Convergence: Consumers and Opportunities for Mobile Media Thomas Ryan 3GSM World Congress Government Mobile Forum Barcelona, 13 th February 2007

2 A tale of two moguls The music mogul The tech mogul

3 Convergence success stories are a reality today Skype –Perhaps the fastest growing product in history –Over 136 MM users as of 11/06 –˜7% of global international long distance minutes Nokia –largest seller of digital cameras –largest seller of MP3 players YouTube MySpace World of Warcraft

4 A “Perfect Storm” is driving convergence Perfect Storm –Technology - Broadband + device penetration –User behavior / demand –Innovative services that leverage them Storm hits online/PC world first –Web > Web 2.0 –Move to user participation (user-generated content, community), openness and massive network effects But mobile is soon to follow. And there are twice as many mobile as PC users –Mobile > Mobile 2.0 –From simple personalization to rich media entertainment, community, user-generated content

5 Mobile broadband reaching tipping point US Residential Broadband (Fixed Line)Global 2.5 / 3G Penetration Source: Morgan Stanley

6 Technology enables convergence, but consumers are driving it People have fundamental need to communicate, connect and participate Young people are in control and are driving this –“Mods” - modify, share and customize everything –Creators, not just consumers –Tech-savvy, multi-tasking hyper-communicators –Fashion conscious –Smart / skeptical We as an industry must adapt to what consumers want in order to succeed

7 Mobile: Opportunity for the Media Industry Global mobile content revenues $150 billion by 2011?(Informa) –Music; TV / video; Gaming; Other Mobile provides direct access to customers –Most personal device; Secure; Interactive; Always on –Proven channel for selling content –Emerging channel for direct marketing and advertising-supported content Mobile provides both extension of existing business models as well as completely new services (made-for-mobile content) Like mobile, entertainment creates an “emotional” bond –Can’t live without music or mobile –People fall in love with artists, not products –Rebundling the music industry: Ringtone + Ringback Full track + Image + Video = “mobile album” Consumer as creator, promoter & retailer

8 What Consumers Want from Mobile Media Variety –Many products and formats –More accessible / easier to find Control –Ability to interact / remix/ customize their media –Express themselves Transparency –“What you see is what you get” –Consumers put off by poor value for money, misleading subscription services, excess data charges Flexible ways to pay for and consume content –Flat-rate pricing –Rental –Ad-supported

9 Challenges Consistently innovate to capture consumer imagination and to maintain loyalty and trust Offer compelling services to ensure consumers embrace paid or ad-supported models Ensure services are transparent, fair and consumer friendly Address piracy and substitution –particularly as open IP penetrates mobile Continue close cross-industry cooperation