The Impact of Technology on the

Media Industry

Andrew M Skinner
Manager. Technology Consulting
Accenture
 “People tend to
overestimate what can be
done in one year and to
underestimate what can
be done in five to ten
years.”

J. C. R. Licklider, 1965
“Grandfather of the Internet”

Copyright © 2007 Accenture . All Rights Reserved. Slide 2

 Some longer term ones just don’t go
far enough

Scientists from the RAND Corporation

have created this model to illustrate how
a “home computer” could look like in
the year 2004.
IN
TE However the needed technology will not
RN be economically feasible for the average
home. Also scientists readily admit that
ET the computer will require not yet
F AK invented technology to actually work,
but 50 years from now scientific
E progress is expected to solve these
problems.
With teletype interfaces and the Fortran
language, the computer will be easy to
use.

Copyright © 2007 Accenture . All Rights Reserved. Slide 3

 Some longer term ones just don’t go
far enough

“I think there is a world market

for about five computers"

Remark attributed to Thomas J. Watson

(Chairman of the Board of International
Business Machines), 1943.

Copyright © 2007 Accenture . All Rights Reserved. Slide 4

 Some short term statements go a
little too far

“This is a revolutionary product

that has the chance to really
impact people's lives, This is
the ultimate digital device.”
Steve Jobs, Apple CEO on iPhone

Copyright © 2007 Accenture . All Rights Reserved. Slide 5

 In 2000 were you expecting…

15,000 songs in
your pocket, 60 23.4% of homes A search bar as the
days of continual time-shifting 60% of entry point to the
music while awake TV content internet

An Online Game Never needing to

Free phone calls would be the 77th delete files on your
PC to free up
globally richest country space*
Copyright © 2007 Accenture . All Rights Reserved. Slide 6
* Apart from in your 128 Mb email account
 In 2012 will you be expecting…

Going to the video shop to No scheduled TV The internet developing

get “the movies”, not just channels, watch what from mainly text content
one but all of them and only you want, when you to a full multi-media
paying for those you watch. want to. experience

People earning a living

Telco’s becoming true online in Virtual Not having to delete
anything from your fridge
media organisations communities !!
Copyright © 2007 Accenture . All Rights Reserved. Slide 7
The Impact of Technology on the
Media Industry

Andrew M Skinner
Manager. Technology Consulting
Accenture
 So what media are people actually
consuming ?

+3
Computer
Phone
+2
% change in share

+1 Radio

Music
0 Film

-1 Television

Magazine Books
-2

-3 Newspapers
0 10 20 30 40 50 60
Source: ZenithOptimedia % of average persons media time

Copyright © 2007 Accenture . All Rights Reserved. Slide 9

 Households that
receive about 60 TV
channels usually watch
only 15.
Households whose systems can
receive 96 TV channels (around the
US national average) actually watch
... 15."

Source: Steven Levy, "Television Reloaded", Newsweek, May 30, 2005, p. 55

Copyright © 2007 Accenture . All Rights Reserved. Slide 10
 Media Consumption today
The concept of the long tail
Frequency

Mass Market Break even

(Demand)

NicheLong TailBreak even

Market

Products
Copyright © 2007 Accenture . All Rights Reserved. (Queries, Songs, etc) Slide 11
Copyright © 2007 Accenture . All Rights Reserved.

10

15

20

25
0

5
BBC 1
CHANNEL 4/S4C
Source:
five

television broadcasting
Demonstration of the long tail in UK
Sky Sports 1
ITV 3
UKTV G old
E4
BBC News 24
© BARB Ltd 2007

Sky Three
Sky Sports News
UKTV History
Sky Movies 1
Hallmark
More4
UKTV Drama
BBC 4
Disney Channel
Five Life
The Hits
Sky Movies 2
Sky Sports 3
Bravo
CITV
Film4 +1
Nickelodeon
Paramount
TMF
Sky Movies 5
Sky Movies 7
Sk y Sports Extra
Cartoon Network
Discovery Real Time
FX
Magic TV
Nic kelodeon Replay
Paramount 2
TCM
UKTV Style
Sky Cinema 1
Sky Movies 9
Sky Premiership Plus
Animal Planet +1
Bid TV
Challenge TV +1
Crime & Inv estigation
Disc ov ery Home & Health
Discovery Real Time Ex tra
Discovery Travel & Living
Disney Cinemagic + 1
Euros port
FTN
5%

The History Channel

10 %

All other Channels

ITV2 + 1
3%

Kerrang!
Men And Motors
MTV Bas e
7%

MTV Hits
National G eographic +1
Brav o 2
Pric e Drop TV
Sc i-Fi Channel+1
23 %

The Biography Channel

4%

Tiny Pop
Trouble
True Movies
UKTV Bright Ideas
UKTV Doc umentary +1
UKTV Food + 1
UKTV Style +1
Zone Horror
17 %

B4
Jetix +1
MTV2
The Vault
Zone Reality+1
Sk y Travel +1
Sky Travel Shop
Bliss
Movies 4 Men 2
BBC Parliament
21 %

Cartoon Network Too

Channel U
4%

Community Channel
Discovery Kids
7%

Eat Cinema
Ex treme Sports Channel
G olf Channel TV
ITV Play
Life Showcase
Motors TV
Rock world TV
National G eographic Adv.
Bubblehits
Real Es tate TV
The Trav el Channel
Slide 12

TWC
UKTV G 2 +1
MTV Flux
Zone Reality Extra
 An estimated 1.08
billion people use the
Internet as of
September 18th, 2006
The global population of 6.5 billion means that
only 16.7% of the worlds population have
access to the internet

Source: the Big Picture, 2006

Copyright © 2007 Accenture . All Rights Reserved. Slide 13
 In 1997, Bharat and
Broder estimated the
size of the indexed Web
at 200 million pages
This figure was revise and update to estimated
size of the indexable Web to at least 11.5 billion
pages as of the end of January 2005

Source: K.Bharat and A.Broder, A technique for measuring the relative size and overlap of public web search engines [WWW1998]
The indexable Web is More than 11.5 billion pages. Gulli & Signorini, 2005

Copyright © 2007 Accenture . All Rights Reserved. Slide 14

 Connectivity to the Internet
500,000
Total Internet Hosts

400,000
Internet Hosts (000's)

300,000

200,000

100,000

0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
Source: ISC Domain Survey: Number of Internet Hosts. © ISC, Inc.

Internet User breakdown Penetration of geography

North America 69.4 %
2% 1% Africa
21 %
3% Asia Oceania 53.5 %
8%
Europe Europe 38.6 %

Latin America
Latin America 16.0 %
29 % Middle East
36 %
North America Asia 10.5 %

Oceania Middle East 10.0 %

Africa 3.5 %
Source: Copyright © 2007, www.internetworldstats.com
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Copyright © 2007 Accenture . All Rights Reserved. Slide 15

Source: Copyright © 2007, www.internetworldstats.com
 Top Global Web Properties

1. Microsoft 740,984
2. Google 508,659
3. Yahoo 494,170
4. Time Warner 260,387
5. eBay 251,423
6. Wikipedia 164,675
7. Amazon 151,033
8. Fox Interactive 135,730
9. CNET Networks 114,940
10. Ask Network 113,881

Source: Total Unique Visitors (000), Age 15+ * December 2006 Total Worldwide - Home and Work Locations.
comScore World Metrix

Copyright © 2007 Accenture . All Rights Reserved. Slide 16

 Top Ten Web Brand
Average time per user per month

1. AOL 5:27:46
2. Yahoo! 3:09:41
3. Fox Interactive 1:52:54
4. MSN 1:52:06
5. eBay 1:49:13
6. Google 1:04:21
7. Microsoft 0:44:14
8. Amazon 0:27:49
9. Ask Network 0:24:51
10. MapQuest 0:12:11

Source: Nielsen//NetRatings

Copyright © 2007 Accenture . All Rights Reserved. Slide 17

 The light bulb was not
invented by the candle
industry looking to
improve output.
Owners of established
technologies tend to focus on
making incremental
improvements to their own
products, avoiding the potential
threat to their own businesses.
Copyright © 2007 Accenture . All Rights Reserved. Slide 18
 Digital Disruptions
Participation
The future is a world where
individuals create content and
share it with each other without
the need for traditional
broadcasters and distribution
channels
Control
The future is a world where the
media that people consume is
control by the individual.
Scheduling of media will be
driven by the consumer
Copyright © 2007 Accenture . All Rights Reserved.
Mobility
The future is a world where
individuals access information
and services on multiple types of
devices from anywhere
Quality
The future is a world where all
the media produced can be
cinema quality – where the
output from consumer devices
approach that of the professional
Slide 19
 The real difference between SD and
HD content

The real difference is more information

Copyright © 2007 Accenture . All Rights Reserved. Slide 20
 So just how much better is a High
Definition image than Standard
definition

1920 x 1080P - HDTV

1024 x 768 - XGA

1280 x 720P
768 x 576 - PAL HDTV
720 x 480 – NTSC/VGA

Total Pixel =345,600

2,073,600
921,600
786,432
442,368
It's important to note that a higher resolution format is not necessarily physically
larger but it will provide a higher PPI (pixel per inch)/PPCM (pixel per cm) density
Copyright © 2007 Accenture . All Rights Reserved. Slide 21
 Indicative application bandwidth
demands

Low End “Broadband”

Dial-up Service

Telepresence
3d Holographics
Virtual Reality
5 sec CD download
Multi-channel TV
Video streaming
Multi-channel TV
Video on demand
Video-streaming
Video-streaming(VHS)
(SD)
Multi-player games

Typical Broadband
Video Conferencing
MP3 Streaming
Online games

ADSL Max
Teleconferencing
Basic Surfing
IP Telephony
Email

0 .064 .128 .256 .512 1 2 10 20 100+

Bandwidth Mbps
•Source: 2010 National Broadband Targets Marketing Australia’s Competitiveness, 31 July 2006, Internet Industry Association
Copyright © 2007 Accenture . All Rights Reserved. Slide 22
 The network is the computer
Text Web Graphical Music File Movie (2 hrs)
Page Web Page
Standard High
Definition Definition
(720x486)† (1080/60i) ‡
File Size..
10KB 200KB 3MB 4GB 28GB
Network Speed

GSM 12.2Kbps 6.5 sec 131 sec 32 mins 30 days 212 days

POT 56Kbps 1.43 sec 28.6 sec 7.3 mins 158 hours 46 Days

3G 384Kbps 0.21 sec 4.2 sec 1 min 23 hours 162 hours

ADSL 8Mbps 0.01 sec 0.2 sec 3.1 sec 66 mins 7.5 Hours

802.11b 11Mbps 0.15 sec 2.2 sec 48 mins 5.6 Hours

802.11g 54Mbps 0.03 sec 0.46 sec 10 mins 69 mins

802.11n 540Mbps 0.05 sec 59 sec 7 mins

Gigabit 1000Mbps 0.02 32 sec 4 mins

Never under estimate the bandwidth of a person with an ipod on a train…….

Copyright © 2007 Accenture . All Rights Reserved. † Assumed compression of 50:1 ‡Assumed compression of 40:1 Slide 23
 The problem is how to deliver
the content to the end user
when the size of the content
is increasing faster than the
bandwidth on the network.
The answer may well be to use the
technologies developed to “share”
media files. Peer-2-Peer.

Copyright © 2007 Accenture . All Rights Reserved. Slide 24

 Today’s infrastructures

CONTENT NETWORKS USERS

TV Studios, Ads, Television Networks

Movies

Web Servers, Data Networks

AOL, Yahoo, Advertising (Internet)

Messaging,
Ring Tones Phone Networks

Independently designed, with specific content & devices;

closed ecosystems
Copyright © 2007 Accenture . All Rights Reserved. Slide 25
 It’s time for the next step

Communications
Broadcasters Networks

Media Production Broadband Operators

Personal Content Mobile Operators

Studios Internet Service Providers

Enterprise Content MVNOs

Advertisers

Content providers Device Explosion

The new opportunity is at the
convergence points
Copyright © 2007 Accenture . All Rights Reserved. Slide 26
 The need for edge devices
Output Device
Caching
Content Broadcast
Streaming
Creation
Retail
“On demand” services Wired
Distribution Broadcast
Controlled
Media
Movement

Retail Wired

Media Hub
Broadcast Wireless Wired

Retail

Copyright © 2007 Accenture . All Rights Reserved. Slide 27

 3 Main issues with Media
revenue at present

Ownership of Content • Subscription based models

1. •
•
•
Media Storage
Insurance
Format transfer

Advertising Revenue
• Skip advertising through user control
2. • Broadcaster or producer focused
• Location specific advertising

BBC License Fee

• What is the role of the BBC ?
3. • Move to Micro News Production
• Content production or public service

Copyright © 2007 Accenture . All Rights Reserved. Slide 28

 The hardware cost of
an iPod is insignificant
compared to the cost
of the media that it
holds
An 80GB iPod will today cost you £259.
The music to fill the same iPod (20,000
songs) will cost, via the iTunes Store,
£15,800.

Copyright © 2007 Accenture . All Rights Reserved. Slide 29

 The Future Home Network

Kitche
n

Bedro
om Loung
e Study

Child
Room

Home
Office
Child
Room
2

Copyright © 2007 Accenture . All Rights Reserved. Slide 30

 An ad spend and media time
imbalance globally
100 %
Online Ad Spend

Online Ad Online Time

Growth Growing
80 % Opportunity

60 %
Offline Ad
Spend Discrepancy:
( Newspapers,
40 %
TV, Radio, Direct ~$70 Billion (North America)
Marketing, etc) Offline Media
~$150 - $200 Billion (Global) Time

20 %

0%
Advertising Consumer
Spend Media Time
Sources: Universal McCann, Google, Accenture Analysis
Copyright © 2007 Accenture . All Rights Reserved. Slide 31
 Summary

• The long tail of media content becoming

more pronounced
• Increased focus from Telco organisation
to the delivery of rich media
• Continued problems with “last mile”
delivery
• Content size increase providing ongoing
need for compression improvement and
distributed storage.
• Advertising revenue following viewers
from television towards Interactive
technologies
Copyright © 2007 Accenture . All Rights Reserved. Slide 32