LEAGUE PATHS TO VICTORY - Ritzau
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THE LEAGUE PATHS TO VICTORY
Video consumption continues to migrate to digital
1 TV Viewing is switching to OTT 2 Massive OTT Audience Growth 3 Content Investment is a Barrier to Entry
• TV viewing is declining as OTT consumption rises • YouTube is the dominant AVOD platform with • SVOD platforms need to invest heavily in content
2bn+ MAUs to create/maintain competitive advantage
• Largest shift in behaviour in 4-15 year-olds
• Worldwide SVOD subscribers forecast to exceed
• COVID accelerated these changes – daily US 1bn by 2025
YouTube viewing up to 97 mins from 57 yoy
MINUTES WATCHED PER MEDIUM # OF SUBSCRIBERS (000S) CONTENT INVESTMENT
200 FY’19 ($ IN BN)1
180 $19.6
160
140 $15.9
120
100 $12.2
80 $9.2 $9.3
60 $5.8
40
$3.8 $2.6
20 $2.0
$1.0
0
2012 2013 2014 2015 2016 2017 2018 2019 2020
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AM
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Netflix Amazon
om
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Disney+ Apple TV+
+
D
BS
Comcast / Sky / Peacock HBO Max/Now TV Film
C
1Excludes sports Moonbug Entertainment Ltd. 2020
Source: Ofcom, Statista, Moffett Nathanson. Private and confidential. 2COVID changed ad spend and viewer consumption
Entertainment & Media: SVOD vs. Box Office Revenues
Digital vs. Non-Digital Ad Spend ($ in bn) ($ in bn)
IMMEDIATE IMPACT OF COVID ACCELERATING MEDIUM TERM IMPACT OF COVID DRIVING
MOVEMENT TO DIGITAL AD-SPEND REVENUE TO SVOD PLATFORMS
Projected data Projected data
$80
$500
$400 $60
$300
$40
$200
$20
$100
$0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Digital Ad Revenues Non-Digital Ad Revenues SVOD Revenues
Source: PwC. Moonbug Entertainment Ltd. 2020
Private and confidential. 3Media services are launching to capture the consumer
Current Stage: Platform Launch Stage Two: Platform Growth Stage Three: Defending Position
ACQUIRING SUBSCRIBERS
PROVIDINAG VALUE WITH GREATER DEFENDING POSITION AND
CONTENT DEPTH & PREVENTING INCREASING SUBSCRIBER AVALUE
• Utilizing strong brand association (e.g. Disney, Apple) SUBSCRIBER CHURN
• Ringfencing proprietary content (e.g. Mulan on • Platforms invest in creating more original IP (e.g. • Defend platform position and value
Disney+, Warner releases on HBO Max) Mandalorian, Stranger Things Season 2)
• Ongoing creation and delivery of premium content
• Creation of unique launch content (e.g. Mandalorian, • Platforms broaden content offering by exclusively
Stranger Things) licensing in key content categories: sports, news, • Turned “owned content” into franchises – Mandalorian,
(e.g. Disney acquires India Premier League) Trolls
• Strategic partnerships to bundle subscriptions (e.g.
mobile service providers or device manufacturers) • Platforms invest in acquiring proven IP to provide • Defending against consolidation amongst platforms
USP (e.g. AT&T Warner (Batman, Harry Potter,
Disney buys Marvel & Star Wars) • Expand revenue streams with bundled offering of value-
added consumer services
• Loyal audience
Tencent cloud gaming, messaging, chat, social, payment,
• Creative talent video, music, games, software
• Large scale fanbase Amazon prime video, delivery, kindle unlimited, Amazon pay
Moonbug Entertainment Ltd. 2020
Private and confidential. 4THE STREAMING WARS
How the Groups line up
Six groups will compete to own video GROUP A GROUP B GROUP C GROUP E GROUP F GROUP G
consumption globally over the next ESTABLISHED ENTITIES RETAILERS SEARCH & SOCIAL OTT PUREPLAYS MUSIC GAMING
five years. The fight for brands will be 1. NETWORKS 1. WESTERN RETAILERS 1. WESTERN SEACH/SOCIAL 1. SVOD 1. WESTERN MUSIC 1. GLOBAL (PC & CONSOLE)
a key battle ground Comcast/Universal/Sky Amazon Google / YouTube Netflix Spotify Google Stadia
AT&T/Warner/HBO Walmart Facebook / Instgram Disney+ / Hulu / ESPN Amazon Music GeForce Now
/ Whatsapp
• Incumbents use infrastructure to try and throttle Viacom/CBS Target Apple Music (see OEM) PlayStation Now
competitors Telefonica Tidal Microsoft Xcloud
• Growth of big tech hampered by regulatory 2. OEM's 2. EASTERN RETAILERS 2. EASTERN SEARCH/SOCIAL 2. AVOD 2. EASTERN MUSIC 2. EASTERN (PC / MOBILE)
pressure Apple Alibaba Alibaba / Youku Viacom: Pluto Tencent Music Ent Tencent Huya/Douyu
Fox: Tubi
• Commoditized networks face consolidation as
Sony Tencent / JD.com WeChat (TenCent) Comcast: Xumo
Roku
Netease Netease
nation states seek to protect domestic networks Microsoft Pinduoduo Baidu / Iqiyi Amazon Video Direct Alibaba Cloud
Youku
Huawei TikTok iQiyi
• Retailers are growing value-added services to
secure customer relationships while benefiting ADVANTAGES ADVANTAGES ADVANTAGES ADVANTAGES ADVANTAGES ADVANTAGES
from online business Thottling competitors via Wider customer relationship Deep customer data Speed & flexibility Speed & flexibility Massive growth
network, device access or Wider user data Brand relationships Global content budgets vs Global appeal Global appeal
proprietary billing Margin & disruption of B&M Scale Local TV budgets Market maturing High margin
• Raw entertainment platforms are narrowly
focused and will be squeezed out if they cannot DISADVANTAGES DISADVANTAGES DISADVANTAGES DISADVANTAGES DISADVANTAGES DISADVANTAGES
scale and increase subscriber services Regulatory environment Legacy bricks & mortar Regulatory environment High content investment Not enough margin to win Massive competition
Legacy capex Entertainment not core AVOD not SVOD Low margin video content investment war Focus is on gaming
Moonbug Entertainment Ltd. 2020
Private and confidential. 5THE STREAMING WARS
GROUP A
Established Entities
Large but Slow
NETWORKS OEM’S TOY COMPANIES
Comcast, AT&T, Telefonica, Deutsche Apple, Sony, Microsoft Hasbro, Mattel
Tel, T-Mobile, Verizon, BT, Viacom/CBS, and Huawei and Spinmaster
Etisalat, etc.
• Apple: 1.4 billion devices + $100bn cash – will be • Mattel likely to become more of a studio
• Comcast & AT&T now own major studios and OTT investing more into Apple TV+ library by acquiring
platforms to complement premium video – Warner is brands • Hasbro bought E1
now day and date on HBO Max
• Sony: 2.2m gaming subscribers, a top MPAA studio • Spinmaster looking for a new Paw Patrol
• Only global players can realistically compete in video and continues to acquire brands like Peanuts and
subscription. Legacy network capex compromises Silvergate MODEL A La Carte product retail
content investment.
• Microsoft refocused on gaming with Xbox xCloud and
• Nation states will regulate to protect domestic Minecraft subscription
incumbents, but global network consolidation
continues MODEL $10-15 /mo for gaming subscription and $400-
$1,000 for device
• Capable of throttling competitors (regulator dependent)
Apple vs Fortnight / Huawei vs Tencent / AT&T and
Comcast vs Netflix/YouTube
MODEL $15 /mo for video + $30-$100 Internet Moonbug Entertainment Ltd. 2020
Private and confidential. 6THE STREAMING WARS
GROUP B
Retailers
Winning online & losing in B&M
WESTERN EASTERN
Amazon, Walmart and Target Alibaba, Tencent/JD.com, PinDuoDuo
• In 2020 bricks and mortar liquidity was strained and sales went into freefall • In China Alibaba, JD.com and PinDuoDuo with 80% of online market thrived
• Stuck at home the consumer accelerated the adoption of digital commerce • Alibaba and Tencent/JD.com combine their retail offerings with other diversified
benefitting Amazon, Walmart and Target. businesses including social, gaming & storage
• Owning a wider customer relationship, content is used to provide online footfall MODEL
• Amazon Direct retail, platform for 3rd party retailers, Prime subscription ($12.99 mo)
• 2021 saw Amazon deliver its first $100bn quarter
• Alibaba Paid search ranking for 3rd party retailers, digital mall service, digital
• But while Amazon Prime offers video, kindle unlimited, same day delivery, payments, Youku AVOD
Prime Now, Prime Gaming/Twitch and Amazon Music next to Alibaba and
Tencent it needs more value-added services to tie the consumer in ENVIRONMENT
• AliExpress has tied up with Mail.ru/VK in Russia and Tencent bought iFlix. Both
invested in payment companies across South East Asia
• JD continues to integrate into 175 Walmart hypermarkets.
• Chinese government sanction of AliBaba may signal a new phase of state
intervention in domestic business. Moonbug Entertainment Ltd. 2020
Private and confidential. 7THE STREAMING WARS
GROUP C
Search & Social
China shows the way
WESTERN EASTERN
Google/YouTube, Facebook/Instagram/WhatsApp Alibaba/Youku, WeChat (Tencent), Baidu/IQiyi, TikTok
• Google/YouTube – dominate search and has worlds largest AVOD business • TikTok is the worlds fastest growing app and if it escapes sanction in the US, the leading
with 2bn+ monthly users in YouTube video platform for the older kids
• Facebook / Instagram / WhatsApp – challenging Google’s dominance, • Baidu has not only matched video to search but with along Alibaba and Tencent has begun to
Facebook has 1.25bn monthly users but it’s less clear to the consumer what convert live streaming to e-purchase in a way that no platform has in the west.
Facebook Watch or Instagram Reels are for
• WeChat dominates messaging and WeChat pay became the leading Chinese e-payment
MODEL service and now offers short-form video
• Freemium – free with advertising or subscription to remove ads
MODEL
• Freemium – free with advertising or subscription to access wider services
ENVIRONMENT
• US and India regulatory steps signal a more antagonistic global environment to check Chinese
social tech international expansion
• Competition for brand revenue and subscribers will drive platform content quality & investment
Moonbug Entertainment Ltd. 2020
Private and confidential. 8THE STREAMING WARS
GROUP D
OTT Pureplay
Investment in Library Depth
SVOD PLATFORMS AVOD & HYBRIDS
Netflix, Disney/Hulu/ESPN Pluto, Tubi, Xumo, Roku, Amazon `Video Direct, Youku, iQiyi
• Netflix – 195m global subscribers since 2007, a fantastic 2020 but • Viacom: Pluto, Fox: Tubi, Comcast: Xumo and Roku – struggle to compete with unlimited free
threatened by companies offering more VAS (gaming etc.) content on Facebook, YouTube and TikTok
• Disney+ - 87m global subscribers since 2019 and an additional 46.9m from • In China Bytedance dominates short from free video pureplay with TikTok
Hulu and ESPN. Investing massively in O&O brand production.
• Amazon’s advertising business jumped 47% to $21bn in 2020
• Sports rights (Disney Premier League India, Amazon ATP) and hero IP to win
subscriber loyalty and deep library content to drive retention • Youku, Tencent and iQiyi all attract videos users to the platform with AVOD before converting SVOD
MODEL MODEL AVOD – free with advertising HYBRID - $2.1 /mo
• Netflix $13.99 /mo
ENVIRONMENT
• Disney+ $6.99 /mo or $12.99 for Disney+ / Hulu / ESPN • US and India regulatory steps signal a more antagonistic global environment to check Chinese
social tech international expansion
• Talks from Baidu to sell a controlling stake in iQiyi to Tencent or AliBaba are on hold on regulatory
competition concerns
• Competition for brand revenue and subscribers will drive
Moonbug Entertainment Ltd. 2020
platform content quality and investment Private and confidential. 9THE STREAMING WARS
GROUP E
Music
When it’s not enough
WESTERN MUSIC EASTERN MUSIC
Spotify, Amazon Music, Apple Music, Tidal, Google Tencent Music Ent, Netease
• Spotify diversifying offering through investment in podcasts. Spotify may • Netease Music in China exclusively acquired the Studio Ghibli catalogue in
2020 and saw off Xiaomi
diversify into video or be threatened by other global content services
backed by larger tech partners
MODEL
MODEL
• Tencent Music $1.33 /mo ….however karaoke users pay up to $15.66
• Spotify $10 /mo /mo generating 2/3 Tencent Music’s revenue
• Apple $10 /mo
• Netease Cloud $2 /mo
• YouTube $10 /mo ENVIRONMENT
• Amazon, Apple, Tencent and Netease music offerings are underpinned by
• Amazon $10 /mo wider customer relationship and greater margin in the rest of their business
to threaten Spotify’s dominance
• Tidal $10 /mo
Moonbug Entertainment Ltd. 2020
Private and confidential. 10THE STREAMING WARS
GROUP F
Gaming
Mobile access, Cloud service
GLOBAL EASTERN
Google, GeForce (Nvidia), PlayStation Now, Tencent Huya/Douyu, Netease, Alibaba Cloud
Microsoft Xcloud
• Chinese gaming is led by mobile consumption, accelerating with 5G and underwritten through
• Most gaming in the west has been led on PC and console. micro-subscription and ads
Cloud gaming is a paid monthly subscription • Chinese gaming generated $33bn in 2019, generated $10.4bn revenue in Q3 2020 up 15% YoY
and is expected to be $46.7bn by 2024
MODEL
• Google Stadia (Free or Pro $10/mo) • TenCent now aiming to increase stake in UMG to 20%
• GeForce Now (Free or Pro $5/mo) MODEL
• TenCent & Huya/Douyu Live 300m MAU – hourly accessPAID MONTHLY MONTHLY
SUBSCRIBERS THE ACTIVE USERS
200m
Content & subscriber lead
VS
LEAGUE Music subscription platform
looking to diversify VS
320mau
130m subs
1.4bn devices & $100bn Fastest growing growing
THE STREAMING WARS app
40m 167m
20m
2,700m +
26m
Money can’t buy: King of search and AVOD
the libraries VS
of the major studios the king of social and
nearest AVOD competitor
17m
2,000m +
12.6m
86.8m
150m
46.9m
The vertically integrated The gameworld gearing up
content company VS to capture younger users
World’s largest retailer VS
with $275bn revenue World’s biggest gaming Co
1,212m
150m 900m
Moonbug Entertainment Ltd. 2020
Private and confidential. 12Consolidation on the way to the final
• Subscription pressure is mounting on consumer wallets STRATEGIC DRIVERS
• Global platforms content expenditure (Disney $20bn vs ITV $0.3) • Own the consumer
• As platforms consolidate the pressure to own great brands will increase to • Own the best Mega Brands
• Create depth of exclusive content • Own the best creative talent
• Massive investment on inhouse production to continue accompanied by
acquisition of third-party mega brands • Deliver scale
• To support retail
• To anchor wider consumer offerings with households
• All have a shared need for more Mega Brands that can become franchises
Moonbug Entertainment Ltd. 2020
Private and confidential. 13ALC & SVOD & App Store
& Apple Arcade
2021-2025 40m TV+subs
$275bn Rev
200m subs
SVOD only
$25bn FYe 2020
Possible
Streaming 1.4bn devices +
$100bn cash
Disrupted in 2020
by new SVOD
87m subs + 47m subs (H&E)
SVOD, PayTV, Parks, Retail
Winners 1.2bn WeChat MAU
0.9bn TC Video subs
Apple TV+ requires
content investment
entrants & Fortnite.
Cloud Gaming
next move?
$180bn FYe 2020
0.12bn gaming subs
Multiple bus models
$91bn FYe 2020 Rev
Gaming & retail #1 IP owner in
underwrites SVOD content
Investing in IP
#1 in search & AVOD
Using global data to will Stadia finally bring
leverage AI & paying subs?
move into Now investing
TikTok expected MAU in retail 2bn MAU
gaming
>1 billion in 2021 Search, AVOD & Stadia
AVOD & social model $179bn FYe 2020 Rev
Needs more Prime Gaming
consumer services evolving but
Bytedance
to keep up with overseas
$30bn FYe 2020 Rev
Asian competitors competition
150m SVOD subs
SVOD, gaming, delivery & Kindle
56m subs
$380bn FYe 2020 Rev
Internet & video SVOD
$103bn FYe 2020 Rev Moonbug Entertainment Ltd. 2020
Private and confidential. 14You can also read
