1. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Planning Your Mobile Entertainment Strategy

2. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

3. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

4. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy The Underlying Driver of Mobile Entertainment Strategy It’s about personalization

5. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Settling the ”Voice vs Data” Debate  Goal is to sell units and keep them  Selling and keeping customers is built on differentiation  Voice is voice (coverage notwithstanding)  Data is differentiation  Differentiation = Sales + Loyalty = Market Share  Debate is really an internal one  Market is settling the debate with their money

6. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Consumer vs Enterprise Data  Enterprise – Robust  Solutions oriented  Typically requires more “Consultative” sales  Consumer – Every phone, corporate or individual, is personal device  Every phone can be personalized  Distribution of product is already in their hands  Marketing programs directed to handset  Sales becomes viral and intuitive  Bottom line – Through service personalization  Augment revenues  Increase loyalty  Market and distribute directly to handset  Leverage scalable distribution

7. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

8. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy The Four Key Money Makers in Mobile Entertainment 1. Mobile Web  Internet access via a handset 2. Downloadable Content  Ringtones  Wallpapers  Games  Video 3. Multimedia Messaging  Camera phone enablement 4. Premium SMS  “Off deck” content delivery  Mobile marketing campaigns 8

9. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Numbers Don’t Lie  2005 US Content Downloads – Doubled to 575 m generating $1.3b  2005 data ARPU up 76%  2005 voice ARPU down 3%  Sales Mix  Ring Tones 58%  Games 28%  Wallpapers 12%  Videos 2% (growth product)

10. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

11. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Mobile Entertainment Value Chain Consumers Application/ Content Aggregation Consumer Facing Portals Content Creation Application Creation Transaction Mgmt/ Billing Wireless Network Software Development Community Record Companies Publishers & Broadcasters Content Aggregators Entertainment Ecosystem Content Aggregators Carriers Billing Companies

12. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

13. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Mobile Browsing Basics  WAP browsing is the workhorse for mobile data  Infrastructure – Wireless Application Protocol Gateway (WAP)  Can be in-network or a hosted services  All Handsets are WAP-ready  All new phones come w/ browser capabilities  Carriers must create the “home deck” mobile browsing experience

14. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy The Mobile Web is the Internet via WAP  Managing a mobile web offer is fundamentally managing access to a variety of WAP sites  Using a WAP content management tool provides total control of the mobile web experience

15. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Mobile Web Browsing Architecture  The WAP gateway is central to all data traffic  The WAP Deck Management platform manages the subscriber main menus and thus their overall online experience  Billing Mediation tracks WAP activity

16. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

17. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Hot Commodities in Downloads Its All About Personalization  Ringtones  Outsells every other type of download 2:1  Wallpapers  Amazingly popular given that people can make their own with camera phones  Games  Simple sells best  Tetras is the # 1 mobile game in the world – bowling is # 2  Video Clips  The hot new category  Difficult to merchandise – how can people see if they want to buy with out giving it away in the process?

18. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy The Download Business Requires “Merchandising” Your Content  Two places for content catalogs  Mobile browser  Desktop web portal  The vast majority of sales will come from the handset WAP portal  Good presentation is key  Remember the 80/20 rule – 20% of the content will represent 80% of your volume

19. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Desktop Portal  Purchase content for your phone from the desktop  Pushes content out to the handset after purchase  Branded with your company look and feel  Linked off your company website

20. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy WAP Content Purchase Portal  Purchase content for your phone directly on the phone  Provides a simplified listing of content  Tied back into the Mobile Web offering

21. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Architecture for Downloadable Content  The Download Distribution Platform stores the content and provides both the desktop and WAP portals for content selection

22. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

23. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Three Business Model Options Three Business Model Options 1. Kilobytes of Use  The easiest from the network perspective  The most difficult for consumers to understand  How many kilobytes on a WAP page – WHO KNOWS!! 2. Minutes of Browsing  A more logical usage metric in the consumers mind  Carriers can use their existing voice minutes plan  Requires some configuration and averaging 3. Monthly All-you-can-eat  Very popular with U.S. consumers but not elsewhere  Creates a barrier to entry – consumer must contact customer service and sign up

24. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Billing Considerations  Limit to Post Paid Subscribers  May use batch billing mediation for monthly  Limits portion of the base that can participate  In developing markets, as little as 10% of base in Post Paid  Open to Pre-Paid  Must have real time balance check to avoid revenue leaks  Opens data products and services to more of the base

25. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy  Data billing has two components  Usage (kilobytes or minutes)  Events (downloads  Some type of intermediation platform is normally required 25 Data Billing Requires Some Effort

26. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Contents Why Undertake a Mobile Data Strategy Where is the Money Mobile Entertainment Value Chain WAP – The Workhorse Of Mobile Entertainment Merchandizing your Strategy Billing Mediation – Monetizing your Strategy Organizational Implications Closing

27. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Organizational Challenges Organizational Challenges  Engineering – New components and protocols  IT – New billing records  Marketing – New, complex marketing relationships  Sales & Service – More feature rich handsets and services

28. Copyright © 2006 ClearSky Mobile Media, Inc. Planning Mobile Entertainment Strategy Key Take Aways  Mobile entertainment offers ARPU, growth, loyalty opportunities  Markets are proven in all regions in both pre-paid and post paid segments  Product offerings are robust  Enabling technologies are readily available  Execution can be complex  Alternatives for rapid, low cost market entry exist today