Telefonaktiebolaget LM Ericsson Class A · OMXSTO:ERIC_A
Telefonaktiebolaget LM Ericsson Class A — Ericsson — Investor Presentation (November 2016)
65 slides from Telefonaktiebolaget LM Ericsson Class A's investor presentation, Nov 1, 2016
Slide 1: TV & Media 2016 Presentation
TV & MEDIA 2016 Presentation Ericsson ConsumerLab
Slide 2: Ericsson ConsumerLab annual research
Ericsson ConsumerLab annual research REPRESENTING 1.1 billion PEOPLE 100,000 RESPONDENTS 20 MORE THAN 40 COUNTRIES Jan 1st YEARS OF RESEARCH TV Media 2016 Ericsson ConsumerLab Presentation | © Ericsson AB 2016 | 2016-11-01 | Page 2 (65)
Slide 3: Global Key Findings: TV Media 2016
Global Key Findings: TV Media 2016 Total TV and video viewing time Consumers’ mobile viewing Scheduled linear TV viewing 1 increases through massive 2 habits thrive with the 3 suffers when millennials go growth in mobile viewing perception of unlimited all-in with streamed user video streaming gener
Slide 4: Methodology
MceETHODOLOGY fas} WW
Slide 5: Representing 1.1 Billion Consumers
Representing 1.1 Billion Consumers 11500 Qualitative and quantitative measured Quantitative android smartphone Base: 13 markets (Used for showing users trends) - Brazil, Canada, China, Germany, Italy, Mexico, Russia, South Korea, Spain, Sweden, Taiwan, UK and US All markets: 22+2 markets - Australia
Slide 6: Representing The view of 1,1 Billion Consumers
Representing The view of 1,1 Billion Consumers Australia Brazil Canada China Colombia Dominican Germany Greece India Italy Mexico Netherlands republic Population** 23 204 35 1367 47 11 81 11 1250 62 122 17 (Millions) Population 16-69** 16 145 25 1025 33 8 56 8 875 43 85 12 (Millions) Internet (panel
Slide 7: Abbreviations & Definitions
Abbreviations & Definitions Abbreviations › Daily UGC viewer › OTT never – People who watch UGC at least once per day – Consumer have never paid for any internet based (OTT) video services › A-VOD (Advertising Video On-Demand) – A video on-demand service that includes advertising. By watching ads th
Slide 8: Evolution of TV
ERICSSON EVOLUTION OF TV.
Slide 9: TV-Attitudes 2010-2016
TV-Attitudes 2010-2016 TV and media attitudes* (showing top 2 answers on 7-graded › Limited changes in many attitudes scale) [self-reported] towards media the last three years 80% I prefer on-demand over scheduled viewing 70% It's very important to relax in front of the TV › Significant growth when
Slide 10: Scheduled TV viewing loses share of time
scheduled TV viewing lose share of time Share of total viewing hours per week for Downloaded movies, › Even if scheduled linear TV lose each type of TV/video* [Self-Reported] TV series & other programs share of total viewing time, it is still Streamed on-demand movies, TV series & other programs rou
Slide 11: The development of weekly viewing habits
The development of Weekly viewing habits From 2013 to 2016 Percentage of consumers that on a weekly basis watch any type of TV/video content in different situations, comparison across years [self-reported] 93% 2013 2014 2015 2016 86% 67% 64% 54% 48% 39% 36% 36% 33% 29% 28% 25% 25% 24% 19% 15% 15% 13
Slide 12: Emerging Content Categories
EMERGING CONTENT CATEGORIES
Slide 13: From Gatekeepers to Flooded Gates
FROM GATEKEEPERS TO FLOODED GATES Pre-digital Digital fame fame Being broadcasted on Everyone’s broadcasted – TV was the measure the gates are wide open of success: many tried, few passed the and the challenge is gates standing out SIX creative parameters that determine the output Simple Advanced Pe
Slide 14: Drivers Differ Between UGC and Paid VOD
DRIVERS Differ Between UGC AND Paid VOD Paid VOD services offer professionally vs curated content and boast a select number of exclusive quality productions that Professional User command attention and time. Generated Paid VOD viewing is typically more planned and “special” UGC services on the other
Slide 15: Importance of live content
Importance of live content Average weekly hours actively watching TV and video content [Self-reported] TV-series according to a fixed TV schedule 3,9 › Long form content continues to keep its Movies according to a fixed TV schedule 3,6 stronghold on viewer eyeballs – almost 60 TV programs according
Slide 16: On demand is already 50% of millennials total viewing time
On demand is already 50% of millennials TOTAL viewing Time Average number of hours active viewing TV/video per week 2016 (for different kinds ~2.5 hours/week more spent by millennials watching streamed on-demand UGC ~4 more spent by 35-69 year old’s watching scheduled hours/week linear TV of content
Slide 17: YouTube grows in importance
YouTube Grows in importance Percentage of consumers watching YouTube with different Percentage of consumers watching YouTube at least daily by age, [self- frequency* [self-reported] reported] 65% 59% 2011 3% 25% 32% 26% 12% 49% 35% 2016 10% 30% 31% 21% 8% 19% 16% >3 hours/day At least daily At least
Slide 18: The appeal of e-sport
THE APPEAL OF E-SPORT Percentage of consumers watching e-Sport [self-reported] 4/10 Watch in the E-sport is particularly appealing to males at younger age, where 41% of 16-19 year olds watch e-sport 16-19 age group either in live or on-demand format! Male Female 41% 37% 32% 1/5 Young women For young
Slide 19: TV viewing increase & screens are shifting
TV viewing increase & screens are Shifting Share of total TV/video-time done on respective device screen on left axis, and average total nr of hours per week watching TV/video [self-reported] BASE: Population aged 16-69**** watching TV/Video at least weekly and having Broadband at home in Brazil’**,
Slide 20: Live streaming: The Good, The Bad and The Ugly
LIVE STREAMING The Good, The Bad and The Ugly 1 2 3 As close as New venues New celebs and old it gets In the years to come, UGVC’ers who master the UGVC’ers will explore the format and create relevant Broadcasting live means being format and give rise to new content will form a new genre in real-tim
Slide 21: Live streamers consume 3x more data
LIVE STREAMERS CONSUME 3X MORE DATA South Korea: Data used by a Live Streaming user/ month 22 3 25 GB 8 South Korea: Data used by a Non-Live 6 2 GB Streaming user/month 33 Monthly data US: consumption Data used by a Live 26 7 GB Streaming user/Month per month (in GB) of video users [On-device Measur
Slide 22: Mobile viewing & devices
MOBILE VIEWING & DEVI f CES WW
Slide 23: A split focus for 2nd screen viewers
A SPLIT FOCUS FOR 2ND SCREEN VIEWERS Percentage of consumers performing activities on a second screen as part of their viewing experience on a weekly basis, 2014 vs. 2016 [self-reported] Percentage of consumers that engage in TV Related activities* on a second screen as part of their viewing experie
Slide 24: Mobile viewing adds, not replaces
MOBILE VIEWING ADDS, NOT REPLACES CONTENT IS ALWAYS CLOSE Being able to view video content on mobile devices increases the total sum DRIVES of all viewing, rather INTEREST IN than just replaces NEW CONTENT viewing on other devices. Mobile viewing is not a zero THE OTHER sum game! DEVICES USED FOR WA
Slide 25: Mobile viewing is more than free content
Mobile viewing is More than Free content › Mobile screen viewing is still dominated by Average minutes per user, using paid and free video services on free or ad-funded video consumption the smartphone screen, and share of total viewing time, in the US [On-device Measurement] › Today roughly 2/3 of
Slide 26: Watch out for in-traffic viewing
WATCH OUT FOR IN-TRAFFIC VIEWING The diffusion of video viewing can be seen in all aspects of life Watching video while driving, to eliminate hours “With music there “Sometimes I get of highway tediousness is an interesting, yet are buttons in the sleepy while I’m dangerous situation steering wheel
Slide 27: Evolution of TV user groups
WW EVOLUTION OF TV USER GROUPS ae
Slide 28: Evolution of TV-User groups
Evolution of TV-User groups Percentage of population belonging to each user group respective year [Self-reported] 19% 17% 16% 17% 17% 16% 15% 18% 18% 19% 20% 22% 22% 19% 5% 7% 20% 9% 12% 16% 18% 22% 22% 19% 16% 16% 15% 14% 15% 15% 16% 17% 17% 19% 20% 20% 19% 17% 16% 15% 14% 14% 2010 2011 2012 2013 2
Slide 29: Screen choices and content viewing time differ between user groups
Screen choices and Content Viewing Time differs a lot between TV user groups Percentage of total weekly TV and video active viewing Average total viewing hours per week watching each type of time spent on each device/screen, [self-reported] TV and video, [self-reported] Tablet screen Smartphone scre
Slide 30: Evolving device usage across all user groups
Evolving device usage across all User groups, but some more than others Percentage of total weekly TV and video active viewing time spent on Percentage of total weekly TV and video active viewing time spent each device/Screen amongst TV Couch Traditionalists* [Self-reported] on each device/Screen am
Slide 31: Screen shifters and mobility centrics watch throughout the day
Screen shifters and Mobility centrics watch TV Video Throughout the day Percentage of consumers that on a weekly basis watch any type of TV/video content in different situations, across age groups [self-reported] Total -13 countries 96% 94% 89% 83% 79% 67% 69% 65% 53% 55% 54% 51% 49% 46% 46% 38% 42%
Slide 32: Content Discovery
ERICSSON CONTENT DISCOVERY
Slide 33: Scheduled linear TV is the #1 go-to service for users aged 45-69
Scheduled linear TV is the #1 Go-To service for users aged 45-69 Percentage of consumers that use each service and selected it as their first go-to service among their top 3 most used services [self-reported] 80% 72% 16-19 20-24 70% 25-34 35-44 45-59 60-69 63% 60% 50% 40% 30% 27% 21% 23% 19% 20% 16%
Slide 34: VOD users spend 45% more time searching for content
VOD users spend 45% more time searching for content The Searching for content is average US Average minutes per day spent searching for content before starting TV viewer will spend 19 percent of time to watch something compared to total average viewing time per service in US [Self-reported] spent on
Slide 35: Bingeing reduces the need for discovery
Bingeing reduces the need for discovery Percentage of consumers that watch two or Percentage of consumers, split on age, that watch two or more more episodes of the same show [Self-reported] episodes of the same show on a weekly basis [Self-reported]: 16-19 20-24 25-34 1% 1% 1% 4% 3% 4% 14% 1% 25% 1
Slide 36: Younger age groups attach importance to personalization
Younger age groups attach importance to personalization Percentage of consumers that think each feature is very important (top 2 answers on a 7 grade scale), [Self-reported]: Provide Parental control capabilities 20% 23% Provide Parental 34% control capabilities 32% 25% 22% Personalized TV service o
Slide 37: Service Experience
SERVICE EXPERIENCE
Slide 38: Net Promoter Score is higher for on-demand services
NET PROMOTER SCORE is higher for on-demand services Likelihood to recommend each TV/Video service to a friend, family member or colleague, amongst those who use it, in US [Self-reported] Scheduled linear TV Services NPS On-Demand Services NPS 14 41 Percentage of consumers who are satisfied with diff
Slide 39: Key drivers of satisfaction
KEY DRIVERS OF SATISFACTION needs to improve for scheduled TV Consumer evaluation of content providers [Self-reported] Scheduled linear TV services On-demand services Video Quality Maintain Initial set-up Mobility Reinforce User Experience Aspects that satisfy Average Satisfaction Video Quality High
Slide 40: Video quality is key when choosing a new paid service
Video Quality is key when choosing a new paid TV/video service Percentage of consumers that find the features important when choosing a new pay-service (top 2 alt. in a 7-point scale), [self-reported] Video Quality 72% The Price 71% Available Content 66% 72% Pricing Plans 65% User Experience 64% No
Slide 41: Millennials do appreciate live programming
millennials Do appreciate Live programming Winding-down In the action When I watch live scheduled linear I feel excited. I like watching live TV. TV it makes me feel relaxed before Its like you are there with the live bed action that is taking place Best content Inclusive – Live Television is fun an
Slide 42: Watching scheduled TV is satisfying for millennials too
WATCHING SCHEDULED TV IS SATISFYING for Millennials too No pressure Weekly entertainment staple Watching my regular TV programs is Makes me excited happy to be watching relaxing, stress free, and enjoyable. I something I like. A show that I follow on look forward to watching them a regular basis loo
Slide 43: Connectivity shaping the new media world
Connectivity shaping the new media world
Slide 44: Two different realities
TWO DIFFERENT REALITIES Reality 1 Solid perceived Homes with connectivity, affordable high speed internet data plans and an ample supply of services allow Downloading illegal for video content to High speed & content diffuse into every facet uncapped internet of everyday life. Sharing illegal conten
Slide 45: Un-limit my stream
UN-LIMIT MY STREAM Percentage of consumers interested in a mobile subscription plan Percentage of consumers interested in a mobile subscription plan including unlimited video streaming in standard definition, including unlimited video streaming in standard definition, [self-reported] who already use
Slide 46: Limitless streaming is particularly appealing to millennials and men
Limitless streaming is Particularly appealing to Millennials and Men Percentage of subscribers of a US based cellular operator that have signed up for a unlimited mobile streaming package (Self-reported) 6/10 are male 58% 13% 35% are millennials 52% Yes +1,0 Hours/week smartphone No viewing at home
Slide 47: Mobile data is almost half of consumption for limitless streamers
MOBILE Data is almost half of consumption for Limitless mobile streamers Mobile data consumption share of total smartphone data usage for video apps comparing those having a limitless video streaming plan with those who have other data plans* [On-device Measurements] OLDER Unlimited data plan Other
Slide 48: Show Me The Money
WW SHOW Me THe MONEY Yy
Slide 49: Three perspectives to content value
THREE PERSPECTIVES TO CONTENT VALUE Consumers Incumbent Disrupting Consumers Media Players Media Players Consumer spending on media Seeing an erosion of Seeing growth opportunities content is increasing, but content value due to binging by offering more content for viewing time is increasing even ha
Slide 50: 46% of media spending is paid scheduled TV
46 % of Media Spending is paid Scheduled TV 600 Average monthly household spending on TV/video 560 and associated services in the US [Self-reported] 520 480 440 400 360 USD 320 280 240 200 160 120 80 40 0 0 5 100 20 65 10 15 25 30 35 40 45 50 55 60 70 75 80 85 90 95 % of Households The average spend
Slide 51: US household spend per TV video service type
US Household spend Per TV Video service type Average monthly household spend on different TV video service types in USD, as well as average number of used TV video services within the household Average pay [Self-reported] per service in US: Average household spend on all TV-services Average nr of se
Slide 52: TV Couch Traditionalists spend most on scheduled linear pay TV
TV Couch TraditionalistS spend Most on Scheduled linear Pay TV Average monthly household spend on Scheduled linear pay TV in the US, per TV user group, in USD [Self-reported] $85 $75 $75 $75 2010/2012 2014/2016 $71 $62 $62 $54 $53 $57 $55 $40 $41 $38 Consumer spending on VOD services in the US has U
Slide 53: More people decrease their TV spending than increase it
More people decrease their TV spending than increase it Self-reported changes in household spending on paid Self-reported changes in household spending on internet based scheduled linear TV, Millennials V.s. 35+ [Self-reported] TV and video services, Millennials v.s. 35+ [Self-reported] 6% 35+ (aged
Slide 54: Price hikes push consumers closer to the edge
PRICE HIKES PUSH CONSUMERS CLOSER TO THE EDGE Reasons for increasing TV and media spending – paid scheduled linear TV vs. paid internet based video services [self-reported] › Price hikes are by far the main reason The provider increased the price of the service 44% consumers are spending more on pai
Slide 55: Cost remains a key driver for cord cutting
COST REMAINS A KEY DRIVER FOR CORD CUTTING Reasons for increasing TV and media spending – paid scheduled linear TV v.s. paid internet based video services [Self-reported]: › Cost is clearly the #1 reason for reducing or Costs, wanted or needed to save money 38% 43% eliminating the TV video service s
Slide 56: The impact of payment models
THE IMPACT OF PAYMENT MODELS 1 2 3 4 A-VOD S-VOD T-VOD TVE (Advertising Video On-Demand) (Subscription Video On-Demand) (Transactional Video On-Demand) (TV Everywhere) From a consumer perspective a Second most successful payment model, loved and Least successful payment model, so far unable to A VOD
Slide 57: Importance & willingness to pay for TV features
IMPORTANCE & Willingness to pay for TV Features Percentage of consumers that say each TV Media feature is Percentage of consumers that say each TV Media feature is important, by age (top 2 answers on 7-point scale), [self-reported] worth paying for, by age (top 2 answers on 7-point scale) [self-repo
Slide 58: Challenges with advertising
CHALLENGES WITH ADVERTISING Personalized ads, based on your viewing habits, age, gender and zip code 25% Percent of people interested in Personalized ads, based on you specifying which ads you don’t want to see again 21% different types of personalized advertising [self-reported] 1 in 4 want to spec
Slide 59: Millennials feel more comfortable with personalized ads
Millennials feel more comfortable with Personalized Ads Global average Percent of people feeling very comfortable vs. not comfortable with personalized advertising 72 million 27% [self-reported] Feel very Americans used ad-blockers comfortable in Q2 2016* Feel very comfortable Do not feel comfortabl
Slide 60: Native advertising is reshaping old theories
NATIVE ADVERTISING IS RESHAPING OLD THEORIES CH-CH-CH-CHANGES Impact on advertising I love my new make-up! Native Advertising Content Break for ads Content Ads are content Letting UGC creators endorse brands with their own voice and format Traditional Native marketing marketing TV Media 2016 Ericsso
Slide 61: Future of TV
ERICSSON FUTURE OF TV
Slide 62: The limitless mobile streamer
the limitless mobile streamer Interest in Attitudes* towards Features Want access to Digital Media preferred TV/video content on the screen Interested in viewing of choice when on the relevant and useful move advertisements Decide when OK with resorting to piracy if preferred TV and what to Interest
Slide 63: The future of scheduled linear TV
THE FUTURE OF scheduled Linear TV Scheduled TV is old but not obsolete, but it will have to embrace the The market for on-demand economy streaming video on just like its viewers demand services is increasingly becoming competitive, especially in developed markets Scheduled TV providers offering inte
Slide 64: In 2020...
IN 2020... ~50%of time on ~50% of time ~50% of consumers will be mobile screens on demand Screen Shifters & Mobility Centrics TV TV Media Media 2016 2016 Ericsson EricssonConsumerLab ConsumerLab Presentation Page64 Presentation | © Ericsson AB 2016 | 2016-11-01 | Page 64(65) (65) Source: Ericsson Co
Slide 65: TV Media 2016 Ericsson ConsumerLab Presentation | © Ericsson AB 2016 | 2016-11-01 |
TV Media 2016 Ericsson ConsumerLab Presentation | © Ericsson AB 2016 | 2016-11-01 | Page 65 (65)