008

  10. Movies in the age of UCGs • Internet tends to become the only repository for all video content • While technology evolution tends to lower the entry cost for producers (even users…), the Internet tends to lower the physical costs of distribution • Cinema faces increasingly direct competition by other forms of video entertainment • The long tail promises more life and mobility to content (in space and in performance) thanks to the proactive role played by uesrs • But the long tail does not kill the Pareto Law (80-20), all it really implies is that the competition for audience increases and so does the relative cost of ensuring the success of a hit will (rule of marketing) • So what is really Cinema? Primary use in theater and strong capacity to build brands (actors, authors, themes, narrative cycles etc.) • Cinema thrives if it preserves its capacity to set trends and influence other forms of entertainment and discussion (personal, social etc.) - VoD Italy 21 November 2008

  11. The on line movie life cycle The current most promising opportunities for on line cinema are related to building/testing projects, brands, audiences and performance On line (cross-media) marketing Community development proj dev-funding-pre-production-post theatrical home video tv utente finale On line retail E-commerce On line ADV - VoD Italy 21 November 2008

  12. Conversation audience is the principal author, and the conversation is the content Platform the architecture of the platform is the key to differentiation and success Service Iteration and Speed "perpetual beta" Engagement "lean forward media" From Packaged Goods to Conversational Media Dictation • creator's dictation of a highly produced package of content Distribution • economic differentiation based on the control of distribution Product Perfection and Deliberation • shipping a highly produced package of media Consumption • "sit back media" vs. vs. vs. vs. vs. As told by John Battelle - VoD Italy 21 November 2008

  13. Digital content Homevideo Theatrical cross-media mkt On-line ADV On-line retail COMMUNITY BRANDING conversational audience Free-to-air Pay-tv E-commerce - VoD Italy 21 November 2008

  14. Three scenarios for thee five major UE countries - IDATE, 2007 Scenarios for 2015 Last year IDATE carrieid out a scenario analysis of the communication ecosystem What’s your guess today? - VoD Italy 21 November 2008

  15. Q&A Thx :-) - VoD Italy 21 November 2008