Nissinen_CMD 2009

Re-inventing Television
Anu Nissinen
President and CEO, Sanoma Entertainment
Sanoma Capital Markets Day
12 October 2009
Agenda
Sanoma Entertainment today
Trends in the business environment
Sanoma Entertainment’s response
CMD 2009 / Anu Nissinen
12.10.2009
2
Sanoma Entertainment’s activities
Commercial Television and Radio
Pay TV
Online TV
Cable Television
Broadband Internet
Online TV
Online gaming
CMD 2009 / Anu Nissinen
12.10.2009
3
Sanoma Entertainment’s present businesses
Commercial TV and Radio
• A strong combination of TV, Radio and Online
FTA TV
PAY TV
RADIO
ONLINE
• Commercial viewing share in the
10–44 target group
33.6% (#2)
• Share of the Finnish TV advertising
market
33.5% (#2)
• Share of radio listening in the 9–44
target group
15.4% (#4)
• Share of the Finnish radio
advertising market
12.7% (#3)
• Ruutu.fi launched in 2009 and growing fast
All share 1H09
CMD 2009 / Anu Nissinen
12.10.2009
4
Sanoma Entertainment’s present businesses
Cable Communications
• A modern Content Delivery Network in the capital
region (Helsinki, Espoo, Vantaa and Kauniainen)
BROADBAND
PAY TV
• 324,000 connected households
(400,000 passed by)
• 60% of households in the region
• 25% of cable homes in Finland
ONLINE TV
• 67,000 Pay TV customers
• 108,000 Broadband subscribers
All share 1H09
CMD 2009 / Anu Nissinen
12.10.2009
5
Sanoma Entertainment’s present businesses
Online Gaming
• Market leader in Finland
• Pelikone #1 gaming site in Finland
• Älypää #1 trivia site in Finland
• Liigapörssi #1 fantasy league in Finland
• Over 40% revenue growth 2009
CMD 2009 / Anu Nissinen
12.10.2009
6
Sanoma Entertainment financials 1H09
Net sales
EBIT excluding non-recurring items
50
8
40
EUR million
41 40
41
41 41
EUR million
7
7
6
6
35
6
5
30
4
20
4
4
3
3
2
10
1
0
0
1Q
2Q
2008
3Q
2009
4Q
1Q
2Q
2008
3Q
4Q
2009
CMD 2009 / Anu Nissinen
12.10.2009
7
Agenda
Sanoma Entertainment today
Trends in the business environment
Sanoma Entertainment’s response
CMD 2009 / Anu Nissinen
12.10.2009
8
TV viewing has been growing…
Time spent watching TV (Finnish population 10+)
Min / day
200
161
160
141
150
150
168
168
172
173
167
169
169
177
166
174
172
150
120
80
40
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1-8
1-8
2008 2009
Source: Finnpanel
CMD 2009 / Anu Nissinen
12.10.2009
9
…and fragmenting…
Channel shares of viewing (Finnish population 10+)
100%
Others
90%
Nelonen
Media
80%
70%
60%
MTV
Media
50%
40%
30%
20%
Yle
10%
0%
'95
'96
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
1-6
'08
1-6
'09
Source: Finnpanel
CMD 2009 / Anu Nissinen
12.10.2009
10
…leading to Finns watching an increasing number of
TV channels per week
Number of TV channels watched per week
12
10.6
9.9
10
9.0
9.2
8.6
8.5
8.0 8.0
7.8
6.9
6.4
6.9
6.2
5.5
5.2
4.0
4
9.8
9.7
8
6
10.6
4.4
5.9
5.7
5.3
6.7
5.9
5.3
5.2
4.6
2
0
10+yrs
4-9yrs
10-14yrs
Sep 04
15-24yrs
Sep 06
Sep 08
25-44yrs
45-64yrs
65+yrs
Mar 09
Source: Finnpanel
CMD 2009 / Anu Nissinen
12.10.2009
11
Online video has become a mass market…
Number of unique video viewers in the US
Million viewers/
month
180
160
140
120
Aug
Aug2009
2009statistics:
statistics:
•• 161
Million
161 Millionunique
uniqueviewers
viewers
100
•• 82%
82%of
ofthe
thetotal
totalUS
USInternet
Internet
audience
viewed
online
audience viewed onlinevideo
video
•• 25.4
Billion
videos
viewed
25.4 Billion videos viewed
80
60
40
20
0
Jan
07
Mar
07
May
07
Jul
07
Sep
07
Nov
07
Jan
08
Mar
08
May
08
Jul
08
Sep
08
Nov
08
Jan
09
Mar
09
May
09
Jul
09
Source: ComScoore
CMD 2009 / Anu Nissinen
12.10.2009
12
…which increases viewing of living images even
further
Time spent viewing online video by average viewer in the US
Min / day
20
Min / day
18
350
16
300
14
200
300
19
319
Online
video
Total
250
150
12
100
50
10
0
TV
8
6
4
2
0
Jan
07
Mar
07
May
07
Jul
07
Sep
07
Nov
07
Jan
08
Mar
08
May
08
Jul
08
Sep
08
Nov
08
Jan
09
Mar
09
May
09
Jul
09
Source: ComScoore, Nielsen
CMD 2009 / Anu Nissinen
12.10.2009
13
Online TV builds on, rather than replaces broadcast
viewing
• Online TV is a different experience,
used for different things
• Two main drivers for online TV use
were
– Catch up (78%, more females,
mainly broadcaster destinations)
– Discovery (22%, more males,
YouTube leading)
• In study a study by Thinkbox,
online TV added even up to 3 hours
of viewing per week to linear
television
Source: Thinkbox
CMD 2009 / Anu Nissinen
12.10.2009
14
TV & online TV will increase its share of advertising
• New technology development that
enhances the TV experience
(HDTV, PVRs…)
• Access to mass audiences
• More targeted offers (thematic
channels) in TV and online
• Emergence of a dual consumption
mode TV/Internet
CMD 2009 / Anu Nissinen
12.10.2009
15
Developments in the picture technology increase
the overall attractiveness of TV
Already here:
High Definition TV
SD picture
Piloting in the near future:
3D TV
HD picture
CMD 2009 / Anu Nissinen
12.10.2009
16
Faster broadband speeds will enable convergence of
broadcast TV and online
Speeds of fixed broadband connections in Finland
% of connections
100%
Enables high
quality HD online
video
90%
80%
70%
60%
50%
Enables SD online
video
40%
30%
20%
10%
0%
4Q05
2Q06
4Q06
Less than 2 Mbps
2Q07
4Q07
2-9 Mbps
2Q08
10-99 Mbps
4Q08
2Q09
100 Mbps or more
Source: FiCoRa
CMD 2009 / Anu Nissinen
12.10.2009
17
Mobile broadband will enable the 3rd screen
Broadband connections by type in Finland
Million connections
2.5
2.244
2.097
1.923
2.0
1.760
1.5
1.174
1.310
1.429
1.520
1.0
0.5
0.0
4Q05
2Q06
4Q06
2Q07
Fixed
4Q07
Wlan
2Q08
4Q08
2Q09
Mobile
Source: FiCoRa
CMD 2009 / Anu Nissinen
12.10.2009
18
Over-The-Top distribution of video content and
converged services are already here
CMD 2009 / Anu Nissinen
12.10.2009
19
New ways to operate within the TV value chain are
forming…
Content
owner
Content
aggregator
Pay TV
operator
Network
operator
Consumer
devices
Broadband
OTT services
Internet TV,
consoles
Online TV
Online video services
New distr. channels
CMD 2009 / Anu Nissinen
12.10.2009
20
…as the market for living images evolves towards
anything, anywhere, anytime
Monetizing
fragmentation
Building the
future of TV
Online video
Pay TV,
FTA thematic
FTA main channels
FTA main channels
Horizon 1
"Watch
what's on"
Horizon 2
Time
Horizon 3
"Anything,
anytime,
anywhere"
CMD 2009 / Anu Nissinen
12.10.2009
21
Online gaming is growing even faster than online
video consumption…
Million visitors/
month
Size of online gaming
audience the US
% of all
online users
100
50%
90
45%
80
40%
70
35%
60
30%
50
25%
40
20%
30
15%
20
10%
10
5%
0
0%
May 07 Dec 07 May 08 Dec 08 May 09
Unique visitors
% of online audience
CMD 2009 / Anu Nissinen
12.10.2009
22
…and the business model is moving from traditional
retail to online
1. Online Digital
Distribution
2. Free Games With
Virtual Item Model
3. Game Cards at
Retail
CMD 2009 / Anu Nissinen
12.10.2009
23
Agenda
Sanoma Entertainment today
Trends in the business environment
Sanoma Entertainment’s response
CMD 2009 / Anu Nissinen
12.10.2009
24
On the online gaming front, we are constantly
developing our services to stay on the cutting edge
New Liigapörssi
01/09/2009
New Taukopelit
24/09/2009
Gamer.fi
25/09/2009
New Älypää
30/09/2009
CMD 2009 / Anu Nissinen
12.10.2009
9.10.2009
25
Nelonen Media has lived the fragmentation trend by
turning from one channel into a multimedia house
June
1997
Jan
2007
Feb
2007
Aug
2007
Feb
2009
Sep
2007
Jun
2009
CMD 2009 / Anu Nissinen
12.10.2009
26
Ruutu.fi has Nelonen Media’s video and audio
content in one online service
• Launched 6/2009
• All Nelonen Media’s video and
audio content in one service
• Concept:
– Easy to use
– Quality and breadth of content
– Increasing viewing time
• Business:
– Ad-funded
– Easy to sell
– Logical extension of Nelonen Media’s
business
CMD 2009 / Anu Nissinen
12.10.2009
27
At Nelonen Media, online TV already builds on
broadcast TV
”Finland’s Next Top Model”
TV live
viewing
TV timeshift
TV
re-run
Online
TV
www
site
2008
237,000
10+ live
28,000
10+
72,000
10+
36,000
39,000
412,000
2009
328,000
10+ live
26,000
10+
60,000
10+
43,000
45,000
502,000
CMD 2009 / Anu Nissinen
12.10.2009
28
Welho has nearly 130 digital channels…
CMD 2009 / Anu Nissinen
12.10.2009
29
…and is in the front line in bringing HD content to
its customers…
16 HD channels and growing + set-top-boxes
+
CMD 2009 / Anu Nissinen
12.10.2009
30
…as well as in building an online platform for TV
content and paid video
CMD 2009 / Anu Nissinen
12.10.2009
31
Broadcasters and Pay TV / Cable operators are capturing the
largest share of ad-supported online TV revenues
2008 share of ad-supported online TV revenues
Source: Screen Digest
CMD 2009 / Anu Nissinen
12.10.2009
32
Sanoma Entertainment is well positioned to benefit
from the new ways of operating in the TV business
Content
owner
Content
aggregator
Pay TV
operator
Network
operator
Consumer
devices
Broadband
OTT services
Internet TV,
consoles
Online TV
Online video services
New distr. channels
CMD 2009 / Anu Nissinen
12.10.2009
33
Let us entertain!
Thank you.
CMD 2009 / Anu Nissinen
12.10.2009
34