VOD’s Advantage: VOD’s Advantage: Quality Content, Consumers & Connections

VOD (Video on Demand) allows users to view/catch up on shows or movies through a single platform from cable, telco or satellite providers without the need for extra hardware.

VOD is now available in 60% of homes; up 43% in five years VOD content has grown exponentially Number of titles have quadrupled Recent episodes and high profile programs have been added to VOD libraries As a result, consumer usage is growing steadily 70% use VOD; 59% watch TV content Time spent with VOD is up; close to 9 hours/months VOD viewers watch longer; spend more time with commercials Who are they? Higher income, A18-34 who are likely to have kids & own more devices Asians tend to watch more VOD content Nielsen measures and reports VOD Viewing VOD viewing is now being measured and therefore monetized within the C3 window. More advertisers are exploring VOD opportunities day 4 and beyond Video On Demand Summary

Video On Demand Is Now Available In 60% Of Homes; Up 43% In Five Years VOD Availability in TV HHs Source: Nielsen; June of each year. 47,660 UE(OOO) 53,278 61,09565,300 67,946 69,481

VOD’s Growth Is Driven By Increased Ease Of Use and Large Number of Titles Available Average U.S. MSO VOD Titles Per Month Source: SNL Kagan Multichannel market trends; Count represents avg monthy selection, reflecting turnover and refreshed content and are not comparable to average titles available simultaneously. # of Titles Has Quadrupled In Past 5 years

…And Libraries Continue To Be Populated With Recent Episodes of Popular Shows Sample Programs on VOD (Availability Varies by Cable Provider)

Two Out Of Three Consumers Use Video On Demand; Mostly Tuning To TV Programming check Source: Comcast reported; 70% use VOD – of those who use, 59% view tv pgm = Rentrak 2013 report 70% of Digital Consumers Use VOD 59% of All TV’s That Watch On Demand Watch Content From Major Cable & Broadcast Networks

One Third Of All TV Entertainment Transactions Occur Within The First Three Days Source: Rentrak 2013 report 23% of all FOD transactions occur within days % of all TV entertainment transactions occur with days 1-3 Day 1Day 2Day 3Day 4Day 5Day 6Day 7 % of Transactions Occurring By Day

So There Exists An Opportunity For Advertisers To Reach More Viewers Outside The First Three Day Window Source: Rentrak 2013 report 69% of all TV entertainment viewing occurs outside the C3 window Day 1Day 2Day 3Day 4Day 5Day 6Day 7 % of Transactions Occurring By Day, ETC…

Usage Levels

Viewers Spend Almost 9 Hours a Month Watching VOD Time Spent (Hrs Per Month) Source: Rentrak state of VOD report % v. 2011

“In The Past 6 Months, How Has Your Video On Demand Usage Changed?” …And Usage Will Continue To Grow: 1 in 4 A18-49 Cite an Increase in VOD Usage in Past 6 Months CAB/Magid Video Nation Study 2013; BASE: Have VOD 1208 In the past 6 months, has your Video On Demand usage….?

On-Demand Viewers Tend To Watch More Of The Commercials Since Fast-Forward Feature Is Most Likely Disabled Source: Nielsen custom Npower Statiistic: avg number of total pgm min viewed per viewer on each mediumm for recent pgm (P2+), oct, 2013 Average Minutes Watched Per Viewers For a 30-min Program LIVE 20 min DVR 23 min VOD 28 min

In Fact, VOD Viewers Watch More Television Overall Daily Time Spent With Time-Shifted Viewing In Primetime Source: Nielsen Cross Platform 1Q14; Recently Telecast VOD (pgm that is delivered on VOD within 7 day of original telecast Daily Time Spent With Live Viewing In Primetime

VOD Viewing By Age/Race

On Average, VOD Contributes 4-5% In The Coveted demo, While Individual Shows Experience a 15-20% Increase in Viewership From VOD % of Viewing Source: Nielsen Cross Platform 1Q14; Recently Telecast VOD (pgm that is delivered on VOD within 7 day of original telecast

VOD Platform Appeals To The Younger Demos % of Viewing Source: Nielsen Cross Platform 1Q14; Recently Telecast VOD (pgm that is delivered on VOD within 7 day of original telecast

…And Asian Americans Tend To Watch More VOD, Whose Contribution Through VOD is 8% % of Viewing Source: Nielsen Cross Platform 1Q14; Recently Telecast VOD (pgm that is delivered on VOD within 7 day of original telecast

Source: MRI Doublebase 2013 A18-49; Base= watch VOD in past month A18-49 Viewed In Past Month (Base: VOD users) Although Movies are Still the Most Popular Genre, 65% of VOD Users Have Watched a TV Show in the Past Month Watched TV Shows On VOD Watched Movies On VOD 81% 65%

Due to their Serialized Nature, Dramas are the Most Popular TV Program Type to Use VOD to “Catch Up” With Distribution Of Top Program Genres Source: Nielsen Primetime internal VOD & total TV usage data; NPower internal VOD data includes only Programming encoded for measurement

What is driving consumers to VOD?

Source: Nielsen; August of each year. “I’ll Watch Past Episodes of TV Programs on VOD to Get Up to Date With The New Season” (Top 2 Box) ‘Catching Up’ Is A Big Driver For VOD Content; Half Citing They Use It To ‘Get Up To Date With New Season’ 1055 Please indicate the extent to which you agree with the following statement – “In order to be up to date with the new season, I’ll watch past episodes of TV programs on Video on Demand.” (Top 2 box – strongly agree, agree) +23% v. YAG +19% v. YAG +12% v. YAG

Who is the typical VOD user?

VOD Users Are More Likely To Be Younger Share of Audience Source: Nielsen; Sept’13

They Tend To Be Higher Educated, Earn More and Own More Video Devices VOD Audience Comp Source: Nielsen Cross Platform 1Q14; Recently Telecast VOD (pgm that is delivered on VOD within 7 day of original telecast

Is VOD measured and therefore able to be monetized?

Nielsen Now Measures and Reports VOD, Allowing the Industry to Monetize Day 1Day 2Day 3Day 4Day 5Day 6Day 7Day 8+ If content has SAME commercial load…does it contribute to linear telecast rating? Yes No If content has DIFFERENT commercial load…does it contributes to linear telecast rating? No Recently Telecast VOD What Happens After The 7 th Day? Content is captured but does not contribute to the linear telecast ratings. Is VOD incorporated in the C3 rating? Yes, if content has same commercial load.

VOD’s Dynamic Ad Insertion Allows For Monetization

VOD Dynamic Ad Insertion What is It? Allows network operators to provide target ads that can be swapped in and out of VOD television programs Footprint? 30+M HHs DAI Universe Who? 10 of the Top 10 DMAs, 26 of the Top 30 Top broadcast and cable programming for example NBCU, Scripps, Fox, & FearNet Source: Canoe 2013 STB Data

VOD DAI Current Usage… Average of 68 VOD DAI campaigns per week 17 networks utilizing the platform Campaign orders come from linear & digital Brand categories executing DAI campaigns include: – Retail – Health & Beauty – Travel – Movie Studio – Food – Pet – Automotive Source: Canoe 2013 STB Data; 8/13

Benefits of DAI… Leverage the Existing Linear TV Plan Potential to target like linear TV, by: Time, Series Genre Rating Use the same ad asset as linear TV Compliment the TV plan's reach as VOD DAI reporting does not disrupt VOD inclusion in the Nielsen rating

Benefits of DAI… Get Timely & Reliable Reporting Pay only on actual viewed ad impressions verified by Canoe (MRC Certification in process) Stable, accurate, single source ad impression reporting delivered on a daily basis by Canoe All ad impressions are "above the fold“ Fuse Canoe HH ad impression with Nielsen VPVHs (apply Linear or C3 VOD VPVHs) Compliment Rentrak data on Program Views

What is the future of VOD?

Video On Demand Revenue Is Poised To Grow PPV/VOD Ad Revenue (in millions) Source: SNL Kagan; revenue for cable, dbs,telco ; grey bars are estimates

Appendix

Pro: Already hooked up to the television. No additional user name, password or additional monthly bills are necessary Virtual library Can watch content anywhere anytime on various platforms with services such as XFinity Con: Fast-forward may be disabled for some content Cable VOD Advantages DVRStreaming Web SitesVOD Pro: Has fast-forward, rewind and pause capability Con: Extra cost to HH Pro: Has fast-forward, rewind and pause capability Con: Extra cost for some content Have to create an account to access info Fast-forward may be disabled for some content