Team ROKR Garret Dodge Damian Fernandez-Lamela Ryan Hudson Bala Venkatrao March 31, 2007

Seamless Mobility: Enabling Cool Experiences Cable TV/Music System Upstairs TV IP Set-top box Consuming content at any time in any place Wireless Carrier

How can Motorola play in the media delivery ecosystem?

The Video Long Tail “ Blockbuster: The top 100 titles account for 69.4% of sales. Netflix: The top 100 titles account for 38.8% of sales. www.thelongtailblog.com “

A New Opportunity Peer IP STB Peer IP STB Create a P2P media distribution network TV/Music System Upstairs TV Home IP STB Wireless Carrier

The Video Long Tail

A Global P2P Content Distribution Platform Source content from anywhere Displaced local content Sporting events Niche content Consumers Distributed to any platform TV Phone Computer

Source content from anywhere

Displaced local content

Sporting events

Niche content

Consumers

Distributed to any platform

TV

Phone

Computer

Set Top Box P2P Architecture

Value Proposition for Consumers Access to interesting but currently unavailable content “MyChannel” user generated content broadcasted to friends and family Video, digital picture slideshow, tvblog Easy to use and makes content readily available on the preferred large screen viewing platform

Access to interesting but currently unavailable content

“MyChannel” user generated content broadcasted to friends and family

Video, digital picture slideshow, tvblog

Easy to use and makes content readily available on the preferred large screen viewing platform

Value Proposition for Content Providers Professional Provides a new platform to reach millions of consumers New revenue stream from premium subscription and/or targeted advertising network Information about viewers Amateur/Consumer Novel distribution platform to reach previously unreachable audiences Friends and family photo/video channel Bloggers

Professional

Provides a new platform to reach millions of consumers

New revenue stream from premium subscription and/or targeted advertising network

Information about viewers

Amateur/Consumer

Novel distribution platform to reach previously unreachable audiences

Friends and family photo/video channel

Bloggers

Value Proposition for Operators Cable Premium fees for currently unavailable content Monthly subscriber packages A la carte viewing Increase average revenue per user, by co-sharing revenue opportunities with Motorola Opportunity to participate in monetization model through ad insertion Cellular Drive adoption of premium data packages Increase usage of photo and video capability

Cable

Premium fees for currently unavailable content

Monthly subscriber packages

A la carte viewing

Increase average revenue per user, by co-sharing revenue opportunities with Motorola

Opportunity to participate in monetization model through ad insertion

Cellular

Drive adoption of premium data packages

Increase usage of photo and video capability

Value Proposition for Motorola Increased sales of premium STBs driven by cable operator desire to sell long tail content packages (higher ARPU) Control of a valuable P2P content distribution network Monetize through revenue share with cable operators Monetize through ad network partnership Extend the vision of seamless mobility to include content creation drive premium mobile device sales

Increased sales of premium STBs driven by cable operator desire to sell long tail content packages (higher ARPU)

Control of a valuable P2P content distribution network

Monetize through revenue share with cable operators

Monetize through ad network partnership

Extend the vision of seamless mobility to include content creation drive premium mobile device sales

DRM Closed P2P system controls content accessibility across network Permissions managed at STB level Limited piracy exposure in user content User generated content submission tied closely to authenticated cable accounts Limitations Apple DRM doesn’t play well with others

Closed P2P system controls content accessibility across network

Permissions managed at STB level

Limited piracy exposure in user content

User generated content submission tied closely to authenticated cable accounts

Limitations

Apple DRM doesn’t play well with others

Revenue Potential Source: 2006 Annual Report/eMarketer 4691.5 2551.2 1563.8 815.6 401.9 Total Revenue ( $ millions) 2816.1 1200.3 316.5 18.0 0 Service Revenue ($ millions) 60 48 24 6 0 Revenue per subscriber ($) 0.35 0.25 0.15 0.05 0 % STB Using P2P Services 1875.4 1350.9 1247.3 797.6 401.9 STB Revenue ($ millions) 80 80 80 80 40 Profit on Unit (20%) ($) 23 17 16 10 10 Box Upgrades (millions) 134.1 100.025 87.925 59.9 50.24 Total Motorola Boxes (millions) 447 400.1 351.7 299.5 251.2 World Broadband Households (millions) 2010 2009 2008 2007 2006

Competition Is Apple a game changer? Yes. Accelerates innovation – and partner’s willingness to work with Motorola iPhone: will be adopted and push advanced capabilities to the mainstream (at a high price point) Leverage on iPod / iTunes And no… AppleTV: opens segment to iPod enthusiasts but limited broader appeal

Is Apple a game changer?

Yes.

Accelerates innovation – and partner’s willingness to work with Motorola

iPhone: will be adopted and push advanced capabilities to the mainstream (at a high price point)

Leverage on iPod / iTunes

And no…

AppleTV: opens segment to iPod enthusiasts but limited broader appeal

Competition Microsoft Xbox as STB, Windows media center PC’s, Vista Cisco Scientific-Atlanta acquisition Likely approach: WiFi/WiMax phone network Other players: Sony, Samsung, Slingbox, etc. FCC regulation changes the STB game in July 2007 First generation 3rd party STBs will have limited functionality

Microsoft

Xbox as STB, Windows media center PC’s, Vista

Cisco

Scientific-Atlanta acquisition

Likely approach: WiFi/WiMax phone network

Other players: Sony, Samsung, Slingbox, etc.

FCC regulation changes the STB game in July 2007

First generation 3rd party STBs will have limited functionality

P2P/Online Competition Joost Founders of Kazaa and Skype P2P video distribution platform (PC) Google/YouTube News Corp / NBC MobiTV Computer/Cell phone distribution 1+ million subscribers at $10/month

Joost

Founders of Kazaa and Skype

P2P video distribution platform (PC)

Google/YouTube

News Corp / NBC

MobiTV

Computer/Cell phone distribution

1+ million subscribers at $10/month

Implementation Customers Partnerships with cable operators like Comcast and demand for HD STB upgrades will enable rapid deployment of P2P STB network Hardware and Software Uses IP STB technology through Kreatel acquisition Develop real time P2P video technology in-house or acquire P2P start-up based on university research Partner for Initial Content Content network partnerships (i.e. Brightcove, Yahoo) User generated (i.e. Flickr)

Customers

Partnerships with cable operators like Comcast and demand for HD STB upgrades will enable rapid deployment of P2P STB network

Hardware and Software

Uses IP STB technology through Kreatel acquisition

Develop real time P2P video technology in-house or acquire P2P start-up based on university research

Partner for Initial Content

Content network partnerships (i.e. Brightcove, Yahoo)

User generated (i.e. Flickr)

Assumptions The company will be able to secure the partnerships with carriers and cable co. Motorola can successfully create the technology layer and it is possible to enforce the IP protection Feasibility of deals for copyright management with content providers FCC won’t block the deployment and the new device will be compliant with the new FCC rules regarding third party providers of set top boxes

The company will be able to secure the partnerships with carriers and cable co.

Motorola can successfully create the technology layer and it is possible to enforce the IP protection

Feasibility of deals for copyright management with content providers

FCC won’t block the deployment and the new device will be compliant with the new FCC rules regarding third party providers of set top boxes

Why Motorola? Why Now? Motorola is uniquely positioned to address this high margin market opportunity Motorola alone has position in both phone and STBs Operator/carrier partners have revenue motivations for pushing extended seamless mobility framework Competitive pressure from Apple entry will push partners to seek alternatives Multi-billion dollar, high margin, recurring revenue opportunity

Motorola is uniquely positioned to address this high margin market opportunity

Motorola alone has position in both phone and STBs

Operator/carrier partners have revenue motivations for pushing extended seamless mobility framework

Competitive pressure from Apple entry will push partners to seek alternatives

Multi-billion dollar, high margin, recurring revenue opportunity

Questions?

Appendix STB Growth Driven by HD & Broadband Adoption

References Motorola Mobile TV solutions, Connect Home, Service provider http://broadband.motorola.com/consumers/ http://www.motorola.com/networkoperators/pdfs/new/mobile_tv_brochure.pdf http://www.motorola.com/content.jsp?globalObjectId=5114-8158 Sling media is currently offering a product that provides some functionalities http://us.slingmedia.com/page/home Sony Freeview microsite http://www.npe.sony.co.uk/ Cisco acquired Scientific Atlanta http://newsroom.cisco.com/dlls/2006/hd_022706.html Microsoft TV IPTV Edition and Microsoft phone http://www.microsoft.com/tv/IPTVEdition.mspx http://www.microsoft.com/presspass/press/1996/jan96/phnvcepr.mspx Nokia licenses Spyglass web technology for digital set-top boxes http://press.nokia.com/PR/199804/776473_5.html

Motorola Mobile TV solutions, Connect Home, Service provider

http://broadband.motorola.com/consumers/

http://www.motorola.com/networkoperators/pdfs/new/mobile_tv_brochure.pdf

http://www.motorola.com/content.jsp?globalObjectId=5114-8158

Sling media is currently offering a product that provides some functionalities

http://us.slingmedia.com/page/home

Sony Freeview microsite

http://www.npe.sony.co.uk/

Cisco acquired Scientific Atlanta

http://newsroom.cisco.com/dlls/2006/hd_022706.html

Microsoft TV IPTV Edition and Microsoft phone

http://www.microsoft.com/tv/IPTVEdition.mspx

http://www.microsoft.com/presspass/press/1996/jan96/phnvcepr.mspx

Nokia licenses Spyglass web technology for digital set-top boxes

http://press.nokia.com/PR/199804/776473_5.html