美國(guó)再工業(yè)中的解放培訓(xùn)講座課件PPT

1、Evolution of the U.S. Consumer ISP IndustryPUTNAM INVESTORSCONFIDENTIALJay JubasMay 25-26, 2000This report contains information that is confidential and proprietary to McKinsey & Company and is solely for the use of McKinsey & Company personnel. No part of it may be used, circulated, quoted,

2、 or reproduced for distribution outside McKinsey & Company. If you are not the intended recipient of this report, you are hereby notified that the use, circulation, quoting, or reproducing of this report is strictly prohibited and may be unlawful.AT-ZXD332-0500-ITP-ISP1Outline Introduction and o

3、verview of landscapeEconomics of ISPsEmerging issuesAT-ZXD332-0500-ITP-ISP2Outline Introduction and overview of landscapeEconomics of ISPsEmerging issuesAT-ZXD332-0500-ITP-ISP3What Is an ISP? An Internet service provider provides Internet access (and potentially other value-added services) to its cu

4、stomers, either residential consumers or businesses.AT-ZXD332-0500-ITP-ISP4AcronymTermHow its usedExamplesISP Internet Service Provider Very loosely AOL, UUNet, V There Are a Variety of Terms Used in the IndustryIAP Internet Access Provider Backbone operators who may or may not sell retailUUNet OSP

5、Online Service Provider Retail ISPwith portalAOL, MSN VISP Virtual ISP ISP with limited/ no infrastructureV , NetZeroModem Aggregator Operator of large modem banksPlanet OnlineAT-ZXD332-0500-ITP-ISP5Accessing the Internet: Dial-up ExampleInternet backboneConnection to the Internet directly via propr

6、ietary backbone or indirectly through a backbone providerConsumer premiseLocal telephone networkISPs operationsISPs backboneRouterWeb serverPublic switched telephone systemLocal point of presence of ISP includes modems, routers, servers, and other communication equipmentLocal trunk access paid by IS

7、P; generally TI connection (1,544 Mbps)Local access fee (phone line) paid for by customerModem and computer generally bought by customer 14.4, 28.8, or 56 KbpsAT-ZXD332-0500-ITP-ISP6There Are Multiple Ways of Accessing ISPsUser interfaceConsumer segmentsUser interfaceMost likely adoptersAccess metho

8、dAT-ZXD332-0500-ITP-ISP7U.S. Internet Penetration Is High and Still Growing Source: Jupiter Communications 12/99Number of U.S. households with Internet accessMillions23.330.841.550.362.468.174.2199819992000200120022003200423304048596469Penetration of all householdsPercentAT-ZXD332-0500-ITP-ISP860403

9、925242018131010SwedenUnited StatesNetherlandsU.S. Is Among Global Leaders in WirednessHousehold internet penetrationPercentUKBelgiumJapanGermanyFranceItalySpainHigh U.S. penetration driven byUnmetered local telephonyHigh PC penetrationU.S. mobile Internet access penetration likely to be much lower t

10、han Europe and JapanESTIMATEAT-ZXD332-0500-ITP-ISP97.59.812.615.017.719.95.37.58.910.512.52.919981999E2000E2001E2002EConsumerBusiness10.415.220.123.928.2U.S. ISP Market Size* Excludes advertising and e-commerce revenueSource: IDC, 1999$ Billions2003E32.41999-2003 CAGR21%24%19%AT-ZXD332-0500-ITP-ISP1

11、03.01.91.61.11.00.80.70.70.70.60.50.50.57.419.0AOLMindspring/EarthlinkMSNAT&T WorldnetNetzero*U.S. Residential Segment Market Leaders* Active subscribersSource: Jupiter Communications, 12/99Number of subscribersMillionsMarket sharePercentProdigyWebTVHomeBell SouthSBCOne MainRCNAltavista*Freei.Ne

12、tOther48.07.54.84.02.82.52.01.81.81.81.51.31.31.318.0September 1999AT-ZXD332-0500-ITP-ISP117203011991801471238460285,2892,0811,345UUNetAT&TGTEIPSINetSprint U.S. Business Segment Market Leaders Source: IDC, 19991999 revenue$ MillionsMarket sharePercentCable & WirelessVerioConcentricQuestFront

13、ier Global CenterOther Total25.513.75.73.83.42.82.31.61.10.539.5100AT-ZXD332-0500-ITP-ISP12Outline Introduction and overview of landscapeEconomics of ISPsEmerging issuesAT-ZXD332-0500-ITP-ISP13ISP Revenue FlowsInternetLocal backboneRouterWeb serverISPModem wholesalerILECUserSubscriptionNetwork feesA

14、dvertisingE-commerceTelephony chargesReciprocal compensation/ interconnection feeSharing of reciprocal compensationAT-ZXD332-0500-ITP-ISP14Traditional ISPs Economics Rely on Subscription Revenues to Cover CostU.S. $ per subscriber per monthBASED ON BENCHMARKSAND MODELINGBest caseNetwork and hostingA

15、ccess revenues on a U.S. ISPCustomer careAcquis-ition costsG&AEBIT20.007.206.002.502.002.3011.1010.20(19.60)20.006.40(11.90)Worst caseAT-ZXD332-0500-ITP-ISP15Costs per subscriberInternet Access Economics Suggest Difficulties for Mid-Sized, Regional PlayersDollars per months per userSource: Team

16、analysisNumber of subscribersThousandsMicroISPMindspringGTEEarthlinkLow costLow overheadLow cost to acquire customersScale economiesCustomer acquisition (advertising)Network management and help deskProcurement$19.95 sub-scription rate101001,00010,0000NETCOMMiddle-tier players structurally disadvanta

17、gedNetwork costsOverhead costsMedium-sized ISPs will suffer under current pricing schemesRevenueCompuServeCostAOL costsAT-ZXD332-0500-ITP-ISP16Scale Is the Key Driver of Execution AbilityBenefits of scaleReduced network cost Enables transporting traffic over lower cost/high-speed pipesEnables more e

18、fficient modem utilization using statistical usage patternsReduced CapexCan take advantage of step volume discounts and favorable credit termsCloser to backboneThe fewer routers needed before backbone is reached lowers the risk of trouble spots and increases control over networkCheaper customer supp

19、ortAn expensive but necessary investment that cannot be delivered to the same level by small ISPsMore attractive to partnersThe ISPs with the largest customer base will be able to partner with the most attractive content partnersTalent managementInternet expertise is in short supply and large compan

20、ies can afford more lucrative compensation packages (including stock options)AT-ZXD332-0500-ITP-ISP17Except for AOL, Most ISPs Are Losing Money89138276716America OnlineEarthlinkFlashnetNetZeroOneMain Revenue, most recent quarter$ MillionsProdigyVoyager1,621-20-10-8-30-28-5265EBIT, most recent quarte

21、r$ MillionsSource: CompustatAT-ZXD332-0500-ITP-ISP18For Most Subscription-Based Dialup ISPs, business Will Get Tougher Slow growthRising customer acquisition costsFalling network costs making “Free ISPs” viableAT-ZXD332-0500-ITP-ISP19Traditional Dial-up Access Is A Slow Growth BusinessSource: Jupite

22、r Communications 12/998.08.99.79.99.38.719981999200020012002200335.941.346.048.347.045.3Number subsMillions$ Billions18.5018.0017.5017.0016.5016.00Revenue/subDollars/monthNumber of subscribers plateaus as current subscribers migrate to broadband faster than new subscribers sign onPricing pressure lo

23、wers revenue per subAT-ZXD332-0500-ITP-ISP20020406080100120199697989920000102Organic Customer Acquisition Costs Are Increasing SteadilyU.S. dollars per gross new subscriberMindSpringEarthlinkFlashnetProdigyBest fitAT-ZXD332-0500-ITP-ISP21Network Costs of a Traditional Network are $5.50-6.50 per Subs

24、criber per Month, Driven Mainly by PRI Costs40.066.22.03.41.06.92.32.97.7PRIEntrance facility feeBack-haulModems and related hardwareCollo-cationfeeTotal network and hosting costHostingDirect connectManag-ement feeEntrance facility feeModem bankBackboneHostingPhone lineCentral officeSwitchIn the U.S

25、., PRI is a retail product sold by ILEC at huge mark-upIP backhaulAT-ZXD332-0500-ITP-ISP225.502.85Source: Industry analysis; Forrester research; McKinsey interviewsU.S. $ per subscriber per monthTraditional network costsNetwork costs with PRI bypass deployedCosts with PRI bypass and increased modem

26、utilization1.70-2.2750%65%New Technology Developments And Increased Utilization Can Reduce Network Costs By 65%AT-ZXD332-0500-ITP-ISP23NetZero and BlueL Offer Free Internet Service And Are Growing Rapidly Free internet access for subscribers willing to divulge personal and demographic data and view

27、and advertisement banner at the bottom of the screen3 million subscribers (nearly 50% are active users)Commerce driven modelFastest ISP to reach 1 million users 14 weeksExpect 3 million subscribers by year endAT-ZXD332-0500-ITP-ISP24Free ISPs Capitalizing on Alternative Revenue Models and Falling Co

28、sts Source: Jupiter Communications 12/992.13.24.76.58.811.51998 1999 2000 2001 2002 2003Share of total advertising spendPercentTotal online ad spending$ Billions1.31.92.53.44.35.48.520.542.071.0104.0147.01998 1999 2000 2001 2002 2003Business-to-consumer e-commerce$ BillionsAT-ZXD332-0500-ITP-ISP25CD

29、 DistributionBlueL Business Model1st Page PortalTelecoms connectionOnline distribution2,200 stores in all 50 states30 million customers weeklyAdvertising circulars reaching 72 million householdsCo-branded, personalized content MyYahoo! Yahoo Mail! Yahoo MessengerLow cost internet access provider“Adv

30、ertising solutions” companyFree online service promoted on home page40 million unique visitors monthlyMerchandisingFeaturing Martha Stewart LivingCross promotions between online and offline storesAT-ZXD332-0500-ITP-ISP2600.30.84.5Non-Subscription Revenues for ISPs are Highly Scale DependentU.S. doll

31、ars per subscriber per month as of June 1999Mindspring*Earthlink*NetzeroAOLU.S. subscribersMillions1.31.41.717AT-ZXD332-0500-ITP-ISP27Consolidation is Likely as ISPs Seek to Grow Their Subscriber Base to Boost Non-Subscription RevenueMergers and acquisitionsAverage acquisition cost/subscriber466 Dis

32、tribution agreementsU.S. dollars per subscriberAT-ZXD332-0500-ITP-ISP28Market Has Punished Most ISPsShare price, Dollars“Everyones scrambling. Its like rats running from a sinking ship . . . the capital markets are completely closed to dialup.” Adam Portnoy, CEO, Surfree“Starting in the late summer

33、and early fall of last year, the market absolutely hammered you if you didnt have 1.5 million subscribers or more.” Tim Newell, E-offering0.010.020.030.040.050.060.070.080.090.0America OnlineEarthlinkOneMNetZeroProdigyVoyagerFlashnet1351.60.32.51.30.30.1Market Cap2/00$ BillionsJan 98Jan 00Jan 99Jul

34、98Jul 99AT-ZXD332-0500-ITP-ISP29Three Types of Consumer ISPs Will SurviveContent rich OSPs (AOL, ExciteHome, others?) Sources of competitive advantageDifferentiated, sticky product offering AOL users spend 80% of time within walled garden Capture pricing premium and other revenue streams ScaleTelcos

35、 (AT&T, BellSouth, SBC .)Ability to bundle with other communications productsLarge customer baseLow cost accessCo-branded/private label free ISPs (B, VirginNet .)Low-cost distribution CD distribution at retailers Pre-loaded on PCs, other devices Online distribution agreementsSubsidized by commer

36、ce revenue E-commerce Customer loyaltyAT-ZXD332-0500-ITP-ISP30Outline Introduction and overview of landscapeEconomics of ISPsEmerging issuesAT-ZXD332-0500-ITP-ISP31IssueSelect questionsBackgroundMigration to broadband How to source? Which technology?Is speed enough to attract customers? Content prov

37、iders/ advertisers generating features requiring broadband accessEarly adopters willing to pay for speedEmerging IssuesEmergence of wireless dataWho to partner with?What degree of integration with wired access?Consumers demanding wireless access as technology makes it possibleVoIPCan service be deli

38、vered at acceptable level?How will telcos respond to cannibalization threat?IP telephony presents opportunity to offer value-added service to consumersOffering consumers tiered serviceWhat do consumers want?What is technologically feasible?Uniform, flat-rate pricing does not enable customer segmenta

39、tionConsumers may be willing to pay for high quality serviceAT-ZXD332-0500-ITP-ISP3210 minsMTV videoImpact of Broadband Download Time15 secs20 minsAudio song (MP3)0.1 sec6 secWeb page13 hoursNarrowband(28 kbps)Broadband(2 mbps)Streaming video requires 1-4 mbpsAT-ZXD332-0500-ITP-ISP33Subscriber Growt

40、h By Platform41.2946.0448.2946.9845.2743.629.0911.4313.456.128.3310.766.121.624.041.753.440.232.401.300.500.070.180.00199920002001200220032004DialupCableDSLMMDS43.151.958.062.366.370.2AT-ZXD332-0500-ITP-ISP34Mass Market Will Require Killer Content to Drive Them to BroadbandSource: Jupiter Communicat

41、ions, 12/995227165No more than current ISPPercent$36-50$26-35$20-25How much would you pay for an access service that provides nearly instantaneous Internet speeds?3713117266$20$20$15What is maximum you would be willing to pay for a package of premium broadband applications in addition to the cost of monthly access?$10$5$0AT-ZXD33