BT Rich MediaFresh opportunity, new revenues         www.btrichmedia.com
BT Rich Media    We bring together flexible content distribution,     with insight and expertise in key disciplines     an...
Now in plain language!     We can take content of any kind, in any form,      and distribute it rapidly and securely to an...
Today’s agenda           Formal introduction to BT Rich Media           Our role in context, within BT and VAS           T...
Our role in context
Broadband market is gaining real momentum • 100 million broadband subscribers worldwide - 65 million   DSL, 33 million cab...
Very aggressive broadband market   Provide   Equipment / Monthly          Download Capacity         r   Installation Cost ...
US market lessons - 2 to 3 yearsahead of Europe • PC Growth within US households peaking     65% end 2003 climbing to 75% ...
Making a success out of Broadband is a mustfor European telcos to get back on the growthtrack…                      •     ...
Global online entertainment marketwill most likely reach $27.4 billion by 2007           $50           $45                ...
Stages of Broadband market development                                                     Chasm                          ...
‘What do you think the benefitsof broadband are?’                                       % Speed / quicker /               ...
Broadband sector is now an eco-system... Providing value added services around the Home of Possibilities       Enabling co...
Technology is enabling change in 2004…• Flexible BandwidthTechnology becoming available to instantly flex broadbandto high...
Our VAS partners include:                Nevis                                  Communicator                 Other services
BT’s products and services are designed toconverge...
To create an effectivebroadband market we must.. Delight our customers with :    •Segmented, simple and complete solutions...
The BT advert
Our platform
Scaleable, powerful and flexible
Our platform partners
Logical architecture                                               UUI  Key                                Workflow Manage...
Clients
Why BT Rich Media ?          • We’re big. But we can do small.          • We combine range in expertise…              – ac...
Bring It To Life
Examples of howwe support your   strategy
• Powerful, cost-effective means of distributing games  footage – live and archive – to passionate fans of  the grass root...
• Help world famous institution to meet its remit  in the broadband environment.• Lectures on art, heritage, design and cu...
• UKTV’s philosophy – delivering great British  programming via Digital TV to viewers – carried  online, given innovative ...
• Most successful UK police drama ever brought  closer to its most loyal viewers using existing  channels such as regular ...
The changing community picture Government, locally funded regeneration projects (e.g. the Raploch Estate in Stirling). All...
Funding available …    … through various governmental sources:           - Wired up communities           - Local council ...
Our platform creates new opportunities tounite communities …          Support creative development and technical          ...
OK, so what does this look like?           - Equipment (servers etc.) based in the              community centre (or alter...
Over to You!
BT Rich Media 2004
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BT Rich Media 2004

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  • This is our value proposition. Better not to talk through this endlessly, but good to show at front end. May also help with the Broadcast Services distinction in the short term … “ Where we fit in the BT family” A recent venture jointly owned by BT Wholesale and BT Retail, and part of the Value-Added Services Group.
  • Key areas to cover in the meeting are : Who we are – positioning of BT Rich Media Demonstrate an understanding of the issues facing customers in their industries today. These issues will be addressed through the BT Rich Media offer Overview of BT Rich Media platform and how it can help customers address the issues outlined in the previous section Case Studies / Reference sites
  • Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
  • Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
  • Can you represent this in a more customer friendly way ?
  • Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
  • Optional Scripting: Our customers include rights owners, producers, broadcasters, music companies, aggregators, ISP’s and mobile operators, artists, corporates and communities. Optional Scripting – ANOTHER LOOK AT MEDIA PLATFORMS: “ When I consider an enabling media platform, what’s it really enabling?” “ Is it offering the as-needed facilities and scaleable delivery to help me execute my own strategy?” “ Or the big investment and long-term lock-in that the supplier needs to secure theirs?” “ What should I expect from a platform? Surely more than just Big Technology?” “ How would I respond to a respected global player, that’s also nimble enough to single-handedly move the goalposts for all media platforms?” “ To support and advance my business, in my industry, and on my terms?” Optional Scripting – BEYOND THE PLATFORM: From big technology risk to big market access ; From passive rights ownership to active rights management; From fixed overhead to flexible resource ; From “pay us, and we’ll take you there” … … to “helping you decide , and helping you get there ”.
  • PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
  • PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
  • PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
  • PIRACY/DECLINE PHYSICAL SALES - 20% decline in CDs sales in last 3 years (IFPI) - 700m music files available on p2p networks (IFPI) - Industry has sent 23m IM warnings to European pirates - RIAA sued 4,000 heavy uploaders to date in US DEVALUING MUSIC - Notion that music is free, linked to piracy - Loss of value - CD prices down 7.6% from 2003 (IFPI) - Value of CD sales will halve in next decade (Enders) - Over 60% of adults downloaders believe "music should be free” (Forrester, Aug 2003) - Commodity - given away newspapers, promotions SHARE OF WALLET - Purchasing music is fourth priority behind behind clothes, saving, computer games in teenage market (eMarketer) - In 2003 teenagers spend less on music than in 2002 (Jupiter) - Factors - reduction in cash and desire to buy other things REDEFINITION OF BIZ MODELS: - industry consolidation - 5 majors control 75% of market - Sony/BMG proposed merger in progress - Warners - cutting half total artists, 1000 jobs, need to make $200m savings - EMI - cutting 1500 jobs - Need to look beyond 'unit sales' - EMI redefining itself as 'digital INTEROPERABILITY - lack of standard format across platforms/devices - success of iPod/iTunes 70% of market - priopetory formats/players - Sony, Apple, WMA PROMOTION OPPS - Decline in print media - mags closing - Radio groups consolidated - TV/radio limited opps to promote new records - less money to invest/promotion budgets restricted - 33,000 album released in 2003 in US - only 10% will be profitable... less room for wastage/error
  • BT Rich Media 2004

    1. 1. BT Rich MediaFresh opportunity, new revenues www.btrichmedia.com
    2. 2. BT Rich Media We bring together flexible content distribution, with insight and expertise in key disciplines and sectors, to help customers identify and exploit new commercial opportunities created by the digital market.
    3. 3. Now in plain language! We can take content of any kind, in any form, and distribute it rapidly and securely to any audience, anywhere in the world, through any channel to any device.
    4. 4. Today’s agenda Formal introduction to BT Rich Media Our role in context, within BT and VAS The relevant propositions Most important - your feedback, consensus on the best way forward
    5. 5. Our role in context
    6. 6. Broadband market is gaining real momentum • 100 million broadband subscribers worldwide - 65 million DSL, 33 million cable • BT has reached 3.0m DSL connections (162% increase in a year) • Net additions growing by 35,000 per week • Broadband penetration has accelerated in the UK from 2% in 2001/2 to 18% households today (& 23% of SME businesses) • On target to achieve 5m connections by 2006 • Further 1,128 exchanges enabled by Summer 2005 bringing broadband to exchanges serving 99.6 per cent of UK homes and businesses
    7. 7. Very aggressive broadband market Provide Equipment / Monthly Download Capacity r Installation Cost Speed Limit £0 £19.99 512Kbps 1 Gbyte £0 £24.99 512Kbps 15 Gbyte £0 £26.99 (Yahoo!) 512Kbps 15 Gbyte £0 £28.99/£29.99 1Mbps 30 Gbyte £0 £19.99 256Kbps No cap £0 £24.99 512Kbps No cap £0 £29.99 1Mbps No cap £0 £17.99 1Mbps 2 Gbyte £0 £22.99 1Mbps 6 Gbyte £0 £27.99 1Mbps 30 Gbyte £25 £15.99 150k No cap £25 £17.99 256k No cap £25 £19.99 512k 50 hours £0 £24.99 512k No cap
    8. 8. US market lessons - 2 to 3 yearsahead of Europe • PC Growth within US households peaking 65% end 2003 climbing to 75% end 2007 • Growth of Internet adoption among U.S households is slowing 88% in 2003 edging up to 92% by 2007 • Consumer interest in upgrading to broadband is declining 33% in 2001, 50% end 2002, 33% end 2003 Conclusion: The “Need-for-Speed” Will No Longer Suffice as a Value Proposition Prices Remain Above the Pain Threshold for Most Dial-Up Households 2004 Parks Associates
    9. 9. Making a success out of Broadband is a mustfor European telcos to get back on the growthtrack… • Mobile has fuelled telcos growth Average European household telecom during the 90s with little impact spending on fixed average spend Early 90s 1.6% (Fixed • It is yet to be seen whether Telephony) broadband growth will have Late 90s Mobile a positive or negative global 3.1% (Fixed + Mobile revolution effect, as it will likely accelerate Telephony) fixed decline Broadband Early 21st revolution?• Leveraging broadband to Century >3.1% ? capture new sources of % of GDP revenues will be key for success
    10. 10. Global online entertainment marketwill most likely reach $27.4 billion by 2007 $50 $45 • Around $10 billion in 2003, $40 growing at a CAGR of 27.7% $35 $30Billions $25 $20 • Includes entertainment services $15 offered over both narrowband $10 and broadband infrastructures $5 $0 • During the forecast period, 04 02 03 05 06 07 20 20 20 20 20 20 broadband will become the Optimistic Most likely Pessimistic predominant delivery platformSource: RHK Inc.
    11. 11. Stages of Broadband market development Chasm Establishment Growth Maturity Today’s Broadband Future Broadband  Basic High Speed Internet UK Broa dba nd  Online Mus ic S e rvice s Access is he re  Vide o S e rvice sCustomers  “All you can eat”  Online Vide o Ga me S e rvice s  No customer loyalty  IP Voice S e rvice s  S ma lle r Bus ine s s a pplica tions  ARP U Growth  No ARPU Growth  Compe titive diffe re ntia tion  Lack of differentiation Chasm Innova tors Ea rly a dopte rs Ea rly ma jority La te ma jority La gga rds 18% 2.5% 13.5% 34% 34% Mass Marketing Broad Segments Micro Segments Today everyone is pretty much offering the same service - content will be the differentiating factor...
    12. 12. ‘What do you think the benefitsof broadband are?’ % Speed / quicker / 56 easier internet 57 18 Can still use phone 13 10 Faster 11 connection Always on / 5 permanent connection 7 BT customers aware of 1 Increased capacity/ Broadband (814) 1 features Cable customers aware of 28 Broadband (244) Dont Know 24 BT Research - Base: All adults aware of Broadband (1159)
    13. 13. Broadband sector is now an eco-system... Providing value added services around the Home of Possibilities Enabling compelling content and applications Enabling the networked home/office Content Computing Music, Video, Gaming, Broadband enabled PCs Education, Sports Business Information Monitoring Alarm Monitoring Communications Broadband Email, Instant Messenger, Click2Call, VoIP, access Digital Entertainment Streamed Music, Video, Call Management, SMS Pictures, Games Consoles Platforms Payment Engine, Content Networking Distribution/Management, Intelligent Hubs, WiFi, Rights Management, Mobile to Fixed Security, Authentication, Storage, QOS Complete service assurance
    14. 14. Technology is enabling change in 2004…• Flexible BandwidthTechnology becoming available to instantly flex broadbandto higher bandwidths• On-line Micro-payments and digital rights managementNew payment and rights management solutions encouragingcontent owners to publish more• Compression SoftwareNew codecs require much less bandwidth to distributemusic/video• WirelessNo wire’ solutions are emerging capable of distributing video andaudio• Connectable DevicesBroadband-enabled home devices are becoming ‘plug and play’
    15. 15. Our VAS partners include: Nevis Communicator Other services
    16. 16. BT’s products and services are designed toconverge...
    17. 17. To create an effectivebroadband market we must.. Delight our customers with : •Segmented, simple and complete solutions •Innovative products and service •Excellent customer support Evolve Broadband products around : •Speed using higher bandwidths •Quality using application controlled ‘Quality of Service’ •Plug and play technology to simplify installation Compel the mass-market to embrace broadband by : •Enhancing Broadband communications •Deliver compelling audio and video content •Take Broadband to all devices Work with partner to : •Open up new channels to market •Extend the product portfolio •Co-market Broadband bundles
    18. 18. The BT advert
    19. 19. Our platform
    20. 20. Scaleable, powerful and flexible
    21. 21. Our platform partners
    22. 22. Logical architecture UUI Key Workflow Management Ingest & Content Productise Manage Schedule Transcode Protect Edit Mgt Rights Content Storage Subscriber Business License Web Billing Distribute Mgt. Rules Mgt Hosting Internet backbone
    23. 23. Clients
    24. 24. Why BT Rich Media ? • We’re big. But we can do small. • We combine range in expertise… – across disciplines (e.g., technology, process, finance, marketing, communications) – and sectors (e.g., media, entertainment, retail and consumer goods) • … with service quality: from raw asset processing right through the media value chain, to the end consumer
    25. 25. Bring It To Life
    26. 26. Examples of howwe support your strategy
    27. 27. • Powerful, cost-effective means of distributing games footage – live and archive – to passionate fans of the grass roots league’s teams.• Drives new advertising revenues, increasing the depth and quality of fans’ engagement with online voting and community.• Enables the League to exploit broadband, to bypass the bottleneck of traditional mainstream broadcasting, to reach and serve a hungry and valuable new audience.
    28. 28. • Help world famous institution to meet its remit in the broadband environment.• Lectures on art, heritage, design and culture distributed to the public, up-to-the-minute learning, insight and inspiration for student, artist and layman.• New access to critics, commentators, and experts - literally, bringing art to life.
    29. 29. • UKTV’s philosophy – delivering great British programming via Digital TV to viewers – carried online, given innovative “just in time” capability• Viewers now access high-quality “how-to” video as needed.• Fresh exploitation channel brought to life, new value realised from existing programming for both audience and advertisers.
    30. 30. • Most successful UK police drama ever brought closer to its most loyal viewers using existing channels such as regular newsletters.• We add rich media and broadband, enhancing the relationship and extending the brand online.• Fresh exploitation of existing rights, new revenue streams, deeper brand loyalty and the facility to test future opportunities in broadband.
    31. 31. The changing community picture Government, locally funded regeneration projects (e.g. the Raploch Estate in Stirling). All requiring: - social inclusion - Future proofing - Training (PC/ new media) - Pride in environment - Shared experiences - Community spirit - Policing - Protection Key delivery to TV (Nevis) as PC household penetration extremely low. Working within BT and other partnerships vital for delivery.
    32. 32. Funding available … … through various governmental sources: - Wired up communities - Local council - Regeneration programmes Wider BT opportunities outside “estates” and in to the remainder of the conurbations
    33. 33. Our platform creates new opportunities tounite communities … Support creative development and technical training: - Shared experiences - Video (TV, VoD, self generated) / Audio (radio) - Internal and external inputs - Securely (password / pay-mechanics) Enable engagement of the community in: - Policing (web cam security offering) - Facilitating control and involvement for consumers in all aspects of their environment (social, health, sports etc.)
    34. 34. OK, so what does this look like? - Equipment (servers etc.) based in the community centre (or alternative) - Community centres are the hub of social activities, making new media learning fun - Enabling policing from the community centres, home, and on the move, giving ownership of environment, and pride in appearance - Local heroes and “TV stars” generated through self-made and relevant programming - Local content made available, and monetised through subscriptions, streams and downloads
    35. 35. Over to You!

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