1© Nokia Siemens Networks 01 / 2007 For internal use The Future of TV Guillermo Wichmann Andinalink, Iberoamerican Convergence & Audiovisual Forum Feb. 26 th 2008 Cartagena, Colombia

Content Introduction to new revenues FutureTV usage vision Market Strategies & Tactics Services Summary

Our Vision By 2015, 5bn people will be connected by communications Mobile and fixed broadband availability will explode Network traffic will grow a hundredfold, capacity must keep pace New business models based on innovative thinking will be needed

Top revenue generators in Entertainment & Media TV is a key driver for new revenue growth TV services are predicted to become the most important revenue generator for the mobile content industry five years from now, coming after Communities and followed by Music and Games. Communities & TV fulfill many of our deepest human needs and have become an important part of the lifestyle of millions of people Importance of service for generating revenues (%)

New Players and Business Opportunities in Interactivity Ecosystem Interactive Application Advertiser Consumer Brands Content Aggregators "Usage Patterns" Market Research Institutes Content Producers Broadcaster ISP / Fixed Carrier Devices Mobile Network Operators Interactive Application Interactive Channel Provider "consume" "create & share content" "interact with the program" End User Right Owners Content Providers TV Channels Interactivity brings Telco & Media industry together and enables new business

Content Introduction to new revenues FutureTV usage vision Market Strategies & Tactics Services Summary

End-Users Demand Better TV My TV My IM My cell phone… Future TV will change the user TV experience from passive zapping to active browsing High frustration with broadcast TV Demand for better TV I have 100 channels, but nothing to watch TodayTomorrow

What will Most Motivate Consumers to Spend on Triple or Quadruple Play Services ? Source: Accenture / Economist Intelligence Unit survey, May 2006 ImportantLess important 0% 20% 40% 60% 80% 100% Convenience of single bill & multiple services Past relations with trusted provider Convenience of single provider 4 technical support Ability to move content between devices Discounted price thanks to bundling

4 Mindsets of Future Future TV Usage Lean forward Lean Back Personal Media Social Media Transaction Media Self Publishing Space Personal ProgrammingCommunity TV

SELF PUBLISHING SPACE 4 Mindsets of Future Future TV Usage COMMUNITY TV TRANSACTION MEDIA PERSONAL CONSUMPTION Lean forward Lean Back Personal Media Social Media TV usage changes from a purely private context to a means to communicate with others FROM PASSIVE ZAPPING TO ACTIVE BROWSING The TV set becomes the center of interactivity The TV set becomes the center of interactivity FROM INDIVIDUAL CONFIGURATION TO SOCIAL SHARING

Personal Consumption Convenience of Personalization Free TV Pay TV Profiling Recommen- dation of content Collaborative filtering Personal TV guides And much more Easy-to-use GUI EPG / ESG Personalized screen Add. Services Demand content Walled garden / internet cPVR / nPVR Broadcast only Content is available at a fingertip Consumers choose from pre-selected content Content can be filtered according to consumer behavior With Future TV, users will enjoy convenience of personalization

Transaction Media Interaction Platform for Flexible Use With Future TV, interaction is fully integrated into TV experience Video telephony Live participation in prime time shows, e. g. Become a Millionaire Red button Quiz Vote Purchase Web on TV / walled garden All common web services Organizer Instant Interaction & Web on TV Live Interaction SMS services Tele voting Delayed Interaction

Self Publishing Space User Creation Future TV connects people in their entertainment Consumers become producer People publish their content in blogs and podcasts People build media communities Private casting Neighborhood TV e. g. People share their experiences inside social networks myspace youtube … Life Caching Self Channelling You invite your friends to share your latest photos & videos Store & Share HOME

Opportunity Multimedia Content on Demand Titles Recommendations drive demand down the long tail VoD (films, news, sports, …) Regional & Local Com- munity Interest Group Content Family Fotos & Videos Friends Fotos & Videos Professional Content Creators Prosumers Semi-Professionals End-users = Everybody Subculture films Affinity groups pull people up the long tail Audience per title 90% of digital multimedia content is not shared; members of the average household are part of 13 non-commercial communities/affinity groups VoD Opportunity

Paradigm Shift in infotainment From technology to content – Content and how it is delivered will be the main driver From consumer to prosumer – The audience becomes part of TV From broadcasting to narrowcasting – Tailored content is king From television to social conversation – TV powers social interaction From media to space – People live inside the media From advertising to branded content – Brands will become media

Content Introduction to new revenues FutureTV usage vision Market Strategies & Tactics Services Summary

The most popular form of entertainment >95% of households own a TV *1 Global broadband household subscriptions are growing from 270m (2006) to 501m (2011) *2 Deployment of higher-speed video capable access technologies is increasing Fastest growth ever for a technology 2.75 bn subscriptions globally end 2006, 4.1 bn end 2011 *3 Worldwide penetration of mobile phones: 42.01% end 2006, 59.1% end 2011, > 100% penetration rate in several countries *3 Soon ~1bn phones shipped globally TV BROADBAND MOBILE PHONES Market trends driving the TV service Sources: 1 Jupiter, 2 Strategy Analytics, 3 Informa 06/06

Mobile TV and Video Services today Technology Cellular and WLAN streaming and downloading Various mobile broadcast (DVB-H, DMB…) trials around the globe Live broadcast services: DVB-H in Finland, Vietnam and 2xin Italy, DAB-IP in UK, 1 x DMB in Germany, 2 x DMB in Korea, ISDB-T in Japan Pricing Cellular services include free introduction, monthly package fees and pay per use Internet portals mainly free promotional content Fees range from 7.5 to 15 /month, clips 0.6-2/pcs, movies on memory cards ca. 25 Volumes 4 million mobile TV subscribers in more than 100 cellular networks worldwide 2 million subscribers of broadcast mobile TV in Korea subscribers in 3 Italys DVB-H network (start June 2006). 12 million downloads from 3s SeeMe TV since launch in October 2005 (Informa Telecoms & Media, October 2006) Content Service packages including on-demand clips and 5 to over 60 live TV channels Several Internet video portals for mobiles Some terminals include pre-installed movies and selected movies sold on memory cards Usage Commuting, during work breaks, at home, background usage Cellular Mobile TV: average active user spends around 25 min on per month, typically ~2 to 6 min sessions DVB-H Mobile TV trial usage min daily

Different Strategies for Different Players Offer rich service over any network access - Access and share personal TV content anywhere Develop leading position with a comprehensive multi-play offer - Seamless sharing and consumption of personal media anywhere, anytime, and by any device (TV, Pictures, Videos) Strengthen brand and differentiate from competition - Basic TV service over 3G, WiMAX or HSDPA New revenue opportunities from subscriptions and interactive services - Subscription based exclusive TV channels with interactive services like voting and chat Increase customer loyalty by one-stop-shopping - TV service over VDSL or PON on top of Broadband Tap into the new source of revenue (content, advertising, interaction) - Extend TV service to include VoD, Ads, & voting MVNO launch for mobile and fixed TV service Provide seamless experience over fixed and mobile TV Community set-up around TV sharing and consumption that can be extended to Pictures and Videos. Mobile Voice Fixed Voice Broadband Internet TV Fixed provider Mobile provider ISP Hybrid provider Cable operator

Content Introduction to new revenues FutureTV usage vision Market Strategies & Tactics Services Summary

TomorrowToday Converged TV enables new user experiences between Mobile TV and IPTV Converged TV Converged media delivery fixed cellular broadcast Separate media delivery platforms CONTENT

Converged Use Case: One Subscription User subscribes to converged TV service 1 Phone & IPTV STB are provided 2 User receives one bill 4 Add-on services subscriptions and upgrades from any device User enjoys mobile TV 3 on the move User enjoys mobile IPTV

Converged Use Case: User Controlled Session Continuity on the Stop Live TV 1 Continue at home 2 Stop Movie 1 Continue on the bus 2 Resume later where you stopped on any device

Converged Use Case: Network Based Personal Video Recorder on the Record is added to the media library and can be consumed on the move or at home Select PVR Control application 1 Program PVR for recording clip 2 Add recording to media library 3 Start watching recorded clip 4

Business Models There is growing demand for specialized and paid content. Revenue by ContentRevenue by Interaction Transactions are part of the Personal TV experience Revenue by Advertising Advertising market is shifting to new media Become a content broker and get a share of revenue Profit from customer- specific advertising Profit from your customers interactions Mobile & IPTV enables to follow the changing consumer demands Mobile & IPTV enables integrated adverts based on user profiles Mobile & IPTV enables transactions by just pushing a button With Mobile & IPTV operators are able to tap several sources of revenue

Content Introduction to new revenues FutureTV usage vision End-user insights Market Strategies & Tactics Services Summary

It is here. Its real. It's going to be big Interactive, mobile and IPTV services are becoming a reality. Over 100 operators have launched mobile TV services offering different kinds of live TV channel packages and on-demand video clips. Over 100 fixed telecom operators globally provide IPTV services. References for streaming,DVB-H and IPTV customers incl. pilots Based on experience from over 40 mobile TV cases, and 80 IPTV customers

Maximum share of customer wallet Users like service bundles that match lifestyles/consumption patterns Mobile TV Stationary Internet IPTV home infotainment Internet At home/office TV On the move Mobile Internet Web2.0 communities Premium VoIP Inner multiplay area - Differentiation & Up Sell 10 Broadband ARPU estimate

Differentiate to strengthen loyalty & brand TV services offer opportunities for the whole ecosystem New revenue streams and growth – a $25 billion opportunity Combined mobile TV and video market opportunity will reach $11 billion by IPTV service revenues will reach $12.8 billion by … by offering innovative services that attract and engage customers: Consistently more than 65% of people show interest in mobile TV On average, people watch TV 3 hours and 40 minutes daily¹ Reports and studies confirm a direct correlation between new and innovative services and enhanced brand image 1 Jupiter 2 Yankee Group (November 2006), 3 Multi Media Research Group Increase customer loyalty Enhance your brand image