The Future of Premium Content Delivery Taras Bugir WW Managing Director, Media & Cable, Microsoft May 21st 2013

The Connected Life by 2020

2011

6B Mobile

2020

12B Mobile

2011

9B Total

2020

24B Total

Revenue opportunity for Mobile Network Operators

$1.2 Trillion

7x 2011 Revenues

Automotive $202B

Health $69B

Consumer Electronics $445B

Utilities $36B

Connected Devices

Source: GSMA, Mobile World Congress 2012

“If you are good at something, never do it for free”

“If you are good at something, never do it for free”

In the Digital Economy it’s all about – aggregating enough Audience – having the right Product – managing the Customer

Aggregating enough Audience

85-95%

5-10%

Fans and Regulars 2x Week

Fly-bys 2x Month

User interaction. Create rich content products to drive audience and advertising revenue but make content compelling enough for subscription revenue – balance.

Consumer perceptions of advertising

73%

67%

67%

67%

66%

57%

57%

54%

53%

51%

44%

30%

27%

22%

19%

12%

Advertisements should tell a unique story, not just try to sell

A video is worth 1,000 words

User product reviews are the best source of truth

In-Store experiences trump online experiences

Television commercials are more effective than online

People buy what celebrities wear / like

The Super Bowl is the best advertising opportunity of the year

Web Banner advertisements do not work

Most marketing is a bunch of B.S.

Beautiful advertising is more effective

Advertising works better on women than on men

Online advertising isn't effective

No one watches TV commercials anymore

All "likes" are good in social media

Every brand needs a funny viral video

Advertising works better on men than women

Source: Adobe Study, October 2012 (Rate each of the following statements based on whether you agree or disagree) The data points come from a study commissioned by Adobe, produced by research firm Edelman Berland and conducted as an online survey among a nationally representative sample of 1,000 adults, 18 years or older, and 250 professional marketers in the United States. Interviewing took place from October 8 to 16, 2012. The margin of error is +/-3% for consumers and 6% for marketers.

Having the right Product

2-10% 1-2%

83-95% 2-5%

Immediate or Breaking Content

Exc

lusi

ve o

r Uni

que

Con

tent

N Y

N

Y

Commodity content, but brand and editorial context can affect value and therefore advertising revenue as well as provide subscriber prospects

5-17% of content is ‘payable’

Motivate users. Create products which balance the advertising revenue stream with the subscription revenue.

Managing the Customer

Customers Audience

Reach Attract Try Use Buy Bid Grow

Not just about converting existing audience, it is about creating new users of technology. Social becomes increasingly important.

Managing the Customer

Customers Audience

Reach Attract Try Use Buy Bid Grow

Not just about converting existing audience, it is about creating new users of technology. Social becomes increasingly important.

You’re in retail now. You’re selling content. Make buying easy.

Connecting to and managing customers is complicated

Four megatrends will dominate the next decade By 2020, mobile, cloud, social and big data technologies will drive at least 80% of the IT industry’s growth (Gartner)

57% of enterprises will be invested in enterprise social by 2014

>70% of CIOs will embrace a cloud-first strategy in 2016

of organizations plan to increase public cloud spending in 2013

54%

of CIOs see mobile as most disruptive technology over next decade

70%

Social networking will follow not just people but also appliances, devices and products

Spending on Big Data:

of all new application development will target a mobile form factor

1/3 In 2013,

Percent of digital universe tagged:

3%

(2020)

33%

(today)

$10 billon 2013 > $20 billion 2016

zettabytes in 2013

4 50% From 2012

Total digital content will grow

=

Social Mobility Big data Cloud

…which are driving media industry priorities

having the right Product

aggregating enough Audience

managing the Customer

Windows Azure Media Services

How do you create value? ….by running the infrastructure, or building the business?

How do you create value? ….by running the infrastructure, or building the business?

The business must… In order to…

Look beyond traditional broadcast Enable ubiquitous delivery across all devices

Balance advertising/transaction revenue focus Grow consumer relationships & transactions

Reduce staff focus on infrastructure Focus staff on business requirements

Avoid unnecessary distraction & costs Drive innovation and competitiveness

Remove rigidity and wait time Fast fail and launch innovation

Grow market share Permeate and monetize all screens

How do you create value? ….by running the infrastructure, or building the business?

Growing your talent base

by attracting and motivating a next-

generation workforce

Attracting and retaining customers

with richer experiences

Impacting financials

by using data and new technologies to identify efficiencies

Anticipating and acting

on opportunities with better insights

from data

Driving innovation

and inspiring customer

experiences with new possibilities