1. UNLOCKING THE DIGITAL DIVIDEND – THE BUSINESS CASE “Revenue and Market Opportunities” Presented by: Gary Allen, Managing Director, RJR Communications Group 1

2. Some Key Factors to Revenue and Market Opportunities Depending on policy and regulatory decisions revenues will be affected by: If broadcasters are allowed to operate multicasting or multiplex systems it may or may not lead to new revenues; The standard chosen by each territory will determine revenue opportunities – ATSC 1.0/2.0 cannot deliver many services that could generate new revenues; The digital broadcast license regime adopted will determine opportunities for revenue and market growth possibilities. 2

3. Radio Revenue and Market Opportunities Many markets in the region are discussing DSO for TV only and not for radio. However with social, new and other digital media the most significant shift of revenues is away from radio; In Europe and the USA much progress has been made in this area; 3

4. Radio Revenue and Market Opportunities Opportunities in such markets include:- More channels being available within the same allocated spectrum – hence a possible increase in channels, especially niche channels; In multi-channel operators, a reduction in distribution costs will allow re-allocation of revenues to develop new services; Most digital radio services include data services, shopping services, weather services, traffic services, etc. – thereby making radio more relevant; adding revenue streams and lowering power consumption costs. 4

5. TV Revenue and Market Opportunities These are tied up with the digital standard that has been adopted: Present ATSC 1.0 (the Americas) standard is incapable of delivering the overwhelming majority of what has been called “digital dividend”; DVB-T2 (Europe) is far more capable of delivering added services that can be “monetised”; ISDB-T (Japanese/Brazilian) is the most diverse standard allowing television, internet, telephony and MMDS services that can truly expand the traditional broadcast sector into multi-platform/multi-media services. 5

6. TV Revenue and Market Opportunities If Digital Broadcast licenses under DSO allow broadcasters certain options revenue benefits can flow, to include: – Multicasting/multiplexing would allow FTA services to increase channels and prospects for growing revenues; – It could allow content channels to become digital broadcast channels; – Wireless cable operations from existing FTA transmission networks could open new business streams; – Wireless data/internet services from FTA networks could allow broadcasters to enter data provision services. 6

7. TV Revenues Saved Workflow changes would reduce operating costs; Digital UHF transmissions could save about 30% in power consumption – though increased transmitter site requirements may eliminate that; 7

8. Summary of Opportunities DSO and Radio – The Caribbean Digital Media approach appear more TV centric but done well and with an appropriate business model can: Increase channels Increase services Save on consumption of revenues by cutting costs DSO and TV Multicasting or multiplexing can open new business opportunities Workflows and efficiencies can reduce costs (save revenues) Digital licensing (if done well) can lead to additional services for broadcasters – such as telephony, data services, subscription TV. 8

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