1. HTEFUTUREDECODED emerging markets online security new product development consumer uptake new technology b2c unknown customer base niche market analysis interactive services market saturation information overload b2b online strategies customer relationship management opportunity identification competitive threats new technology barriers to entry digital delivery tracking mechanisms eCommerce segmentation consumer confusion mCommerce broadband connectivity clicks and mortar unexploited killer apps media mix consumer classification differing pricing policies personalization development trading channels wireless internet technology virtual value chains iTV revenue streams and business models Balancing ARPU and future growth to 2006

2. HTEFUTUREDECODED © Datamonitor 2 Agenda The positioning of pay-TV services Conceptualizing the digital ARPU Revenue generating interactive TV services Digital pay-TV revenues in Europe to 2006 Digital PPV revenues in Europe, 2006 Regional variation in digital pay-TV revenues Digital pay-TV revenues by platform Digital pay-TV ARPU by platform Changing iTV business models Leading revenue generating iTV services

3. HTEFUTUREDECODED © Datamonitor 3 Positioning of pay-TV services Consumer appeal and revenue generating potential differ by service. Pay-TV channel packages continue to dominate business models. Enhanced programming will be vital in order to drive interactive revenues. Appeal to consumer Revenue potential Free-to-air Pay-per-view Enhanced programming Games Gambling Basic pay-TV TV-Internet Communications & community Premium pay-TV subscriptions Walled garden T-Commerce High Low High

4. HTEFUTUREDECODED © Datamonitor 4 Conceptualizing the ARPU Subscriptions are the most important revenue stream. Subscription ARPU grows only slowly. PPV and interactive services to dominate total ARPU growth. iTV transactions PPV Premium channels iTV charges iTV subscriptions Basic subscription Revenues Time

5. HTEFUTUREDECODED © Datamonitor 5 Revenue generating interactive services Many non revenue generating iTV services will help drive uptake and reduce churn. Games and gambling dominate early iTV business models. Information and communications will be widely used but will generate little revenue. Revenue potential for service providers Appeal to consumers Interactive shopping Limited revenues Attract subscribers High Low High Interactive banking Interactive advertising Enhanced programming E-mail & Internet Limited value Drive revenues Information Gaming Gambling

6. HTEFUTUREDECODED © Datamonitor 6 Digital pay-TV revenues in Europe to 2006 In 2006 digital pay-TV will generate $38.6 billion in Europe. Digital pay-TV revenues grow at a CAGR of 33% to 2006. iTV and PPV services account for 23% of revenues by 2006. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 200120022003200420052006 Interactive PPV Subs $m

7. HTEFUTUREDECODED © Datamonitor 7 Digital PPV revenues Digital PPV almost doubles consumer buy rates. Digital PPV generates $4.9 billion in 2006. Adult and sport content account for 31% of digital PPV revenues by 2006. Movies Sport Adult Music Other

8. HTEFUTUREDECODED © Datamonitor 8 Regional variation in Europe Pay-TV and satellite dominated markets grow slowly. Cable dominated markets demonstrate rapid revenue growth. Germany will be Europe’s most lucrative digital pay-TV market by 2006. 5% 10% 15% 20% 25% 30% 35% 40% 45% 20%40%60%80%100% Benelux France Germany Italy Nordics Spain UK Pay-TV and satellite dominated markets Cable dominated markets Revenue CAGR 2001-2006 DTV penetration, 2001 Digital pay-TV revenues in 2006

9. HTEFUTUREDECODED © Datamonitor 9 Digital pay-TV revenues by platform Satellite dominates digital pay-TV in 2001. Cable is the most lucrative digital pay-TV platform by 2006. DTT digital pay-TV revenues grow only slowly. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 200120022003200420052006 Satellite Cable DTT $m

10. HTEFUTUREDECODED © Datamonitor 10 Digital pay-TV ARPU by platform in Europe The satellite ARPU will be $548 per year by 2006. Digital cable ARPU grows rapidly as uptake of premium services takes off. DTT ARPU falls due to mass uptake of FTA services diluting early pay-TV led growth. 0 100 200 300 400 500 600 200120022003200420052006 Satellite Cable DTT Annual ARPU ($)

11. HTEFUTUREDECODED © Datamonitor 11 Changing iTV business models Premium line dial-up dominates iTV revenue generation in 2001. By 2006 pay-per-use and subscription charges dominate iTV revenue generation. Advanced CA and smart card billing technologies are required to implement subscription and PPU revenue streams. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 200120022003200420052006 Pay-per-use Premium dial-up Subscription $m

12. HTEFUTUREDECODED © Datamonitor 12 Leading revenue generating iTV services iTV services will generate $4.1 billion in 2006, excluding games, gambling and T-Commerce. Multimedia services generate $1.2 billion in Europe in 2006. Participation services will continue to be one of the most important revenue generating services. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 200120022003200420052006 Education Internet access Participation Multimedia Communications Community Information $m

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