TV & VOD content

myths busted!
November | 2013
 AGENDA

1. Who is Vubiquity?

2. TV in Africa: landscape for digital

video services

3. How VOD licensing works

4. Ten lessons for potential VOD

providers

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 THE NEW VUBIQUITY

North America • Europe • Middle East • Asia • Africa• Latin America • Caribbean
Global Provider of Multiplatform VOD Services

Created from merger of Avail-TVN and

OnDemand Group
Providing service in over 30 territories
Managing more than 28,000 hours of content
monthly from over 340 content providers
Reaching over 77 million households through
more than 280 service providers
With over 400 people in 9 offices and
3
employee locations around the world
 DEFINING DIGITAL MEDIA SERVICES

ANY ANY
CONTENT CONTENT
PROVIDER PROVIDER

DATA, INFORMATION, DATA, INFORMATION,

ANALYTICS ANALYTICS
PLATFORM

Any Network Any Device Any Business Model

Enabling the transformation from broadcast to personalized, On Demand

consumption of Any Media on Any Network via Any Device
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 EFFICIENT CONTENT OPERATIONS

Two processing centres in North

America and Europe
Working in both PAL and NTSC
3,000 promos produced per year
Working in multiple languages:
English • German • French •
Spanish • Arabic • Portuguese •
Greek • Turkish • Serbian •
Slovenian • Croatian • Czech
Slovakian • Bulgarian • Hebrew

The highly automated operational workflow generates efficiency by eliminating menial work and
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focusing effort on value added tasks. Delivering to major operators globally.
AGENDA

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TV VIEWING IN THE REST OF THE WORLD HAS EVOLVED FAST

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 THE AFRICAN OPPORTUNITY

• Even in the most developed African country – South Africa – TV was

only introduced as recently as 1976

• Some Northern African countries (e.g. Algeria, Egypt, Morocco,

Tunisia) have TV penetration of over 90%, but in sub-Saharan Africa
there are over 840 million households and TV penetration is only 44
million (i.e. 5%)

• However, it is estimated that by 2015, over 50% of African households

will have a TV

• Multichoice (DStv) and Canalsat Horizons have dominated the pay TV

market with their DTH platforms

• Cable TV has proved limited (large unpopulated areas etc.) but a fast-
paced digital switchover process and emergence of viable IPTV
models is starting to change the pay TV landscape
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 THE AFRICAN OPPORTUNITY (cont...)

• Despite all the challenges (low incomes, massive inequality, low fixed
line penetration, low smart phone usage) the growth opportunities in
Africa are huge
• IPTV platforms are beginning to grow, albeit in relatively small (<100K)
instances, but aggregated across French and English speaking
territories can be significant quickly
• Push VOD over 3G will enable mobile broadband operators to offer VOD
in a limited form until LTE takes off (2015+) when full streaming VOD
over mobile will be a reality
• Hollywood studios looking to aggregators such as Vubiquity to create
volume plays

“Africa is our key growth point going forwards”

Alessandro Tucci, SVP at Fox International (Oct 9th, 2012)
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 FIXED LINE PENTETRATION HOLDING BACK OTT

• Fixed line services have been restricted to a small number of households

and in many countries cover less than 10% of the population
• However, mobile subscribers in Africa are already over 600 million today
and forecasted to reach 800 million by 2015
• Most analysts predict mobile broadband will almost completely bypass fixed
line in most of Africa
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 MYBROADBAND ONLINE PIRACY SURVEY

• 58% of respondents had pirated copyrighted movies, TV series, music, software or

games over the last 12 months
• The majority of South Africa’s online pirates indicated that they mainly download TV
series and movies
• 92% of online pirates indicated they would stop pirating if the content they were
pirating was affordable and made convenient to get and use
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 GROWTH....

• East Africa’s Kenya, Tanzania and Uganda will add substantial

numbers to their TV household counts.

• About 35.3% of TV homes (14.0 million) took digital signals by end-

2012, and this digital TV penetration will rocket to 95.5% by 2018 –
with household numbers quadrupling to 49.0 million

• Sub-Saharan Africa will have 33.8 million DTT homes by 2018 – 25.7
million FTA and 8.0 million pay – up from 4.6 million at end-2012

• South Africa will remain the dominant pay TV revenue generator but
its share of the total will fall from 61% ($1.77 billion) in 2012 to 47%
($2.16 billion) in 2018

• Sub-Saharan pay TV revenues will reach $4.62 billion in 2018, up

from $2.88 billion in 2012.

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 TRANSITION FROM PHYSICAL TO DIGITAL IN SOUTH AFRICA

Filmed entertainment revenue share, by category, 2012 vs. 2017

Source: Aquidneck Consulting, PwC, Informa 13
How VOD licensing works...

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 VOD DEFINITIONS...

TVOD SVOD

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 VOD DEFINITIONS...

TVOD SVOD
Revenue Share... CPS Based...

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 CONTENT LICENSING WINDOWS FOR MOVIES

• Content Windows are set from a title’s initial local Cinema premiere and
cover the life span of the title
• Windows for movies generally follow a pre-defined , fixed pattern
(Theatrical, DVD, PPV/TVOD, Pay TV, FTA, SVOD)

Theatrical
DVD Retail/Rental
M TVOD Currents
O 1st Pay (i.e Multichoice)
V 2nd Pay/Free TV (i.e. TopTV / eTV)
I
E TVOD Library
S SVOD

0 4 6 9 12 24 36
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Time in Months
MINIMUM GUARENTEES: A GOOD THING OR A BAD THING???

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Ten lessons for potential VOD
providers...

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HOW DO I MAXIMZE ON DEMAND?

What are the ten key lessons Vubiquity

sees across its 280+ operator
customers around the World in terms
of maximising a TV business and using
VOD to support other core revenue
streams?

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1. IT’S A MULTI-SCREEN WORLD

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 2. BUNDLING TV REDUCES CHURN

33%
35

30

25
50% Churn
18.5%
20 16.5% Reduction
Churn levels
15 among
7.8% subscribers to
10 different product
bundles
5 (source: JP Morgan)

0
1-Play 2-Play 3-Play 4-Play

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3. BUNDLE SVOD TO HEAD OFF CORD CUTTING

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 4. INVEST WISELY ON NEW SERVICES

VUBIQUITY U.S. Customer Survey: December 2012

Q. “Whether or not you actually use the following

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services or channels, how valuable are they to have 60
available to you for your TV service?” 55
[Scores represent 8-10 Value] 47

40

33
Overall, VOD ranks 30 30

#1 in terms of value
by pay TV 14
10
subscribers

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5. SUPPORT ALL BUSINESS MODELS FOR CONTENT

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6. OFFER BOTH LOCAL & INTERNATIONAL CONTENT

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7. FREE CONTENT MEANS INCREASED VOD REVENUES

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8. LEVERAGE MARKETING VALUE OF TVOD RELEASES

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9. SUPPORT SOCIAL MEDIA OR LOSE EYEBALLS

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10. SHOW ME THE MONEY (BUTTON)!

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 HOW DO I MAXIMZE ON DEMAND?

1. It’s a multiscreen world

2. Bundling TV reduces churn
3. Bundle SVoD to head of “cord cutting”
4. Invest wisely on new services
5. Support all business models for content
6. Offer both local & International content
7. Free content means increased VOD revenues
8. Leverage marketing value of TVOD releases
9. Support social media or lose eyeballs
10. Show me the money (button)!

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 CLOSING REMARKS

• It’s an exciting time for TV in Tanzania

• DTT switchover will create huge new
opportunities
• OTT is coming
• Delivery is still an obsession...
• Content is king!
• New platforms can learn from the
global VOD business and get a head-
start in terms of building a successful
video business

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 Nick Ruczaj
VP Business Development
: nruczaj@vubiquity.com
: +44-7900-898-852