The document summarizes key trends in the media industry as it undergoes major changes due to digital disruption. It notes that time spent on internet has increased 4x from 2001-2012 while TV viewing has declined. Internet advertising revenue has doubled from 2006-2012 while newspapers and magazines have declined. The rise of mobile devices and social media are changing how content is consumed. Media companies now have an opportunity to develop new business models to engage consumers across multiple platforms.

1. Accelerated
change
Turning the digital revolution into
an opportunity for the media industry
Eric Hazan
Paris, April 25th
Forum des medias
Sino-Français 2013

2. McKinsey & Company |
7%
2001
43%
45%
5%
Newspapers
Radio
TV
Internet
2012
5%
33%
44%
18%
Average time spent per day on TV,
Internet, Radio and Newspapers
4x
time spent on
the Internet
between 2001
and 2012
The media industry is going through major changes
1

3. McKinsey & Company |
Net advertising revenue
8%
7%
11%
32%
26%
2006
12%
19%
13%
34%
15%
Outdoor
Magazines
Newspapers
14%
Radio
TV
Internet
2012
11%
2
2x
Internet
advertising
revenue
between
2006 and
2012
The media industry is going through major changes

4. McKinsey & Company |
Adopting a diversified
business model
Developing multi
access digital
Adjusting costs
You have the opportunity to be a groundbreaking actor towards
a new stable media business model
3

5. McKinsey & Company |
Top iConsumer Trends for 2012
2012
Mobile
Tablets
PC
4
Touch Here
A new order in devices
1

6. McKinsey & Company |
Top iConsumer Trends for 2012
x2growth in
applications
use in 4 years
5
Planet of the Apps
New modes for content and media consumption
2

7. McKinsey & Company |
Top iConsumer Trends for 2012
2012
6
Social Saturation
Platform shifts, monetization challenges
3
Other
internet
Social

8. McKinsey & Company |
Top iConsumer Trends for 2012
Digital is now the most
influential touch point for
all product categories for
12% to 29%
of the connected
population, depending
on the category
7
Retail 3.0
New advertising challenge for media
4

9. McKinsey & Company |
Top iConsumer Trends for 2012
2012
Mobile
data
Mobile
voice
88
Communications breakdown
Voice to all-data drives media consumption
5

10. McKinsey & Company |
2012
Top iConsumer Trends for 2012
99
YouVideo
Rise of user-controlled programming and distribution
6
DVD,
VOD,
OTT
Linear TV

11. McKinsey & Company |
4 distinct profiles rising from data and voice usage!
Minutes of usage per day
Mobile voice usage
1 10 100 1,000
1
10
100
1,000
Omnivores
1
10%
of total respondents
Mobile data usage
Selective users:
“entertainers” + “practicals”
2 3 25%
of total respondents
Traditionalists4 65%
of total respondents
1010

12. McKinsey & Company |
65
100%
Practicals +
Entertainers +
Omnivores
Traditionalists
Share of data
usage
(Volume of Data)
95
5
Share of
population
35
2 segments representing only 35% of people consume almost all dataSelective
users
1111
Key segment characteristics
Share of usage, percent

13. McKinsey & Company |
Online subscription
€ / Month
10x
more eager
to pay
Omnivores tend to spend more
than their counterparts
12
Omnivores 10.7
Practicals 4.0
Entertainers 8.9
Traditionalists 1.1
Online magazine subscription
Digital reader newspaper subscription
Online newspaper subscription

14. McKinsey & Company |
Omnivores are willing to pay more for more qualitative content
13
Willingness to pay for additional service
Share of respondents, percent
3x
more time
spent on
online media
than others
Omnivores 28
Entertainers 22
Practicals 11
Traditionalists 3

15. McKinsey & Company |
Video is the fastest growing premium ad format
ENTERTAINMENT
Interactive multimedia
experience
ADVERTISING
The next frontier for
premium advertisers+
PUBLISHERS WITHOUT VIDEO INVENTORY
will be less competitive on drawing cross
platform spending
Online
1414

16. McKinsey & Company |
Video traffic and advertising spend go digital
EUROPE EXAMPLE
2016
11,042
2013
4,947
2011
2,290 660
2016
2,564
2013
1,211
2011
Digital video traffic
2011-16e, petabyte per month
Digital video advertising spend
EUR millions, 2011-16e
x6growth x4growth
1515

17. McKinsey & Company |
US is still leading the OTT wave, but Europe is catching up and OTT
consumption continues to grow
32% 22% 20%29%
PENETRATION RATE OF OTT SERVICES
1616

18. McKinsey & Company |
OTT viewing has shifted away from PCs to tablets and mobile devices
17
OTT/streaming share across screens
Index, 2009 = 100
From
6% to
20%
in 4 years
only
100
6%
71%
23%
Mobile + tablet
PC
TV
20122009
181
20%
88%
74%

19. McKinsey & Company |
Mobile data usage is rapidly growing, driven largely by mobile video
18
US consumer data usage
Average MB per month of mobile data
x5
between
2008 and
2013
2013
1,959
2008
441
2 GB
Email
Web
Audio
Video
1 GB
Typicalusagetoday

20. McKinsey & Company | 19
Use your
content and
audience
to drive sales
for others
Create deep
partnerships
with e-commerce
players
SOURCE: McKinsey's Next Generation Media
Catalog the
taste and
preference of
the audience
Elicit and
capture
consumers’
signals of intent
Create
commerce-
friendly touch
points
We’re all in the lead generation business now!

21. McKinsey & Company | 20
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