Video Value Chains Case Study Update:
The Evolution of Video Services
Natalie Klym
Research Associate, MIT
nklym@cfp.mit.edu
May 31, 2007
Philadelphia, PA
The goals of today’s talk
• Give an overview of the video case study
• Look at today’s changes in historical context
• Present a framework for video platforms
• Examine current competitive dynamics among
video services
• Discuss future trends
Overview of video case study
• The evolution of the U.S. TV industry can be broken
down into three phases
– Original broadcast model (1930s-1940s)
– First reinvention of television (1940s-1990s)
– Second reinvention of television (1990s – present)
• Each phase includes a combination of
– TV extensions
– New delivery platforms
– New content providers
• General trend towards value chain fragmentation
• Today’s video landscape is messy and complex,
and changing quickly
The original broadcast model
•
Simple TV service model
–
networks produce content
–
deliver content over licensed spectrum
–
linear programming, no interactivity
–
ad-supported service, free to consumers
•
Dominated by big three networks (ABC, CBC, NBC)
•
Vertical integration of production, content aggregation & delivery
TV
Big 3
networks
OTA
The first reinvention of television
Cable
VCR
– retransmits broadcasters signals (1940s)
– imports distant broadcast signals (1950s)
– Cable content industry is born (1970s)
Satellite
–late 1970s
– time-shifting, ad-skipping, trick
plays
– on-demand retail channel
– Direct-to-home systems (1980s)
– Distributes cable & broadcasters programming
New content
providers
New delivery
platforms
TV
STB
Satellite TV
Cable TV
networks
STB
Cable TV
Recording
Big 4
networks
VCR
OTA
VOD
(movies)
New delivery
platform for
movies
B&M
Film
studios
The second reinvention of television
Digital transmission
•
•
•
more channels
HDTV
enables interactive services (EPG, VOD)
Transfer of recorded
content to PCs, PDAs
Digital recording
•
•
•
•
increases rate of recording
enables transfer of recorded content to PCs, PDAs
integration with Internet /PC value chain
redistribution via Internet
PDA
PC
Digital
recording
Satellite TV
TV
STB/DVR
STB/DVR
Cable TV
networks
Linear
Cable TV
VOD
Big 4
networks
OTA
Digital transmission
VOD added to
digital cable
Interactive services
(EPG, VOD)
DVD
B&M
Post
(DVD)
Film
studios
The second reinvention of television
New delivery
platforms
Public Internet
Cell
phone
Wireless networks
New content
providers
Web video
PC
PDA
Private Internet
IP STB
Public Internet
IP STB
TV
Satellite TV
Cable TV
networks
Big 4
networks
STB/DVR
STB/DVR
Linear
Cable TV
VOD
OTA
DVD
B&M
Post
(DVD)
Film
studios
Video Delivery Platforms
Public Internet
•
Web video: YouTube, iTunes Store, Joost, Innertube, ABC.com
Content accessible
over the public
Internet
•
Comcast The Fan (MSO Web content accessed from outside the
MSO’s network)
•
P2P networks (authorized & unauthorized)
•
Mobile TV services (e.g., Slingbox on VoIP phone)
Private Internet
(IPTV)
•
Telco IPTV model
•
Verizon FIOS – On Demand content only
Content accessible
from the operator’s
private IP network
•
Comcast The Fan (MSO Web content accessed from inside the
MSO’s network)
•
MSO Web content over IP
•
Next Generation Mobile TV services (IP over next generation
networks)
Proprietary
Networks
•
Digital cable and satellite services
•
Verizon FIOS – everything but On Demand content
Content accessible
from the operator’s
private proprietary
(non-IP) network
•
Mobile TV services, (e.g., Verizon VCast, MobiTV)
Proprietary
Closed
Short tail
QoS
Service Examples
IP
Open
Short + long tail
Best effort
Platform
Video Delivery Platforms
Public Internet
•
Web video: YouTube, iTunes Store, Joost, Innertube, ABC.com
Content accessible
over the public
Internet
•
Comcast The Fan (MSO Web content accessed from outside the
MSO’s network)
•
P2P networks (authorized & unauthorized)
•
Mobile TV services (e.g., Slingbox on VoIP phone)
Private Internet
(IPTV)
•
Telco IPTV model
•
Verizon FIOS – On Demand content only
Content accessible
from the operator’s
private IP network
•
Comcast The Fan (MSO Web content accessed from inside the
MSO’s network)
•
MSO Web content over IP
Web TV services
•
Over IP
Next Generation Mobile TV services (IP over next generation
networks)
Proprietary
Networks
•
Digital cable and satellite services
•
Verizon FIOS – everything but On Demand content
Content accessible
from the operator’s
private proprietary
(non-IP) network
•
Mobile TV services, Over
(e.g., proprietary
Verizon VCast,
MobiTV)
networks
Carrier-based TV services
Proprietary
Closed
Short tail
QoS
Service Examples
IP
Open
Short + long tail
Best effort
Platform
Web vs carrier-based TV
Web
Joost
iTunes
Internet
modem
You
Tube
MSO
Servers
MSO
acquired
content
VOD
open delivery platform
short + long tail content
best effort connection
IP stream
PC
TV bridge
Digital Cable TV (QAM)
closed delivery platform
short tail content
QoS connection
non-IP stream
QAM STB
TV
Apple TV
Akimbo
Media center
TiVo
Web video over “Cable IPTV”
Web
Joost
Internet
iTunes
modem
Home
Network
QoS path for YouTube content
You
Tube
modem
You
Tube
Cable
MSO
IP STB
Digital Cable TV (QAM)
VOD
TV bridge
QAM path for YouTube content
QAM STB
MSO
acquired
content
PC
TV
Apple TV
Akimbo
Media center
Will Web TV compete with or complement carrierbased TV services?
•
“Unbundled value chains innovate faster. The Apple’s and Microsoft’s will
provide experiences, not pipes and will be more agile than the network
operators who provide more integrated services.”
•
“The user has become the master. Consumers know how to put together their
own bundle of services. It doesn’t have to be an integrated solution.”
•
“We’re starting to see the tail wagging the dog – the terminal is driving
consumer choices. In the future, Sony and Samsung will have TVs connected
to the Internet. People will buy devices that happen to connect to content.”
•
“At the end of the day, most people buy bundles of services. The consumer will
buy the least costly package.”