4k - wikileaks 0/f1 us phase zero... · – around 20 full-length and short films shot in 4k,...

4K

October 5 , 2012

Copying / Printing Prohibited

Your par t t o pl ay.2

Agenda

Goals of Phase 0

Consumer PerspectiveContentUser Experience

Business case


Agenda

Goals of Phase 0


Business case


Phase 0 as an A&P Activity

M. Lucas


Sony Direct – Guest General Reactions

3) What has been the general reaction to this product from store guests who may seriously consider purchasing this product?

The general reaction is that there is no content available at this time, concern that Sony will not support after a year, or the fact that refresh rate is still too slow at this time.The price shocks them when they are looking at similarly "large" TV’s from Sharp, Samsung and the pricing is not nearly the same. Even though you attempt to point out the difference in our TV to the competition, the pricing does not justifyThey are very impressed with the resolution and quality of the television overall. They do have concern of how it is going to be shipped to their home/business.Wow. Price.The quality looks amazing.Well we haven’t had any serious buyers, only people who wanted information! That the 3D is great and all Sony TV's should use the same 3D technologyWe will not be selling or have a display at are store, so we can only really answer questions on the knowledge that we get from trainings and other people.

Press Reactions


Without Content Solution (Now) With Content Solution

84” 4K TV Selling Proposition

1. Huge screen – 84”2. Future proof – wait for

higher resolution content3. Existing content is

upscaled4. Immersive sound – 50W5. 3D, SEN, Media

Remote, Connectivity6. Closer viewing distance

+ wider viewing angle

Benefits Barriers1. Other big screens cost less2. When is content coming?

How will it come? Cost? 3. Upscaled content doesn’t

look that much better to justify cost

4. Already have a high-end sound system

5. Same features in core TVs6. Does it matter w/o 4K

content?

For Sony: No strong differentiation from competition to drive value equation. Missed opportunty to leverage Sony United advantages. Slower 4K adoption as warm leads with Sony Direct’s high end guests are not converting.

● Benefits

For Sony: 1st mover innovation story drives buzz/PR delivers strong value. Leverages Sony’s advantage of owning content studios. Meets customer expectation for content availability and strengthens Sony content service. Stimulates 4K adoption and more 4K content production.

1. Future is here - Enjoy new TV out of the box with compelling content

2. Higher cost is justified3. Wider viewing angle/more comfortable viewing

distance4. Show it off to friends with movie night5. If Sony can deliver this industry first, I trust they’ll

provide more amazing entertainment experiences

Thinking about it, but . . .

Truly amazing. . .


Advantage Sony

Opportunity:Establish Sony as the leader in 4K – 1st moverAccelerate 4K market adoptionEnergize Dealers and org behind strong/unique selling propositionJustify Sony value equation at $25k SURE price (vs. $15k competition)Upside sales of FSH and VW1000ES

Risk if not:No defense for vs. “no 4K content” claim of OLED campSlower acceptance of 4K technologyChallenged value equation vs. other 4KPotential to lose content first mover advantage


4K Content Timeline

Q3FY12 Q4 Q1FY13 Q2 Q3 Q4 Q1FY14 Q2 Q3 Q4

Direct TV

Broadcast Expansion

Sony Only 4K Server

Sony Only 4K Box

RED Server?

• Opportunity to leverage the next 14 months until 4K broadcast arrives

14 months 6-9 months

Phase 0 Phase 1


Agenda

Goals of Phase 0


Business case

Candidates for Phase 0 Launch Content“4K Gallery”Best of 4K

4K “Digital Bundle”Hollywood Movies in 4K

10 movies:Recent and

classics

Culture(Arts,

documentaries, etc.)

Nature(e.g. Timescapes)

Niche Sports(e.g. Red Bull)

Music Videos (SME)

SONY CONFIDENTIAL

Theatrical Trailers

Phase 0 Content• Digital Bundle

– 10 SPE Movies scanned in 4K

– Pre-loaded on HDD and/or downloaded on installation

– No conflict with studio agreements with other parties

• 4K Gallery (Tentative naming)

– Around 20 full-length and short films shot in 4K, refreshed every month

– Nature, extreme sports, culture, etc.

– Subscription (free for FSH & FPJ owners, $50/yr for FSM, FSL owners

Day 1: Digital Bundle

10 SPE Movies, chosen for picture quality (e.g. won Oscar for Cinematography), popularity & demographic matching.

(Tentative title list in discussion with SPE)

RecentHits

Classics

What is a “Digital Bundle”?

• Consumer must purchase hardware (FSH) in order to receive Digital Bundle movies

• Consumer owns the digital copy, same as EST (Electronic Sell Thru)

• No conflict with studio agreements with VOD providers, Amazon, Netflix, etc.

Day 1: “4K Gallery”Full Length Content

Genre: NatureLength: 1h 20mSource: Red EpicDistributor: Rubber Monkey

Genre: ScienceLength: 3x 1hSource: CGIDistributor: 3net

Day 1: “4K Gallery”Full Length Content

Genre: Extreme SportsLength: 1h 30mSource: Arri Alexa/Red EpicDistributor: Brain Farm/Red Bull

Genre: NatureLength: 1h 30mSource: Red EpicDistributor: Giant Screen

Genre: DramaLength: 30mSource: F65

Genre: NatureLength: 7mSource: Canon 5D

Day 1: “4K Gallery”Short Form Content

Genre: MusicLength: 30mSource: F65

Genre: NatureLength: 30mSource: Red Epic

Berlin Philharmonic

Genre: DramaLength: 15mSource: F65

Genre: AutoLength: 15mSource: F65

Day 1: “4K Gallery”Movie Trailers

Genre: Movie TrailerLength: 3mSource: Red EpicStudio: SPE

Genre: Movie TrailerLength: 3mSource: Red EpicStudio: SPE

Genre: Movie TrailerLength: 3mSource: Red EpicStudio: WarnerTrailer Aggregator: Video Detective

Genre: Movie TrailerLength: 3mSource: Red EpicStudio: ParamountTrailer Aggregator: Video Detective

Genre: Movie TrailerLength: 3mSource: Red EpicStudio: WarnerTrailer Aggregator: Video Detective

Genre: Movie TrailerLength: 3mSource: Red EpicStudio: DisneyTrailer Aggregator: Video Detective

Phase 0: Content Security

Obstacles for Phase 0

– PC does not have secure location to install Marlin key.

– 4K workflow toolchain does not currently support Marlin encryption at muxing phase.

– Media Player needs modifications to support decryption keystore access during demux phase

Security Countermeasure for Phase 0

– Encrypt content MP4 samples using AES-CBC encryption and store encrypted files on cloud server.

– Downloaded content is stored on home server in encrypted state.

– Use unique key per movie/content for added security. Authenticated users (SEN ID) securely retrieve key from cloud server.

– Decryption occurs in blocks during playback within the decode phase of player.

SEN ID

AES-CBCContent Decryption

Unique key per movie

Authenticated and Encrypted

HDCP 1.4

Same as Blu-ray


Agenda

Goals of Phase 0


Business case

Pha s e 0 Us e r Expe r i e nc e

SONY CONFIDENTIAL

Browse / Control from Tablet Enhanced metadata experience

Play on TV


Transition Plan Phase 0 to 1 for FSH/FPJ

SubscriptionContent

Phase 0

Server Phase 0

Storefront

Network Service

Phase 0 vs Phase 1

Phase 0 Phase 1

Digital Bundle 10 movies from SPE -

Premium Content EST & Rental

No (SNEI API cannot support)

YesInitially SPE only.Other studios late 2013.

Other 4K content (free) Yes20 assets at launch, add 10/mth.



SubscriptionContent

Phase 0

SubscriptionContent

PremiumContent

Phase 1

Server Phase 0

BoxPhase 1

X

Store Assumptions: • Phase 0 storefront will add Premium content (pay per view - PPV) in Phase 1• Phase 1 storefront to include “some” free content, but reduced from Phase 0 (subscription

concept & costs go away)• Phase 0 server would still be able access Phase 1 store, but not PPV content (only free

content)

Storefront Storefront



SubscriptionContent

Phase 0

SubscriptionContent

PremiumContent

Phase 1

Server Phase 0

BoxPhase 1

X

Storefront Storefront

Consumer wants: Own Phase 0 Server No Phase 0 Server

Premium Content Upgrade Display HW to HDCP 2.1New 4K Box

Upgrade Display HW to HDCP 2.1New 4K Box (+ Tablet for FPJ)

No Premium Content Do nothing Upgrade Display HW to HDCP 2.1New 4K Box (+ Tablet for FPJ)

Hardware Requirements


Proposition

Phase 0: Server + Subscription Service (November – June ‘13)

New sales Installed BaseFSH $25k Bundle* NAFPJ 4K $25k Bundle $3,500 (N-60 days) *Bundle includes:

● Server loaded with ten 4k movies + tablet● Subscription download service

Phase 1: Box + Revenue Share Service (June ‘13 – FY13)

FSL/M $500 box NAFSH/FPJ $500 box + tablet $500-$1000

HW upgrade to HDCP 2.1 + Box


Server Unit Projections

Phase 0 – 655 units (TV 190, FPJ 365+100)

Phase 1 – 21.6k units (TV 21.2k, FPJ 450)

Ph0 Ph1 Base* Nov Dec Jan Feb Mar Q1 Q2 Q3 Q4 TotalFPJ 100% 75% 100 35 40 45 50 55 165 135 135 135 895 FSH 100% 75% 0 50 40 20 20 20 55 45 75 75 400 FSM 0 50% 0 0 0 0 0 0 887 1501 2088 524 5,000 FSL 0 50% 0 0 0 0 0 0 2165 5050 7024 1762 16,000

100 85 80 65 70 75 3,271 6,731 9,322 2,496 22,295 *FPJ Base 25%

Attach Rate

Note: - Server units based on attach rate assumptions, not equal to total HW sales. - Assumes FSH or like through Q4FY13. Does not include additional 4K FPJ’s in FY13.


Cost Summary: Phase 0, 1 & Common

Summary:

Rev enue Cost Net Inv estment

Pha se 0: 300,000 2,045,128 -1,745,128

Common: 1,230,000 -1,230,000

Pha se 1: 7,574,000 4,807,840 2,766,160

Tota l 7,874,000 8,082,968 -208,968

Common Cost inc lud e:Init ia l d ev elop ment S/WDesign Cent reDigita l Bund le finishing c ost

Pha se 1: Exc lud es $12mil glob a l d ev elop ment c ost (TKY est . c ost )


Common Development Tasks for Phase 0 & Phase 1

Phase 0 Phase 1

HTML5 Storefront Yes Yes

Integration of storefront with SNEI APIs

Yes (Authentication & 1 SKU)

Yes (Authentication & multiple SKUs)

Integration of storefront with back end

Yes (Level 3 file hosting)

Yes (DADC full ingestion and hosting system)

Tablet app for storefront navigation

Yes Yes

Confidential32 SEL UXSM Group Your par t t o pl ay.

Network Service Activities

Business Responsibility

Content Acquisition

Business Plan/Strategy

Content OperationsStore Front PlanMaterial OperationIngestion

Cashing & Hosting

ID & BillingSNE API

Phase 0SEL

SNEI

SEL(SNEI,SPE)

SELSELSELSEL

SEL(Level3,Akamai)

SNEI

Phase 0SEL

SNEI

SEL(SNEI,SPE)

SELSEL/HES

SELSEL/HES(DADC)

SEL(DADC?)

SNEI


Cost Breakdown: Phase 0

Phase 0 Insta ll Base (FPJ)

Tota l Unit s Tota l Unit s555 100

a mt (USD)Tota l No of Unit s 555 Tota l No of Unit s 100

Rev enue from Sub sc rip t ion 0 - Rev enue from Sub sc rip t ion 3000 300,000

Cost Cost HW Cost 2000 1,110,000 HW Cost 2000 200,000

Cost of Content ($25 p er month X 7 mo.) 25 97,125 Cost of Content 25 17,500 Cost of Op era t ion ?? 100,000 Cost of Op era t ion

Inwa rra nty Serv ic e (4% F.ra te) 4% 35,520 Inwa rra nty Serv ic e (4% F.ra te) 4% 6,400 Susta ining Cost 145,833 Susta ining Cost

Int ia l d ev elop ment S/W Int ia l d ev elop ment S/WInt ia l dev elopment H/W 300,000 Int ia l d evelop ment H/W

Design Cent re OtherDigita l Bund le 50 27,750 Digit a l Bund le 50 5,000

Digita l Bund le finishing c ost One t ime feeTotal Cost 1,816,228 Total Cost 228,900

Profit / Loss (1,816,228) Profit / Loss 71,100

Common c ost s


Cost Breakdown: Phase 1 & Common

Phase 1 Common Costs

Tota l Unit s Tota l Unit s21,640 22,295

a mt (USD) a mt (USD)Tota l No of Unit s 21,640 Tota l No of Unit s

Revenue from Sub sc rip t ion/Tra nsa c t ion 0 - Revenue from sa les of b ox ($500 @ 30% DM ) 350 7,574,000 Cost Cost

HW Cost 150 3,246,000 HW Cost - Cost of Content (rev enue sha re mod el) - Cost of Content (Revenue Sha re md l)

Cost of Op era t ion ?? 100,000 Cost of Op era t ionInwa rra nt y Serv ice (4% F.ra te) 4% 129,840 Inwa rra nt y Serv ic e (4% F.ra te) -

Susta ining Cost 250,000 Susta ining CostInt ia l d evelop ment S/W Int ia l d ev elop ment S/W 1,000,000 Int ia l d ev elop ment H/W TKY est . Int ia l d ev elop ment H/W TKY est .

Design Cent re Design Cent re 20,000 Digit a l Bund le 50 1,082,000 Digit a l Bund le 50 -

Digit a l Bund le finishing c ost One t ime fee Digit a l Bund le finishing c ost One t ime fee 210,000 Total Cost 4,807,840 Total Cost 1,230,000

Profit / Loss 2,766,160 Profit / Loss 1,230,000

Phase 0 Resource Detail Software

Phase 0 beta 16MM $330KPhase 0 launch 8MM $170KPhase 0 post launch 12MM $250KPhase 1 transition 12MM $250KTotal Software $1,000K

Design Center $20K

Hardware– Total 15 HC Months $300K– 4 HC Month – HW System Design (Key component selection)

– 2 HC Month – Reliability testing

– 2 HC Month - 4k Stream testing

– 3 HC Month – Trial/Production Support

– 2 HC Month – User Guide & Sales training

– 2 HC Month – Field Test Total to launch Phase 0 : $1.32M

Sustaining: $250K/year

Content Quality Committee

• Use same standards and practices as quality committee in Tokyo

• Manage locally for speed and efficiency

Phase 0 Content Acquisition Process

Red BullRubber MonkeyGiant ScreenBrain FarmHeavy GDewald AukemaStance FilmsTSO PhotographyShawn ReederSnaproll MediaArctic Light PhotographyEsquireFlatlight FilmsBent Image Labs4K Film Production Inc.Evosia StudiosStian RekdalVita Brevis FilmsHoward HallVincent La foretPatrick LawlerShowdown VisualAndrew WildingT-RecsRay GalleryHD TimelapseACL Digital CinemaVFS Digital DesignEtc, etc.

SEL 4K Content Team:Filter & curate

Mike LucasKerri Fox-MetoyerLaura WolfPat LeonNick Colsey

Phase 0 Candidate Content

20 assets for Day 1.~10/month refresh each month

Picture quality review and approve/reject of each asset.

4K Producers & Film-makers

SNEI Content Acquisition Team:NDA & Contract for total SEN

Mike AragonChristina Kim

Download Time

Clips, Shorts (15m) (5GB)

TV Episode (30m) (10GB)

Movie (1hr 30m) (30GB)

Any content via physical distribution

0 10 20 30 40 50 60

US Average 5.8Mbps Extreme Broadband 40Mbps Physical Media

Hours

Sony 4K dealers will recommend cable modem service with at least 40Mbps

Based on 3840 x 2160 H.264 average 70Mbps

Less than 2 hours

4K over Broadband in US

At least 40Mbps connection needed for overnight download of high quality content (~100Mbps)

~2% of US HH currently subscribe to >40Mbps (“Extreme” broadband)

Available to over 40% of HH (at $10 - $50/mth extra)

Dealers to promote with MSO/Telco

SONY CONFIDENTIAL

Source: FCC

Schedule for Phase 0

September October November December

3 10 17 24 1 8 15 22 29 5 12 19 26 3 10 17

Miles tones

Trial Build (SD)

Fie ld Tes t

PC HW Specs

Software

4k Server

Table t App

SQA

Sales Training

Service Training

ProductShipping

MPPP

Final

AlphaSW

BetaSW

Alpha Beta RC / GM

Alpha Beta RC / GM

SQA1 SQA2

FT1 FT2

15 29

MPSW

12 19 26 30

4k Stream Testing

24

Today

CDN

ADC

High-Level Component Architecture

HDMI 1.4a(A/V interface)

(after phase 0)

HTML5 Tablet remote UI

server updates via

ADC

DRM unwrap

4K decoder player

SNEI

RDSCustomer support via RDS

storefront & content aggregation

fulfillment

authentication,payment processing

RDS client

download and store content

4K Home Server

4K TV

Tablet Remote

session management

HTML5 TV remote UI

DRMwrap

4k - wikileaks 0/f1 us phase zero... · – around 20 full-length and short films shot in 4k,...

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