The document discusses how traditional business models are being disrupted by the transition to personalized access and purchase of goods and services enabled by digital transformation. It identifies 6 key enablers of transformational change: having a compelling reason for change, a clear long-term vision and strategy, the patience to see transformation as a multi-year journey, putting customers at the center, proving success to skeptics, and over-communicating during times of change. The document also examines how subscription-based revenue models are fast becoming popular across many industries and consumer segments in Australia and New Zealand, with connectivity and personalization expected to be important drivers of digital goods and services spending in the coming years.

1. DISRUPTING THE TRADITIONAL
BUSINESS MODEL

2. Kim Benito
VP, Global Services APAC, Zuora

3. Kevin Noonan
Lead Analyst, Ovum
David Tan
Partner, Deloitte Digital

4. DISRUPTING THE
TRADITIONAL
BUSINESS MODEL
• Transition from
traditional to
personalized access and
purchase of goods &
services
• Overview: 6 enablers of
transformational
change
• Observations,
Challenges and
Suggestions

5. Digital Transformation journey
Transition from traditional offerings towards personalized goods & services
page
05
Competitive, and comparative pricing points to improve value for
money
Increased use of internet enabled connected devices
Exponential rise in media consumption of multi-screen video
services worldwide
Decreased costs of Digital goods & services catalogue
Personalisation is becoming essential
Digital revenue models i.e. subscription or one time payment offer a
strong audience engagement that can improve repeat sales.

6. TRANSFORMATIONAL CHANGE

7. 6 Enablers of transformational change
within any organisation
01
A Strong Compelling
ReasonA strong, compelling reason to
motivate transformational change
02 A Clear Vision and
Strategy
A clear vision and strategy, but with
room for agility and iteration
03
A Multi-year Journey
The patience to know that
transformation is a multi-year
journey
04
Put the Customer at the
CenterThe need to put the customer at the
centre of the transformation equation.
05
Proving Success with
SkepticsThe importance of demonstrating to
skeptics that different actions can lead to
different results
06
Over-communication
The need to over-communicate to
employees, customers, stakeholders,
shareholders

8. External market factors,
industry shifts and changes
in buyer preferences that
create a compelling reason for
change.
A STRONG COMPELLING REASON

9. Unlimited access
Core driver towards digital enabled goods & services access and
purchase journey
page
09
0
20
40
60
80
100
120
Unlimited access to product & services in
real-time
Access to first look products and premium
services
Regular renewal, upgrades and maintence
of products and services
Highly personalised product and services at
disposal
Delivery of highest quality of product and
services on-time
The ability to always be at the forfront of
technology, fashion and trends
None of the above
ANZ: Adoption drivers (2016)
ANZ Australia (A) New Zealand (NZ)
Source: Ovum’s B2C Subscription survey (August 2016); N=300

10. ANZ consumers are embracing both subscription and one
time payment modes in the digital transformation era
page
010Source: Ovum’s B2C Subscription survey (August 2016); N=300
40%
32%
21%
6%
1% 0% 0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1% 2-9% 10-20% 21-30% 31-40% 41-50% 51% and
above
ANZ: Percent of monthly household disposable
income for subscription services (2016)
39%
22%
19%
12%
4%
2% 1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2-9% 10-20% 0-1% 21-30% 51% and
above
41-50% 31-40%
ANZ: Percent of monthly household disposable
income for one time payment (2016)
Almost a third (32-39%) are spending aggressively on subscription and one time payment in the
transformation era. So will a hybrid model i.e. transaction and subscription video on demand suit this
market?

11. Subscription based revenue models
Fast penetrating every business segment; media sector leading adopter
page
011Source: Ovum’s B2C Subscription survey (August 2016); N=300
83 81
54
46 43 40
36 36 34
30 30 27
23 22 21 21 21 19 18 18 17 17 17 16 14
8 5 2
ANZ: Subscription Services by Segments (2016)

12. Embracing agile iteration
within an established
enterprise
A BOLD VISION…BUT WITH
ROOM FOR ITERATION

13. Myth Gen Z (14-25 age) are core customers for digital goods & services
page
013
Some of pivotal survey
highlights are:
• Almost one-third (36%) of Gen Y (26-
35 age) and silent generation (71+
age) have been using any form of
subscription service from less than an
year.
• Population aged between 26-50
years, control more than half (56%) of
total subscription services across ANZ
market
in 2016.
34
28
13 11 11
36
24
34
9 7
14
10
8
9
4
9
13
2
16
8
26-35 36-50 14-25 51-70 71+
ANZ: Subscription Services Longevity
(2016)
Less than 1 year
2-5 years
6-10 years
More than 10 years
Source: Ovum’s B2C Subscription survey (August 2016); N=300

14. Managing expectations
during a multi-year
transformation
TRANSFORMATION: A MULTI-YEAR
JOURNEY

15. PUTTING THE CUSTOMER AT THE
CENTRE
Designing and delivering
an engaging experience
for a new set of customers
and buyers

16. Transformation continuous process integration of new goods &
services to
improve engagement is pivotal
page
016
Connected life paradigm is fast becoming reality. This paves way for service providers to enhance
their goods & services offering into multiple segment such as connected healthcare, education, and
wealth management.
22%
37%
29%
9%
3%
ANZ: Connected Life services
likely spend by age (2016)
14-25 26-35 36-50 51-70 71+
52
17
5 5 5
17
8 5 8 4 6
19
21
11 14 14
10
10 14 7
8 4
12
4
24 20 15
5
10 9
11 14
8
Connected
healthcare
Connected
education
Connected
financial &
wealth
management
services
Connected
electronic
goods &
services
Personalized
connected
living room
entertainment
Connected
Car (includes
aftermarket
maintenance)
Connected
home care
Connected
pet care
Connected
personal
hygiene and
beauty care
Connected
housing & real
estate
Connected
regional &
global
professional
services
ANZ: Value add connected life services
priorities (2017-2019)
Top 1 Top 2 Top 3
Source: Ovum’s B2C Subscription survey (August 2016); N=300

17. Building a life-time trust and loyalty is essential for
sustainability
page
017
30
21 13 14 10 7 12
39
25
22 28
15 13
14
26
18
28 20
6 8 3
18
15 11 5
6 4 3
15
1 6
10
1
2 0
Highly trusted global
and regional service
provider
Addition of new services
enabling connected
home entertainment
experience
Enables a single, unified
livelihood instead of
multiple separate
subscriptions
Provides unique
portfolio of media and
non-media, products /
services
It's a social status and
enables collaboration
with friends and family
Planned provision of
connected healthcare
Facilitates multi-
platform, remote
education services
ANZ: Consumers Future Preference
14-25 26-35 36-50 51-70 71+
As consumers move to the next wave of personalization, they will demand for highly trusted global
and regional service provider (boundary-less goods & services) offering unique value proposition to
enable connected life.
Source: Ovum’s B2C Subscription survey (August 2016); N=300

18. the importance of
demonstrating to skeptics
that different actions can lead
to different results
PROVING SUCCESS WITH SKEPTICS

19. The need to over-
communicate to employees,
stakeholders, customers
during times of change
OVER-COMMUNICATION

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