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1 Copyright Snark Consulting VoD in LATAM: a business perspective Daniel Collico Savio – Snark Consulting

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A summary of my presentation in ITS conference.

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  • 1. VoD in LATAM: a business perspective Daniel Collico Savio Snark Consulting1Copyright Snark Consulting

2. Introduction QuestionsHow VOD players are setting prices in LATAM? Any correlation with countries PPP? Is there any pattern or strategy? GuidelinesFocus on VOD projects designed for mainstream. No bundles, no AdVOD, no fidelization projects. Always keep a balanced vision: What theory suggests Practical Business Development approach2Copyright Snark Consulting 3. Theory vs Practice Design phase. Context, market, competitors Deal with Content Owners Define main variables: TVoD, SVoD, EST Content quality Devices Territory Some 10+ variablesOutput: only a business plan 3Copyright Snark Consulting 4. The whole picture ProtectionPublishingIMS/ERPContent OwnerRightsContentPre-encryptionAssetAggregationContent ProtectionEnd UserBillProductsTransaction ManagerCustomerTransactionsAuthorisations Encrypted AssetIngestion Meta DataReoirtubgBuys and FeesAssetDistributionMeta DataContent Mgnt System (CMS)VOD ServerEncrypted AssetEncrypted AssetPropagationProductsTrick modesSTBIngestionApplicationsAggregationBilling InfoContent ownerVOD CatalogueMarketingAuthor Rights4Payment Copy rightsPayment LicensesPayment VOD AssetsEnd UserCopyright Snark Consulting4 5. iPTV vs OTT IssueOTTRationaleMy network, my customersTotal freedom.Linear TVYesNoDevicesSet-top box = main deviceMultiscreenServiceDefined with precisionBlur + Best effortHDYesNoBillingMany payment methodsCredit cardBW5iPTV> 2MAdaptive bitrateCopyright Snark Consulting 6. STOF Model applied to Content business Value proposition: Price, TVoD, SVoD, VAS, Bundles, etcService Design Hard aspects: Speed, QoS, Legacy system integration, User Interface, etc.Organisation DesignTechnology DesignHHRR : No skilled personnel regarding ContentFinance Design Economic issues: MGs and revenue share negotiations6Business Model for IPTV Service: a dynamic framework (Bouwman, Zhengjia, van der Duin and Limonard) - 2007Copyright Snark Consulting 7. STOF dimensions and Content DimensionExamplesSServiceContent definition Market differentiation. Type of business. VAS integrationMajor Studios selection. Multiscreen. Is it SVOD, TVOD or both? Promotions? Bundles?TTechnologyBandwidth QoS Integration with legacy systems, CRM or AnalyticsHigh BW enables better penetration and assures QoS. Profiles and processing costs.OOrganizationContent, legal and Mkt skills in the organization. Possible fixed-mobile convergence reg Content.Seek help from aggregator. Share same Studios with partners.F 7DefinitionFinanceRevenue share negotiation MGs negotiationNeed of CPS model Copyright Snark Consulting 8. Main parameters in VoD design ParameterConstraintUncertaintyInitial critical massMkt OperatorSize of operatorLowSVOD subsMkt OperatorAdvertising BudgetHighTVOD eventsMkt OperatorAdvertising Budget, Medium virality estimation# TitlesStudiosContent roadmapLow# DevicesNW OperatorTechnologyLowProduct mixMkt OperatorTechnologyLowContent costStudiosContent budgetHighQoS, HD avail 8SourceTech OperatorTechnologyLow Copyright Snark Consulting 9. A difficult conversation 9Copyright Snark Consulting 10. Big Telco modelizationRevs, Costs (USD)iPTV context Both TVOD and SVOD Sdet-top boxes HD MGs each quarter Break-even in 20 months$ 1,000,000.00$ 900,000.00 $ 800,000.00 $ 700,000.00 $ 600,000.00 $ 500,000.00Costs$ 400,000.00Revenues$ 300,000.00 $ 200,000.00 $ Avg Costs 100,000.00 $ 0.00 061218243036Months10Copyright Snark Consulting 11. New player modelizationRevs, Costs (USD)OTT context Only SVOD 3 screens Only SD MGs dilluted per month Break-even in 29 months$ 400,000.00$ 300,000.00$ 200,000.00Avg Costs Costs$ 100,000.00Revenues $ 0.00 061218243036Months11Copyright Snark Consulting 12. VOD price benchmark Country ARG ARG ARG ARG BRA BRA BRA BRA COL COL CHI CHI PER MEX MEX MEX MEX MEX MEX MEX LATAM LATAM LATAM LATAM LATAM 12ServiceOperator (or owner) On Video Telefonica Arnet Play Telecom On Demand Cablevision Vesvi Grupo Vi-Da GVT GVT Now NET On Demand Sky Vivo Play Telefonica ClaroTV Claro VideoTienda UNE-EPM On Demand VTR Bazuka VTR Claro VOD Claro Clarovideo Claro Yuzu Maxcom Total Movie Total Play On Demand Cablevision Klic Cinpolis On Demand MegaCable Bajo Demanda Axtel Netflix Netflix iTunes Apple Prime Amazon Vudu Walmart Hulu Plus ProvidenceTVOD $ local 18 18 20 10 9,9 9,9 9,9 6900 6000 2490 1990 12,8 49TVOD Price USD 2,40 2,40 2,67 1,33 4,13 4,13 4,90 4,13 3,60 3,13 4,88 3,90 4,61 3,9245 40 423,60 3,20 3,36SVOD $ local 50 50 35 29,9SVOD Price USD 6,67 6,67 4,67 3,9914,96,2119,9 90008,29 4,695 79 149 100 99 89 75 691,8 6,32 11,92 8,00 7,92 7,12 6,00 5,52 7,993,99 3,99 4,99 7,99PPP USD 18,20 18,20 18,20 18,20 12 12 12 12 10,80 10,80 18,40 18,40 10,7 15,30 15,30 15,30 15,30 15,30 15,30 15,30 11,7 11,7 11,7 11,7 11,7Copyright Snark Consulting 13. Rise and fall of Cuevana 13Copyright Snark Consulting 14. TVoD price vs PPP correlation VuduVTR Chile Zombies Cloud Klic MxicoUNE ColVesvi ARG14Copyright Snark Consulting 15. SVOD price vs PPP correlationYuzu MexicoZombies Cloud NetflixUNE Col Vesvi ARGClaro Per15Copyright Snark Consulting 16. Yet another zombies film?16Copyright Snark Consulting 17. Twitter killed 2nd screens17Copyright Snark Consulting 18. Summary Mainstream will adopt VoD in the long run if it is perceived as convenient Price User experience Technical expertiseEnd users normal distribution -if there is such a thing.MainstreamFollowers18Early adoptersCopyright Snark Consulting 19. Conclusions BPs are tricky. They demand a lot of expertise High uncertainty in Studios and market variables Rising cost of content No correlation between PPP and PricesZombie strategy: most OTTs are following big players Interesting :zero VoD strategy in some cases Trends of VoD in LATAMProblems with broadband and piracy Content is King (yes, its true this time!) Twitter killed all 2nd screen developments Analytics VoD is not a golden mine, but it is the new mantra. Who is competitor? Netflix or Google? 19Copyright Snark Consulting 20. Thank you! Daniel Collico Savio - Snark Consulting [email protected] - Twitter: kolyiken20Copyright Snark Consulting