what you need to know before engaging with cable industry players and c-level?
TRANSCRIPT
What you need to know before engaging with Cable Industry players and C-Level?
Last release: October 2014
Houria TAIR-CHAUVIN
Operation model is franchised
Business is lightly regulated
Value is in 2 sides of the value chain
Household TV centric business
Ca
ble
bu
sin
es
s
mo
de
l
Due to historical market specific structure, the traditional Cable Billing & OSS systems were built to support simple TV offering ….
Business requirements Systems requirements
• Manage inventories of set-top boxes
• Manage inventories of smartcards (with DRM access)
• Schedule truck rolls
• Manage subscribers (low churn rate)
Network and Element ManagementNetwork and Element Management
Ordering Provisioning
Subscriber
management system
Ordering Provisioning
Subscriber
management system
Ordering Provisioning
Subscriber management system
Network and Element Management
Houria TAIR-CHAUVIN
Financial KPI
Market Trends
IT Market in Motion
What next
1 2
3
4
Houria TAIR-CHAUVIN
Vodafone
Suisse Germany Belgium
Germany Germany
LGI
UK
Ireland
Poland
Poland Poland
Poland
Sky
UK 2nd
Isle of white
UK UK
UK
M7 to
acquire
KabelKiosk
Czech Republic
West Europe Central EuropeLiberty Global
Revenues $16.8
Vodafone Group
Revenues £6.4bn
Liberty Global and Vodafone are the most important players in Europe
Houria TAIR-CHAUVIN
Source: screen digest (2011) + WIK calculator for liberty global
EUROPEAN MARKET STRUCTURE
Homes passed by cable vs BB adoption per member statePercentage of households passed by cable (2010)
Houria TAIR-CHAUVIN
The gap in Europe between cable coverage and cable broadband penetration represents a significant opportunity to monetize existing infrastructure
Financial KPI
Market Trends
IT Market in Motion
What next
1 2
3
4
Source left : cable deuthsland – financial statement 2013
Source right :AD-little _Cable infrastructure as a competitive Next Generation Access (NGA)
Source: Liberty Global report-Re-thinking-the-Digital-Agenda-for-Europe
Annualization of CAPEX per users according to population density
CAPEX requirement for cable upgrades (EUR per home passed)
Cable providers are conservatives in their infrastructure spending
CAPEX BREAKDOWN EXAMPLE OPEX BREAKDOWN EXAMPLE REVENUES STREAMS
30%
60%
5%
Support Capital
Line extension
Upgrade
Efficiency CAPEX
21%
19%
17%
10%
Other
Housing association business
Subscribers acquisition cost
Premium TV CPE
Internet & Pone
Houria TAIR-CHAUVIN
34% 66%
Infrastructure Services & offerings
Source: BCG – BskyB analysis - Cisco
Source : Liberty Global Investor Conference
42%
18%
19%
11%
10%
Administration Sales management
Marketing Transmission
Programing
~ 40% for S&M,
Marketing
administration
Strategy • Economies of scale, • Migration from analog to
digital cable ,• Access to key content and
exclusivity,• Move programming spend
in-house
In-House programming content
• Investments in tapeless environment (TCO: £315/ device)
• Deployment of digital media platform
• Single centralized digital master for all platforms
Breakdown of support costs
Cisco IBSG : white paper
LGI example of S&Mcosts
… and they have to deal with excessive operation and maintenance costs
CAPEX BREAKDOWN EXAMPLE OPEX BREAKDOWN EXAMPLE REVENUES STREAMS
Houria TAIR-CHAUVIN
• Ad revenues are the total number of ads sold, multiplied by the average number of viewers which is then multiplied by the CPM.
• CPM is the cost an advertiser pays for every thousand viewers who watch a 30-second television ad. These costs vary depending on the show and time of day.
• The highest fees are typically paid for sports and general entertainment channels.
• The highest is $4.77 per subscriber per month, commanded by ESPN (2011 data, provided by SNL Kagan).
• Around 70% of revenues derived from traditional retail TV subs.
Source left : Average estimated with Accenture data and BskyB data (require further investigation
59%
35%
6%
Subscription fees Advertising interactive TV
Interactive TV revenue by Stream
Most of cable channel TV revenues are generated through advertising & subscriber fees
CAPEX BREAKDOWN EXAMPLE OPEX BREAKDOWN EXAMPLE REVENUES STREAMS
Houria TAIR-CHAUVIN
Financial KPI
Market Trends
IT Market in Motion
What next
1 2
3
4
Channel and
Devices
Content
Consumption and
behaviors
Advertising
Technology and
Cloud
New business
models
• New channel and proliferation of devices
• Increased use of new devices (e.g. tablets) for video viewing
• New channels for content (Pay TV, OTT, UGC)
• Explosion of available content and pricing
• New format as “produced for digital” and cheaper distribution forms
• Growing popularity of sport, prime-time hits and niche content
• Increased competition for premium drama and sport
• Shift to non-linear consumption patterns
• Viewing increasingly shifting to non-linear format
• 2nd screen with impact on how they discover, navigate and view content
• Shift in advertising budget and format
• Digital advertising competing/impacting revenues of traditional advertising formats
• In TV money is slowly being shifted from linear to non-linear
• Technology shift to cloud based video
• OTT entrants demonstrate structural cost advantages (with ERP model increasing)
• Cable must still deal with legacy and fragmented system
• Deconstruction of the linear value chain
• Many different forms of non-linear video distribution business models emerging
Technology, Consumer and New entrants force cable operators to review their model
Houria TAIR-CHAUVIN
• Consolidate architecture into convergent system
• Develop new market & monetizing network assets
• Use Cloud principles where possible
• Improved Integration Seamless Capabilities
• Launch new business types of services on multiple platforms and industries
• Adapt service quickly to an exponential growth
• Reduce Technician’s repair visit cost
• introducing a sophisticated on-line tool to help with troubleshooting
• Manage customer relationships & innovation (OTT)
• Provision, manage, and inter‐work CPE, STBs, and the new home networking devices.
• Understand how their networks and services are behaving
• how their customers are actually experiencing services.
Transformtheir business
Reduce their time windows
Rethink the “Household” model
Improve customer excellence
This big pressure from the market place creates opportunities to capture a significant share of the market
Houria TAIR-CHAUVIN
SI
Operations
Support
• System monitoring (green/yellow/red)
• E2E Quality of service control
• Server/services troubleshooting
• System Maintenance
• Efficient dimensioning and planning tool
• Subscriber statistics for service control
• Regional overview of usage
• Workforce management
• Customization possibilities with appropriate CSI
support
• Integration friendliness - seamless integration
• Standardized Mediation layers to aggregate data from
different sources
End user
• Quality of Experience / Service support
• Multi-Device support (TV everywhere)
• Automate Self-Service / self-care service
• Provide and get real-time insights into customer
behavior
These are some typical needs per function
Houria TAIR-CHAUVIN
Financial KPI
Market Trends
IT Market in Motion
What next ?
1 2
3
4
• Business drivers will come through Digital TV expansion and Robust broadband growth
• Requirement to consolidate provisioning and service architecture to meet new trends
• Interest to develop paths into the mobile world (for maintaining high ARPU)
• Tend to move to IMS for providing the future middleware and service delivery platform
for quad-play services bridging TV
• What about Cloud !?!
Cable infrastructure has significant competitive strengths including solid revenue and cash flow growth potential
Houria TAIR-CHAUVIN
