Digital content distribution
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- The company has strengths in global content negotiation, connectivity through fiber/LTE networks, and a large distribution network that position it well to capture opportunities in video consumption. - It aims to develop a differentiated value proposition through exclusive content, multi-device packages, and integrated operator billing and services. - The growth of internet video traffic and connected devices is reshaping the content landscape, providing an opportunity for telcos to become trusted providers of internet video.
Digital content distribution
- 1. - Selling content to the customer base Points of difference Global Network beyond connectivity Product differentiation Market strength - Consumer Distribution network Service provisioning capability Leading OBs 2015 Revenue target* €Bn 1.2-1.5 *According to guidance criteria MR. ROBERTO DE LA PIAZZA 1
- 2. Content is a killer app in the digital space Broadband penetration There is a rising expectation and speed growth boost video of Pay TV quality and usability consumption The growth of video 7Bn connected devices consumption over Internet is worldwide in 2015, able reshaping content windows map to stream video* and business model Telcos are more likely to be >80% of internet traffic will seen by consumers as a trusted be video by 2015* provider for internet video services Huge potential but low penetration 80% of people use of connected TVs provide a their tablet while watching TV** window of opportunity for operators with services based on STB * White Paper Cisco 2011, ** Nielsen Q4 2012 poll of mobile users in the US, UK, Germany & Italy 2
- 3. Our strategy to develop a different value proposition Global content negotiation unit Package across multi devices CONTENT Selective ‘Exclusive’ production capability Integrated with Operator Billing and CRM tools Fiber/LTE Investment Multi device offering IPTV/OTT/DTH Linear, on demand development CONNECTIVITY FUNCTIONALITY and interactive CDN guarantees quality services Strong Channel Support 3
- 4. We believe we have the best distribution assets for capturing the opportunity through the entire value chain Linear TV Hybrid TV OTT Fiber/LTE Investment IPTV/DTH development CDN guarantees quality 4
- 5. Linear TV – strong position, but we want to pick up the pace And a huge opportunity in the next few Expanding the business through our footprint years Colombia Venezuela Pay TV Penetration* 250k 125k 2008 2011 2015 March 2012 2011-2015 Brazil 825k 3.3 M 675k Peru customers 12% 24% 37% +13 pp 50k 26% 27% 32% +5 pp 400k Chile Germany 14% 20% 24% +4 pp Czech 75k 135k 800k 32% 44% 53% +9 pp 2010-2012 Spain estimated Latin America – keeping the growth pace as growth medium class segment is growing fast 15% Brazil- the market with largest potential Selective opportunities in Spain * Source: Pyramid Media Forecast 1Q 12 5
- 6. And we have started to build a power position in the hybrid / pure OTT video market A huge opportunity Leading the LATAM pure OTT video market US$ 1 billion >125k subscribers are using our LATAM & EUROPE OTT VIDEO REVENUES (Exc OTT services already ADVERTISING) MARKET IN 2015 # Extending video services to the mass market Complementing traditional pay TV offers with multiscreen and VoD capabilities New entrants are trying to gain traction so strong track record is expected in the sector Sources: # PWC 6
- 7. opportunity alongside the whole We believe we have the best content assets for capturing the opportunity through the entire value chain Acquisition Wholesale Tv Content Production Retail pay TV Digital / Internet Content pay TV operations UCC Global Content Unit Global content negotiation Selective ‘Exclusive’ A potential powerhouse unit production capability Package across multiple devices 7 4
- 8. Terra – A potential powerhouse Audience (millions of unique visitors) Revenues (millions of euros) 104 90 303 70 285 2010 2011 MAY 2012 2010 2011 Terra is investing in product and geography to maintain its lead in the digital media environment Source: comScore May 2012 8
- 9. Reshaping digital content consumption Reshaping sports coverage Global and local producers 360º Music model integrates live delivering Xtreme Live events create unique offering music, content and streaming GUADALAJ ARA 2011 U IC MS M S U IC U IC MS M S U IC M S U IC U IC MS 7,000 LIVE EVENTS / MONTH FREEMIUM – UNIQUE OFFERING FREEMIUM 200 LIVE CONCERTS / YEAR >300,000 FREE USERS 2.25 MILLION EYEBALLS ORIGINAL PROGRAMMING ~ 100,000 SUBSCRIBERS >350,000 SUBSCRIBERS RIGHTS ACQUISITION LEADERSHIP IN LATAM LEADERSHIP IN LATAM 9
- 10. Content distribution conclusions Estimated growth of 15% in 2010-2012 in TV/Video market We have upsides in Brazil by participating in market expansion We also have upsides in Spain by expanding market footprint We have already started to build a strong position in OTT video services market Terra is a leading growing digital media that is reshaping the way people watch digital content 10
- 11. Get in touch Explore our Hub: http://www.telefonica.com/digitalhub Track us on Twitter: http://www.twitter.com/tefdigital Watch our latest videos: http://www.youtube.com/telefonicadigital Look us up on LinkedIn: http://www.linkedin.com/company/telef-nica-digital 11