GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on
“Competitive Platforms
for the delivery of Digital Content”
June 22 2007 – Geneva
Digital
Content
Delivery:
Challenges
and
Opportunities for Telecom Operators and Regulators
| Lorenzo Maria Pupillo| Public Strategies|
GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
Delivery of Digital content : major trends
The long-awaited digital convergence is now truly coming of age
After satellite and DTT, it is now Internet Protocol Television that is
experiencing an important growth
There are not IPTV players providing VOD services making important
revenues yet
Following US trend, in Europe new offers are based on free content
Internet as technological discontinuity
From CONSUMER TO PROSUMER: Consumer +Producer
Need to look beyond established business models (i.e. traditional TV) for
new models of content distribution and consumption
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
IPTV Market in Europe
Broadband TV
2006
IPTV and pay TV growth 2006-2010
€680 million
revenues in WE
25000
mln €
20000
4.4% of pay TV
market
15000
10000
Broadband TV
2010
5000
0
2006
2007
Classical pay TV
2008
IPTV
2009
2010
€2.6 billion revenues
12% of pay TV
market
Source: ITMedia Consulting
2
GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
UGC and IPTV in Western Europe 2006-2010
2010
3000
mln €
2500
2000
 UGC €2 billion
1500
 IPTV €2.6 billion.
 Total Broadband video
market €4.6 billion.
1000
500
0
2006
2007
UGC
2008
2009
2010
IPTV
Source: ITMedia Consulting
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
CONTENT DELIVERY MODELS
Disney
Sky
Mediaset
TI
Customer
TI
Sky
Fastweb
Customer
Sat
Disney
Sky
Mediaset
TI
Customer
Fastweb
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
TV over IP MODELS
Managed
“Classical IPTV”
IP Networks
Walled Garden zone
Managed Network with Multiple
Service Provider
Open Media zone
Content Delivery
Network and
P2P Model
Internet
Single Service Provider
Multiple Service Provider
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
REVENUE SHARING
FROM THIS
TELCO BUYS MOVIES
F R O M M A J O R S AT
MINIMUM GUARANTEED
PRICES AND RESELLS
THEM UNDER ITS OWN
BRAND.
TELCO SUPPORTS ALL
RISKS
TO THIS
MAJORS AND TELCOS
SHARE RISKS AND REVENUE
ON SALE OF MOVIES .
TELCO RECEIVES REVENUE
SHARE IN EXCHANGE FOR
C APA C I T Y AN D N E T W O R K
SERVICES. MAJORS
RECEIVE THEIR REVENUE
SHARE IN EXCHANGE FOR
THE RIGHTS TO THE
CONTENT IT OWNS
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
MUTUAL STRENGHTS IN THE REVENUE SHARING MODEL
NETWORK OPERATOR
CONTENT PROVIDER
Provider of Capacity and customer
Content
base
Networks services ( encoding, Storage, Experience in right management
QoS, DRM, Billing)
 Services for the UGC communities
Negotiations with producers
Strong brand
customer service
Content aggregation
founded
on
good
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
Exploiting content through the natural NGN abilities personalisation and
 fragmentation of interests
(uni)multi-casting
 searching tools and personalisation
are key
 NGN may realise a distributed and
relatively inexpensive inventory
 (business model to be consolidated)
diffusion
physically
limited
Long Tail
Content and context are driving
technological and market choice
 fruition mode (time, personalisation)
 locality
items sorted
by popularity
 peculiarity
 volatility
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
Fixed Network Business Model Evolution
$$$
Capabilities di
Dynamic TV,
profiled advertising,
Editorial validation
UGC
Promotion in a
contest-dependent
mode
UGC Production and
distribution
Authentication, iDRM,
3rd party billing, metering
Fruition of content
available on the net
BB Access
Traditional Digital Media Content
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
Long Tail Markets
: Concentration
of investments in
RELATIONS
TELCO-PROVIDERS
advertising (Italy, 2005)
Average
investment
200
compa
nies
av. inv.
23Mn€
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
ADV traditional
media
50% of revenues of
Google Italia is paid with
a credit card, i.e. comes
from SMEs
800
companies
av. inv.
2Mn€
20.000
companies
av. inv.
7.000€
45.000
companies av.
inv. 3.000€
ADV
Online
200
1.000
21.000
No. companies
Source: NetConsulting, Mediaset
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
NGAN AS A TWO-SIDED MARKET
USERS
buy capacity and services from telco to reach efficiently their providers
TELCO AS CAPACITY/NETWORK SERVICES PROVIDER
buy capacity and services from telco to reach efficiently their customers
CONTENT
PROVIDERS
ASP
ADVERTISING
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
DIFFERENT LEVEL OF QUALITY TO MONETIZE INVESTMENT
To monetize investments in NGA operators can offer content providers
different level of quality of services to deliver their applications to
consumers
This could make a substantial difference to the business case for such
infrastructure investment. In this regards, NGAN is an example of two-sided
market. Just as magazine charge both advertisers and subscribers, NGAN
providers may plan to secure payments from both consumers and
application providers
Regulation that prevented these strategies could remove a potential
source of revenue and return for NGAN
Source: OFCOM , 2006
12
GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
Challenges for Policy Makers and Regulators
Ensuring effective competition in the creation, packaging and
distribution of audiovisual content
A reduction in regulation and its associated costs – with a greater
reliance on self-regulation and the exercise of individual consumer
responsability to address concerns about undesirable content.
How to manage the PROSUMER ?
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
Growing consumer involvement
Consumer
Involvement
Consumer
Source: IVIR 2007
Prosumer
Traditional
Near-video-
Video-
YouTube,
Broadcasting
on-demand
on-demand
(“traditional”)
MySpace,
Tribler, etc.
14
GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
How to manage the Prosumer ?
 Companies : new services for the Prosumer (Prosumer first !!!!)
Regulators : Regulatory holiday” for User Generated Content services !
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GRUPPO TELECOM ITALIA
EBU – ITU Meeting of High-Level Experts on “Competitive
Platforms for the delivery of Digital Content “
| Lorenzo Maria Pupillo
| Telecom Italia - Public Strategies
THANK YOU FOR YOUR ATTENTION
Lorenzo Maria Pupillo
Executive Director, Public Strategies
Telecom Italia
Corso d’Italia 41 – 00198 Rome, Italy
Tel +39 06 3688 2924 – Fax +39 06 91253906
lorenzo.pupillo@telecomitalia.it
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