entertainment sell-through roadmap · entertainment sell-through roadmap • 1.0 was physical (dvd)...

Entertainment Sell-Through Roadmap

• 1.0 was physical (DVD) distribution

• 2.0 is ubiquitous content availability through cloud services– More ways to acquire and use content– Seamless integration between digital and physical media

(DVD,BD,DECE)

• DECE was formed to develop the standards to enable

Entertainment 2.0.

2Copyright 2009 Digital Entertainment Content Ecosystem LLC

DECE – A Digital Open Market

• New cross industry group of global stakeholders formed to define new industry standard to:– Enable a new consumer experience for digital media

with enhanced digital flexibility and content accessibility

– Establish a framework and deploy a back-end service that facilitates compatibility across multiple digital distribution services and devices

• DECE intends to make online sell-through of film, TV and other digital content as ubiquitous and compatible as DVD.

Copyright 2009 Digital Entertainment Content Ecosystem LLC

DECE Confidential 4

Why DECE?

• First digital platform designed for scale

• Open platform enabling 3rd-party innovation

• Lowers barrier to entry for devices and services

• Achieves “better-than-free” goal

• Next-generation EST usage model designed for Millennials

• Preserves sell-thru business model

Consumer Benefits – EST Lift

DECE Confidential

0%2%4%6%8%

10%12%14%16%18%20%

$8 $13 $18 $23

EST WITH Interoperable Digital Locker

Baseline: EST WITHOUT Digital Locker

% Increase in Units / $ Sales if Interoperable Digital Locker ONLY Offered

EST Price

At range of potential price points, Digital Locker increases unit demand and $ sales by 15% or more

Low High

Source: Oliver Wyman “Future of Home Entertainment” Demand Simulation Research, November 2007

Consumer Benefits – Segments

DECE Confidential

14%

32%

7%

0%

5%

10%

15%

20%

25%

30%

35%

Total Population Under 35 Over 35

Impact of Interoperable Digital Locker Rights (subset of usage model)(% ∆ in total revenue by age group)

Source: Oliver Wyman “Future of Home Entertainment” Demand Simulation Research, November 2007

The Adult Millennial Value Pyramid: Cell Phones, Laptops, And Desktops Already Surpass TV

Can’t live

without

Lower value

Cell phone, Laptop, & Desktop

TV, Game console & Smartphone

Digital music player, DVR, & Digital video player

Satellite radio & Handheld Gaming Device

Millennial Strategy Program®How would you rate the value of the devices you use? (1= It has no value to me at all; 5=I cannot live without it)

Value placed on devices used by Adult Millennials

2004

2006

2008

2010

2012

201436 64

7 36 57

13 36 50

20 36 43

27 36 37

33 36 30

0% 20% 40% 60% 80% 100%

Boomers Generation X Millennials

A Plurality Today … A Majority by 2010 … 18-49 Domination By 2014 And Beyond Percentage of 18-49 age group

Based on U.S. Census population projections

41 million

Number of Millennials

50 million

59 million

68 million

77 million

86 million

Boomers Gen X’ers Milllennials

Participating Members (No Class Designation)

Extend MediaDTS

Liberty GlobalMod SystemsMacrovisionMovie Labs

RIAA

DECE Confidentialo 9

MembershipLevel

Content Providers

Service Providers Client Implementers

Mgmt CommitteeMembers

FoxNBC/UWBParamount

ComcastMicrosoftThomsonNokiaVerisign

IntelPanasonicSonyHPSamsungToshiba

FoundingMembers

Lions Gate Best BuyDeluxe Digital

CiscoLucentPhilips

AdobeAscent Media

Blueprint DigitalCable Labs

CoxDolby Labs

Sonic SolutionsSwitch Communications

TescoVerimatrixWidevine

Zoran

DECE Organization & Participants

What if DVD Rolled Out This Way?

People would think we were crazy


The Problems with EST Today

• Silo services limit consumers into a single device platform and a single retailer for purchasing content.

• Every additional service silo further fragments the market.• It is another format war, but with online services.• Content delivered from a single network service to a single device

platform lowers the consumer’s perceived value of ecosystem


12

The Open Marketplace for DVD

• Defined Standard with a choice of storefronts and devices– Approved format– Single usage model providing consistent experience

Retailer Retailer Retailer Retailer


DECE’s New Digital Media Product

13

DECE

• Defined Standard with a choice of storefronts and devices– Approved format– Single usage model providing consistent experience

DECERetailer

DECERetailer

DECERetailer

DECERetailer


Key Content Attributes

14

• Domain usage model• Rights locker • Multi-format support

• Remote access• Sharing within a family• Export to DVD

DECERetailer

DECERetailer

DECERetailer

DECERetailer

DECE


Defining a New Digital Media Product

Product/Format

ResolutionDistribution

ChannelBusiness

Model

Standard Def Physical• Sell-thru• Rental• Subscription

High Def Physical• Sell-thru• Rental• Subscription

Multi-Def Digital• Sell-thru• Rental• Subscription

Copyright 2009 Digital Entertainment Content Ecosystem LLC15

• DVD & Blu-ray established standards for SD and HD physical media

DECE

Defining a New Digital Media Product

Product/Format

ResolutionDistribution

ChannelBusiness

Model

Standard Def Physical• Sell-thru• Rental• Subscription

High Def Physical• Sell-thru• Rental• Subscription

Multi-Def Digital• Sell-thru• Rental• Subscription

16

• DECE will define a new open standard for digital distribution

DECEBrand


System Overview


DECE’s Ecosystem RolesContent

Providers

DigitalService

Providers

Online Retailers

Device Makers

DECECoordinator

Licenses content to Retailers

Interfaces to DECE Coordinator Provides content fulfillment services

Customer-facing storefront serviceSells DECE content

Manufacturer of compliant devicesPlays ecosystem content

Manages DECE Locker Accounts/DomainsFacilitates cross-service and device compatibility

Locker AccessService

Providers

Consumer-facing streaming serviceSells DECE content access service


DD

DECE’s Ecosystem Roles

Digital Service Provider A / CDN

Retailer A

DomainDevice

A

DECECoordinator

LASPA

Domain Device

B

Domain Device

C

Digital Service Provider B / CDN

Retailer B

LASPB

DECE Domain/Account

19

StreamingDevice


Digital Library

Linking Retailers Accounts to DECE

DECERetailer

DECERetailer

DECERetailer

DECERetailer DECE

Retailer DECERetailer


Setting Standards

• All content will have the same standard usage model.• All services will follow UI guidelines when providing

interoperable features to simplify consumer experience.• All content will be available in all of the approved

standard formats from all Retailers.• All content will be branded.• All services and devices will follow standard compliance

rules.• All interactions between Retailers/DSP and Central

Coordinator are standardized.


What We All Gain

Content Owners Digital Retailers CE/IT Companies

• Enhanced value of content• Supply chain optimization• Competitive marketplace• Tool against piracy• Solution to interoperability• Mass market for digital content

• Enhanced value of service • Lower barrier to entry • Competitive marketplace • Increased device reach• Solution to interoperability• Mass market for digital content

• Enhanced value of devices • Lower barrier to entry• Competitive marketplace • Greater access to content• Solution to interoperability • Mass market for devices

A new standard for digital distribution will enable consumer choice resulting in a mass market for digital content,

devices and services


Service Perspective: Scalability

• A retail service in an open marketplace is not limited to a single device platform and can reach a mass market of devices

SiloRetailer

SiloDevice

DECERetailer

DECEDevice

DECEDevice

DECEDevice

DECEDevice


Device Perspective: Scalability

• A device in an open marketplace is not limited to a single service silo and can receive content from a mass market of retail services

SiloRetailer

SiloDevice

DECEDevice

DECERetailer

DECERetailer

DECERetailer

DECERetailer


What the Consumer Gains

Consumers

• Purchasing an experience, not a format • New ways to acquire and access content• Authorized content sharing within household• Greater choice of interoperable devices• Choice of service providers (Retailers)


Summary

• Enable a new consumer experience for digital media with enhanced digital flexibility and content accessibility

• Establish a framework and deploy a back-end service that facilitates compatibility across multiple digital distribution services and devices


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