The speech was delivered in "New Era, New TV" seminar organized by Orange Labs Beijing. The presentation focuses on the business models and market trends of online video/TV and mobile TV.

1. Future of TV
Learning from China, Japan and Korea
about the future of TV and Video
Yiqun Bo, Consulting & Research Manager | +8* | www.plus8star.com
New Era, New TV Seminar | Orange Labs Beijing | December 2008

2. 薄益群
BO Yiqun
Clément

3. www.plus8star.com

4. Cross-Market Consulting
Mobile & Internet Innovation
China | Japan | South Korea

6. Agenda
1. Why China, Japan & Korea?
2. Is advertising the only valid business model?
3. Case studies of successful services
4. What are the barriers?
5. How about mobile?

7. 1. Why China, Japan & Korea?

8. In Japan & Korea, broadband is
among the fastest and cheapest
on Earth (100Mbps for <30 USD)

9. 3G penetration in Japan and
Korea is over 70%

10. Broadband infrastructure readiness
100%
3G penetration
80%
USA
60%
40%
Japa
Chin
n
a
20%
0%
0% 20% 40% 60% 80%
% of Internet connections above 5Mbps
(Source: Akamai, 1H2008)

11. Part 1 Conclusion
1. Why China, Japan and Korea?
China is the world’s largest market
Japan is the most “mobile literate”
Korea is the most “Internet literate”

12. 2. Is advertising the only valid
business model?

13. Can advertising revenues
scale for video services?

14. China’s ad market breakdown
US$23.8
billion
Movie
Paper
TV 6% of total
ad market
Online
media
Outdoor
Online
TV/video

15. What if…?
Hockey Stick of
Broken Illusions
“The model is flawed”
Content / $
Content /
Costs
Curve of
Unclear Hope Advertisement
“We’re profitable!”
revenues
Everyone
Here
today
Costs start
before
Time
revenues
Source: Plus Eight Star

16. Facts and Assumptions
#1 | YouTube is still not profitable
#2 | Ad revenues grow “linearly” (?)
#3 | Content grows much faster
#4 | Costs follow content
#5 | Ad$/Content goes down
囧
#6 | …囧

17. Winter is at the door.
Who will survive?

18. Poor advertisement market share
Online
TV/video

19. 3 main categories
Remaining issues for UGC
IPR
Content Control
UGC: User Generated Content
IPR: Intellectual Property Rights

20. Faster growth brings more players
to online media
e.g. CCTV online, Phoenix TV online

21. Looking back
#1 Internet winter had 2 types of survivors
(1) Game companies
(2) WVAS providers
Tencent NetEase Shanda

22. Stocks
NetEase: online
gaming
Tencent: virtual Sina: ad
goods, gaming,
WVAS
Baidu: ad
Are B2C models safer than B2B?

23. Easier to sell to end-users
than to companies?

24. Promising revenue models
#1 | Pay per view
#2 | Monthly subscription
#3 | Premium services
#4 | Rev. share w/ producers & “sharers”
#5 | Connection with e-commerce

25. Part 2 Conclusion
2. Is advertising the only valid
business model?
Ad-only models seem to have problems
Now, online video is already a media
So there must be some solutions…

26. 3. Case studies of successful
services

27. Profitable Video Sharing Site

28. Founded: October, 2004
Revenue: 10 million EUR
80~90% from ads
Breakeven in Q1 2008

29. 3 million subscribers
10 million Unique Visitors/month
2% CTR = 20x Naver! (leading portal)
P2P saves 40% expenses

30. Pandora TV vs. YouTube Korea
(Page Views)
Number of Page Views for Pandora TV and YouTube Korea
500
Page Views (million)
400
Pandora TV
300
200
Over 3 times!
100
YouTube
Korea
Jul.08
Aug.07
Sources: Daum directory

31. Pandora TV | Business Models
Companies Content Creators
(advertisers)
Provide advertising
contents with payment
Creating/posting and
>80% of total Sharing UCC contents
revenue
‘CUPI’ convertible
• Share ad revenue with virtual currency
content creators & sharers
• Charge users premium
content/option

32. Video + E-commerce
Nico Nico Douga
”smiling videos”
quot;Japan's YouTubequot;

33. Paying members:
7 million members in
200,000
total by Jun 08 (started July 2007)
Mobile members:
1.7 million
(started Aug 2007)

34. Breakdown by gender Breakdown by age
30s
18%
Female: 29%
>30
20s 8%
47%
Male: 71%
<20
27%

35. Main features
• Registration only
• On-video comments
– Over 1.2 billion comments on 1.1 million videos
– Average: 1,000 comments per video!
• Most of the content focus on local pop culture
– Anime, video-games, J-pop music videos, etc.

37. The text on the videos is based on a
timeline, which allows a new form of
asynchronous communication. In
fact, we see ourselves as a
communication service using videos
-- at “Infinity Ventures Summit”, Nov. 2008, Sapporo
Seiji Sugimoto
CEO, Niwango

38. Revenue sources
Premium members
47%
200,000 (June 2008)
5 USD / month
Affiliate links
39%
820,000 USD / month
Online ad
14%
300,000 USD / month
Monthly revenues
2.1 million USD

39. Affiliate links
related to
mouse and pet
product

40. Video + e-Commerce
=
Social Commerce or TV Shopping 2.0?

41. Online/Offline mass media?

43. Afreeca TV (March, 2006)
Monthly unique visitor: 5 million
Usage time per day: 45 minutes
YouTube + Live broadcasts + Game Portal

44. BJ = Broadcasting Jockey
“Broadizen”
(Broadcast + Netizen)

45. 1.5 million Private Channels run by BJ
“BJ Managers” for content monitoring

46. Encouraging Creation: Open Studio

47. Afreeca TV | Business Model
1. Premium options 3. Create / Upload / Share
2. Use of Afreeca TV’s
cybercash ‘Star Balloon’
Broadizen
(Broadcast + Netizen)
Organizations/ Communities Advertising Companies
Providing ad platform
for advertisements
Setting-up of
broadcasting
system

48. Don’t forget to turn off your webcam…

49. 4. Where are the barriers?

50. Are users willing to pay?
Drawing inspiration from digital music

51. iTunes
=
5 billion songs

52. More music is sold “online” than
“offline” in China and Korea

53. Ringback tones were created in
Korea in 2001
They reached 30% penetration in
less than 2 years

54. Digital music revenues in Japan
Source: Infinity Venture Partners, 2008

55. 90% of digital music
sold in Japan is mobile

56. Chinese users too!
~1.2 billion
EUR
Source: China Mobile, 2008

57. Affordable content
Mega TV (IPTV) in Korea
0.5 USD per TV episode
1 USD for a movie

58. Part 4 Conclusion
4. Where are the barriers?
Ecosystem different from traditional TV
Users pay for the right user experience
Need for 1-click payment systems

59. 5. How about mobile?

60. Mobile TV penetration in Japan
and Korea is over 30%

62. 37 million mobile TV phones were
sold by June 2008 in Japan
Mobile TV started in May 2006

63. In Japan over 70% of new handsets
are mobile TV-enabled

64. 2008 Trends

65. Mobile Service Trends: Japan
Mobile TV service “One Seg”
Twist screen
with data menu overlay
Decorated and animated mobile
Internet browsing (left)
messaging

66. Mobile Service Trends: Korea
Mobile TV Mobile web browsing service
Video phone call Mobile widget

67. Is it a success?

68. Remaining Questions
What business models for mobile TV?
(data back-channel? M-commerce?)
Who pays for the infrastructure?
How to attract advertisers?
How to get the right content?
How to charge users for content?

69. Part 5 Conclusion
5. How about mobile?
It seems too late for broadcast mobile TV
Affordable alternatives
Ecosystem hard to create

70. Conclusion
1. Why looking at China, Japan & Korea?
• Advanced and innovative markets
2. Is advertising the only valid business model?
• No, other possibilities
3. Case studies of successful services
4. What are the barriers?
• Users are willing to pay
5. How about mobile?
• Unclear

71. Contact Us
www.plus8star.com
boyiqun@plus8star.com
boyiqun +81 | Japan
+82 | Korea
bo_yiqun@hotmail.com +86 | China
Telecom & Internet
www.linkedin.com/in/boyiqun + Added Value
* High quality
www.slideshare.net/plus8star

72. About +8*

73. There are more ideas
outside your country
than inside
Tom Kelley
CEO, IDEO
The 10 faces of Innovation

74. “Innovation Arbitrage”
About us
•
– +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia.
– We provide local expertise & global perspective on mobile and Internet innovation from
China, Japan and South Korea to add value to and accelerate the development of our
clients’ businesses.
Our services
•
– Analysis of proven best practices and business models from Asia
– Other services: executive study trips, market entry strategy, M&A advisory, partners
identification, negotiation support.
Founder & CEO: Benjamin Joffe
•
– 9 years experience with mobile & Internet in Asia
– Selected among “China’s Top 100 mobile industry influencers” in 2007
– Regular speaker at events on mobile and Internet in Asia
– Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and
Spanish

75. Selected References
Adidas | E-commerce strategy for China, Japan & Korea
•
Bouygues Telecom | Cases studies of leading Asian Web 2.0 services
•
and virtual worlds
Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet
•
convergence strategies
Hemisphere | Analysis of mobile marketing best practices in Japan and
•
South Korea (Hemisphere is a leading digital advertising agency),
analysis of leading social platforms (SNS, virtual worlds, online games).
Microsoft | Analysis of Japan’s key players and market catalysts for
•
mobile commerce market positioning in China
DeNA | Case studies of the best practices of leading social networks in
•
China and South Korea (DeNA operates Mobile Game Town, Japan’s
leading mobile SNS service)
China Mobile | Benchmark of Korean leading online communities
•
Sands Capital Management | Evaluation of China’s investment
•
opportunities in social networks in China

76. Social Work
Mobile Monday
•
– Founder of the Mobile Monday forum in Beijing since 2006 (3,000+
members, 23 events, over 80 presentations).
Media
•
– Monthly column on Asian innovation for Asian Business Leaders (one of
the leading Chinese business magazines), numerous interviews in
international media.
Events
•
– Regular keynote speaker and moderator at Internet, Telecom, Media and
Investment events
e.g. ITU Asia, Asia Venture Capital Forum, China Mobility International Summit,
O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08 Conference,
Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile Monday Global
Summit, etc.)

77. Thanks!