Simon Cole, Chief Executive, UBC Media Group Radio AS A Retailer

The need for a changed model Revenues flat Impact of internet New stations fragment existing listening Source: Radio Advertising Bureau

Revenues flat

Impact of internet

New stations fragment existing listening

Rock and a hard place Revenues flat Impact of internet New stations fragment existing listening Costs increase New services Multi platform world FM DAB Streaming DTV

Revenues flat

Impact of internet

New stations fragment existing listening

Costs increase

New services

Multi platform world

FM

DAB

Streaming

DTV

New platforms, new revenue? Fragmented audience on new platforms challenges ad model New services need critical mass Initial sales at discount Ad revenue must be augmented Website display advertising Music sales via website Capital Radio 30,000 downloads per month, 1,000 every day

Fragmented audience on new platforms challenges ad model

New services need critical mass

Initial sales at discount

Ad revenue must be augmented

Website display advertising

Music sales via website

Capital Radio 30,000 downloads per month, 1,000 every day

Where is the new value? New media model values ‘users’ or ‘customers’ Radio’s ‘customer base’ is robust Radio is powerful at motivating listeners This power needs to be harnessed Create a new media relationship with listeners

New media model values ‘users’ or ‘customers’

Radio’s ‘customer base’ is robust

Radio is powerful at motivating listeners

This power needs to be harnessed

Create a new media relationship with listeners

The ‘connected’ radio listener Browser based listeners can currently React instantly to a call to action Instantly identify and buy music ‘ Listen Again’ Download podcasts and additional content This connectivity will soon be available outside the PC/Mac Wi-Fi connected radios Set top boxes

Browser based listeners can currently

React instantly to a call to action

Instantly identify and buy music

‘ Listen Again’

Download podcasts and additional content

This connectivity will soon be available outside the PC/Mac

Wi-Fi connected radios

Set top boxes

Value of connected radio Sky Gnome Unsuccessful attempt by Sky to create their own digital radio linked to sky box Orange Liveradio Wi-Fi radio launched in Switzerland, France and now UK Apple’s iTunes Tagging HD Radio Creates iTunes customers from digital radio in the US.

Sky Gnome

Unsuccessful attempt by Sky to create their own digital radio linked to sky box

Orange Liveradio

Wi-Fi radio launched in Switzerland, France and now UK

Apple’s iTunes Tagging HD Radio

Creates iTunes customers from digital radio in the US.

Creating radio’s own e-commerce platform Cliq means radio gets a buy button. From Q3 2008 on new ‘connected’ digital radios from Pure. Using music to create a direct relationship with the listener Multiple platform access of micro payment account

Cliq means radio gets a buy button.

From Q3 2008 on new ‘connected’ digital radios from Pure.

Using music to create a direct relationship with the listener

Multiple platform access of micro payment account

The Cliq experience Music discovery is a massive driver of adoption Price is extremely sensitive Music is increasingly expected for free and as MP3 Mobile phone platform is technically weak and ineffective May be useful as a ubiquitous fill-in Standards may improve over time Not cost effective now

Music discovery is a massive driver of adoption

Price is extremely sensitive

Music is increasingly expected for free and as MP3

Mobile phone platform is technically weak and ineffective

May be useful as a ubiquitous fill-in

Standards may improve over time

Not cost effective now

Mayday Madness Exposed free music to 1.6m radio listeners for 24 hours 3,500 requests for Cliq application 100% increase in registered Cliq customers in 48 hours 65% of customers took 5 tracks or less Less than 20 ‘abusers’

Exposed free music to 1.6m radio listeners for 24 hours

3,500 requests for Cliq application

100% increase in registered Cliq customers in 48 hours

65% of customers took 5 tracks or less

Less than 20 ‘abusers’

Mayday Madness Total cost of free music offer was less than £10,000 Average listening time rose from 1.6 hours to 4.5 hours Cost per registration £18.16

Total cost of free music offer was less than £10,000

Average listening time rose from 1.6 hours to 4.5 hours

Cost per registration £18.16

The emerging model ‘ Free’ music as a way to engage listeners Prompt to open Cliq account Could be funded by advertiser Will have side benefit of increasing listening hours Listeners become customers Able to transact directly Can use their value to leverage third parties Can use relationship to increase listener loyalty

‘ Free’ music as a way to engage listeners

Prompt to open Cliq account

Could be funded by advertiser

Will have side benefit of increasing listening hours

Listeners become customers

Able to transact directly

Can use their value to leverage third parties

Can use relationship to increase listener loyalty

A different relationship Over 5,000 songs sold Research of 100 customers Most users have no portable MP3 player Less than 10% use iTunes High usage of mobile phones to play music 100% of research sample would recommend service to a friend

Over 5,000 songs sold

Research of 100 customers

Most users have no portable MP3 player

Less than 10% use iTunes

High usage of mobile phones to play music

100% of research sample would recommend service to a friend

The choice Radio either begins to create its own interactive commercial relationship with its listeners, or it chooses to be be a portal that earns money creating customers for other.

Radio either begins to create its own interactive commercial relationship with its listeners, or it chooses to be be a portal that earns money creating customers for other.