Net Insight Ab Class B · OMXSTO:NETI_B
Net Insight Ab Class B — Investor Day (November 2016)
77 slides from Net Insight Ab Class B's investor day presentation, Nov 22, 2016
Slide 1: Welcome to Net Insight's Capital Market Day
Welcome to Net Insight’s Capital market Day November 22 2016 1| Capital Market Day Nov 22 2016 | Net Insight
Slide 2: Agenda
Agenda 9.10 This is Net Insight Fredrik Tumegård, CEO 9.45 Net Insight Technology and Offering Martin Karlsson, CTO and VP Product Portfolio 10.15 Business and Financial Position Thomas Bergström, CFO 10.35 BREAK 10.50 Live OTT Per Lindgren SVP Live OTT 11.20 Tata Communications Brian Morris VP and
Slide 3: Net Insight: Shaping the future of media
Net Insight Shaping the future of media Fredrik Tumegård 3| Capital Market Day Nov 22 2016 | Net Insight
Slide 4: Net Insight covers the TV production chain from camera to content owner to consumer
Net Insight covers the TV production chain from camera to content owner to consumer Event Studio Home 4| Capital Market Day Nov 22 2016 | Net Insight
Slide 5: Net Insight in figures
Net Insight in figures 481 SEK Million 40% September YTD Growth 207 SEK Million Total turnover R4Q Q3’16 Liquid funds Q3 2016 500 customers 60 across the globe countries 44% 75Nps +250 Brand Awareness in 2016 customers likely to recommend Employees & Consultants Net Insight +30 Patents 30% 5| Capita
Slide 6: Industry benchmark H1 2016
Industry benchmark H1 2016 6| Capital Market Day Nov 22 2016 | Net Insight Source: IBC Show 2016 – Observation and Analysis Media Technology Industry by Devoncroft
Slide 7: Addressable Market
Addressable Market Broadcast and 470 MUSD Media Networks Addressable Market 2016 3-4% Growth rate Digital Terrestrial 70 MUSD Project driven will Networks Addressable Market 2016 decline after 2017 Live OTT 500 MUSD Addressable Market in a few years 24% Growth rate Based on 2015 IABM Report Fiber Tr
Slide 8: Long-term growth and profitability
Long-term growth and profitability • Net Insight is growing with 52% during Q3 • Delivering an operating margin of 15% in Q3 • Strong profitability from our core business financing investment in the new segment of Live OTT 8| Capital Market Day Nov 22 2016 | Net Insight
Slide 9: Customer and business perspective
Customer and business perspective 9| Capital Market Day Nov 22 2016 | Net Insight
Slide 10: Film describing Live OTT and the future media experience
Film describing Live OTT and the future media experience https://youtu.be/Qh12BPfVLjQ 10 | Capital Market Day Nov 22 2016 | Net Insight
Slide 11: Our value is to increase productivity in the TV production chain and generate new revenues
Our value is to increase productivity in the TV production chain and generate new revenues TV consumer proposition Sye generates new revenues TV company Service provider proposition proposition ScheduALL & Nimbra and Nimbra increase ScheduALL efficiencies by automates network handling personnel prov
Slide 12: Transforming the company is a condition for future growth
Transforming the company is a condition for future growth Customer and market oriented Product oriented • Living the Net Insight brand • Value-based selling & Solutions • Communication based on solving customer problems & industry trends • Selling focused on products and networks - Box- • Differenti
Slide 13: More than 500 customers around the globe
More than 500 customer around the global 77% willing to recommend K T 13 | Capital Market Day Nov 22 2016 | Net Insight
Slide 14: Revenues
Revenues ~85% Revenue from repeat customers ~30% Recurring revenue from Services & Support ~20% Revenue from Software Licenses 14 | Capital Market Day Nov 22 2016 | Net Insight
Slide 15: The media and broadcast industry is transforming
The media and broadcast industry is transforming 15 | Capital Market Day Nov 22 2016 | Net Insight
Slide 16: The industry is undergoing significant transformation
The industry is undergoing significant transformation Consumer Changing habits of TV viewers TV Production More efficient workflows Networks Transformation of media networks 16 | Capital Market Day Nov 22 2016 | Net Insight
Slide 17: Projects Index 2016
Projects Index 2016 Measures end-user implementation and plans to spend money over the next 12 months Install or enhance workflow / asset management system 29 Network Upgrade cameras 26 Nimbra Cloud services / cloud technology 25 Upgrade infrastructure for HD / 3Gbps operations 24 Upgrade transmissi
Slide 18: Primary product choice factors 2016
Primary product choice factors 2016 Source: Devoncroft report 2016 - Video Transport (N=792) Technical Performance 40% Saving Money / Being more Efficient 28% Purchase Price 13% Raising Revenue 11% After sales service and support 9% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 18 | Capital Market Day Nov 2
Slide 19: A diversified competitive landscape
A diversified competitive landscape Media Resource Management Live OTT • Xytech • Providers to legacy CDNs • Dataminer • Edgeware • Vimsoft • Ericsson MDN • Farmerswife • Anevia • Inhouse Bespoke • Concurrent • Arris • Live OTT initiatives from today’s CDNs • Akamai Media Network • IBM • Broadpeak N
Slide 20: Higher awareness for Net Insight
Higher awareness for Net Insight Video transport 2011 2012 2013 2014 2015 2016 Global 22% 28% 29% 32% 39% 44% APAC 25% 28% 30% 34% 42% 47% EMEA 27% 35% 35% 40% 43% 54% Americas 15% 20% 21% 22% 30% 29% Source Devoncroft Big Broadcast Survey 2011-2016 20 | Capital Market Day Nov 22 2016 | Net Insight
Slide 21: Shaping the future of media
Shaping the future of media 21 | Capital Market Day Nov 22 2016 | Net Insight
Slide 22: Clear strategy for growth
Clear strategy for growth Market Innovator Repositioning of the company – glass to glass New brand – visionary, true partner and experts Customer and market orientation New price models – shift towards recurring revenues Broadened our portfolio with new solutions, resource Grow core business managem
Slide 23: Technology & Offering
Technology & Offering Martin Karlsson, CTO and VP Product Portfolio 23 | Capital Market Day Nov 22 2016 | Net Insight
Slide 24: The Broadcast World is Changing
The Broadcast World is Changing Changing habits of TV viewers Consumer • There has been an huge uptake in Video OTT services the last couple of years • OTT as an efficient distribution of TV is changing the TV landscape • OTT disrupting traditional value chains and overcoming traditional pay-TV plat
Slide 25: Net Insight covers the TV production chain from camera to content owner to consumer
Net Insight covers the TV production chain from camera to content owner to consumer Event Studio Home A product portfolio spanning glass-to-glass 25 | Capital Market Day Nov 22 2016 | Net Insight
Slide 26: Net Insight occupies a solid position in the market with clear competitive advantages
Net Insight occupies a solid position in the market with some clear competitive advantages Unique Selling Propositions Contribution Production Distribution On-demand bandwidth Personnel, resources, workflows Synchronization and service isolation Time distribution Net Insight simplifies network compl
Slide 27: Technology Strategy
Technology Strategy Key trends Capture the eyeballs Do more with less • Build platforms and ecosystems to move up the value chain Net Insight • Towards virtualization and cloud based SaaS offerings Technology & • Drive interoperability and standards compliance Strategic Pillars • Leverage COTS Hardw
Slide 28: From Hardware to Software and recurring revenue streams
From Hardware to Software and recurring revenue streams Nimbra MSR Sye ScheduALL Nimbra VA Features 28 | Capital Market Day Nov 22 2016 | Net Insight
Slide 29: SYE – A software-only cloud solution
SYE – A software-only cloud solution Sye SDK Sye SDK Digital Rights Partner Ecosystem Management Ad insertion 29 | Capital Market Day Nov 22 2016 | Net Insight
Slide 30: ScheduALL Connector Community
ScheduALL Connector Community Explosive growth in #transactions 100000 Allows companies using ScheduALL to publish and sell resources to each other 10000 1000 A service provider selling satellite capacity to a broadcaster 100 Service Provider Broadcaster Broadcaster Service Broadcaster Provider 30 |
Slide 31: Next generation media networks
Next generation media networks Software defined and agile, with assured quality and performance •DEPLOY SERVICES FAST AUTOMATE EVERYTHING • Provision and develop Customer, application and new services quickly workflow provisioning •MIX APPLICATIONS RETAIN BROADCAST QUALITY • Live, file and IT Qualit
Slide 32: It's a Software Defined Network
It’s a Software Defined Network Remote Live Post File-based Production Production Production Workflows Workflows Applications Control & ScheduALL Orchestration Nimbra SDN Controller Infrastructure Nimbra on IP Nimbra on IP Nimbra on IP Nimbra on IP 32 | Capital Market Day Nov 22 2016 | Net Insight
Slide 33: Towards a Global Media Network
Towards a Global Media Network Operator A Source Operator C Operator B Destination One service 33 | Capital Market Day Nov 22 2016 | Net Insight …and of course end-to-end customer provisioned
Slide 34: Business and Financial position
Business and Financial position Thomas Bergström CFO 34 | Capital Market Day Nov 22 2016 | Net Insight
Slide 35: Business models
Business models Implementation of live ott services Expansion Expansion of of new usage viewers per viewer Sye Expansion of Expansion usage of new per viewer viewers • HW, SW and services • Software and services • Software and some services • Initial HW & License pricing • Licence fees based on user
Slide 36: Regional development
Regional development Net Sales by Region - Rest of the World 140 600 - Diverse market conditions – high growth - Middle East and Africa growth engine 120 500 - Indirect business model MSEK rolling four quarters 100 400 - Americas MSEK by quarter 80 300 - North vs South 60 - US worlds largest media m
Slide 37: Net Sales by Product Group
Net Sales by Product Group 140 70% 120 60% - HW pricing shifted in favour 100 50% of SW - Some price pressure on HW 80 40% - Support and Maintenance MSEK 60 30% revenues important – recurring nature 40 20% 20 10% 0 0% Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Hardware Software Customer Service
Slide 38: Gross margins
Gross margins • Strong gross margins maintained • COGS consist mainly of manu- facturing cost and services staff • R&D amortization to sales has decreased to around 12% of sales An incremental change in sales volume of 10 MSEK affects gross earnings by ~7,5 MSEK 38 | Capital Market Day Nov 22 2016 |
Slide 39: Building for growth
Building for growth EX PEN DI TU R ES ( MSEK) EX PEN DI TU R ES TO SA L ES ( %) 142 34% 31% 97 26% 30% 96 82 22% 86 134 122 37% 37% 33% 28% 105 105 108 28% 41 56 10% 11% 12% 27 23 30 8% 8% 2012 2013 2014 2015 R4 Q SEP '1 6 2012 2013 2014 2015 R4 Q SEP '1 6 G&A Expenses Selling Expenses R&D expenditu
Slide 40: Financial focus areas
Financial focus areas - 40% growth YTD, 20% organic growth - Growth driven by Core business - Core business financing investment in the new segment of Live OTT 40 | Capital Market Day Nov 22 2016 | Net Insight
Slide 41: Strong cash position to support growth
Strong cash position to support growth 350 90 ScheduALL 88 300 acquisition 86 • Positive cash flow despite investments 250 84 in Live OTT 200 82 Percent MSEK 150 80 • Strong cash position for flexibility 78 100 76 50 74 • Strong balance sheet builds long-term 0 72 trust 2012 2013 2014 2015 9 mths 20
Slide 42: Live OTT
Live OTT Per Lindgren SVP Live OTT 42 | Capital Market Day Nov 22 2016 | Net Insight
Slide 43: Establish a leading position in Live OTT
Establish a leading position in Live OTT Enter the OTT market in November 2015 Launch the solution Sye in April 2016 Commerical testing is ongoing Announcement of TATA to provide global Sye services Announcement of SIS for B2B video distribution 43 | Capital Market Day Nov 22 2016 | Net Insight
Slide 44: Which services are out in the market?
Which services are out in the market? Live OTT BUT already exists • Latency problems live news and • No syncronization live sports as • Poor quality play services • Social is broken • No interactivity 44 | Capital Market Day Nov 22 2016 | Net Insight
Slide 45: Synchronized Live OTT
Synchronized Live OTT The solution to deliver true live streaming video over the Internet with low delay and frame-accurate synchronization between devices. 45 | Capital Market Day Nov 22 2016 | Net Insight
Slide 46: True Live OTT monetization is based on interactivity
True Live OTT monetization is based on interactivity Enables social interaction Enables supreme QoE Preventing TV Cord-Cutting Enables true live betting Enables breaking news Re-inventing the 2nd screen 46 | Capital Market Day Nov 22 2016 | Net Insight advertisement model
Slide 47: Live OTT viewing is growing
Share of Live OTT viewing is growing OTT content viewed being Live content (%) CAGR +40% 18% 13% 9% 2013 2014 2015 47 | Capital Market Day Nov 22 2016 | Net Insight Source: Mediavision 2016 Swedish viewers
Slide 48: Live OTT market segments
Live OTT market segments OTT – Live OTT – Linear Recorded OTT – Live Enhanced Screen 48 | Capital Market Day Nov 22 2016 | Net Insight
Slide 49: Content value chain for Live OTT
Content value chain for Live OTT VoD Catch- Up Linear TV Live TV Events Share of volume Content Owners/ Right’s Holders Content Aggregators Programs Content Aggregators Channels CDN – Content Delivery Network Consumers 49 | Capital Market Day Nov 22 2016 | Net Insight
Slide 50: Enabling new business model for content owners
Enabling new business model for content owners With Enhanced Yesterday New Today New Trend Screen Content Content Content Content Owner Owner Owner Owner Content $ Content $ Content Broadcasters Broadcasters Broadcasters Broadcasters $ $ $ Channels $ Operators Operators Operators Operators TV Offeri
Slide 51: Consumers are willing to pay for Live Sports
Consumers are willing to pay for Live Sports Pay x times for Paying 4.5 times as much for sports TRUE LIVE SPORTS XX CHANNEL Sport, film, serier VS VS ???kr/mån 51 | Capital Market Day Nov 22 2016 | Net Insight
Slide 52: Revenue sources for True Live OTT
Revenue sources for True Live OTT Uptake Interactivity & TRADITIONAL TRUE Personalization CDN LIVE per Client Total Revenue CDN base for Live OTT CDN CDN Streaming Live Streaming Gigabyte/hour Gigabyte/hour 52 | Capital Market Day Nov 22 2016 | Net Insight
Slide 53: User based price model
User based price model • New revenue streams and business models • Integration into existing TV-solution • Customer trials towards viewers are done in phases Commercial Consumer Revenue Initial Pilot testing launch Stream sales process 1. 2. 3. 4. 5. Customer relationship building Revenue 53 | Capit
Slide 54: The Sye solution can be implemented and provided in different ways
The Sye solution can be implemented and provided in different ways CDN CLOUD 54 |Capital Market Day Nov 22 2016 | Net Insight
Slide 55: A greater TV experience
A greater TV experience the benefits for the TV user SYNCHRONIZED TV Independent frame sync across devices enabling shareable and social interaction LOW DELAY Constant, but configurable low delay enabling harmonization with broadcast references, which provides an elevated live viewing experience, wi
Slide 56: Industry Acknowledgement
Industry Acknowledgement 56 | Capital Market Day Nov 22 2016 | Net Insight
Slide 57: Tata Communications' Media Ecosystem
TATA COMMUNICATIONS’ MEDIA ECOSYSTEM BRIAN MORRIS VICE PRESIDENT & GENERAL MANAGER GLOBAL MEDIA & ENTERTAINMENT SERVICES
Slide 58: Tata Communications is enabling seamless global transport of content
Tata communications is enabling seamless global transport and management of content as a cloud-based managed service
Slide 59: Tata Communications at a glance
TATA COMMUNICATIONS AT A GLANCE
Slide 60: Macro trends impacting media and entertainment industry
MACRO TRENDS IMPACTING MEDIA AND ENTERTAINMENT INDUSTRY 5m+ 82% 70% years to watch the amount of video of all IP traffic will be of global internet traffic by that will cross global IP networks video traffic 2017 will be contributed by each month in 2020. by 2020. OTT video / audio. 58% 2x Growth ex
Slide 61: The media value chain is moving towards virtualised infrastructure
THE MEDIA VALUE CHAIN IS MOVING TOWARDS VIRTUALISED INFRASTRACTURE Storage Terrestrial video networks Independent Mobile platforms software vendors Post production suites BROADCASTER/ OTT and IPTV Data centre & CONTENT OWNER CDN networks hosting services Content libraries Security Cloud services Sat
Slide 62: These changes are driven by changing consumer behaviour
THESE CHANGES ARE DRIVEN BY CHANGING CONSUMER BEHAVIOUR Advertising Electronic home video Internet advertising Films revenue to take over box office revenue in 2017 Expected to grow at 12.1% CAGR $12b $11.8b During 2014-19, overtaking TV advertising In home Box office by 2017 Digital Music Streaming
Slide 63: We are enabling customers across segments leverage these trends
WE ARE ENABLING CUSTOMERS ACROSS SEGMENTS LEVERAGE THESE TRENDS CONTENT OWNERS BROADCASTERS SPORTS FEDERATIONS & TEAMS NEWS NETWORKS AGGREGATORS SERVICE PROVIDERS DTH / CABLE COMPANIES
Slide 64: We are meeting our customers' key needs
WE ARE MEETING OUR CUSTOMERS’ KEY NEEDS DRIVE TRANSFORM TURN CAPEX REVENUE OPERATIONAL EFFICIENCY INTO OPEX • Launch new services at the • Leverage the world’s most • Avoid the time, risk and capital of touch of a button extensive video-networked build-your-own infrastructure • Translate broadcast h
Slide 65: Our media ecosystem is an end to end integrated solution
OUR MEDIA ECOSYSTEM IS AN END TO END INTEGRATED SOLUTION SATELLITES WORKFLOW CDN Ultra Live OTT VIDEO CONNECT OTT AUTOMATION A fibre-based global Up-link and down- & PLAYOUT Content Delivery A Low Latency Our OTT platform media transport link satellite teleport Network: synchronous enables our clien
Slide 66: Our media ecosystem delivers global collaborative workflows
OUR MEDIA ECOSYSTEM DELIVERS GLOBAL COLLABORATIVE WORKFLOWS BASED ON A SUITE OF INTEGRATED FILE-BASED SERVICES Uniting creative groups, production house, distributors, broadcasters, and retailers A video network like no other, 300 TRANSCODING CONTENT media hotspots in 125 countries, SERVICES INGEST
Slide 67: Powered by our global infrastructure
POWERED BY OUR GLOBAL INFASTRUCTURE Video Connect network Secondary Main teleports Main Video MPLS Existing Planned Data centre and main global links global links connected switching points network CDN nodes CDN nodes network Data Videocentre MPLS teleports Secondary Main switching Existing CDNnetwo
Slide 68: We have been helping transform the experience of Formula 1
WE HAVE BEEN HELPING TRANSFORM THE EXPERIENCE OF FORMULA 1™ FORMULA ONE MANAGEMENT TEAMS • 10X faster connectivity to all 21 • Real time car data circuits across the globe 87 races communications across to-date the globe in 0.244 secs • Enabling remote operations in • Remote IT operations UK BROADCA
Slide 69: We deliver F1 races to Sky viewers
“The integration of our operations in Europe is focused on accelerating innovation and serving our viewers better – and Tata Communications’ global fibre network will help us do just that.” Keith Lane WE DELIVER F1® RACES TO SKY Director of Operations at Sky VIEWERS IN THE UK, IRELAND, GERMANY, AUST
Slide 70: We have delivered rugby union matches to 100 countries
“There are 10,000 kilometres and several time zones between the match locations, so we need a partner with the reach and capability in both Europe and Asia to distribute these matches internationally. Working with Tata Communications will enable us to deliver a brilliant viewing experience for fans.
Slide 71: We see a strong demand for Live OTT services
WE SEE A STRONG DEMAND FOR LIVE OTT SERVICES THE CURRENT DRAWBACKS OF LIVE OTT: • 30s to 5min delay between first and second screen • Different OTT screens can be seconds or minutes apart. THE SOLUTION WITH LIVE OTT: • Different OTT screens can be in sync around the world, just like a true broadcast
Slide 72: Our partnership delivers a strong customer proposition
OUR PARTNERSHIP DELIVERS A STRONG CUSTOMER PROPOSITION…
Slide 73: Delivering a feature packed service offering
DELIVERING A FEATURE PACKED SERVICE OFFERING 1 Predictable, configurable, fixed latency providing true live broadcast to our consumers 2 Synchronised screens enabling social interaction and interactivity – Monetisation through subscription/advertising/pay per view models 3 Higher media quality. Fast
Slide 74: Thank you
THANK YOU tatacommunications.com © 2016 Tata Communications. All Rights Reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries.
Slide 75: Reasons to invest in Net Insight
Reasons to invest in Net Insight A clear strategy for growth Market Innovative Global Reach Transition Technology • Expanding video traffic • Improving QoS over IP networks • 500 customers • Expanding in live streaming • End-to-end orchestration • 60 countries • Centralized production demands • Redu
Slide 76: Demonstration: Customer Provisioned Networks, Live OTT
Demonstration Customer Provisioned Networks Live OTT 76 | Capital Market Day Nov 22 2016 | Net Insight
Slide 77: netinsight
netinsight