Digital Media Strategies

We cover all of the major media sectors, including advertising, TV and video, music, games and social media.

Orange looks to Dailymotion for “Cloud Video” solution
February 2, 2011 17:09 Martin Olausson

Last week Orange confirmed that it has entered into exclusive negotiation with Dailymotion – the French UGC Video portal and YouTube competitor – with a view to acquiring a 49% stake in its capital for 59 million Euros. Beginning in 2013, the project allows Orange a progressive capital increase to 100% and also allows for the integration of new business partners. The signature of the final agreement should be reached in the coming months that will enable both parties to optimize their video services and enrich their respective offers.

Commenting on the deal, CEO of France Telecom-Orange Stéphane Richard said that “Our role is to support our customers in this digital revolution - we would like to bring them into the 'Cloud Video’ world where Dailymotion is a major player.” 

Thus we thought it might be interesting to take a closer look at Dailymotion users from our recent Digital Media survey and here are some of the results: 

 

As the graph above shows, Dailymotion primarily attracts French Internet users but some traction exists in other major region as well. The deal with orange will likely help Daiylymotion build international presence by leveraging Orange’s large international footprint.

When comparing Dailymotion users to YouTube users, it becomes clear that Dailymotion I more skewed towards younger age groups. A seen in the graph below, the majority (62%) of Dailymotion users are under 35 years old while the majority (52%) of YouTube users are actually 35 years or older. 

Thus, Dailymotion may be able to help Orange attract younger age groups by its brand affiliation. Perhaps more interesting though is that Stéphane Richard’s comment about “Cloud Video” and the strategic implication for Orange. With the acquisition of Dailymotion, Orange will join Telefonica as two of the few major telecom operators in the world that operates standalone over-the-top video portals (Telefonica owns and operates Terra TV in Latin America and Europe). As OTT video becomes an increasing part of how consumers access video content, more moves into cloud video by major telecom operators is to be expected.

Martin

 

Share |

Login to add comments
Sky pulls the plug on Sky Songs
December 13, 2010 18:12 Martin Olausson
We hate to say I told you so but as we wrote when Sky Songs was launched little over a year ago, this lacklustre venture into online music was unlikely to succeed from the start.   Originally Sky Songs offered access to four million tracks for download and unlimited streaming in two versions, £6.49 per month (1 £6.49 album or 10 songs per month + unlimited streaming) or £7.99 per month (1 £7.99 album or 15 songs per month + unlimited streaming). In an attempt to boost subscriber uptake, Sky later slashed the price to £5 per month but still failed to gather much interest from consumers. In a statement, Sky Songs said that "regrettably we've not been able to reach a large enough customer base in order for the service to continue". As we suggested in our original assessment of Sky Songs, this uncharacteristically lackluster service from Sky added little of value to consumers and was doomed to fail. Martin  Client Reading: Digital Media Index: Q3 2010
, , , ,
Share |

Login to add comments
sns-pic.jpg
October 18, 2010 19:10 Martin Olausson
Share |

Login to add comments
Social Networks Set to Conquer Asia
October 18, 2010 19:10 Martin Olausson
Social networks, such as Facebook, MySpace and Twitter, which used to be a nascent Internet phenomenon only a few years ago, have now become an indispensable element for many of us in our daily lives. Accessing social networks and sharing information has quickly become one of the most important online activities for many Internet users around the world. With more than 500 million users globally, Facebook, the largest social network in the world, would be the third largest country by population, on the heels of India and China. And as a communication tool, social networks are already starting to replace or complement many of our existing online communication applications, such as email, instant messaging and news.   However, our just published report, “Global Social Network Market Forecast”, finds that there are significant regional differences in the uptake of different social networks as well as in business models for how social networks are monetized. Less than 40% of Internet users in Asia were regular social network users at the end of 2009 compared to approximately 60% in North America and Western Europe. Advertising remains the most widely recognized revenue model for social networks, despite that the highly commoditized social network ad inventory means that most social networks can only charge advertisers a fraction of the price other online publishers charges. Social games feed social networks with a cut of their virtual items sales, and social networks such as e.g. LinkedIn have for many years been successful at charging for a premium tier service, where recruiters and job-seekers can utilize the social network’s premium functions to reach their goals of finding a candidate or a new job opportunity. There are also different revenue models for monetizing social networks emerging in different regions. Whereas revenues from sales of virtual items are estimated to only represent around 9% of total social network revenues in North America this year, it is expected to represent about 22% of revenues in the Asian market. And while advertising has been and will continue to be the main revenue source for most social networks, revenues from selling virtual items and social network credits will likely ramp up more rapidly in Asia than in the Western World. Social networks, such as Tencent and Cyworld in Asia, already generate significant revenues by selling avatar accessories and virtual gifts. Nevertheless, based on the successful experience of these companies, we expect to see other social networks, both in Asia and in the Western World, to adopt the virtual items business model for gaining incremental revenues going forward. As the Asian Internet market continues to grow at breakneck speed, we projects that this region will represent the greatest growth opportunity for social networks over the next five years. Whereas Facebook has conquered most places in the Western World, it has struggled to gain traction in many Asian markets. We believe Facebook now needs to increase its focus and commitment to the important and rapidly growing Asian market if it wants to remain the world’s leading social network five years from now.

GLOBAL SOCIAL NETWORK USERS BY REGION, 2010 VS. 2015

sns-pic.jpg

Client Reading: Global Social Network Forecast

, , , , , ,
Share |

Login to add comments
sns-pic.jpg
October 18, 2010 19:10 Martin Olausson
Share |

Login to add comments
sns-pic.jpg
October 18, 2010 18:10 Martin Olausson
Share |

Login to add comments
sns-pic.jpg
October 18, 2010 18:10 Martin Olausson
Share |

Login to add comments
Akamai gets close to Brightcove
August 11, 2010 14:08 Martin Olausson
On the heals of Limelight Network’s acquisition of Delve Network which I wrote about last week, Brightcove, one of the leading Online Video Platforms (OVP) in the world, today announced that it is ditching Limelight in favor of Akamai, the world’s largest Content Delivery Network (CDN). The agreement between the companies is presented as a wide-ranging alliance to drive quality, performance, and innovation in the online video industry and represents an end-to-end offer that makes high-quality video publishing and distribution easily available for businesses and organizations of all sizes. The two companies have a combined customer base that includes the leading media, e-commerce, and enterprise companies, as well as small businesses around the globe.  The integrated solution is designed to give customers a fast, seamless path to leverage the proven advantages of Akamai's HD Network and Brightcove's feature-rich online video platform to deliver high quality, adaptive bit rate video across Flash and iOS devices. Going forward, Brightcove will provide the Akamai HD Network as a bundled component of the Brightcove online video platform service. The deal is sure to be a blow to Limelight but hardly a surprising one after its acquisition of Delve Networks last week. Meanwhile, the deal represents a great win for Akamai as Brightcove brings with it a bunch of media customers as well as small and medium sized enterprise customers from around the world. As this deal brings together a leading OVP with a leading CDN it represents the highest profile deal to date in our opinion and give further impetus to the convergence trend between the CDN industry and the OVP industry that we have been predicting for some time. Martin Olausson Client reading: Online Video Platforms: Battling for Supremacy in a Fiercely Competitive Market
, , , , , , ,
Share |

Login to add comments
Limelight Networks Boosts Online Video Capability
August 5, 2010 17:08 Martin Olausson
Limelight Networks, one of the leading Content Distribution Networks (CDN) in the world, acquired Online Video Platform Delve Networks earlier this week for an estimated $10 million in a mixture of stock and cash. The acquisition illustrates a growing trend of convergence between the CDN and the OVP industry. As we wrote in our recent report on the Online Video Platform (OVP) industry, there’s a growing number of smaller OVPs which generate an increasing amount of revenues by serving Content Distribution Networks (CDN) directly. As many video content owners are reluctant to deal with multiple vendors and suppliers in the video delivery process, CDNs have started to offer their clients bundled video management and delivery solutions by using OVPs' software and paying license fee. It is noteworthy that OVPs and CDNs are both symbiotic and competitive in the value chain as they both provide some parts of the services needed for online video delivery. On one hand, a partnership between OVP and CDN is necessary to serve clients' video delivery needs; on the other hand, both sides are adding new features to their existing services and are trying to commoditize the other so that one can be more differentiated and maintain a premium price when negotiating deals with clients. We expect to see many more deals like the Limelight/Delve one in the coming year as both OVPs and CDNs try to enhance their ability to offer flexible and increasingly sophisticated solutions to a progressively divergent set of customer needs. Martin Olausson
, , , , ,
Share |

Login to add comments
Microsoft gets pricing right for Kinect for Xbox 360
July 20, 2010 17:07 Martin Olausson
Microsoft Xbox is at the moment very focused on reigniting stagnating sales of Xbox 360 consoles and elongating the 360’s lifespan. It is pursuing a two part strategy to accomplishing this; 1) launching an updated Xbox 360 “Slim” console, and 2) expanding the Xbox footprint by focusing on the “social gamer” segment with its controller free motion capture platform Kinect for Xbox 360.  Early sale trends from the US and UK markets suggest that the new Xbox 360 Slim has indeed accelerated console sales and now Xbox is turning its attention to the second part of the strategy – expanding its footprint into the social gamer segment. As we wrote in our recent report on Kinect, we believe that one of the key factors that will make or break Kinect will be if Xbox can get the pricing and bundle strategy correct for the price sensitive social gamer segment. We suggested at the time that Xbox need to have an entry level bundle (e.g. Xbox Arcade, Kinect, Dance Central game) starting at below $300 to succeed in breaking into this segment. Well it seems as Xbox may have listened to us as they today officially announced an estimated retail price (ERP) bundle of $299 (€299/£249) for an entry level Xbox console which will come with 4GB storage (compared to the current 256MB Arcade version), Kinect hardware and the “Kinect Adventures” game. The standalone Kinect hardware will get an ERP of $149 (€149/£129) as has been widely rumored for some time. While we think this latter price point is likely too high to entice most existing Xbox owners to upgrade to the Kinect platform, we believe it makes sense for Xbox to focus on the entry bundles for now, in order to accelerate console sales, and keep the standalone Kinect price high until a larger catalog of Kinect games has been launched. All in all, we think Xbox has skilfully negotiated the first major hurdle for Kinect – getting the price point for an attractive bundle correct. It now needs to focus on getting third party developers to embrace the Kinect platform and quickly build up an attractive catalogue of Kinect compatible games.  Martin Olausson
, , , ,
Share |

Login to add comments