Technology MegaTrends-2011

S t u a r t W. Vo l k o w
VP Strategy and Development
www.theinstitute.tv

UCLA Entertainment Studies
svolkow@ucla.edu

Copyright 2011, Stuart W. Volkow Media Marketplace

1

Media & Entertainmnet
M e g a t r e n d s

1
2

Stuart W. Volkow, Copyright 2009

2

Piero Golia
Copyright 2009 Stuart Wayne Volkow. Xtropia Partners

3

“The computer will disappear
into the environment. …all these
devices will be connected to the
wireless Internet.”

Bill Gates

4


4

• “Societies have always been shaped more by
the nature of the media by which men
communicate than by the content of the
communication.”

• “The new electronic interdependence recreates
the world in the image of a global village.”

11/13/2006 Copyright 2006 Stuart Wayne Volkow 5

5

“Media, by altering the environmont, evoke in us unique
ratios of sense perceptions. The extension of any one
sense alters the way we think and act- the way we
perceive the world”.

Copyright 2010 Stuart W. Volkow 6

6

Opportunities for Semiconductor / Hardware / Software / Services

Car Electronics Mobile
Computing Growth Drivers Over Time, 1960 – 2020E GPS, ABS, A/V Video
Home
1,000,000 Entertainment
Mobile Consumer Games
100,000 Wireless Home
Devices / Users (MM in Log Scale)

Appliances
n Cellphone /
atio Desktop Internet Smartphone
10,000 r
t eg Kindle
n
gI
1000
asin PC 10B+
Tablet
re
100 Inc Units??? MP3
Cell phone /
Minicomputer 1B+ Units / PDA
Users
100MM+
10
Units
Mainframe
10MM+ Units
1

1MM+ Units

1960 1970 1980 1990 2000 2010 2020

7
Note: PC installed base reached 100MM in 1993, cellphone / Internet users reached 1B in 2002 / 2005 respectively;
Source: ITU, Mark Lipacis, Morgan Stanley Research. 32


7

UN Stats
The Global Picture

• World Population: 6.6
Billion
• Total Phone Lines: 4
billion
• Mobile Accounts: 2.68
billion
• 574.63 million in PRC

• People Living on less than
$1/day: 900 Million

8
8

Content Distribution Advertising Infrastructure Services

MSOs Agencies Satellites Google
Studios
Telcos Interactive
Spectrum Amazon
Networks Agencies
DBS Online Ad Skype
Community Data Centers
Networks
Broadcast Facebook
Brands Fiber

P l a t f o r m s
HTML Android IPV6 FLASH iOS

9

PWC

http://www.pwc.com/outlook

Copyright 2010, Stuart W. Volkow Media Marketplace 10

10

PWC
E & M Outlook 2009-2013 FINDINGS

• Global entertainment and media spending will
rise to $1.6 trillion in 2013, amounting to 2.7%
compound annual growth driven by digital
gains
• U.S. will underperform the world at a 1.2% CAGR
rate to reach $495 billion in 2013
• Digital media revenue will expand from 17% of
U.S. revenue in 2008 to 25% by 2013
• There is a downward pressure on ad rates in the
digital environment: Over capacity, falling demand

PricewaterhouseCoopers' annual "Global Entertainment and
Media Outlook 2009-2013."

11


• TV advertising is declining 0.6%, with recorded
music expected to drop 4.7% on a compound annual
basis.
• Ability to monetize brand/rights across platforms is
Critical for Success. music labels monetize events,
producers go into talent management, broadcasters go
into Web TV, leveraging branding, and customer data
they own and/or can collect.

• Consumers’ rising influence
Companies are increasingly listening to their consumers and
involving them in product development.


12


New platforms are boosting consumption of old content

• Innovation in devices and applications is enhancing the
experience of the consumption of content.

• Early adopters of tablets read more and access more content,
suggesting that tablets could prompt a revival in book
reading.

• HDTV is supporting television revenues, 3-D is boosting film,
and authorized music sites are steadily restoring the value of
recorded music that was lost to illegal peer-to-peer
downloading.


13

The Internet is Becoming the
Dominant Media Platform
Worldwide

14

Total Internet Users
Worldwide

1,966,514,816
2000-2010 Growth

444.8 %
www.internetworldstats.com

Active
Digital Media Universe
May ’09

381,285,866

Nielsen

15
15


16

Most of the World’s Internet Trafﬁc Travels
By Submarine Cables

www.telegeography.com
17


18

Pew Internet and American Life Project

19

Why The “BRIC” Countries are Important
2/3 of the Worlds Pop. in 15 Countries


20


21


22

“The mobile device will be the primary
connection tool to the internet for most
people in the world in 2020. “

The Future of the Internet III, The Pew Internet and American Life
Project (www.pewinternet.org).

24

“...we view the mobile Internet, and
related device proliferation, as one of
the biggest opportunities in the history
of the technology industry.

The opportunity to connect the 4+ billion
mobile device users to the Internet is
arguably 40x the opportunity to connect
100 million PCs to the Internet in the
1990s.”
MORGAN STANLEY RESEARCH
NORTH AMERICA, Apple Report, May 2009
25


25

The Dominant
Internet
Platform
Will be
Wireless/
Mobile

26
26

Impact of Google SMS
Kisaakye Bukenya who heard about MTN Google SMS
from staff training, asked over 6 000 community members
about HIV/AIDS: how one can get infected with the
virus, how to prevent infection, how to care for someone
infected with the virus and more. This information
prompted him to get tested at Mulago Kitoni, a clinic near
his home in rural Masaka, Uganda

30

iPhone + iTouch Users = 8x AOL Users 8 Quarters After Launch

iPhone + iTouch vs. NTT docomo i-mode vs. Netscape vs. AOL Users
First 20 Quarters Since Launch
~57MM
60 Mobile Internet Desktop Internet
iPhone + iTouch Netscape*
50 Launched 6/07 Launched 12/94

40
Subscribers (MM)

~25MM Mobile Internet

30 NTT docomo i-mode
Launched 6/99

20
~11MM

Desktop Internet
10
AOL*
~7MM v 2.0 Launched 9/94

Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19
Quarters Since Launch
iPhone + iTouch NTT docomo i-mode AOL Netscape
32
Note: *AOL subscribers data not available before CQ3:94; Netscape users limited to US only. 33
Source: Company Reports , Morgan Stanley Research.


32

2010E Inflection Point, Penetration >20%
Global 3G+ Subscribers & Penetration, 2007 – 2014E

3,500 43% 45%
2010E: Inflection Point
3G+ Penetration Reaches
38% 40%
3,000 Sweet Spot
2,776
33% 35%
2,500 2,348

3G+ Penetration (%)
27% 30%
3G+ Users (MM)

1,928
2,000 25%
21%
1,503
1,500 20%
15%
1,055 15%
1,000 11%
8% 688 10%
430
500
273 5%

0 0%
2007 2008 2009E 2010E 2011E 2012E 2013E 2014E

3G+ Users 3G Penetration
33
Note: 3G+ technologies include WCDMA, HSPA, TD-SCDMA, 1xEV-DO, LTE and WiMax.
Source: Ovum, Morgan Stanley Research. 35


33

Global Mobile Phone Subscribers
to Reach 4.5 Billion by 2012

34

On the typical day, nearly one-fifth
(19%) of Americans use the internet
on a mobile device.

The Future of the Internet III
Dec 4, 2008 (Pew)

35

Evolving Competing Wireless Standards

EVDO
WiMax
3G HSPA / HSDPA 3.5 G
(high speed downlink packet access)

4G?
36
36

The Ascent of Smartphones
From Geek to Chic
January 2005 February 2009
45 models 202 models

Source: Levi Shapiro
www.m-e-f.org (Mobile Entertainment Forum) 0

39

Smartphone Owners (Millions)
JA
N

0
2
4
6
8
10
12
14
16
FE 200
B 5
M 20
AR 05
AP 200
R 5
M 200
AY 5
JU 200
N 5
2
JU 00
L 5
AU 20
G 05
SE 200
P 5
O 200
C
T 5
N 20
O 05
V
D 20
EC 05
JA 200
N 5
FE 200
B 6
M 20
AR 06
AP 200
R 6
M 200
AY 6
JU 200
N 6
2
JU 00
L 6
AU 20
G 06
SE 200
P 6
O 200
C
T 6
N 20
O 06
V
D 20
EC 06
JA 200
N 6
FE 200
B 7
M 20
AR 07
AP 200
R 7
M 200
AY 7
JU 200
N 7
2
Smartphone Adoption*, Jan'05 to April'08, US

JU 00
L 7
AU 20
G 07
SE 200
P 7
O 200
C
T 7
N 20
O 07
V
D 20
EC 07
JA 200
N 7
FE 200
B 8
M 20
AR 08
AP 200
R 8
20
08
40

Motorola Atrix Dual Core
T-Mobile’s G1
Nokia’s 5800 Android Android

41

Apple Mobile Share Should Surprise on Upside Near Term

Near term, Apple is driving the platform change to mobile
computing. Its mobile ecosystem (iPhone + iTouch + iTunes +
accessories + services) market share / impact should surprise on
upside for at least the next 1-2 years.

Long term, emerging markets competition, open mobile web
(paced by likes of Google Android) and carrier limitations pose
challenges. RIM likely to maintain enterprise lead for 1-2 years
owing to installed base.

Morgan Stanley Presentation from Web 2.0 Summit
37

42


42

Fastest Hardware User Growth in Consumer Tech History

Global Cumulative Unit Shipments in First 10 Quarters
iPhone + iTouch vs. Wii / DS / PSP / iPod / BlackBerry

60

Nintendo Wii
Cumulative Unit Shipments (MM)

50
Apple
iPhone + iTouch Nintendo DS
40

Sony PSP
30

20
Apple RIM
iPod Blackberry
10

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
Quarters Since Launch
43
Note: iPhone launched in CQ2:07; iTouch launched in CQ3:07; iPod launched in CQ4:01; Wii launched in CQ4:06; DS
launched in CQ4:04; PSP launched in CQ1:05; Blackberry smartphone launched in C2002. Source: Apple, Nintendo, Sony,
38
RIM, Katy Huberty, Morgan Stanley Research.

43

The iPhone Changes Behavior
Service Penetration, Market v. iPhone
Owners,

51% iPhone
Social Network/Blogs
5%
Market

31%
Video
6%

74%
Music
8%

88%
Browsing
14%

32%
Playing Games
21%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percent Phone Owners Using Service in Month

44

Open Mobile Video Coalition
800+ TV Stations and Growing ...

800+ TV Stations, 4 Networks, ~100MM Homes Passed,
Public and Commercial Stations, NAB / MSTV / ATSC Coordination

Confidential Property of the Open Mobile Video Coalition—Not for Distribution Without Authorization

45

Apps as a Medium

75,000 iPhone Apps, 1.8 billion downloads,
$200 million USD in August 2009

46

47


47

48


48

49


49

Apple’s iPad Sales
Accelerate: Three Million
Sold in 80 Days

50


51

How Many iOS Devices Have
Been Sold as of Jan 2011?
160 million!
8 million iPads


52

Who Has More Cash, Apple or
Microsoft?
• Microsoft: 43.25 Billion (Yahoo Finance)
• Apple: $39.8 billion in cash and short-term
investments (Apple Jan 25 Earnings Call)


53

Globalization of the
Entertainment Marketplace

Hollywood Economic
Challenges

34
54

• More than 50% (60%?) of Hollywood B.O. Gross is
International
• The entertainment industry is growing fastest in
the Asia-Paciﬁc region, which will see a 6.8%
annual growth rate
• Asia Pacific has been the second TV market after
North America for more than a decade.

Copyright 2010 Stuart W. Volkow

55

Universal joins the $1 billion club.
THR, 14 August 08

“Third studio to reach international
milestone in '08. Paramount International
Pictures hit the mark on June 17, and
20th Century Fox International and
Warner Bros. Pictures International joined
on July 9 and July 19, respectively.”

Globalization has raised the financial
importance of many overseas markets,
including Russia and Brazil—both of
which are among the top 10 markets for
"Avatar," WSJ, 5 Jan 2010

34
56

Domestic: $600,788,188 32.6% +
Foreign: $1,242,091,767 67.4%
===========================
Worldwide: $1,842,879,955

57

In 2006, six films accounted for
nearly 30% of all the major
studios’ international grosses


58

“Tentpole” Hits Are Still Hollywood’s Engine

$306 Million $471 Million
$244 Million

!
Est. Gross % Share Gross
1. ! WARNER BROS. ! $2101 ! 14.1%
2. ! UNIVERSAL ! $1664 ! 11.2%
3. ! 20TH CENTURY FOX !$1518 ! 10.2%
4. ! PARAMOUNT ! $1402 ! 9.4%
5. ! BVI !$1246 ! 8.4%
34
59

Domestic Total as of Foreign Total as of
Jan. 4, 2010: Jan. 4, 2010:
$360,209,452 $702,942,307


60

Behind Momentum of
'Avatar' Are Big Sales
Boosts From Abroad
By ETHAN SMITH, ALAN
CULLISON And MAX
COLCHESTER


61

Total Lifetime Grosses
Domestic: $163,214,888
33.1%
+ Foreign:
$330,000,105
66.9%

= Worldwide: $493,214,993

Domestic Summary
Opening Weekend:
$61,235,105
(#1 rank, 3,777 theaters, $16,213 average)
% of Total Gross: 37.5%

Widest Release:
3,802 theaters
Close Date:
July 22, 2010
In Release:
112 days / 16 weeks


62

Digital Cinema

Stuart W. Volkow

63


64

Electronic Projection
DLP

65

Christie Digital
2048x1080

66

•SONY CRX

SONY SXRD 4 K Projector- Fantastic!!
67

Digital Cinema Server with a Digital Cinema
Distribution Master. 180 GB for “CASANOVA”

68

Christie 2K Digital Projection System
At The Entertainment Technology Center, Hollywood CA.

69

In Moscow, 3-D screenings of "Avatar" have
been booked for a week in advance, and some
theaters have scheduled screenings at 3 a.m.
and 5:30 a.m.

Tickets for 3-D screenings typically cost about
50% more than for a two-dimensional movie,
a fact that has fueled the sales numbers for
"Avatar." About 30% of the screens outside the
U.S. are showing the picture in 3-D, according
to distributor Twentieth Century Fox; those
have generated 64% of the movie's
international total.

WSJ, 5 Jan 2010


72

3D Digital Cinema

 CHICKEN LITTLE
 MEET THE ROBINSONS
 BEOWULF
 JOURNEY TO THE CENTER OF
THE EARTH
 U2
 HANNAH MONTANA & MILEY
CYRUS
Concerts and  FLY ME TO THE MOON
Sports Events  AVATAR
 MONSTERS VS ALIENS
 9 3D movies planned from Pixar/
Disney
Stuart W. Volkow

73

Gaming and
Gamification
74

$22 Billion USA 2008

75

Bestselling Game in the USA Jan, Feb ‘09

6 million units of Wii Fit
77

8 million sold in its ﬁrst quarter

78

Trends...
Online, Casual,
Social,Mobile
STEAM App Store

81

Social media

34
83

Chris DeWolfe
Tom Anderson

84

$580 million

NYT, June 16, 2009, 1:34 PM
MySpace Cuts Work Force by 30
Percent
By BRAD STONE

$15 Salary million over two yrs
85
85

http://tctechcrunch.files.wordpress.com/2011/01/facebookgraph-r7big.jpg


86

26 yr old Facebook
Billionaire
Mark Zuckerberg
USERS:
2006: 7 million
2007: 40 million
2010: 500 million
Authenticity of ID
Opt-In News Feed
Open APIs
Microsoft would pay $240 million
for a 1.6 percent stake in
Facebook. The investment values
Facebook, Copyright 2007 Stuart Wayne Volkow. Xtropiahalf
which is three and a Partners
years old and will bring in about
$150 million in revenue this year, at
$15 billion. NYT, 10/14/07
87


88


89

Largest Share Gainer of Online Usage Over Past 3 Years

Share of Global Online Time Spent, 6/06 – 8/09

14%

12%
% Share of Global Minutes

10%

8%

6%

4%

2%

0%
6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09

Yahoo.com Msn.com Google.com YouTube.com Facebook.com

Source: comScore global, 8/09. 4

90


92


93

Transformation of
the Television
Industry

Stuart W.Volkow 2007
94

From Fortune Magazines 25 most Powerful People In
Business:

Steve Jobs, Apple
Rupert Murdoch, News Corp
Bob Iger, Disney
Jeff Imelt, GE
Schmidt, Page, Brin, Google

11/13/2006 Copyright 2006 Stuart Wayne Volkow

95


96

CATV Largest MSOs
>80% subs

‣US CATV Revenue: 86 Billion USD
‣26 Billion USD in Advertising
‣Source: NCTA.com


98

DBS
32 million subs


99

Te l c o s


100

assets and cash estimated at $6 billion to $7 billion


101


102

Digital Mobile TV
MobiTV subscribers will reach
seven million this year, or about 2%
of all U.S. cellphone users.

AT&T Mobile TV

AT&T CV

DVB-H
DMB (470-750MHz)
104

1 billion
served
(per day)

Sold to Google
for $1.65B

★ 52% of U.S. users use a
video sharing site (May ’08)
★ 27% of online video
consumers use YouTube
★ 49% of online viewers
18-29 use YouTube
Pew Survey Chad Hurley
106
Chad Hurley
106

YouTube: We’re Bigger Than
You Thought
By Miguel Helft ,October 9, 2009, New York
Times

The company released more precise viewing
ﬁgures than it had in the past, saying it serves
more than 1 billion videos a day, or roughly
30 billion in a month.
The post appeared intended, in part, to rebut a
much-quoted report by Spencer Wang, a Credit
Suisse analyst, who predicted that YouTube
would lose $470 million in 2009.

107

36% of recent Internet users have
watched a TV show or other video
stream online, compared to 28%
at the end of 2005, while three-
quarters of these adults have done
so in the past 30 days.

Ipsos “Face The Web Report”

108

CES 2010 CES 2011

109


109

Anywhere.....

Satellite TV Company Echostar
Acquired SLING MEDIA in 2007
for $380 Million

110

110

VOD over the Internet


111


112

TODAY DIGITAL DISTRIBUTION HAS TAKEN A
COMPLETELY DIFFERENT COURSE WITH THE
POPULARITY OF INTERNET SITES AND VIDEO ON
DEMAND

Stuart Wayne Volkow, Copyright 2009 113

113

Original Content with Distribution

115

Home Media Networking, IP TV,
7/15/06
Copyright Stuart W. Volkow 2006
116

Media Connector ?
116

http://www.youtube.com/watch?
v=vS0la9SmqWA&feature=player_embedded
117

2/3 Screen Experience
We estimate that over 66 million US consumers are
simultaneously using a PC while watching TV. With
broadband service becoming nearly ubiquitous, and
consumers using a PC while watching TV,

Copyright 2008, Stuart W. Volkow TV Reborn 119

119

Marketing and
Advertising Budgets
Are Shifting

120


120

$23 Billion
Google’s Ad
Revenue ’09
$70 Billion Annual TV
Advertising Revenue in USA

>20 Billion to $26.8 Billion
major Networks Internet Ad
Spend ’10
(CPG and Auto are largest)

CATV Newspapers
$34 Billion
26 Billion (2008)

121
121

PWC Internet Advertising Revenue Report

“The fundamentals of interactive advertising spend continues to be positive and I would expect to
see continued growth in the future.” said David Silverman, partner, Assurance,
PricewaterhouseCoopers “The cyclical fourth quarter to ﬁrst quarter drop in traditional media
advertising spend, combined with an overall economic slowdown, resulted in a not so unexpected
ﬁrst quarter slowdown in the growth of online advertising.”

Copyright 2006 Stuart Wayne Volkow 122 11/13/2006

122

PWC, IAB Internet Advertising Revenue Report 2008 Full
Year Results
123

IN CONTEXT ADVERTISING Works

Revenue (ttm): 22.68B
Revenue Per Share (ttm): 71.861
Qtrly Revenue Growth (yoy): 7.30%
Gross Proﬁt (ttm): 13.17B
EBITDA (ttm): 9.24B
Net Income Avl to Common (ttm): 4.93B
Diluted EPS (ttm): 15.504
Qtrly Earnings Growth (yoy): 27.10%
ttm = Trailing Twelve Months (as of 6 Jan 2010)
yoy = Year Over Year (as of 6 Jan 2010)
(from Yahoo Finance)

125

2007-2008
U.S. Census Bureau
Population 300 million
HHs 116.8 million
Within Major Cities 39 million
Persons / HH 2.59
% < 18 24.8
% > 65 12.4
Hispanic 14.4
Black 12.8
Median HH income $50,303
Per Capita Income $27,000
Rank in UNDP Index 19
Table 1.
Income and Earnings Summary Measures by Selected Characteristics: 2007 and 2008
(Income in 2008 dollars. Households and people as of March of the following year. For information on confidentiality protection, sampling error,
nonsampling error, and definitions, see www.census.gov/apsd/techdoc/cps/cpsmar09.pdf)

Percentage change in
2007 2008 real median income
(2008 less 2007)

Characteristic
Median income Median income 127

Pew Internet & American Life Project
Feb-March ’07 Survey

% of USA Population Activities by % of Users
who Use the internet Email 91
Total Adults 71% Search for Info 91
47% have “high-speed” access
-------------------------- Get Map/Directions 86
Women 70 Medical Info 80
Men 71 Weather 78
-------------------------- Buying Research 78
Age
Travel 73
18-29 87%
30-49 83 News 72
50-64 65 Watch a Video Clip 56
65+ 32
Recieve a Video Link 75
View Video Daily 19

128

woman, and child in a particular group. It is derived by dividing the total income of a particular group by the total population in that group (excluding patients or inmates in
institutional quarters).
Source: U.S. Census Bureau, Current Population Survey, 2008 and 2009 Annual Social and Economic Supplements.

Figure 1.
Real Median Household Income by Race and Hispanic Origin: 1967 to 2008

2008 dollars Recession
80,000

70,000
$65,637
60,000
Asian
$55,530
50,000 $50,303
White, not Hispanic

All races
40,000
$37,913
Hispanic (any race) $34,218
30,000
Black
20,000

10,000

0
1959 1965 1970 1975 1980 1985 1990 1995 2000 2008

Note: Median household income data are not available prior to 1967. For information on recessions, see Appendix A.
Source: U.S. Census Bureau, Current Population Survey, 1968 to 2009 Annual Social and Economic Supplements.

U.S. Census Bureau Income, Poverty, and Health Insurance Coverage in the United States: 2008 7

129


130

Gen X Vs Millennial Media Consumers
Gen X Millennials
Born 1965-1976 Born 1977 – 1998
51 million 75 million

Accept diversity Celebrate diversity
Pragmatic/practical Optimistic/realistic
Self-reliant/individualistic Self-inventive/individualistic
Reject rules Rewrite the rules
Killer life Killer lifestyle
Mistrust institutions Irrelevance of institutions
PC Internet
Use technology Assume technology
Multitask Multitask fast
Latch-key kids Nurtured
Friend-not family Friends = family

Casual, friendly work Structured, supportive work
environment environment
· Involvement · Personalized work
· Flexibility and freedom · Interactive relationship
· Work as A place to learn · High demands & expectations
131

75 Million Millennials in USA
‣ Tech Savvy Digital Natives

‣ Optimistic

‣ First Gen to take computers for granted

‣ Excellent Ability to Filter Out Advertising

‣ Hard to Impress

‣ The Internet is their most important
medium


132

C o n s u m e r E l e c t ro n i c s

http://gallery.me.com/svolkow100330

133

135

Copyright Stuart W. Volkow 2006 7/15/06

135

Restructuring of The
Music Business

Most people are getting music from their
friends — either burning CDs or ripping digital
ﬁles. And despite the record industryʼs
crackdown, there is no reduction in the
number of people of peer-to-peer ﬁle sharing
service. NPD Market Research 2008

Will movies / TV be next?

137

Technology MegaTrends-2011

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (19)

Semelhante a Technology MegaTrends-2011

Semelhante a Technology MegaTrends-2011 (20)

Mais de UCSD Cntr For Astrophysics & Space Science; The Clarke Cntr For Human Imagination

Mais de UCSD Cntr For Astrophysics & Space Science; The Clarke Cntr For Human Imagination (12)

Último

Último (20)

Technology MegaTrends-2011