bns conduit, not content is king

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Conduit, Not Content-The New King

In the Entertainment World

June 2009

Jeffrey Soong, CEO


A trip down memorylane…

19661. Newspapers2. Broadcast TV3. Magazines4. Broadcast Radio5. Eight Track

19861. Newspapers2. Magazines3. Broadcast TV4. Radio5. Cassette Tapes6. Walkman7. VCR8. Cable TV9. Personal Computer10.Console Video Games11.PC Video Games

Source: Piper Jaffrey & Co.

20061. Newspapers2. Magazines3. Email4. Broadcast TV5. Radio6. CD Player7. Cable TV8. Personal Computer9. Satellite Television10. Internet11. Cell Phone12. DVD Players13. Satellite Radio14. MP3 Players15. TiVO/DVR16. Slingbox17. iPod18. Blogs19. Online Video20. Mobile Internet21. Console Video Games22. PC Video Games23. MMORP Games24. Mobile Games25. Text Messaging26. Mobile Video27. Movie Downloads28. Podcasts29. Instant Messaging30. Social Networks


2007 2008 2009 2010 2011 2012 2013

Asia 6 8 10 11 11 12 12

Eastern Europe 9 11 11 11 11 11 11

Latin America 6 8 10 12 12 12 12

Middle East 1 2 1 1 1 1 1

North America 2 2 2 2 2 2 2

Western Europe 15 15 16 16 16 16 16

Total 39 46 50 53 53 54 54

% of total 75 countries 52% 61% 67% 71% 71% 72% 72%

Source: SNL Kagan

Number of Countries per Region with Four or More Digital Multichannel Platforms

Industry Fear Factor 1: A hypercompetitive platform environment


Fear Factor 2: New ‘World Order of Media”

Source: Piper Jaffrey Investment Research

5. Main Navigation Method Portals Search

8. Media Consumption Pattern Focused single channel use Multi-channel, distributed attention


Fear Factor 3: Piracy

• Net cost of pay-TV piracy in Asia US$ 1.5 billion in 2007 -> US$ 1.7 billion in 2008

• Majority of illicit content comes from industry insiders, so difficult to curb the piracy flood at the source

• Shifts from peer-to-peer downloads to streaming which allows immediately viewing without installing a program

• Forcing ISPs to block connections does not work• Amazon and Apple have removed DRM; Apple changed

pricing to a tiered approach

Fighting piracy with conventional methods is relatively futile


Fear Factor 4: Consumers don’t want to pay

Proliferation of platforms and entertainment choices have seemingly reduced individual’s willingness to pay for content.


How do consumers determine content value?

• The four C’s: Context, Community, Convenience and Content

– ability to share content amongst friends and family, and the technologies and functions to do this are key in defining value for consumers.

– consumers want all-in-one service aggregators to provide cheaper, more flexible access to digital content

– maximising customer attention which can be monetized with deeper, more relevant layers of must-have content

The double edged sword: Content distributed over multiple platforms creates more revenue opportunities … but consumers

are increasingly unwilling to pay


Avoiding commoditization and preserving the value of content• Conduit, not Content is the true king

– Attractive value added services, functionality and applications cannot be matched by piracy or advertising-based ‘free’ content

– Search Engines, video portals, social networking sites combined with underlying technology and architecture should enable viewers to find the content they want to watch

Apple app. store NBC Multi screen Internet TV


Smart EPGs will lead the way


How Conduit will be King


Industry stakeholders should…

• Embrace Conduit as the key enabler for content profitability

• Master seamless convergence of platforms• Create intuitive minimum-click user

interfaces • Ensure simplicity at the front and backend• Future-proof technology to cater for

evolving trends• Forge relationships across industries • Consider new business models rather than

anti-piracy measures


About BNS

• Long-standing and proven experience with telco-grade IP- entertainment, automation and AV systems– Telco and Hospitality focus

• Extensive content expertise• Open platform philosophy guarantees

future proofing of technology• Understanding the needs and expectations

of the “i-Pod generation” (access anywhere, over any device)


• Blue Chip Client Base• Regional Focus

Regional office

Customer deployments


The BNS Products and Solutions Portfolio

(BNS Touch)

(BNS Touch)


Globally Renowned PartnersEncoder

VideoServer

CA/DRM

M/W

NetworkEquip.

Codec

STB

Others


29/F, Siu On Centre188 Lockhart RoadWanchai, Hong KongPh: +852 2180 9918Fax: +852 2180 9919www.bnsltd.com

Thank You

bns conduit, not content is king

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