Digital Entertainment on Campus: The Ruckus Approach Michael Bebel CEO, Ruckus Network, Inc.

IFPI – International Federation of the Phonographic Industry – The Recording Industry 2006 Piracy Report

Industry Response - Technology Digital Rights Management (DRM) – Enables protected online distribution DRM Content locked in DRM requires a key that contains usage rights enabling various business models including: Permanent Downloading Subscription Downloading PPV or Rental

Industry Response - Technology Digital Rights Management (DRM) – Interoperability Problem Open Magic Gate DRM Fairplay

The Ruckus Approach What is RUCKUS? “Free & Legal” A college community focused, advertising supported online media company enabled by technology and fueled by passion Market Opportunity: Entry point is 16.5 million full time college students –Media Servers on Campus – Optimizes user experience and reduces bandwidth costs –According to Harris Interactive, U.S. college students carry $122 billion in spending power, including $24 billion in discretionary spending

21 st Century Student Profile Trend Setters…Defining Media consumption The computer is the media center  Average of 6 hours a day online  Most media is consumed through a PC Music & movies are essential elements of their identity  3,200 average number of music tracks on their PC  92% listen to music daily  Watch at least 1 movie/week…often ‘jump around’ Sharing & Networking is a critical part of everyday life  New channels for Communication and expression  Sharing…part of a digital ‘identity’ Ruckus Bridges the gap…delivers lasting value  A library of licensed content that Social Networks do not offer  An online ‘community’ that music services lack Digital Media is about discovery & sharing…building identity & prestige!

RUCKUS Today RUCKUS: Digital Media Community Music …Unlimited Access –2.8 million tracks and growing…Key: stay current –Next generation Music Discovery Video (Beta)… Movies, Music Videos and Shorts –Unlimited access to hundreds of titles –Movies: Independent films – Major studios…coming soon –TV – coming this Fall Sharing…Creating Connections through shared interests –Enable Discovery & Sharing…licensed Content Monetization –Banner & Videos Ads –Sponsorships RUCKUS is all about Sharing & Discovery!

Experience & Expectations It’s Working: –Delivery Network in place, local caching on campus optimizes user experience –Over 120 schools live with a full pipeline –Proven Adoption Rates –60+% of on campus students register in the first week –100s of thousands of active users downloading tens of millions of songs on a monthly basis Positive Usage Patterns –50% of users return weekly – 8 Sessions per week (5 player, 3 site) –150 to 200 minute Average Player Sessions –10 page views per Site Session Moving Forward –Announced “Free for All” students program on Jan. 22 –Adding more content and media types –More robust Video offering in the Fall