internet multimedia business models and trends, yossi cohen, dsp-ip
DESCRIPTION
VoIP and video services are very popular but are they making money? What will be the services supplied by the next Skype or Joost? This lecture review the business models of current VoIP and Video services and try to predict future trends in those fields. VoIP Bizmodel - main problem is the erosion of per minute prices. Solutions include: * Personalization/Avatars/Socialization * Connection to other people/experts – Kasamba, Bitwine, Jyve and other ClickToCall solutions Other Trends: * Twitter - Extended Presence/Micro Blogging * Converged IM and VoIM solutions * VoIP over Mobile (Fring, iSkoot, EQO) Issues: Identity management UGC video - business models is based on advertisement: text advertisement and content wrapping, no personalization or focus. Solutions include: * No specialization => Specialized videos like 5Min - expert short instructional video – better focus for advertisement * Content wrapping => Video overly advertisement - a bit better CTR than content wrapping * Nothing to publish?=>Artificial Content placement, video tagging * Social discovery web sites Issues: How to filter content, centralize web search, create personal recommendation platforms, work on all three distribution channelsTRANSCRIPT
VOIP & VIDEO TRENDS FOR INTERNET STARTUPSYossi CohenCTODSP-IP
VOIP &
VIDEO
TREND
S FOR IN
TERNET
STARTUPS
Overview
VOIP SOLUTIONS AND TRENDSVoIP statusVoIP Trends
VOIP STATU
SPC VoIP History
PC VoIP by two parallel paths for personal and business use:
•Enterprise Phone switches offered PC VoIP extensions•Large IM Portals offered VoIP
VOIP STATU
SEnterprise
PC VoIP started as PC phone extension for enterprise
•Avaya•Cisco•Nortel•Connegy•Tadiran
Personal VoIM
Large portals with IM clients started offering VoIM•Single Client IM
•IRC, ICQ •AOL AIM•MSN Messenger•Yahoo! Messenger•Jabber
•Converged IM •Meebo •Trillian•GaimYack!
VOIP STATU
SVoIP Challenges
• VoIP subscription fees are:•None•Very low per minute rates•Low Monthly/Yearly Flat rate
•Client acquisition costs are very high•Vonage–$150-200 according to CEO interview •Offerings of “VoIP subscriber for sale” $ 200 per head
•Churn is very high•No Differential factors: if I’m on a 19.99 flat package I could turn to a different vendor for 18.99•(Ask Vonage)
VOIP TREN
DS
VoIP Trends
VOIP TREN
DS
Personalization
Skype Offers Klonies with Comverse
More Avatars by• Combots•WeeMe •IDT
VOIP TREN
DS
Mobile VoIP
Usually free calls between subscribers PC over current Portal VoIP networksLower than standard rates for mobile calls
EQO - Widget for MySpace for Mobile
Fring – Leading Israeli Mobile VoIP Company
iSkoot – Deal with Skype Mobile
VOIP TREN
DS
Messaging Convergence
Cerulean Studios’ Trillian Connects to leading IM services:
•MSN•ICQ•Yahoo
VoIM convergence•Farsight
VOIP TREN
DS
Connect to Expert/Service
Palore• Call and rate services
like restaurants or plumbers
BitWine • Connection to
experts
Kasamba • connect to expert,
bought by LivePerson for $ 40M June 2007
VIDEO SOLUTIONS AND TRENDS•Specialized niche videos•Video overly advertisement•Video understanding and tagging•Media discovery
UG
C VIDEO
TOD
AYUGC Video Today
Is this the best video delivery system we can create?
A $1.4B system?
Where are the Videos I like??
VIDEO
CHALLEN
GES
Portal Video Challenges
• Revenues are mostly based on Advertisement:•No Focus or Ad personalization per
•Content•User
•Low CTR•Clients wants to see video and not buy Cola or a new phone
•High expenses•“CDN costs are killing us”
•Personalization – Nada !•Aggregated search mechanism - No •Personal recommendations – No •“Save” option•Low stickiness
VIDEO
SOLU
TION
SSolutions
•Specialized niche videos• Example: 5Min, Café-Confidential in
Metacafe
•Video overly advertisement• Example: YouTube - August 2007
•Video understanding and tagging• Examples: VeoTag, Blinkx• Better Search results• Better Advertisement targeting
•Social discovery web sites• Discover people with the same taste
TREND
S
Recommendation Systems close the loop between content creator/distributors and the users
VIDEO
SOLU
TION
SInternet Video Trends
ProcessPastPresentFuture
DistributionBroadcastPre defined
channels
UGC / Pre defined channels
My Customized channel
ConsumptionLean Back – open loop
Lean ForwardText search of clips
Lean back
Content typePremium ContentUGC content + Stolen Premium
content
UGC + Legal Premium content +
Meshups
FINANCIAL ISSUES IN SCALING
● Revenues models ● Expenses (Do we really need to speak about it?)● IPR Issues● Development issues
FINAN
CIAL ISSUES IN
SCALING
Revenue Models
• Advertisement• Google, MetaCafe, YouTube and most of Web
2.0 services
• Subscription fees• Business service – LinkedIn• Content download - Rhapsody music service by
real
• Per interaction model• iTunes – per song payment ~ $1• Guba – per video payment ¢45-99• Requires attention to client retention• Requires very low cost of billing handling (~¢1 )
• No revenue model – Exit
FINAN
CIAL ISSUES IN
SCALING
VoIP and Video startup scaling
Full scale Full scale commercial commercial deploymentdeployment
Scaling1M users
Commercial Dev. + Beta100K users
Garage+Alpha
10K users
Idea
Web 2.0 Web 2.0 developmentdevelopment
FINAN
CIAL ISSUES IN
SCALING
Community oriented Startup
Create a Community• Socialization• Information sharing
Community Bonding/Gluing• Socialization and search
tools• Stronger relations and
interactions between community members
Bridging Communities• Creating mutual interest
spaces• Bridging technological Gap
CreateCommunities
Social Service
FINAN
CIAL ISSUES IN
SCALING
Community Creation
Bridging
Bonding
Community
Free Services•Goals
•Group creation•Group Scaling
•Identity•Connection •Basic communication•Presence
Premium Services•Goal
•Revenues•border crossing •Presence – Mood•Personalization•Cross technology services
•VoIP<->PSTN•VoIP over Mobile•Free WLAN
Technology orientedpremium bridging services
Community free services
FINAN
CIAL ISSUES IN
SCALING
Expenses
What Should be the cost of the model? What is the delta-expense between 1M and 10M users?
• Linear • Semi-linear• Flat
Linear Cost• IP and Patents for media coding and processing
Semi linear• Support, Infrastructure
Flat• Development costs
FINAN
CIAL ISSUES IN
SCALING
IPR Costs
•As engineers we tend to see only development •For large scale deployment, IPR (Royalties) are the largest expense (ask Adobe and Skype)•Payment for IPR:
• Codec Patent rights (G729, G723.1, MPEG4)• Developer royalties for companies developing
our:• Signaling• Multimedia codecs
FINAN
CIAL ISSUES IN
SCALING
Ownership problems – 3rd Party IP•Standard media codec and many algorithms used for media coding are protected IP and requires payment to patent owners.•Although after the community is large enough there are revenues from premium services, they do not cover IPR costs
Revenues
IPR Costs
How to finance this gap? Subscribers
Revenues
IPR Costs
Subscribers
FINAN
CIAL ISSUES IN
SCALING
Development Models review
Development
ProsCons
Internal Development
Create IP for the companyNo Royalties / 3rd costs
Time-to-marketDevelopment risksLarge initial cost
BuyTime-to-marketLow initial cost (royalties)No development risks
IPR if existsRelay on other companies
OutsourceLow development risksTime-to-MarketNo Royalties / 3rd costs
Hmmm…
Deciding which option to choose affects the development cost, scaling costs and TTM
FINAN
CIAL ISSUES IN
SCALING
Project Mapping into development option space
OutsourcingMake/Internal development
Buy
Development risk
Long-term/IP cost
Time-to-Market Develop +Consulting
FINAN
CIAL ISSUES IN
SCALING
Summary
•Pay attention to scalability and IP ownership issues•Rapid Development
• Use open source for rapid prototyping and demos• Buy or outsource whatever you can’t develop fast. • Don’t get stuck because on technology issues
•Mix technological breakthrough, product features, client behavior understanding and innovative GUI to get ahead of the pack
Biz ModelBiz Model
TechnologyTechnology
ScalingScaling
IdeaIdea