LUMA Partners presents “The Future of TV,” as presented at the Upfront Summit conference on February 4, 2016. This presentation reviews some of the key topics discussed at the conference: the rise of digital video, the traditional TV model, and convergent video.

1. Terence Kawaja LUMApartners
The Future
of TV

2. The First Half of My Career Was in TV

3. The Second Half Was in Digital

4. The Third Half? Convergent TV

5. The Third Half? Convergent TV
Too Early!
January 2001
merged with

6. LUMA is a Leading Authority on Convergent TV
Over 600,000 Views

7. The State of
DIGITAL VIDEO

8. Hours
28%
Source: eMarketer, comScore Video Metrix December 2015
U.S.
Digital
Video
Proper5es
Ranked
by
Unique
Video
Viewers
Average
Time
Spent
per
Day
with
Digital
Video
by
Device
in
U.S.
YouTube Has Dominated the Rise of Digital Video
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2011
2012
2013
2014
2015
Tablet
Smartphone
Desktop
Other

9. But Now It’s Not the Only Game in Town

10. Facebook Auto-Play Videos are Ubiquitous
75%From Mobile
8 Billion Daily Views

11. Mobile Apps Bring Live Content to Your Fingertips

12. Snapchat Has Built Mobile-First Advertising

13. Publishers of All Kinds Are Investing in Video

14. There Just isn’t Enough Supply!
Display
Ad
CPM
$1.90
Video
Ad
CPM
$24.60
Source: ZenithOptimedia, Note: Average CPM

15. $4.2
$5.2
$7.5
$9.6
$11.4
$0
$2
$4
$6
$8
$10
$12
2013
2014
2015
2016
2017
Source: eMarketer
$
billions
CAGR:
28%
Digital
Video
Digital Video Spend Continues to Rise
CAGR:
150%
ProgrammaDc
Video

16. Source: eMarketer
$
billions
Digital
Video
But is Still Only a Fraction of the TV Market
TV
$66.4
$68.5
$69.6
$72.7
$74.1
$0
$10
$20
$30
$40
$50
$60
$70
$80
2013
2014
2015
2016
2017
$0
$10
$20
$30
$40
$50
$60
$70
$80
2013
2014
2015
2016
2017
ProgrammaDc
Video

18. Traditional Digitalvs.

19. Traditional Digitalvs.

20. 100 : 1
19
Buckets
36
~
100
Companies
~
400
$150
Billion
Total
Spend
$6
Billion
$1.5
Billion
$
/
Company
$15
Million
Traditional TV vs. Digital Video Players

21. 100 : 15x
Cash
New Entrants Have Plenty of Money to Build or Buy
Market Cap: $2 Trillion
Cash: $400+ Billion
Source: Needham & Co. estimates the TV ecosystem to be ~$400 Billion

22. Screens
Delivery
Content
2008 Was So Simple: Traditional & Digital Silos

23. Delivery
Screens
Content
Second Screen
Chromecast /Airplay
Partnerships
“Netflix + Disney”
Convergence Begins with Device Proliferation

24. OTT/CTV
Delivery
Screens
Content Partnerships
“Netflix + Disney”

25. Final Late
Night Episode
Evolution of
Top Rated Show
Most Viewed
Episode
1993
1990
1992
80MM
52MM
38MM
TraditionalTV
ContentModel

26. Final Late
Night Episode
Evolution of
Top Rated Show
Most Viewed
Episode
1993
2007
1990
2013
1992
2009
80MM
30MM
52MM
8MM
4MM
38MM
Crosschanneldevices
killedthetelevisionstar!

27. Big $$$
A18-49
Reach
Incremental Budget
A25-54
Reach
Paying 30-50%
more for .5-1%
more reach?!
TRP
Source: Needham & Co. , Nielsen
Incremental Cost
Per Reach Point
Incremental is Increasingly Expensive on TV!

28. Slack in Demand for Upfront Buys

29. Selling Points Reversed in 2015
Upfronts
NewFronts
Selling
Premium
Content
Selling
Data-­‐Driven
Approach

30. Selling Points Reversed in 2015
Selling
Data-­‐Driven
Approach
Selling
Premium
Content
Upfronts
NewFronts

31. Now TV is Being Aggressive with Data
Credit
Card
Data
Subscriber
Data
Target
Audience
Yogurt
Buyers
Frozen
Snack
Buyers
Wireless
Data
Users
Inspired by WSJ

32. Digital is Increasing Investment in Original Content
Everyone
is
gePng
in
on
the
game
?

33. OTT/CTV
Delivery
Screens
Content Partnerships
“Netflix + Disney”
Convergent TV Through OTT Distribution

34. OTT Options Are Growing
$50-­‐$70
$8
$9
$20
$99/year
$15
$6
Average
Basic
Cable
Packages
~$120
Source: NPD Group
$15
Stream

35. -­‐60%
-­‐50%
-­‐40%
-­‐30%
-­‐20%
-­‐10%
0%
10%
20%
30%
TV’s Year of Doom
Note:
Market
Data
as
of
1/27/16
(2%)
12%
(23%)
(24%)
(14%)
(45%)
(28%)

36. Perception vs. Reality in Addressable TV
Linear
TV
Programma5c
TV
Percep5on
Reality
Linear
TV
Addressable
Linear
TV
Video
On
Demand
(VOD)
Over
The
Top
(OTT)
Digital
Video
Programma5c
TV

37. Total
US
TV
&
Video
Market:
100%
Digital
Video:
10%
RTB:
1%
Ø The
winners
will
provide
tools
that
help
the
TV
AND
Digital
stakeholders
Focus on the 100% Opportunity
Ø RTB
is
a`racDng
a
small
fracDon
of
the
Video
Market

38. Marketer
Agency
MVPD
Network
Ø Premium
supply
/
content
on
digital
Ø Consistent
raDngs
across
plaaorms
Ø Accurate
ROI
analysis
Ø Strategic
planning
Ø One
plaaorm
for
campaigns
on
TV
and
digital
Ø ProgrammaDc
workflow
and
RTB
capabiliDes
Ø Cross
device
matching
Ø Audience
extension
Ø ProgrammaDc
capabiliDes
for
TV
supply
Ø Yield
management
for
TV
and
Digital
content
Ø A`ract
TV
quality
adverDsing
spend
for
digital
content
What TV Stakeholders Want

39. Programmatic Platforms
Targeting Technology
Attribution / Analytics
Low-Cost Production
Integrated
Workflow
Premium Content
Brand Relationships
Convergence of Two Worlds

40. 33 Video Deals in the Last 2 Years

41. 33 Video Deals in the Last 2 Years
~$700 Million

42. Convergent TV via M&A
CONTENT
DISTRIBUTION
MONETIZATION
Media

43. Major Strategics Now Focused on Convergent TV

44. A Reflection of a Growing Buyer Pool
MARKETING
TECH
CRM
SOFTWARE
INTERNET
ORIGINALS
TELCO
MARKETING
MEDIA
DATA
CONSUMER
INTERNET
TECH
SERVICES
COMMERCE
Right Time
Decisioning of
Consumer Data
(Ad Tech and MarTech)

45. Potential TV Game Changers
Regulation Technology Content

46. LUMA’s Commitment to LA
Over 170 Exits
in past 2 years

47. LUMA’s Commitment to LA
Over 170 Exits
in past 2 years
December 2011
December 2015
has been acquired by
The undersigned acted as co-financial
advisor to MarketShare Partners.
December 2011
December 2015
has been acquired by
The undersigned acted as co-financial
advisor to MarketShare Partners.
December 2011
July 2014
The undersigned acted as exclusive financial
advisor to Adconion Media Group Limited
has been acquired by
a subsidiary of
December 2011
December 2015
The undersigned acted as co-financial
advisor to MarketShare Partners.
December 2011
April 2014
LUMA Securi=es, a wholly-owned broker-dealer of
the undersigned, acted as underwri=ng
co-manager to The Rubicon Project, Inc.
Ini4al Public Offering
$116,799,660
December 2011
September 2015
has been acquired by
Principals currently at the undersigned acted as
exclusive financial advisor to Looksery, Inc.

48. New York | San Francisco | Palo Alto
Access. Insights. Execution.
LUMApartners
Thank you! @tkawaja