HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential

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HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
HbbTV UK market update
Success built on partnership and collaboration

Simon Hunt
Digital UK
14th November 2018

Confidential
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
Introducing Digital UK

  Digital UK leads development of Freeview,       DTV Services Ltd, known as Freeview, owns
  working with world-leading companies to         the Freeview brand.
  deliver television which informs, educates      The company leads on consumer and retail
  and entertains.                                 marketing. Working closely with Digital UK, it
  Freeview Play brings terrestrial TV, catch-up   also grants trademark licences to Freeview
  and on-demand together in next generation       Play device, content and retail partners.
  televisions and boxes from leading
  manufacturers.

        Working together to create the world’s best free TV service
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
In the UK, full-fat Pay TV has peaked and free-TV and SVOD are
growing

TV households take-up of Free, traditional Pay and SVOD services                                   Total TV screen time, by type
       All Free main sets (inc
       YouView and Free Sat)
                                 13,4              All Pay
                                        13,2                                                                                                                                                 Unmatched
                                               (sat and cable)   12,8                              13%               14%               16%
12,6                                                                                                                                                     17%               19%               inc SVOD
                                                                                            11,6                                                                                             streaming
                                                                                                   14%               13%               14%               13%
           Freeview main         9,8                                                                                                                                       14%               Recordings
                                                                                            9,7
9,1             sets                    9,1                                      Any SVOD                                                                                                    and catch-up
                                                 Sky DSat         8,6

                                                                           7,2

                                                                           5,9
                                                                                  Netflix   4,9
                                                                                                   73%               73%               71%               69%               68%                Live

                                                                           1,6   Amazon
                                                                                  Prime
                                                                                  Video
 Q2 '16

                                                                           Q1 '16

                                                                                                            Q2 '16
 Q1 '16

 Q3 '16
 Q4 '16
 Q1 '17
 Q2 '17
 Q3 '17
 Q4 '17
 Q1 '18
 Q2 '18

                                         Q1 '16
                                         Q2 '16
                                         Q3 '16
                                         Q4 '16
                                         Q1 '17
                                         Q2 '17
                                         Q3 '17
                                         Q4 '17
                                         Q1 '18
                                         Q2 '18

                                                                           Q2 '16
                                                                           Q3 '16
                                                                           Q4 '16
                                                                           Q1 '17
                                                                           Q2 '17
                                                                           Q3 '17
                                                                           Q4 '17
                                                                           Q1 '18
                                                                           Q2 '18

                                                                                                   Q1 '16

                                                                                                                     Q3 '16
                                                                                                                              Q4 '16
                                                                                                                                       Q1 '17
                                                                                                                                                Q2 '17
                                                                                                                                                         Q3 '17
                                                                                                                                                                  Q4 '17
                                                                                                                                                                           Q1 '18
                                                                                                                                                                                    Q2 '18
                                                                 Source: BARB
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
Viewing habits are changing, but much more gradually than many
suggest
  Long-form viewing minutes per day, by category (daily minutes viewed, forecast)

  Source: Mediatique for BBC
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
Freeview Play: a strategic response to a rapidly changing
sector

                 Three strategic challenges
                                                   • In an increasingly competitive
                                                    market, Freeview Play is our
                                                    response to the need for a new
                                                    model to underpin the future of
                          Increasing                free-to-view TV.
                         competition
                                                   • One that responds to growing
                                                    consumer appetite for hybrid
                                                    viewing and puts UK
                                                    broadcasters front and centre of
                                                    the proposition.
         Importance of                  Hybrid
            free TV                     viewing
                                       behaviour
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
Defining principles

                                                 • Collaboration – working
                                                  with UK and global partners

                                                 • Innovation – built on
                                                  standards (HBBTV 2.0)

                                                 • Simplicity – all your TV in
                                                  one place

                                                 • Scale – leveraging the
                                                  horizontal market and
                                                  Freeview brand

                      Private and confidential
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
Progress to date – our partner line-up
    Device Partners
                                                       ?
                                                       ?

                                                       ?
         Content Partners

                                                       …?

                            Private and confidential
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
UK Smart TV sales are the engine for Freeview Play’s
Growth

                                           23%   21%   20%   20%
                   30%   30%   28%   29%                            Other TV sales, non-Smart
 44%   41%   41%

                                                       30%   26%
                                                 31%
                                           31%                      Other Smart TVs (Android, Samsung)
                               36%   31%
                         43%
                   48%

             47%
       53%
 52%
                                                       51%   54%
                                           46%   48%                Share of all TV sales that are FVP
                                     41%
                               36%
                         27%
                   22%
             13%
 4%    7%
16 Q1 16 Q2 16 Q3 16 Q4 17 Q1 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 18 Q3
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
Freeview Play is already actively used in 2.6 m UK homes
and we expect it to become the largest hybrid TV service
Actuals and forecast for FVP annual device sales (m              FVP active installed base (actuals to Q3 2018 and forecast for
devices)                                                         later years)

                                                                                                                                         11.1
                                            4,3
                                      4,1
                                3,9
                                                                                                                                9.0
                                                                        Sky Dsat: 8.7m
                          3,4

                    2,8                                                                                                7.0

                                                  FVP TV and                                                           Active FVP devices
              2,0                                 STB annual                                                  5.0      (millions, forecast)
                                                  retail sales
                                                                        Virgin 3.7m
                                                                                                      3.2
                                                                                                   2.6
                                                                        Youview: 3.0m
        0,8
                                                                                          1.7
                                                                                                Active FVP devices
                                                                              0.5               (millions, actuals)
  0,1                                                             0.1

 2015 2016 2017 2018 2019 2020 2021 2022                         Q4 15       Q4 16       Q4 17      Q4 18    Q4 19    Q4 20    Q4 21    Q4 22
HbbTV UK market update Success built on partnership and collaboration Simon Hunt Digital UK 14th November 2018 - Confidential
And, driven by consumer demand for Foundation TV

 Wider Smart TV
                                         Free to air broadcast channels
 ecosystem:                              at the hub of TV viewing

                                         Free TV catch up
                                         and on demand

                                         Multichannel operators OTT
                                         eg TV Player+, Now TV,
                                         Eurosport Player

                                         SVOD / TVOD OTTeg Netflix,
                                         Amazon,Wuaki TV
Freeview Play help maintain an ecosystem supporting
manufactures and channels business models
                   Manufacturer Partners                                                  FTA Channel Partners
 Bringing the best of live and on-demand TV                   A single HbbTV app syndicated to every Freeview Play device partner
 together in a free, universal proposition                         •   DUK manages the CP syndication and testing
                                                                   •   Create opportunities with white label suppliers

Supporting device profitability                               Maintain prominence for FTV catch up & on demand Apps
     •       Supporting device sales and replacement cycles        •   Multiple entry points to their app outside the clutter of App stores
     •       Development of revenues streams from payTV            •   Maintenance of relationships with their audiences and advertisers

 Replacing complexity with simplicity
                                                              Enhanced content discovery that starts with the TV Guide
                                                                   •   Simple and compelling backwards EPG that keeps the channel line-up and their
                                                                       channel brands at the heart of hybrid TV
                                                                   •   Powerful discovery mechanism to reinforce the value of the broadcast channel brand
 Foundational TV, for everyone                                         and content attribution
                                                                   •   Deep links to their app retain direct control of the experience and advertising

 Freeview Play is the unifying banner to drive take up        Metadata aggregation and distribution that retains editorial integrity
                                                                   •   Metadata and programme images are aggregated in the Freeview Play
                                                                       metadata delivery system
         •     Open and collaborative
                                                                   •   Retention of their approved metadata and images is mandatory for device
                                                                       partners so that they retain full editorial control
         •     Adopting international standards                    •   Powerful APIs for device partners drive their metadata into their native UIs for
                                                                       programme based search and recommendations
Freeview Play adds value through our Device partners’
native UIs
   Native UI & TV Guide            Apps Portal          Search & Recommendations

Prominence in channel-based   Prominence in app-based    Prominence in content-led
        discovery                    discovery                  discovery
Our focus is on further innovation with our partners to enhance
the experience of Freeview Play users
                                                                        2020+
                                      2018 – 2019              Preparing a fully hybrid
          2014 – 2017                   Evolution                     platform
       Launch and growth                                     • Dynamic IP content
                                UHD content over IP           insertion in DTT streams
    Backwards EPG
                                Freeview mobile app for     • Personalised content
    Catch up apps               iOS & Android                 discovery across multiple
    Metadata aggregation      • Restart from the TV Guide     screens
     and distribution system     and live channel            • Addressable advertising
    Search and curated        • Voice discovery with PSB
     recommendations                                         • IP channels
                                 prominence
    Widen distribution                                      • Distribution-agnostic
                               • Visual UIs                    devices
     partnerships
Marketing to drive branding, comprehension and TV sales

         Brand                         Product                          Retail
   To help drive brand fame     To help drive understanding    To leverage TV advertising
  and awareness, creating a         of Freeview Play, with      to further support instore
    halo effect for the other   tailored messages targeted    and online retail activity with
          advertising           at our audience segments.      our manufacturer partners
Thank you
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