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
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
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
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
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
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
Progress to date – our partner line-up Device Partners ? ? ? Content Partners …? Private and 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
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
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
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