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‘We create
successful businesses that exploit the unprecedented choice,
control and convenience of the broadband video economy", Peter Hamilton
We are living through a unique moment
in the history of human communications: A massive technical disruption
is upending established relationships across the entire commercial
media landscape. Digital technologies are rendering obsolete the
established relationships among content generators, packagers,
distributors, advertisers, funders and service providers.
This disruption creates enormous
uncertainty and anxiety for established players that have thrived in
each of these markets, but equally enormous opportunity and excitement
for entrepreneurial entrants.
M&AMG
helps entrepreneurs and industry leaders address these challenges
successfully by devising business models that exploit new technological
opportunities to replace the models that thrived under older
generations of communication technology.
M&AMG approaches
this challenge bystudying global markets,
targeting business opportunities, devising strategies, identifying
partners, developing business plans, negotiating deals, arranging
finance, and forming profitable ventures.
The key to understanding the
disruption and its implications is broadband. Broadband technology is
driving a fundamental re-arrangement of the relationships among
financiers, developers, producers, packagers, distributors, and
consumers of video programming. Broadband obliterates longstanding
communications barriers and reduces costs throughout the value chain,
replacing a traditional economy of video scarcity with a revolutionary
economy of video ubiquity.
Traditional gatekeepers face
unprecedented challenges. Terrestrial TV operators, cable and satellite
operators, and advertising agencies have long thrived by parceling the
scarce resource of high-quality video among a desirous paying public;
demand has always outstripped supply. The sudden explosion in both
video supply and video distribution outlets has undermined this
long-accepted central truth. And because video is an emotionally
powerful medium, low-cost IPTV (Internet-protocol digital TV) similarly
undermines the truths governing traditional media outlets such as print
and radio.
The IP-enabled economy is expanding
rapidly. Consumers can now access virtually any audiovisual content,
including HDTV, anytime, anywhere, and on any video-capable device. New
video-based networks and communities are emerging; each one provides
new opportunities to distribute, track and monetize the exchange of
video. Several metrics capture the velocity of this change and indicate
its likely near-term acceleration:
- According to comScore, nearly 123
million people in the U.S. (70% of the total U.S. Internet audience)
viewed 7.2 billion videos online, in January 2007 alone,
- According to iSuppli Corp., the
number of global broadband subscribers will more than double in five
years, growing from 270.4 million in 2006 to a projected 622.7 million
by 2011.
- iSuppli also predicts that
household broadband penetration will exceed 50% in the United States
and Japan by the end of 2007, and in Europe by the end of 2008.
- According to Motorola, two thirds
of Western Europeans under-25, but only thirty percent of over-55, have
watched TV shows online.
- The proliferation of broadband
Internet has fundamentally changed the way that consumers access and
interact with media content. According to Forrester Research, Inc.,
consumers between the ages of 18-26 spend approximately 12 hours per
week using the Internet, compared to approximately 10.5 hours per week
watching television
(“State of the Consumers and Technology: Benchmark 2006,” Forrester
Research, Inc., July 2006).
- eMarketer estimates that at the
end of 2006, nearly 60% of all Internet users regularly watched videos
online, and approximately 80% are expected to do so by the end of 2010.
The implication is obvious: IPTV is poised to explode, following the
pattern that on-line music set only a few years ago. The potential is
enormous—as are the pitfalls of failing to adjust. The potential is
enormous—as are the pitfalls of failing to adjust. Success in this
layered and complex new world will require expertise in the
technologies, the timelines, and the consequent new business models
that they enable. M&AMG will
provide this expertise. |