This document discusses the shifting landscape of online video and its impact on traditional video providers. It notes that online video is giving power to consumers and media companies while disrupting cable, satellite, telco and mobile companies. It then outlines some key architectural principles for delivering online video services, including next generation platforms using web services, large-scale unicast delivery, video intelligence, common client architectures, and services across both managed and unmanaged networks. Finally, it introduces Cisco's Medianet blueprint for delivering these next generation online video services.

1. SHIFT HAPPENSFrom VALUE DESTRUCTION to VALUE CREATION Dr. Ken Morse CTO, Service Provider Technology Group Cisco

2. Traditional Video Competitive Landscape is in FluxNew Entrants, Everyday, in Online Video Online Video Video Satellite Companies Mobile Companies Cable Companies Telco Companies

3. Online Video – Shifting the Balance of PowerMoving in Favor of Consumers and M&E Companies POWER M&E Companies Cable Companies Satellite Companies Telco Companies Mobile Companies M&E Companies Consumers

4. Online Video is part of a broader“Viewer-Controlled” Video Trend Total hours of Media Viewing by US population Annual Share of Viewing (person hours, in billions) 501 484 474 60 (13%) 105 (22%) 162 (32%) 2-3% 414 (87%) 379 (78%) 339 (68%) LATENT DEMAND: Addressableby Online Video (e.g. catch-up TV) * Online Video=Video watched via the Internet typically within an internet browser (ex. YouTube, Hulu, Daily Motion, Omroep.nl, …) Source: BlackArrow estimates based on internal DVR/VOD deployment estimates and publicly reported data from Nielsen Media, Nielsen NetRatings, Comcast and comScore.

5. User Survey Highlights Key Demand Drivers for Internet Delivery of Video to TV “Which of the following might encourage you to start streaming or downloading TV programmes/movies online or, if you already do this, to watch more online TV programmes/movies than you currently do?” 44% 24% 41% 29% 40% 29% 23% 38% 38% 29% 27% 29% 26% 24% Source: Olswang Convergence Consumer Survey, November 2008

6. Online Video to the TV will be enabled by avariety of devices 130M Capable Homes, 40M Active Homes Incumbents Cable / Satellite / Telco Competitors Tru2Way STB/PVR Hybrid STB TiVo MCE nDTV Game Console 360M Capable Homes, 170M Active Homes iSTB (NeuLion) internet Blu-Ray Player PC Source: TDG

7. Fragmentation Takes Hold BusinessModels Consumer Experience Content Fragmentation Broadcast, Premium, UGC Device & Screen Fragmentation TV, PC, Mobile, Gaming, PDA Interactivity Fragmentation Lean back, Lean forward, Social Subscription Fragmentation Broadband, TV, Mobile, Movie rentals, OTT Free vs. Paid Ad Dollars Fragmentation Transition from linear TV to online

9. TV, PC, Mobile

10. Highest Service Velocity

12. TV

13. Higher Service Velocity

15. TV

16. Limited Service Velocity

17. Business Model: B2CMore Open, More Flexible, More Monetization Opportunities

18. How do we get there?Key Architectural Tenets for IP Video Next Generation Platform Next Generation Platform Built on Web Services Protocols Accelerates universal reach and 3rd party innovation Large-scale Unicast Video Intelligence Common Client Architecture Managed / Unmanaged

19. How do we get there?Key Architectural Tenets for IP Video Next Generation Platform Content networks scale exponentially for large-scale unicast services Leveraging multicast technologies for efficient distribution Large-scale Unicast Video Intelligence Common Client Architecture Managed / Unmanaged

20. How do we get there?Key Architectural Tenets for IP Video Next Generation Platform Video intelligence propagates deep into the network edge Providing media, device, and network awareness Large-scale Unicast Video Intelligence Common Client Architecture Managed / Unmanaged

21. How do we get there?Key Architectural Tenets for IP Video Next Generation Platform Common Client Architecture Multi-device support – for PCs, set-tops, gaming consoles, mobile devices, etc. Large-scale Unicast Video Intelligence Common Client Architecture Managed / Unmanaged

22. How do we get there?Key Architectural Tenets for IP Video Next Generation Platform Services Across Managed and Unmanaged Networks Common experience no matter where the user connects Large-scale Unicast Video Intelligence Common Client Architecture Managed / Unmanaged

23. IP Video reshapes video distribution architectures IP Core Edge Aggregation VoD VoD VoD SP Services/Content Third-Party Services/ Content Media Data Center Media Data Center Regional Media Data Center / VHO Regional Media Data Center Connected Home Business

24. Medianet The Architectural Blueprint for Delivering Next Gen IP Video Services Consumption Contribution Production Distribution Post Production Secondary Primary Direct To Home Headend News Gathering Telco Consumers Headend Cable Studio to Studio Ingest Headend Mobile Sport Events Media Data Center IP IP IP IP Core IPNetwork Content Providers Service Providers Tighter Linkages Between Core, Data Center and Edge

25. Core + E-MSE Core + E-MSE Medianet The Architectural Blueprint for Delivering Next Gen IP Video Services Consumption Contribution Production Distribution Post Production Secondary Primary Direct To Home Proximity Routing Headend Media Data Center News Gathering Telco Aggregation Router Consumers Headend Cable Studio to Studio Ingest Real-time Transcoding Data Center Switch Distribution Router Aggregation Router Headend Mobile Sport Events Aggregation Router Distribution Router Media Data Center IP IP IP IP Core IPNetwork Aggregation Router Content Providers Service Providers Storage Storage Tighter Linkages Between Core, Data Center and Edge Video Processing Consumer Apps NRT Transcode Svc. Delivery Billing Device Mgmt Encryption UCS Storage Storage Storage

26. Shift Happens: Will SPs Lead an Eco-system Searching for Value Creation