Overview
Qtv creates a new distribution channel for content and service providers to deliver digital entertainment to the television. It offers the 2-way interactivity of the Internet with a viewing experience on the television in the living room.
Qtv is the only solution that leverages the game consoles already connected to the television in over 100 million worldwide households. In the United States, over half of all broadband households (20+ million) have a PlayStation 2 connected to their TV. Equally compelling is the market demographics of broadband PS2 households. A CD is all that is required to give millions of households' access to the third party content services available through Qtv.
The TV provides significant revenue opportunities. You can make your content libraries available on the largest screen in the house. The TV also commands higher rates, whether advertising, subscription or pay-per-view rates. Providers and advertisers alike can tailor their content and advertising to individual users, further increasing their effectiveness. Qtv can also be co-marketed to your customers and you will receive a share of the revenue BroadQ receives from the customers you bring to Qtv.
Our revenue model is typically a share of the revenues associated with the content, services or advertising delivered to the TV. Our business model is flexible and we will adapt to your our content partner's businesses. Qtv virtually eliminates the barriers to delivering TV entertainment and brings not just "eyeballs," but high value qualified customers.
The addressable market is characterized by the:
PC-TV Market
Qtv initially attracts consumers as a low cost solution for accessing their own photos, music and videos on the TV. Consumers overwhelmingly want to enjoy their digital content on the best sound system and the largest screen in the home - the home entertainment system. The below chart is a 2005 Park Associates survey that illustrates the number of consumers that have digital content stored on their home computer:
Percentage of U.S. Internet Users with Digital Content Stored on Home Computers
With the volume of content on their home computers, it is no surprise that a 2004 Park Associates study found that 57% of U.S. Internet users wanted to watch their PC based videos on their TV and 53% wanted to listen to their music on their home entertainment system.
Online Video Market
The Internet video market is exploding, but video on the PC has limited appeal for many types of content. Qtv enables providers to use their existing systems (such as their Spotlight websites) to extend their reach to the best sound system and largest screen in the house - the TV. Qtv also gives the providers the ability to increase their revenue opportunities, rapidly moving the profitability of Internet video models forward.
There is little question that the world of online content services is exploding. According to ClickZ:
- "The worldwide market for online content services is expected to expand by a factor of 10, growing from about 13 million households during 2005 to over 131 million households by 2010," said the report. (In-Sat)
- Since 2005, watching video over broadband has increased 127% and includes 11.4% of US adults.
Many online services that are increasing in popularity can naturally make the transition from the PC to where consumers really want to experience them - the TV For example the activities noted below can be delivered in the comfort of the living room on the TV via Qtv. Most importantly their use is growing, according to MediaMark:
Internet Activities of U.S. Adults with Access to the Internet
Activities Performed in Last 30 Days All Adults Fall 2006 % Change From Fall 2005 % Change From Fall 2002 % Made a purchase for personal use 34.2 +5.7 +57.7 Used instant messenger 26.8 +20.6 N/A Obtained sports news/information 23.8 -7.0 +15.1 Played games online 22.4 -1.3 +22.4 Downloaded music 15.7 +23.3 N/A Watched online video 11.4 +123.7 N/A Listened to radio on the internet 10.9 +3.8 +25.6 Visited online blogs 6.7 +163.9 N/A Made a phone call online 2.6 +197.7 N/A Used online gambling site 2.2 N/A N/A Source: Mediamark Research Inc., Fall 2006
N/A = Activities not included in 2005 or 2002 Surveys.
TV Platforms
Qtv is the only interactive internet TV service that has the potential to deliver broadband content and services not only to the emerging Active TV device market, but also to deployed gaming platforms and Microsoft Media Center devices. The cornerstone is the Sony Playstation 2 (PS2) with an immediate market potential market of over 45 Million U.S. and over 40 Million European households. Millions of these PS2's are already connected to a home network for on-line gaming, many others are in homes with an existing broadband service and the remainder is rapidly adopting broadband. Qtv provides yet another incentive for broadband adoption and a home network.
It will take years for other devices to reach numbers that come close to the existing PS2 market. Consumers will not replace the PS2 rapidly with other devices, in fact the PS2 market is still growing. According to a recent Business Week article
- Despite all the hype surrounding the PS3, its predecessor is likely to outsell it for two more years. "The PS2 will have legs well into 2008," says Michael Pachter, an analyst at Wedbush Morgan Securities in Los Angeles.
- "The PS2 probably has the capacity to sell more than any other gaming" console, says Simon Jeffrey, chief operating officer at game maker Sega of America (see BusinessWeek.com, 12/28/07, "Sega Games the Systems").
- The PS2 already owns the industry's all-time sales record. As of last March, Sony had shipped more than 103 million units worldwide. In the year ending in March, 2007, Sony expects to sell an additional 11 million—and just 6 million PS3s. In the following year, Sony will likely ship another 11 million PS2s vs 7 million PS3s, according to research by rating agency Standard & Poor's (MHP).
Our focus is on the experience delivered into the home and not the enabling technology. Qtv can be integrated into set top boxes, networked TV's, networked DVD players, other game consoles and more. Qtv will be extended to new platforms as they become available and the services will evolve as advances are made in the infrastructure and technology.
Content Models
Entertainment On Demand
Qtv enables on-demand video and music. The content can be streamed, downloaded or progressively downloaded using a content manager running on the PC.
Interactive Services
Qtv provides direct interactivity between service providers and the consumer, enabling services like weather, local events, movie listings and games.
Streaming Content
Qtv can deliver live streaming video and Internet radio to the TV, enabling new revenue opportunities.
Provider Channels
Providers can make their content available through a branded channel.
Shopping
Online shopping services can give consumers access to their online shopping portals from the TV.