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Digital Disruptor
How Bitcoin is Driving
Digital Innovation in
Entertainment, Media
and Communications
(EMC)
Feb. 7, 2014
PwC
#DigitalDisruptor
D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
2013: The year of Bitcoin Source: Online mention data via Sysomos MAP,
2013
May 600k
50% Treasury crackdown on money
April
Chinese e-commerce laundering. Presidential
Volume of mentions
Positive 400k
30%
March October 300k
Speculation of new Silk Road controversy. Bitcoin
unregulated virtual ATMs in Canada. Exchange
20%
currency and value. launched in the United Kingdom. 200k
10% Negative
100k
0% 0
Dec 12 J F M A M J J A S O N D 13
Source: Online mention data via Sysomos MAP, 2013.
Note: While regulators have publicly stated they do not wish to stifle innovation, federal agencies continue to advance their own understanding of Bitcoin and its
technology. It is likely that the regulatory environment for users, miners and exchangers will evolve over time. Companies considering Bitcoin should monitor regulatory
developments and how they shape the market in coming years.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
$1,400
2013:
Canada and Slovakia introduce
$1,200
Bitcoin ATMs.
$1,000 2014:
Overstock.com has 840 orders
$800 on first day of taking Bitcoin. The
company estimates $500,000
$600 worth of Bitcoin business since
January 9.
Avg. Bitcoin $
$400
2014:
$200 Kings become first NBA team to
h
$ H ig announce Bitcoin acceptance.
oin
B itc
0% 2014:
Canada and the Bank of France
J 2013 F M A M J J A S O N D
say Bitcoin isnt legal tender.
Source: The Wall Street Journal, Bitcoin Vs Gold: A Tale Of Two Manias, 2013. Source: PwC Research, 2014.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
pattern as a digital currency: other users, or companies with 2.7%* Visa, MasterCard,
Banks, governments, payment goods and services to sell, with Discover
processors and payment minimal fees and no float time. 2.9% PayPal
gateways. Added to this proposition 2.75% Square
BitPay and BIPS are is that consumers who use a
Free ** Coinbase
payment gateways for Bitcoin decentralized, peer-to-peer
transactions, and they are payment system can be shielded Free *** BitPay
Commodities Future Trading Considering options on Bitcoin as a commodity, or a * Variable as set by the acquiror (bank).
Commission marketable good produced to satisfy wants or needs. ** No fee for first $1 million in payment processing.
After that, 1% charge.
Internal Revenue Service Considering options on Bitcoin as a taxable currency. *** No transaction fee with $30 / month subscription.
Source: Congressional Research Service, Bitcoin: Q+A and Analysis of Legal Issues, 2013.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
60%
11.3 million
ust
sumer tr The number of Bitcoins in circulation in July
40% U K con
2013.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
How digital wallets work with Bitcoin: Buying movie tickets BitTorrent, in its new business model
as a legitimate content provider,
is integrating Bitcoin into its system,
encouraging content creators to share music
with fans in exchange for Bitcoin. It may
also integrate Bitcoin metadata into its code,
Customer has a smartphone To buy a ticket, customer The Bitcoin network sends
potentially open-sourcing innovation among
with a digital wallet app uses phone to scan a Bitcoin money from the customers
the two protocols. BitTorrents protocols
installed, and goes to a movie QR code on the point of sale online Bitcoin tally to the
generate roughly 40% of the worlds internet
theatre that supports Bitcoin machine that matches the theatres account. On average,
traffic each day.
transactions. price of the ticket. this takes ten minutes or less.
Source: PwC Research, 2013. Sources: Online mention data via Sysomos MAP,
2013. PwCs 2013-2017 Global Entertainment and
Media Outlook, 2013.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
3,000
94 % of people skip pre-roll
advertisements when browsing
the internet.
2,400
Early innovators
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
Zynga is an online social gaming company that has faced increased competition, loss of players on Humble Bundle accepts Bitcoin for video
social networks and challenges porting its games to mobile devices. Zyngas active daily users went game packages under a name-your-own
from a high of 72 million in 2012 to 30 million in 2013. In January 2014, it announced Bitcoin global pricing model. It splits the profits with
acceptance in their games FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, developers and nonprofits.
Hidden Shadows and CityVille.
PC Game Supply accepts Bitcoin for digital
Potential benefits: delivery and for game bundles under a
Improved profitability due to lower transaction costs for in-game purchases of virtual goods, publicity name-your-own price model.
and social media word-of-mouth exposure, closer alignment with core Bitcoin demographics.
The State of New Jersey settled with a
Potential challenges: online video game company for $1 million
Extending Bitcoin to mobile devices could prove challenging since Bitcoin wallet apps have been amid accusations of the company stealing
rejected from several leading app stores. Bitcoin from video game players using
malware.
Source: TechCrunch, Zynga Links Up With BitPay For A Bitcoin Payment Test, 2014. Zynga Game Network, Sources: Online mention data via Sysomos MAP,
2013. Inside Network Survey, 2013. 2013. GameSpot, Time spent gaming on the rise,
2010. Gartner, Forecast: Video Game Ecosystem,
Worldwide, 4Q13, 2013. ZDNet, Video game firm
settles Bitcoin mining dispute for $1 million, 2013.
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Source: The Wall Street Journal, Bitcoin Couple Travels the World Using Virtual Cash, 2013. Sources: Online mention data via Sysomos MAP,
2013. U.S. Travel Association, 2013. IBISWorld,
2013. PwC Research, 2013. PwC, PwC Hospitality
Directions: Q3 2013, 2013.
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Source: Bloomberg, China Bans Financial Companies From Bitcoin Transactions, 2013. CNBC, Baidu
division now accepting bitcoins, 2013. Mashable, Bitcoin Prices Plunge..., 2013. PwC Research, 2014.
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Know what it is and have Know what it is but Heard something Never heard about it
used it at least once have not used it about it
Base: Total Respondents (1000); 18-24 (195); 25-34 (310); Base: Total Respondents (1000); 18-24 (195); 25-34 (310); 35-49 (388); 50-59 (107)
35-49 (388); 50-59 (107)
How interested are you in using Bitcoin for: How interested are you in using Bitcoin for Internet
(Somewhat - Very Interested) purchases with your phone, tablet, or laptop?
Very
Very
Very Interested
Interested
Interested Somewhat
Somewhat
Somewhat Not
Notvery
Notvery
very Not
Notatatall
Not allall
at
Base: Total Respondents (1000) Base: Total Respondents (1000); 18-24 (195); 25-34 (310); 35-49 (388); 50-59 (107)
What do you see as the top five benefits of using How willing are you to actually use Bitcoin to conduct
Bitcoin for your purchase / sale transactions? Internet purchase / sales transactions?
Very
Very
Very Interested
Interested
Interested Somewhat
Somewhat
Somewhat Not
Notvery
Notvery
very Not
Notatatall
Not allall
at
Helps protect identity while making payments 15%
Base: Total Respondents (1000) Base: Total Respondents (1000); 18-24 (195); 25-34 (310); 35-49 (388); 50-59 (107)
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C o n s u me r i n tellige n c e s e r ie s
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Why are you not very/not at all interested in using Bitcoin for Internet purchase/sale transactions?
Need more information / dont know much about it 16% 15% 14% 18% 10%
New / unproven / not enough experience / not around a long time 5% 1% 6% 4% 10%
Base: Not Interested in Bitcoin Total (491); 18-24 (91); 25-34 (141); 35-49 (207); 50-59 (52)
What other feature(s) would make you interested in using Bitcoin for purchase/ sale transactions?
Better security / fraud protection / credits not stolen 14% 13% 13% 14% 13%
Dont know 8% 8% 6% 9% 8%
Base: Total Respondents (1000); 18-24 (195); 25-34 (310); 35-49 (388); 50-59 (107)
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C o n s u me r i n tellige n c e s e r ie s
D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
What would be the top five benefits to using Bitcoin for your purchase / sale transactions?
Base: Total Respondents (1000); 18-24 (195); 25-34 (310); 35-49 (388); 50-59 (107)
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
What potential barriers do you see using Bitcoin to conduct purchase/sale transactions?
Indicate your level of concern to the following statements reflecting potential barriers / concerns to using Bitcoins to
conduct purchase / sale transactions.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
When did you last make a purchase or sale online using your laptop or your mobile device? (Overall breakdown)
When did you last make a purchase or sale online using your laptop or your mobile device? (Breakdown by age)
Use the scale to indicate how interested you are in using Bitcoins for your Survey demographic breakdown:
Internet purchase transactions made using your phone, tablet, or laptop.
Gender:
Male
45%
Female
55%
Age Range:
50-59
11%
Based on the description, benefits and concerns addressed, how willing
would you be to actually use Bitcoins to conduct Internet purchase / sales 18-24
transactions? 20%
35-49
25-34
38%
31%
1,000 Respondents
Geographically Diverse/U.S.
Appendix: Sources
1. PwC Social Listening, Sysomos MAP, 2013. 11. Business Insider, The Ninth-Largest Newspaper In The Country
2. BBC, Bitcoin: Price v hype, 2013. Is Trying Out A Bitcoin Paywall, 2014.
3. BBC, Bitcoin: Price v hype, 2013. 12. The New York Times, In China, New Limits on Virtual Currency,
4. Forbes, Bitcoin valued at $1300 by Bank of America analysts, 2009.
2013. 13. American Gaming Association, Online Gaming, 2014.
5. The New York Times, $25 Million in Financing for Coinbase, 14. Forbes, Bitcoin Casinos Release 2012 Earnings, 2013.
2013. 15. CBS, Nevada legalizes online gambling, 2013.
6. Bloomberg, Bitcoin: Making Online Gambling Legal in the 16. Computer World, In Kenya, Bitcoin linked to popular mobile
U.S.?, 2013. payment system, 2013.
7. Wired, The Grand Experiment Goes Live: Overstock.com Is 17. CoinDesk, Mobile Vikings: the First Cellular Network to Accept
Now Accepting Bitcoins, 2014. Bitcoin, 2013.
8. CoinDesk, Bitcoin Price Index, 2014. 18. HushVoice Website, 2014.
9. Reddit, Petition Kickstarter to take Bitcoins, 2013.
10. S. Meiklejohn and M. Pomarole. A Fistful of Bitcoins:
Characterizing Payments Among Men with No Names, In IMC,
2013.
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D I G I T A L D i s r u p t o r : H o w B it c o i n i s d r i v i n g i n n o v ati o n i n E M C
About PwC
PwCs Entertainment, Media and Communications practice For questions and comments,
PwCs practice works with businesses to address the challenges and contact:
opportunities presented by digital transformation, assisting them shift from
Deborah Bothun
traditional business models to businesses, brands and revenue streams that Principal
leverage digital content and platforms. We work with clients across a wide U.S. Advisory Entertainment, Media
range of key industry sectors including: television, film, music, Internet, and Communications Leader
deborah.k.bothun@us.pwc.com
video games, advertising, publishing, radio, out of home advertising, sports,
business information, casino gaming, and more.
Ben McConnell
PwCs Digital / Social practice Managing Director
U.S. Advisory Digital / Social Practice
PwCs practice helps organizations capitalize on the social, mobile and
ben.mcconnell@us.pwc.com
other digital technologies that are transforming the way business gets done, @benmcconnell
from customer value to revenue growth. With a strong, customer-centric
focus, PwCs social and digital practice employs a range of solutions, from
operating models, to technology models, to technology solutions, to customer
Matthew Lieberman
U.S. Entertainment, Media and
data to global social and digital strategies. Communications Marketing Leader
matthew.lieberman@us.pwc.com
Analyst
David J. Neff, PwC Digital / Social Strategy
Design
Eleanor Bartosh, PwC Digital / Social Strategy
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