Media usage keeps growing and fragmenting. As content available for media consumers increases, media companies must work harder to be interesting and discoverable. As media consumption habits change, the use contexts of TV change too. One million households in Finland have no access to broadband connection fast enough to enable diverse media consumption. This is a summary of observations of Finnish Broadcasting Company’s environment produced by network of experts in various positions in Yle. Tuija Aalto Head of Stategy, Yle

1. Finnish Broadcasting Company
Business Environment Analysis
May 2013

2. To Reader
Media usage keeps growing and fragmenting. As
content available for media consumers
increases, media companies must work harder to
be interesting and discoverable. As media
consumption habits change, the use contexts of
TV change too.
One million households in Finland have no access
to broadband connection fast enough to enable
diverse media consumption.
This is a summary of observations of Finnish
Broadcasting Company’s environment produced
by network of experts in various positions in Yle.
Tuija Aalto
Head of Stategy, Yle
Workgroup
• Annika Ruoranen, Head of Audience Insight, News
and Current Affairs
• Eija Moisala, Head of Audience and Media
Insight, Media Unit
• Erja Ruohomaa, Head of Strategy Research
• Jari Lahti, Chief Strategy Officer, Yle Media
• Jarno Liski, Journalist
• Janne Holopainen, Media Regulation Manager
• Juha Haaramo, Audience researcher
• Kaj Backman, Media producer
• Leevi Kokko, Head of Audience Insight, Yle.fi
• Maria Hausen, Producer
• Marina Österlund-Karinkanta, Senior Media Analyst
• Marjo Ahonen, Head of Strategy and Planning, News
and Current Affairs
• Olli Sipilä, Head of Technology and Development &
CTO
• Outi Roivainen, Audience researcher
• Pasi Ekman, Development Manager, Technologies
• Sami Kallinen, Head of Yle Internet Development
• Satu Keto-Kantele, Head of Content, Creative
Content
• Susanna Snell, Head of Audience Insight, Creative
Content
15.5.2013 2

3. Megatrends in media business
15.5.2013 3
Ubiquitous
computing
Automation
Digitalisation
Globalisation
Media is transformed by the combined
effects of
automation, digitalisation, globalisation and
ubiquitous computing.
The following affect media content and
media user experience:
• Huge amount of content available
• Free content & services
• New business models
• Development of devices
• Cloud computing
• Differences in regulation accross nations
and regions
• Recommendation algorithms
• User data based personalisation and
deteoration of privacy as its result.

4. Yle’s competitors are global in all of
the relevant business areas
15.5.2013 4
Mass media
Leisure
activities
Interaction &
participation
Online Video Services Social Media
News services

5. Commercial media suffer from the
recession and global competition
15.5.2013 5
According to TNS Gallup
media advertising fell
13,3% in a year (Q1
2013/2012) in Finland.
This was the fourth
consequtive quartal of
advertising falling.
Some newspapers in
Finland raise paywalls
(Helsingin
Sanomat, Keskisuomalain
en, Aamulehti) while others
count on online ad sales
(Iltasanomat, Iltalehti).
Google launched it’s local
version of YouTube for
advertisers in Finland in
February 2013 and will
grow its already high
82M€ share of advertising.
Facebook’s share of
Finnish online ad revenue
is rising fast, too.
TNS Media Intelligence

6. On the rise: subscription based
services and user data
15.5.2013 6
Assuming Netflix has 200 000 monthly paying
subscribers in Finland, its turnover will be 15M€ in
2013. All of the VOD service providers combined
(including Netflix, HBO, Viaplay etc.) can together
reach a total turnover of 20-30M€. In comparison, the
Finnish television companies’ pay-TV operations
generated a combined turnover of 70-90M€ in 2012.
YouTube is launching pay TV channels in several
countries – not yet in Finland.
Music streaming service Spotify already accounts for
the lion’s share of digital music sales in Sweden
according to Swedish Recording Industry Association
(GLF).
The value of the data generated by using digital
services is considered to be remarkable and global
businesses have the economy of scale in using such
data compared to smaller national media companies.
User data powers targeted advertising and
personalised recommendations. Several EU
contries, concerned about their citizens’ privacy, have
launched an inquiry attempting to stop Google from
combining user data from the many online properties
it offers.

7. Finns under 45 use slightly less
radio and TV than five years ago
7
Radio listening of the over 45-year olds seems
to have stabilised to four hours a day. Those
under 45 listen to radio less and less.
Over 45 year old Finns seem to watch more TV
every year. However, comparing TV viewing
from year to year is increasingly difficult as
the possibilities of TV viewing are changing.
Under 45 years old watch five minutes less TV
today than in 2008. Will the trend contiunue, or
will TV watching increase as more
opportunities to watch online emerge and
the content available keeps increasing?
Sources: KRT Online, Finnpanel/Yle Media. Tv
Peoplemeter, Finnpanel/Yle Media.
Note: Radio and TV figures are measured
differently and are not fully comparable.

8. 11% of the 25-44-year-olds’ TV
viewing is time-shifted
The population’s (4+) TV viewing in
Finland according to Finnpanel
• 91% live
• 7% time-shifted
• 2% online viewing
15.5.2013 8Tv Peoplemeter, Finnpanel, comScore - Yle Media
12
7
5 6
15
17
14
9
7%
10%
7% 7%
11%
11%
6%
3%
0
2
4
6
8
10
12
14
16
18
20
All 10
years
and older
4-9 y 10-14 y 15-24 y 25-34 y 35-44 y 45-64 y 65+
(minutes/day)

9. Free time daily internet use
frequency by devices
How often internet is accessed on different devices in one’s free time
(n = does access internet on the device in question)
Source: Taloustutkimus Web & Mobile Tracking 2012

10. TV viewing contexts are in a flux with
second screens and social TV
15.5.2013 10
TV industry is developing second screen concepts in
order to enhance TV viewing experience by interactivity
and engagement.
Second screen also delivers new, measurable advertising
opportunities to advertisers.
Social TV
29 % of all surveyed use internet simultaneously with TV.
Being social online while watching is a regular habit
for half of the under 44-year-olds.
12% of viewers want to comment and discuss TV online
• 17% of men
• 10% of women
37 % of 15-29-year –old –Finns
share media content via social media.
Source: Monimediatutkimus 2012, Yle Media.
Television is becoming a background medium as
personal devices command the viewers’ attention.
”TV is often on, even though I’m not actually
watching any program”
50 percent of women 15-44 agree with the
statement according to a multi media survey by
Yle.

11. Internet ready TV sets but a fraction of
online video devices at homes
15.5.2013 11
Internet ready TV sets (Smart TV, Connected TV) are only a small part of
all the devices capable of online video consumption even if they become
more common in households. Playing programmes from mobile
devices on big screen increases. Tablet device sales and use are rising
while PC’ and TV set sales fall. Game consoles are also used for media
viewing.
TV-set ownership in homes in
February 2013
TV-set: 93%
Flat screen 75%
Recording capable STB 50%
Full HD TV 38%
Sourcre: Statistics Finland

12. Current key players in Finnish
audiovisual content market
Company Turnover Linear TV-channels
Turnover 2012,
Estimate 2012
A rough estimate 2013
Free-to-air Pay-tv FTA + Pay Weekly
reach (*
Average
weekly
viewing
minutes (*
Yle 423 4 4 87 604
MTV3, C More 268 3 19 22 88 406
Sanoma-Nelonen 110 3 5 8 83 212
Discovery-SBS 13 2 5 7 56 75
FOX ≈ 5-10 1 2 3 50 44
Viasat-Viaplay 20 (** 0 20 20 7 5
Netflix ≈ 10-20 ? ?
HBO Nordic VOD ≈ 5 ? ?
You Tube.fi ? ? ?
Makuuni, largest DVD-
rental chain 16 ? ?
15.5.2013 12
*) Weeks 1-15/2013, Source http://www.finnpanel.fi/en/tulokset/tv.php
**) Viaplay VOD and linear pay-tv-operations, excl. tv-ad revenues
MajorFinnishtv-companies&VOD-services

13. Comparison of some VOD services
available in Finland May 2013
Netflix has best user experience in the heuristic
assessment conducted by Yle Media in May 2013.
The user interface is simple and the
recommendation algorithm is unrivalled.
None of the compared services had very broad
content or the newest titles. Viaplay had more titles
than Netflix.
The broad device support of the international VOD
services leaves national broadcasters’ VOD
services such as Yle Areena, Ruutu and Katsomo
behind. Not many of the services have Smart TV or
game console support. In smartphones, the weakest
support was for Windows Phone.
In addition to monthly subscription price, several of
the VOD services offered pay-per-view-prized
content as well (series season, hockey
game, movie).
15.5.2013 13
Netflix
Viaplay
SVT Play
Yle Areena
YouTube
Boox TV
BBC iPlayer
Katsomo
Ruutu
HBO Nordic
Tv-kaista
Elisa Viihde
Sonera Viihde

14. Availability of news services online
Several Finnish newspaper have announced
paywalls in 2013: Helsingin sanomat and
Keskisuomalainen (HS 9,90e/month, 5 free articles /
week.)
Example price: Keskisuomalainen online :
Tablet newspaper: iOS, Android, Windows 8.
PDF paper, Archives, unlimited access to online
news KSML.fi, mobile service, subscribers’ benefits
- 18,90€ /month.
Aamulehti is expected to implement paywall during
2013. Both advertisers’ expectations and paywall
logic are driving publishers towards more local
news content.
News UI. Helsingin Sanomat and Maaseudun
tulevaisuus have touchscreen apps.
Most of the newspapers have digital editions (a
print paper facsimile), resulting in less than
optional user experience in mobile devices. Other
news publishers have specific mobile optimised
news sites as well as apps, according to
observations on the most important news media in
Finland by Yle in May 2013
App stores. Vertical ecosystems such as Apple’s
App Store and Google Play Store offer distribution
platforms for news apps and charge a roayalty of
the price. To reach smartphone users publishers
have to make their paid for content
available, although they end up taking a loss on
revenue because of that.
Yle news is the only news medium in Finland
without an iOS app. Yle has a news application
for Windows 8 .
Yle News is also the only to have responsive
news site, which functions on all devices. The
page layout adapts to screen size and offers the
same functionalities on all devices.
Aamulehti has responsive beta
helppo.aamulehti.fi.
Volume. Yle and Ilta-Sanomat published most
news online during the observation period in
May, nearly 200 per day.
All news publishers have RSS feeds.
15.5.2013 14

15. Cost structure of linear broadcasting
over IP and broadcast
Broadcasting cost is lower
than IP unicast distribution
in a situation where every
Finn 10 years or older
watches a channel more
than 45 minutes per day.
The distribution costs are
lower on broadband networks
than via broadcasting network
in Finland until the average
daily viewing of TV channel
reaches 45 minutes.
Sources: Akamai estimate
and Digita C-mux list price.
15.5.2013 15
Cost, euros
Viewing, minutes

16. Availability of TV-over-broadband
Approx. one million households are living in single family
houses, outside or close to densely populated areas. Most of
those households can have only copper wire based DSL-
FBB, in addition to wireless BB.
FBB population coverage will be reduced from current 92%
to approx. 80% by 2020.
Sources: Ficora, MITC, Markab Oy.
15.5.2013 16
In Finland there are 2,5 million households.
59 % of households have subscribed fixed
broadband.
Approx. one million households are living on
densely populated areas, where high speed
broadband is a commodity.
several HD-channels
one HD-channel or two SD-channels
one SD-channel with good quality
one SD-channel with uncertain quality
VOD only
Fixed BB allows ….
25MB
4 MB
10 MB
2 MB
< 2MB
25 Mbits FBB
available for
60% of households
84%
10MB
88%
4MB
91%
2MB
8% of
house-
holds
have no
FBB
available
92%
<2MB
Fixed broadband (FBB) population coverage

17. Broadcast radio might be digitized
through cellular networks
15.5.2013 17
Several European countries are preparing
or building digital broadcasting networks
for radio (DAB etc). DAB uses in most
cases VHF III frequency band.
Finnish public and commercial radio
companies seem not to be willing to invest
in digital audio broadcasting networks. In
Fínland the VHF III band is used for digital
tv-brodcasting.
The potential of 4G cellular networks for
radio channel distribution will be studied in
Finland.
Audio content from radio channels is
already available over internet. All
domestic radio channels are streamed over
internet and several companies are
offering also audio on demand services.
11% of population 9+ years are listening
to radio channels over internet on
weekly basis, according to Finnpanel .

18. Ubiquitous media in cars
15.5.2013 18
Media content is brought to cars using personal devices: smartphones, tablets and wearable computing
devices such as Google glasses.
Service information such as realtime traffic information and weather servcices are delivered to in car
computers as part of intelligent traffic. Open traffic, weather and similar data allows for combinations of new
kinds of services.

19. YLE STRENGTHENS FINNISH SOCIETY AND CULTURE BY PROVIDING
EVERYONE WITH INFORMATION, EDUCATION, INSIGHTS AND EXPERIENCES.
STRATEGIC GOALS
YLE SERVES ALL FINNS
YLE PROVIDES VALUE TO SOCIETY
YLE HAS THE MEDIA SECTOR'S BEST COMPETENCE
Yle Strategy

20. VISION
We provide a world-class public service.
.
VALUES
Reliability, independence, and respect for everyone.
MISSION, VISION, VALUES
MISSION
Yle strengthens Finnish society and culture by providing
everyone with information, education, insights and experiences.
20

21. STRATEGIC GOALS
Yle serves all Finns
Yle provides value to society
Yle has the media sector's best competence
STRATEGIC GOALS
21
1.Yle serves all Finns
1. Our content is relevant to all Finns regardless of age, gender, place of
residence, background or situation of life.
2. We create diverse culture in an open way, through interaction with Finns.
3. Our content is easy to find in a multi-channel world.
2.Yle provides value to society
1. Finns appreciate Yle and deem it important to society.
2. We create an opportunity for everyone to participate in communication and
interaction in a digital age.
3. We promote the vitality of the creative sector and our goal is that it is easy for
partners to cooperate with us.
3.Yle has the media sector's best competence
1. We have the best people and partners.
2. We boldly renew our operations.
3. We operate in a transparent, effective way.