Presentation at International Bar Association, IBA Conference Vienna 2015, the impacts of video market changes on traditional tv-companies

1. Traditional Broadcaster in Transformation
International Bar Association IBA
Annual Conference Vienna 2015, 6th October 2015
Session “On demand and streaming content vs broadcasting
- the next great disruption?”
Janne Holopainen,
Media Regulation Manager,
Yle - Finnish Broadcasting Company
janne.holopainen@yle.fi

2. Introduction
• Yle, the Finnish Broadcasting Company,
Finland's national public service media company.
See more http://yle.fi/aihe/artikkeli/2014/12/31/yle-nutshell
• My professional background:
telecom network and av-media delivery businesses last 20 years
Scope of presentation
• “Traditional Broadcaster” covers both
• publicly funded Public Service Media companies and
• commercial tv-broadcasters
• Finnish perspective,
also applies to other Nordic countries
• Focus in video delivery to audience
• Note: video = all video content types, incl. tv-content
5.10.2015 2Janne Holopainen

3. Overview of video content value chain
in broadcasting
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
5.10.2015 Janne Holopainen 3
End-
user
To earn:
audience attention and time spending
(ad-funded and publicly funded media content)
To earn:
usage fees
(pay-tv & other chargeable media content)
Business goals of video content providers,
incl. Traditional Broadcasters:

4. The position of Traditional Broadcaster in the
value chain
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
IN BROADCASTING NETWORKS
Traditional Broadcaster Broadcaster
/Network op.
Pay-tv-operator TV- & STB-
manufacturers
5.10.2015 Janne Holopainen 4
End-
user

5. The position of Traditional Broadcaster in the
value chain
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
IN BROADCASTING NETWORKS
Traditional Broadcaster Broadcaster
/Network op.
Pay-tv-operator TV- & STB-
manufacturers
Scarce
resource
=> bottle-
neck
Gatekeeper
position
5.10.2015 Janne Holopainen 5
End-
user
Monopolistic during
analogue TV period,
until Cable-TV, Direct To
Home Satellite-TV &
Digital Terrestrial TV,
- currently still
oligopolistic

6. Video delivery networks vs.
Video offering / consumption concepts
Offering / consumption concepts
Linear i.e.
program scheduled
Video on demand, VOD
Delivery
networks
Broadcasting
networks
Broadband
networks
5.10.2015 Janne Holopainen 6

7. Video delivery networks vs.
Video offering / consumption concepts
Offering / consumption concepts
Linear i.e.
program scheduled
Video on demand, VOD
Delivery
networks
Broadcasting
networks
Linear
tv-channels
Broadband
networks
5.10.2015 Janne Holopainen 7

8. Video delivery networks vs.
Video offering / consumption concepts
Offering / consumption concepts
Linear i.e.
program scheduled
Video on demand, VOD
Delivery
networks
Broadcasting
networks
Linear
tv-channels
Broadband
networks
5.10.2015 Janne Holopainen 8

9. Video delivery networks vs.
Video offering / consumption concepts
Offering / consumption concepts
Linear i.e.
program scheduled
Video on demand, VOD
Delivery
networks
Broadcasting
networks
Linear
tv-channels
VHS
PVR i.e. DVR
Broadband
networks
5.10.2015 Janne Holopainen 9

10. Video delivery networks vs.
Video offering / consumption concepts
Offering / consumption concepts
Linear i.e.
program scheduled
Video on demand, VOD
Delivery
networks
Broadcasting
networks
Linear
tv-channels
VHS
PVR i.e. DVR
Broadband
networks
Network-PVR
Catch-up of
linear tv-channels
VOD-catalogues
Personal video playlists
5.10.2015 Janne Holopainen 10

11. Video delivery networks vs.
Video offering / consumption concepts
Offering / consumption concepts
Linear i.e.
program scheduled
Video on demand, VOD
Delivery
networks
Broadcasting
networks
Linear
tv-channels
VHS
PVR i.e. DVR
Broadband
networks
Streaming of
broadcasting
tv-channels
Streaming of single
events
”Internet only”
tv-channels
Network-PVR
Catch-up of
linear tv-channels
VOD-catalogues
Personal video playlists
5.10.2015 Janne Holopainen 11

12. Ongoing changes in video consumption habits
1) The speed of the change from linear video consumption to VOD is
difficult to estimate exactly
• Direction of change is clear, speed of change may vary in future
• New discontinuation phenomena are possible
• Earlier: Impact of smartphones and tablets on av-media consumption,
In future perhaps virtual glasses & augmented reality?
2) Demand for linear video channels will continue
• Total viewing minutes of linear tv-channels will decrease,
but peak viewing will remain high
• Cultural & commercial importance of live events, incl. sports
• Number of linear tv-channels will decrease
• Advertising revenues from linear tv-channels vs. VOD-content?
• Consumer willingness to pay for linear pay-tv channels vs. VOD-
content?
3) Video usage behaviour will further polarize while older generations will
remain with linear tv-channels and younger generations will mostly shift to
VOD-viewing
5.10.2015 12Janne Holopainen

13. 5.10.2015 13
15% 19%
Janne Holopainen

14. The position of Traditional Broadcaster in the
value chain
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
IN BROADCASTING NETWORKS
Traditional Broadcaster Broadcaster
/Network op.
Pay-tv-operator TV- & STB-
manufacturers
Scarce
resource
=> bottle-
neck
Gatekeeper
position
IN BROADBAND NETWORKS
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
User-interface &
personalization
User device &
consumption
5.10.2015 Janne Holopainen 14
End-
user

15. Traditional Broadcaster transforming to Video
content provider
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
IN BROADCASTING NETWORKS
Traditional Broadcaster Broadcaster
/Network op.
Pay-tv-operator TV- & STB-
manufacturers
Scarce
resource
=> bottle-
neck
Gatekeeper
position
IN BROADBAND NETWORKS
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
User-interface &
personalization
User device &
consumption
Traditional Broadcaster transforming to
Media content provider
Broadband
network
operators
Media content
provider
Device
manufacturers
5.10.2015 Janne Holopainen 15
End-
user

16. Traditional Broadcaster transforming to Video
content provider
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
IN BROADCASTING NETWORKS
Traditional Broadcaster Broadcaster
/Network op.
Pay-tv-operator TV- & STB-
manufacturers
Scarce
resource
=> bottle-
neck
Gatekeeper
position
IN BROADBAND NETWORKS
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
User-interface &
personalization
User device &
consumption
Traditional Broadcaster transforming to
Media content provider
Broadband
network
operators
Video content
provider
Device
manufacturers
Several other
video providers
5.10.2015 Janne Holopainen 16
End-
user
Fierce competition
on audience attention
Source of
user
behaviour
data

17. Overview of video content value chain
- currently
Content
production
Content
financing &
commissioning
Content
aggregation
& publishing
Delivery
networks
Customer
management &
invoicing
User device &
consumption
5.10.2015 Janne Holopainen 17
End-
user
To earn:
audience attention and time spending
(ad-funded and publicly funded media content)
To earn:
usage fees
(pay-tv & other chargeable media content)
Business goals of video content providers,
incl. Traditional Broadcasters:
In present-day video content
market also several other
players are striving for same
audience attention and
usage fees, incl.
- broadband network
operators,
- ”general use” video platforms
(YouTube, Facebook etc.)
- marketers of consumer
products (e.g. Red Bull)

18. Estimated reach of Yle broadcasting TV-channels
and pursued reach of Yle on-line services
2017 2020 20232014
1 m
2 m
3 m
4 m
Yle daily
tv-reach
3.5 - 4 m
5.10.2015 18Janne Holopainen

19. Estimated reach of Yle broadcasting TV-channels
and pursued reach of Yle on-line services
2017 2020 20232014
1 m
2 m
3 m
4 m
Yle daily
tv-reach
3.5 - 4 m
5.10.2015 19Janne Holopainen

20. Estimated reach of Yle broadcasting TV-channels
and pursued reach of Yle on-line services
2017 2020 20232014
1 m
2 m
3 m
4 m
Yle daily
tv-reach
3.5 - 4 m
5.10.2015 20Janne Holopainen

21. Traditional Broadcaster transforming
to Video content provider
Yle goal:
To maintain its relevance for entire Finnish audience despite the changes in media
consumption
 Focus of Yle media publishing is shifting to internet
• An intensive migration to a “web & mobile first” publishing ongoing
 Most important goal in the field of media delivery:
• Secure sufficient broadband networks capacity to enable video delivery to
entire nationwide audience simultaneously
• Both in fixed and mobile broadband networks
 Shift from a broadcaster to a video content provider has also a lot of other
impacts on Yle
• content creation & acquisition and
• aggregation & publishing.
5.10.2015 21Janne Holopainen