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  • 1. IPTV Industry Potential and Limitations Thursday, May 3, 2007 Penn Club, New York James Meyers, Chief Executive Officer, Alpha Media                                                                                               
  • 2.
    • Council Member Biography
    • James Meyers is the Chief Executive Officer at Alpha Media, an
    • entertainment media company with international sales and distribution
    • operations, US sales and distribution operations, cable television assets,
    • plus international production operations. He is responsible for managing
    • corporate strategy development, new alliances within the entertainment
    • and investment communities, and overall operations. He has over 20 years
    • of experience in the entertainment, media and telecommunication
    • industries. Previously, he was the Chief Executive Officer at Cinema
    • Entertainment, an interactive television channel producer; and the
    • President and United States Resident Officer at DIRECTV International,
    • where he was responsible for managing investment, development and
    • operations.
  • 3.
    • Table of Contents
    • Everyone Bundles
    • An Introduction To IPTV
    • The Ever Expanding Bundle
    • The Many Pieces Of A Successful Service…It’s Not Just The Bundle
    • Broadband Video: Not To Be Confused With IPTV
    • Japan / A Case Study
  • 4.
    • About GLG Institute
    • GLG Institute (GLGi SM ) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community.
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      • Share Seminar details with colleagues or friends
  • 5.
    • Gerson Lehrman Group Contacts
    • John Aronsohn
    • Vice President
    • Gerson Lehrman Group
    • 850 Third Avenue, 9th Floor
    • New York, NY 10022
    • 212-984-3673
    • [email_address]
    • Christine Ruane
    • Senior Product Manager
    • Gerson Lehrman Group
    • 850 Third Avenue, 9th Floor
    • New York, NY 10022
    • 212-984-8505
    • [email_address]
  • 6.
    • IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project.
    • You acknowledge and agree that Gerson Lehrman Group does not screen and is not responsible for the content of materials produced by Council Members. You understand and agree that you will not hold Council Members or Gerson Lehrman Group liable for the accuracy or completeness of the information provided to you by the Council Members. You acknowledge and agree that Gerson Lehrman Group shall have no liability whatsoever arising from your attendance at the event or the actions or omissions of Council Members including, but not limited to claims by third parties relating to the actions or omissions of Council Members, and you agree to release Gerson Lehrman Group from any and all claims for lost profits and liabilities that result from your participation in this event or the information provided by Council Members, regardless of whether or not such liability arises is based in tort, contract, strict liability or otherwise. You acknowledge and agree that Gerson Lehrman Group shall not be liable for any incidental, consequential, punitive or special damages, or any other indirect damages, even if advised of the possibility of such damages arising from your attendance at the event or use of the information provided at this event.
  • 7. Big Dish Early 1980s 1920s POTS 1993 Cable 1950s DTV launched 1994 1984 1947 1920s 1930s 1940s 1980s 1990 1995 2000 2005 2010 Cable Satellite Mobile Cellular Broadband Broadband 1997 Telephone 1997 2006 Television POTS History of the Bundle… James J. Meyers CEO, Alpha Media
  • 8. IPTV: A Definition
    • Internet Protocol Television (IPTV) :
      • IPTV (Internet Protocol television): the delivery of programming by video stream encoded as a series of IP packets.
      • IPTV can be free or fee-based and can deliver either live TV or stored video to the Television one addressed program at a time
      • Traditional Pay-Television: all programming is broadcast simultaneously and is available by tuning to the channel.
    James J. Meyers CEO, Alpha Media Super Headend Hub Office Serving Office Splitter -Fiber -Cable -Twisted Pair Legend
  • 9. Verizon / AT&T: The Bundle Bundled line churn is 50% lower than voice-only lines James J. Meyers CEO, Alpha Media Source: Company Reports X X Dual-Tuner DVR X X VOD X X Phone Service X X Mobile X X Internet X X High Definition TV X X International Channels /Packages X X Basic + Premium Channels FiOS (Verizon) U-Verse (AT &T) Offerings
  • 10. Verizon / Fios and AT&T / U-verse James J. Meyers CEO, Alpha Media
    • AT&T / U-Verse
    • $4.6B investment
    • 6mbs/DOWN_1mbps/UP
    • Up To 6Mbps
    • Fiber-to-the-Node
    • MPEG-4
    • 18 Million homes by end of 2008
    • Verizon / FiOS
    • $23B investment
    • 35mbs/DOWN_6mbps/UP
    • Up to 100Mbps
    • Fiber-to-the-Home
    • MPEG-2
    • 18 million homes by end of 2010
    USD$ Billions Source: Company Press Releases
  • 11. Telco Landscape * AT&T TV via U-Verse (18,000), Bellsouth/ DIRECTV, SBC/Dish Network ** Verizon TV via FiOS (207,000), DIRECTV(540,000) ***Qwest TV via DIRECTV James J. Meyers CEO, Alpha Media Subscribers Source: Company Reports, Leichtman Research Group
  • 12. Satellite / Cable Landscape James J. Meyers CEO, Alpha Media Subscribers Television Broadband Source: Company Reports, Leichtman Research Group
  • 13. Customer Satisfaction Satellite / Cable James J. Meyers CEO, Alpha Media 1,000 point scale based on seven categories: Overall Satisfaction, Performance and Reliability, Cost of Service, Billing, Image, Offerings and Promotions,and Customer Service . As communications companies venture into new arenas (like cable into voice, and telcos into video), customer satisfaction can become more difficult to achieve because they are peddling products in which they have had no prior experience selling. Source: J.D. Power and Associates
  • 14. Customer Satisfaction Satellite / Cable James J. Meyers CEO, Alpha Media Source: J.D. Power and Associates
  • 15. James J. Meyers CEO, Alpha Media Average Monthly Churn Sources: Company Annual report, SEC filing, MultiChannel News *Churn represents Verizon FiOS television service **Churn represents AT&T U-verse television service, U-Verse Churn over 4% +
  • 16. DBS / Satellite - Past, Present, Future James J. Meyers CEO, Alpha Media The biggest year-end surprise within the multiplatform business was satellite TV with better-than-expected subscriber gains achieved by the two big DBS companies. Subscribers (1000s) Sources: Banc of America Securities (1000s) (1000s)
  • 17. James J. Meyers CEO, Alpha Media DVR / HD Bundle X = Implemented O = Planned to Implement Legend DVR and HD services are becoming two additional weapons wielded by Satellite, Cable, and Telephone companies whom are vying for customers and increasing ARPU Source: The companies O O X X Time Warner X X X X Tivo O O O X DirecTV TBA O X X EchoStar O O X X Verizon X X O X AT&T O O O X Cox O O O X Comcast Programming DVR via cellphones Programming DVR via Web Multi-room DVR HD-DVR
  • 18. James J. Meyers CEO, Alpha Media Average Revenue Per User (ARPU) *POTS only USD$ Source: Company Annual Reports
  • 19. James J. Meyers CEO, Alpha Media Pay-TV Subscription Distribution Source: Kagan Research 2006 2015
  • 20. James J. Meyers CEO, Alpha Media Broadband Subscriber Growth Subscribers Source: Banc of America Securities
  • 21. Not to be Confused with Broadband Media 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Offers Major Studio content on pay-per-view basis Download-to-own service for feature films. VOD-HD Offers Burn-to-DVD Download-to-own service MAJOR studio films Netflix Cinema Now Apple - itunes (Music) Movie Link Vongo Joost “ Watch Now” Streaming movies and DVD Apple - itunes (Music / VIDEO) March: Apple TV released Apr. 11, 07 Sold : 2.5b music tracks, 50m TV shows, 2.5m movies P2P, by founders of Skype and Kazaa Pay-per-view / VOD
  • 22. James J. Meyers CEO, Alpha Media Film and Video Distribution Internet Video Represents .1% of the $35 Billion generated Studio revenue in 2006 Source: Adams Media Research
  • 23. James J. Meyers CEO, Alpha Media Internet Audio and Video Spending USD$ Millions USD$ Millions Source: Adams Media Research
  • 24. James J. Meyers CEO, Alpha Media Consumer Spending on Internet Video USD$ Billions Source: Adams Media Research
  • 25. Expect shift toward greater parity between revenue sources. User Paid Services are expected to be 45% of total revenues by 2010 Online Video’s Future James J. Meyers CEO, Alpha Media USD$ Billions Source: Parks Associates
  • 26. James J. Meyers CEO, Alpha Media High-Speed Households Units (Millions) Source: Video-On-Demand: The Future of Media Networks, 2 nd Ed. Cable - 55% of market, DSL - 45% of market (2006)
  • 27. Subscribers as of March 2007
    • Japan
    • 100 MBPS/ $23
    • Digital Living Room,
    • Mathushita, Sony, Toshiba, Sharp, Hitachi
    • Integrating w/ All New TVs
    • Korea
    • 51 MBPS/ $40
    • Digital Living Room
    • Samsung
    • Integrated Home Networking
    • USA
    • 30 MBPS / $39
    • Digital Living Room
    • MICROSOFT
    Japan and Korea Policy: Fiber to Every HH by 2010 FTTH Subscribers (Millions) 15% of all HHs 23% of all HHs 1.3% of all HHs M M M Source: Asahi Shimbun, Chosun Ilbo, Company Data
  • 28. James J. Meyers CEO, Alpha Media Thoughts
    • Bundling is becoming essential for long-term survival
    • Consumer-focused industry innovations are key to success
    • Being first mover is important. Execution is crucial
    • Video capabilities of Telco, Cable and Satellite providers are mirroring the increase in HDTV households
    • Options for broadband video are growing at a rapid pace. Apple TV, Joost, and other services present the future of video/media content via broadband
      • Asian providers should be followed closely as they are pushing the envelope of speed and applications over broadband and fiber