Over the Top: New Business Models with New Interna8onal Telecom Rules Columbia Business School Christopher Libertelli Head | Global Public Policy NeElix Inc.
Roadmap First:
NeElix & the video watching revolu8on
Second:
Broadband expansion – the gatekeepers & Internet openness
Third:
An Interna8onal Policy Environment for Long-‐ Tail New Entrants
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Netflix and the Video Watching Revolution
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2007
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2012
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Content
Unparalleled depth and breadth of content library
Feature Films
Television
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Device Ubiquity
Over 900 Devices Stream NeElix
Blu-ray Players
Game Consoles
HDTVs
Phones and Tablets
Other Players Home Theater Systems
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First Era of Television: Broadcast Networks
Few choices: ABC, CBS, NBC
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Second Era of Television: Cable/Satellite Networks
~300 Choices: ESPN, HBO, Discovery, TNT, AMC, etc.
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Third Era of Television: Internet Networks
Millions of Choices Apps Keep Improving All Screens
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The Changing Landscape 35M 30M 25M 20M 15M 10M 5M
HBO Comcast
DIRECTTV Dish Network
Starz
Time Warner Netflix
0M
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Content Windowing A Feature of OTT Video Business
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Movie Windows- Blurring 30 Days DVD Street Date
THEATERS 3 months
HOSP.
License period: Perpetuity
DVD Same as DVD
VOD
Premium PPV
15 months
en Brok
PAY TV 1
60 months
AD SUPPORTED TV
12 months
PAY TV 2
TV Has Windows too… Season 1 airs
Season 2 airs
Season 1 DVD available
• Hulu: rolling 5 eps • Amazon & Apple: day after ep for sale
Season 3 airs
Season 4 airs
Season 2 DVD available
Season 3 DVD available
Sells into syndication after ~4 seasons (80-100 episodes) are produced or aired
Confidential - Do Not Disclose
Season n airs
Season 4 DVD available
Airing in syndication ~2+ year after initial airing
‘Mad Men’ Premiere Draws Record Viewers on Netflix Boost March 26, 2012
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Netflix Originals
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Broadband Expansion: The Gatekeepers & Internet Openness
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Three Types of Threats to Internet Openness 1. Wholesale: ISPs discriminate in interconnection policies
2. Retail: ISPs discriminate over last-mine consumer connections
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Subtle: moving consumers from a psychology of abundant bandwidth to constrained connections? 18
An Example of Retail Discrimination
An International Policy Environment for Long-Tail New Entrants Key principles:
Policymakers should put their thumb on the scales in favor of increased consumer choice
Multi-modal competition is the goal
Avoid the reflexive application of legacy rules to Internet applications
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