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Terence Kawaja LUMApartners
The Future
of TV
The First Half of My Career Was in TV
The Second Half Was in Digital
The Third Half? Convergent TV
The Third Half? Convergent TV
Too Early!
January 2001
merged with
LUMA is a Leading Authority on Convergent TV
Over 600,000 Views
The State of
DIGITAL VIDEO
Hours	
  
28%	
  
Source: eMarketer, comScore Video Metrix December 2015
U.S.	
  Digital	
  Video	
  Proper5es	
  	
  
Ran...
But Now It’s Not the Only Game in Town
Facebook Auto-Play Videos are Ubiquitous
75%From Mobile
8 Billion Daily Views
Mobile Apps Bring Live Content to Your Fingertips
Snapchat Has Built Mobile-First Advertising
Publishers of All Kinds Are Investing in Video
There Just isn’t Enough Supply!
Display	
  Ad	
  CPM	
  
$1.90	
  
Video	
  Ad	
  CPM	
  
$24.60	
  
Source: ZenithOptimed...
$4.2	
  
$5.2	
  
$7.5	
  
$9.6	
  
$11.4	
  
$0	
  
$2	
  
$4	
  
$6	
  
$8	
  
$10	
  
$12	
  
2013	
   2014	
   2015	
 ...
Source: eMarketer
$	
  billions	
  
Digital	
  Video	
  
But is Still Only a Fraction of the TV Market
TV	
  
$66.4
$68.5
...
Traditional Digitalvs.
Traditional Digitalvs.
100 : 1
19	
   Buckets	
   36	
  
~	
  100	
   Companies	
   ~	
  400	
  
$150	
  Billion	
   Total	
  Spend	
   $6	
  Bil...
100 : 15x
Cash
New Entrants Have Plenty of Money to Build or Buy
Market Cap: $2 Trillion
Cash: $400+ Billion
Source: Needh...
Screens
Delivery
Content
2008 Was So Simple: Traditional & Digital Silos
Delivery
Screens
Content
Second Screen
Chromecast /Airplay
Partnerships
“Netflix + Disney”
Convergence Begins with Device ...
OTT/CTV
Delivery
Screens
Content Partnerships
“Netflix + Disney”
Final Late
Night Episode
Evolution of
Top Rated Show
Most Viewed
Episode
1993
1990
1992
80MM
52MM
38MM
TraditionalTV
Conte...
Final Late
Night Episode
Evolution of
Top Rated Show
Most Viewed
Episode
1993
2007
1990
2013
1992
2009
80MM
30MM
52MM
8MM
...
Big $$$
A18-49
Reach
Incremental Budget
A25-54
Reach
Paying 30-50%
more for .5-1%
more reach?!
TRP
Source: Needham & Co. ,...
Slack in Demand for Upfront Buys
Selling Points Reversed in 2015
Upfronts	
   NewFronts	
  
Selling	
  Premium	
  Content	
   Selling	
  Data-­‐Driven	
  A...
Selling Points Reversed in 2015
Selling	
  Data-­‐Driven	
  Approach	
   Selling	
  Premium	
  Content	
  
Upfronts	
   Ne...
Now TV is Being Aggressive with Data
Credit	
  Card	
  Data	
  
Subscriber	
  Data	
   Target	
  Audience	
  
Yogurt	
  Bu...
Digital is Increasing Investment in Original Content
Everyone	
  is	
  gePng	
  in	
  on	
  the	
  game	
  
?	
  
OTT/CTV
Delivery
Screens
Content Partnerships
“Netflix + Disney”
Convergent TV Through OTT Distribution
OTT Options Are Growing
$50-­‐$70	
  
$8	
  
$9	
  
$20	
  
$99/year	
  
$15	
  
$6	
  
Average	
  Basic	
  Cable	
  Packa...
-­‐60%	
  
-­‐50%	
  
-­‐40%	
  
-­‐30%	
  
-­‐20%	
  
-­‐10%	
  
0%	
  
10%	
  
20%	
  
30%	
  
TV’s Year of Doom
Note:	
...
Perception vs. Reality in Addressable TV
Linear	
  TV	
   Programma5c	
  TV	
  
Percep5on	
  
Reality	
  
Linear	
  TV	
  ...
Total	
  US	
  TV	
  &	
  Video	
  Market:	
  100%	
  	
  
Digital	
  Video:	
  10%	
  
RTB:	
  1%	
  
Ø  The	
  winners	...
Marketer
Agency
MVPD
Network
Ø  Premium	
  supply	
  /	
  content	
  on	
  digital	
  
Ø  Consistent	
  raDngs	
  across...
Programmatic Platforms
Targeting Technology
Attribution / Analytics
Low-Cost Production
Integrated
Workflow
Premium Conten...
33 Video Deals in the Last 2 Years
33 Video Deals in the Last 2 Years
~$700 Million
Convergent TV via M&A
CONTENT	
  
DISTRIBUTION	
  
MONETIZATION	
  
Media
Major Strategics Now Focused on Convergent TV
A Reflection of a Growing Buyer Pool
MARKETING	
  TECH	
  
CRM	
  SOFTWARE	
  
INTERNET	
  ORIGINALS	
   TELCO	
  
MARKETI...
Potential TV Game Changers
Regulation Technology Content
LUMA’s Commitment to LA
Over 170 Exits
in past 2 years
LUMA’s Commitment to LA
Over 170 Exits
in past 2 years
December 2011
December 2015
has been acquired by
The undersigned ac...
New York | San Francisco | Palo Alto
Access. Insights. Execution.
LUMApartners
Thank you! @tkawaja
LUMA's Upfront Summit Keynote: "The Future of TV"
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LUMA's Upfront Summit Keynote: "The Future of TV"

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LUMA Partners presents “The Future of TV,” as presented at the Upfront Summit conference on February 4, 2016. This presentation reviews some of the key topics discussed at the conference: the rise of digital video, the traditional TV model, and convergent video.

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LUMA's Upfront Summit Keynote: "The Future of TV"

  1. 1. Terence Kawaja LUMApartners The Future of TV
  2. 2. The First Half of My Career Was in TV
  3. 3. The Second Half Was in Digital
  4. 4. The Third Half? Convergent TV
  5. 5. The Third Half? Convergent TV Too Early! January 2001 merged with
  6. 6. LUMA is a Leading Authority on Convergent TV Over 600,000 Views
  7. 7. The State of DIGITAL VIDEO
  8. 8. Hours   28%   Source: eMarketer, comScore Video Metrix December 2015 U.S.  Digital  Video  Proper5es     Ranked  by  Unique  Video  Viewers   Average  Time  Spent  per  Day     with  Digital  Video  by  Device  in  U.S.   YouTube Has Dominated the Rise of Digital Video 0   0.1   0.2   0.3   0.4   0.5   0.6   0.7   0.8   2011   2012   2013   2014   2015   Tablet   Smartphone   Desktop   Other  
  9. 9. But Now It’s Not the Only Game in Town
  10. 10. Facebook Auto-Play Videos are Ubiquitous 75%From Mobile 8 Billion Daily Views
  11. 11. Mobile Apps Bring Live Content to Your Fingertips
  12. 12. Snapchat Has Built Mobile-First Advertising
  13. 13. Publishers of All Kinds Are Investing in Video
  14. 14. There Just isn’t Enough Supply! Display  Ad  CPM   $1.90   Video  Ad  CPM   $24.60   Source: ZenithOptimedia, Note: Average CPM
  15. 15. $4.2   $5.2   $7.5   $9.6   $11.4   $0   $2   $4   $6   $8   $10   $12   2013   2014   2015   2016   2017   Source: eMarketer $  billions   CAGR:  28%   Digital  Video   Digital Video Spend Continues to Rise CAGR:  150%   ProgrammaDc  Video  
  16. 16. Source: eMarketer $  billions   Digital  Video   But is Still Only a Fraction of the TV Market TV   $66.4 $68.5 $69.6 $72.7 $74.1 $0 $10 $20 $30 $40 $50 $60 $70 $80 2013 2014 2015 2016 2017 $0 $10 $20 $30 $40 $50 $60 $70 $80 2013 2014 2015 2016 2017 ProgrammaDc  Video  
  17. 17. Traditional Digitalvs.
  18. 18. Traditional Digitalvs.
  19. 19. 100 : 1 19   Buckets   36   ~  100   Companies   ~  400   $150  Billion   Total  Spend   $6  Billion   $1.5  Billion   $  /  Company   $15  Million   Traditional TV vs. Digital Video Players
  20. 20. 100 : 15x Cash New Entrants Have Plenty of Money to Build or Buy Market Cap: $2 Trillion Cash: $400+ Billion Source: Needham & Co. estimates the TV ecosystem to be ~$400 Billion
  21. 21. Screens Delivery Content 2008 Was So Simple: Traditional & Digital Silos
  22. 22. Delivery Screens Content Second Screen Chromecast /Airplay Partnerships “Netflix + Disney” Convergence Begins with Device Proliferation
  23. 23. OTT/CTV Delivery Screens Content Partnerships “Netflix + Disney”
  24. 24. Final Late Night Episode Evolution of Top Rated Show Most Viewed Episode 1993 1990 1992 80MM 52MM 38MM TraditionalTV ContentModel
  25. 25. Final Late Night Episode Evolution of Top Rated Show Most Viewed Episode 1993 2007 1990 2013 1992 2009 80MM 30MM 52MM 8MM 4MM 38MM Crosschanneldevices killedthetelevisionstar!
  26. 26. Big $$$ A18-49 Reach Incremental Budget A25-54 Reach Paying 30-50% more for .5-1% more reach?! TRP Source: Needham & Co. , Nielsen Incremental Cost Per Reach Point Incremental is Increasingly Expensive on TV!
  27. 27. Slack in Demand for Upfront Buys
  28. 28. Selling Points Reversed in 2015 Upfronts   NewFronts   Selling  Premium  Content   Selling  Data-­‐Driven  Approach  
  29. 29. Selling Points Reversed in 2015 Selling  Data-­‐Driven  Approach   Selling  Premium  Content   Upfronts   NewFronts  
  30. 30. Now TV is Being Aggressive with Data Credit  Card  Data   Subscriber  Data   Target  Audience   Yogurt  Buyers   Frozen  Snack  Buyers   Wireless  Data  Users   Inspired by WSJ
  31. 31. Digital is Increasing Investment in Original Content Everyone  is  gePng  in  on  the  game   ?  
  32. 32. OTT/CTV Delivery Screens Content Partnerships “Netflix + Disney” Convergent TV Through OTT Distribution
  33. 33. OTT Options Are Growing $50-­‐$70   $8   $9   $20   $99/year   $15   $6   Average  Basic  Cable  Packages   ~$120   Source: NPD Group $15   Stream
  34. 34. -­‐60%   -­‐50%   -­‐40%   -­‐30%   -­‐20%   -­‐10%   0%   10%   20%   30%   TV’s Year of Doom Note:  Market  Data  as  of  1/27/16   (2%)   12%   (23%)   (24%)   (14%)   (45%)   (28%)  
  35. 35. Perception vs. Reality in Addressable TV Linear  TV   Programma5c  TV   Percep5on   Reality   Linear  TV   Addressable     Linear  TV   Video  On     Demand   (VOD)   Over  The  Top   (OTT)   Digital     Video   Programma5c  TV  
  36. 36. Total  US  TV  &  Video  Market:  100%     Digital  Video:  10%   RTB:  1%   Ø  The  winners  will  provide   tools  that  help  the  TV  AND   Digital  stakeholders   Focus on the 100% Opportunity Ø  RTB  is  a`racDng  a  small   fracDon  of  the  Video  Market  
  37. 37. Marketer Agency MVPD Network Ø  Premium  supply  /  content  on  digital   Ø  Consistent  raDngs  across  plaaorms   Ø  Accurate  ROI  analysis   Ø  Strategic  planning   Ø  One  plaaorm  for  campaigns  on  TV  and  digital   Ø  ProgrammaDc  workflow  and  RTB  capabiliDes   Ø  Cross  device  matching   Ø  Audience  extension   Ø  ProgrammaDc  capabiliDes  for  TV  supply   Ø  Yield  management  for  TV  and  Digital  content   Ø  A`ract  TV  quality  adverDsing  spend  for  digital  content   What TV Stakeholders Want
  38. 38. Programmatic Platforms Targeting Technology Attribution / Analytics Low-Cost Production Integrated Workflow Premium Content Brand Relationships Convergence of Two Worlds
  39. 39. 33 Video Deals in the Last 2 Years
  40. 40. 33 Video Deals in the Last 2 Years ~$700 Million
  41. 41. Convergent TV via M&A CONTENT   DISTRIBUTION   MONETIZATION   Media
  42. 42. Major Strategics Now Focused on Convergent TV
  43. 43. A Reflection of a Growing Buyer Pool MARKETING  TECH   CRM  SOFTWARE   INTERNET  ORIGINALS   TELCO   MARKETING   MEDIA   DATA   CONSUMER  INTERNET   TECH  SERVICES   COMMERCE   Right Time Decisioning of Consumer Data     (Ad Tech and MarTech)
  44. 44. Potential TV Game Changers Regulation Technology Content
  45. 45. LUMA’s Commitment to LA Over 170 Exits in past 2 years
  46. 46. LUMA’s Commitment to LA Over 170 Exits in past 2 years December 2011 December 2015 has been acquired by The undersigned acted as co-financial advisor to MarketShare Partners. December 2011 December 2015 has been acquired by The undersigned acted as co-financial advisor to MarketShare Partners. December 2011 July 2014 The undersigned acted as exclusive financial advisor to Adconion Media Group Limited has been acquired by a subsidiary of December 2011 December 2015 The undersigned acted as co-financial advisor to MarketShare Partners. December 2011 April 2014 LUMA Securi=es, a wholly-owned broker-dealer of the undersigned, acted as underwri=ng co-manager to The Rubicon Project, Inc. Ini4al Public Offering $116,799,660 December 2011 September 2015 has been acquired by Principals currently at the undersigned acted as exclusive financial advisor to Looksery, Inc.
  47. 47. New York | San Francisco | Palo Alto Access. Insights. Execution. LUMApartners Thank you! @tkawaja
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LUMA Partners presents “The Future of TV,” as presented at the Upfront Summit conference on February 4, 2016. This presentation reviews some of the key topics discussed at the conference: the rise of digital video, the traditional TV model, and convergent video.

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