2. BT Rich Media
We bring together flexible content distribution,
with insight and expertise in key disciplines
and sectors, to help customers identify and
exploit new commercial opportunities created
by the digital market.
3. Now in plain language!
We can take content of any kind, in any form,
and distribute it rapidly and securely to any
audience, anywhere in the world, through any
channel to any device.
4. Today’s agenda
Formal introduction to BT Rich Media
Our role in context, within BT and VAS
The relevant propositions
Most important - your feedback,
consensus on the best way forward
6. Broadband market is gaining real momentum
• 100 million broadband subscribers worldwide - 65 million
DSL, 33 million cable
• BT has reached 3.0m DSL connections (162% increase in
a year)
• Net additions growing by 35,000 per week
• Broadband penetration has accelerated in the UK from 2%
in 2001/2 to 18% households today (& 23% of SME
businesses)
• On target to achieve 5m connections by 2006
• Further 1,128 exchanges enabled by Summer 2005
bringing broadband to exchanges serving 99.6 per cent of
UK homes and businesses
7. Very aggressive broadband market
Provide Equipment / Monthly Download Capacity
r Installation Cost Speed Limit
£0 £19.99 512Kbps 1 Gbyte
£0 £24.99 512Kbps 15 Gbyte
£0 £26.99 (Yahoo!) 512Kbps 15 Gbyte
£0 £28.99/£29.99 1Mbps 30 Gbyte
£0 £19.99 256Kbps No cap
£0 £24.99 512Kbps No cap
£0 £29.99 1Mbps No cap
£0 £17.99 1Mbps 2 Gbyte
£0 £22.99 1Mbps 6 Gbyte
£0 £27.99 1Mbps 30 Gbyte
£25 £15.99 150k No cap
£25 £17.99 256k No cap
£25 £19.99 512k 50 hours
£0 £24.99 512k No cap
8. US market lessons - 2 to 3 years
ahead of Europe
• PC Growth within US households peaking
65% end 2003 climbing to 75% end 2007
• Growth of Internet adoption among U.S households is slowing
88% in 2003 edging up to 92% by 2007
• Consumer interest in upgrading to broadband is declining
33% in 2001, 50% end 2002, 33% end 2003
Conclusion:
The “Need-for-Speed” Will No Longer Suffice as a Value
Proposition
Prices Remain Above the Pain Threshold for Most Dial-Up
Households
2004 Parks Associates
9. Making a success out of Broadband is a must
for European telcos to get back on the growth
track… • Mobile has fuelled telcos growth
Average European household telecom during the 90s with little impact
spending on fixed average spend
Early 90s 1.6%
(Fixed • It is yet to be seen whether
Telephony)
broadband growth will have
Late 90s Mobile a positive or negative global
3.1%
(Fixed + Mobile revolution effect, as it will likely accelerate
Telephony)
fixed decline
Broadband
Early 21st revolution?• Leveraging broadband to
Century >3.1% ?
capture new sources of
% of GDP revenues will be key for success
10. Global online entertainment market
will most likely reach $27.4 billion by 2007
$50
$45 • Around $10 billion in 2003,
$40 growing at a CAGR of 27.7%
$35
$30
Billions
$25
$20
• Includes entertainment services
$15
offered over both narrowband
$10
and broadband infrastructures
$5
$0
• During the forecast period,
04
02
03
05
06
07
20
20
20
20
20
20
broadband will become the
Optimistic Most likely Pessimistic predominant delivery platform
Source: RHK Inc.
11. Stages of Broadband market development
Chasm
Establishment Growth Maturity
Today’s Broadband Future Broadband
Basic High Speed Internet UK Broa dba nd Online Mus ic S e rvice s
Access is he re Vide o S e rvice s
Customers
“All you can eat” Online Vide o Ga me S e rvice s
No customer loyalty IP Voice S e rvice s
S ma lle r Bus ine s s a pplica tions
ARP U Growth
No ARPU Growth Compe titive diffe re ntia tion
Lack of differentiation
Chasm
Innova tors Ea rly a dopte rs Ea rly ma jority La te ma jority La gga rds 18%
2.5% 13.5% 34% 34%
Mass Marketing Broad Segments Micro Segments
Today everyone is pretty much offering the same
service - content will be the differentiating
factor...
12. ‘What do you think the benefits
of broadband are?’
%
Speed / quicker / 56
easier internet 57
18
Can still use phone
13
10
Faster 11
connection
Always on / 5
permanent connection 7
BT customers aware of
1
Increased capacity/ Broadband (814)
1
features
Cable customers aware of
28 Broadband (244)
Don't Know 24
BT Research - Base: All adults aware of Broadband (1159)
13. Broadband sector is now an eco-system...
Providing value added services around the Home of Possibilities
Enabling compelling
content and applications Enabling the
networked home/office
Content Computing
Music, Video, Gaming, Broadband enabled PCs
Education, Sports
Business Information Monitoring
Alarm Monitoring
Communications Broadband
Email, Instant Messenger,
Click2Call, VoIP, access Digital Entertainment
Streamed Music, Video,
Call Management, SMS
Pictures, Games Consoles
Platforms
Payment Engine, Content Networking
Distribution/Management, Intelligent Hubs, WiFi,
Rights Management, Mobile to Fixed
Security, Authentication,
Storage, QOS
Complete service assurance
14. Technology is enabling change in 2004…
• Flexible Bandwidth
Technology becoming available to instantly flex broadband
to higher bandwidths
• On-line Micro-payments and digital rights management
New payment and rights management solutions encouraging
content owners to publish more
• Compression Software
New codecs require much less bandwidth to distribute
music/video
• Wireless
No wire’ solutions are emerging capable of distributing video and
audio
• Connectable Devices
Broadband-enabled home devices are becoming ‘plug and play’
17. To create an effective
broadband market we must..
Delight our customers with :
•Segmented, simple and complete solutions
•Innovative products and service
•Excellent customer support
Evolve Broadband products around :
•Speed using higher bandwidths
•Quality using application controlled ‘Quality of Service’
•Plug and play technology to simplify installation
Compel the mass-market to embrace broadband by :
•Enhancing Broadband communications
•Deliver compelling audio and video content
•Take Broadband to all devices
Work with partner to :
•Open up new channels to market
•Extend the product portfolio
•Co-market Broadband bundles
25. Why BT Rich Media ?
• We’re big. But we can do small.
• We combine range in expertise…
– across disciplines (e.g., technology, process,
finance, marketing, communications)
– and sectors (e.g., media, entertainment, retail and
consumer goods)
• … with service quality: from raw asset processing right
through the media value chain, to the end consumer
28. • Powerful, cost-effective means of distributing games
footage – live and archive – to passionate fans of
the grass roots league’s teams.
• Drives new advertising revenues, increasing the
depth and quality of fans’ engagement with online
voting and community.
• Enables the League to exploit broadband, to bypass
the bottleneck of traditional mainstream
broadcasting, to reach and serve a hungry and
valuable new audience.
29. • Help world famous institution to meet its remit
in the broadband environment.
• Lectures on art, heritage, design and culture
distributed to the public, up-to-the-minute
learning, insight and inspiration for student,
artist and layman.
• New access to critics, commentators, and
experts - literally, bringing art to life.
30. • UKTV’s philosophy – delivering great British
programming via Digital TV to viewers – carried
online, given innovative “just in time” capability
• Viewers now access high-quality “how-to”
video as needed.
• Fresh exploitation channel brought to life, new
value realised from existing programming for
both audience and advertisers.
31. • Most successful UK police drama ever brought
closer to its most loyal viewers using existing
channels such as regular newsletters.
• We add rich media and broadband, enhancing
the relationship and extending the brand online.
• Fresh exploitation of existing rights, new
revenue streams, deeper brand loyalty and the
facility to test future opportunities in broadband.
32. The changing community picture
Government, locally funded regeneration
projects (e.g. the Raploch Estate in Stirling).
All requiring:
- social inclusion - Future proofing
- Training (PC/ new media) - Pride in
environment
- Shared experiences - Community spirit
- Policing - Protection
Key delivery to TV (Nevis) as PC household
penetration extremely low. Working within BT and
other partnerships vital for delivery.
33. Funding available …
… through various governmental sources:
- Wired up communities
- Local council
- Regeneration programmes
Wider BT opportunities outside “estates” and
in to the remainder of the conurbations
34. Our platform creates new opportunities to
unite communities …
Support creative development and technical
training:
- Shared experiences
- Video (TV, VoD, self generated) / Audio (radio)
- Internal and external inputs
- Securely (password / pay-mechanics)
Enable engagement of the community in:
- Policing (web cam security offering)
- Facilitating control and involvement for consumers in
all aspects of their environment (social, health,
sports etc.)
35. OK, so what does this look like?
- Equipment (servers etc.) based in the
community centre (or alternative)
- Community centres are the hub of social
activities, making new media learning fun
- Enabling policing from the community
centres, home, and on the move, giving
ownership of environment, and pride in
appearance
- Local heroes and “TV stars” generated through
self-made and relevant programming
- Local content made available, and monetised
through subscriptions, streams and downloads
This is our value proposition. Better not to talk through this endlessly, but good to show at front end. May also help with the Broadcast Services distinction in the short term … “ Where we fit in the BT family” A recent venture jointly owned by BT Wholesale and BT Retail, and part of the Value-Added Services Group.
Key areas to cover in the meeting are : Who we are – positioning of BT Rich Media Demonstrate an understanding of the issues facing customers in their industries today. These issues will be addressed through the BT Rich Media offer Overview of BT Rich Media platform and how it can help customers address the issues outlined in the previous section Case Studies / Reference sites
Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
Can you represent this in a more customer friendly way ?
Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
