Presentation slides addressing content bundling, content windows and TV Everywhere from 3Vision's Advanced Content Strategies Panel at The Connected TV Summit 2014. (June 11th 2014)

1. Breakout B; Advanced Content Strategies
The Future of Content
June 2014
Breakout B; Advanced Content Strategies
The Future of Content

2. The Future of Content
What is the future of the content bundle, including a la carte?
What more adjustments can we expect in content windows for catch-up and pay in all its forms?
1
2
3 Is the TV Everywhere covenant going to hold and for how long?
2013 post-event unanswered questions...
2

3. What is the future of the content bundle, including a la carte?1
3

4. Source: DTV Research (May 2014) and ABI Research (Jan 2014)
$0
$25
$50
$75
$100
$125
2006 2007 2008 2009 2010 2011 2012 2013
US Multichannel Pay TV Revenues (US$ billions)
Cable Satelitte Telco IPTV
$0
$56
$113
$169
$225
2010 2013 2014 2020
Global Pay TV Revenues (US$ billion)
US$Billions
N. America Latin America Western Europe
Eastern Europe Asia Pacific MENA
S.S Africa
Pay TV Revenues continue to grow - but globally this is primarily from emerging markets
4
Pay TV is still growing

5. Pureplay
Pay TV
Broadcaster
Content Owner 13
27
30
48
Global OTT SVOD Ownership (%) Device Integration %
PC/MAC
iPad
Android Tablet
Games Console
Connected TV
Pay TV Platform 12
51
23
55
65
100
Source: 3Vision OTT Survey, 2013 5
OTT is becoming ever-prevalent
OTT services are impacting packaging decisions - and are being influenced by current players

6. Netflix have now launched on three Pay TV operator set-top-boxes in Europe, with three US MSOs to come
6
Netflix is becoming part of the bundle

7. Sky are using Now TV to chase the 50% of the market not taking Pay TV
7
Now TV has allowed Sky to create a mini-pay tier

8. Are there home entertainment revenues to chase?
0
5,000
10,000
15,000
20,000
2010 2011 2012 2013
US Home Entertainment Spending ($M)
Source: Digital Entertainment Group, 2013 Annual Report
YOY GrowthYOY Growth
Digital Subscription 32%
Digital Rental 5%
Digital Retail 47%
Physical Rental -10%
Physical Retail -8%
8
As digital revenues grow at the expense of physical can Pay TV actually gain?

9. Sky Store + BT Box Office
With more examples of Pay TV operators introducing ownership models...
9

10. What more adjustments can we expect in content windows for catch-up
and pay in all it’s forms?
2
10

11. Video Piracy
Source: CEG BitTorrent tracker, April 2014 11
Game Of Thrones
The Big Bang Theory
The Walking Dead
Arrow
How I Met Your Mother
Breaking Bad
Marvels Agents of S.H.I.E.L.D.
Greys Anatomy
Revenge
Once Upon a Time
Modern Family
Person of Interest
House of Cards
Vikings
Bates Motel
Hannibal
Scandal
Grimm
Elementary
The Vampire Diaries
0 100,000 200,000 300,000 400,000
Unique P2P Users on BitTorrent in one April 2014 week - Top 20
Worldwide U.S.
Piracy continues to be a significant issue - with 3.7 million global peers using BitTorrent daily

12. Piracy - Driving global release windows
Game of Thrones aired throughout the world within 24 hrs of US TX
12

13. 2nd Pay - emergence fueled by SVOD growth
13
With growing numbers of services more and more are carving up the Pay Window

14. 2nd Pay - Premium movie providers potentially unconcerned...
14
With premium movie service providers seemingly unperturbed by the loss of window - holding their primacy

15. Box set culture - impacting catch-up rights
15
A growing TV box set service culture is blurring the lines between catch up and SVOD

16. Box set culture - Binge viewing growing
All 18-29 30-39 40-54 55+ Male Female
6360
48
58
73
78
62
Binge Viewers - Amongst On Demand Users (%)
Source: Harris Interactive, April 2013 16
Runner-up to ‘Selfie’ as 2013 word of the year... binge viewing is growing and socially acceptable...

17. Box set culture - value to SVOD is impacting catch-up
17
As the catch-up proposition strengthens so does the SVOD operator’s resistance to allow them to stack...

18. Is the TV Everywhere covenant going to hold and for how long?3
18

19. TV Everywhere
19
Largely the TV Everywhere covenant is holding... following the money

20. But cracks are appearing...
Initiatives are limited, non-threatening to core, and chasing incremental revenues
20

21. TV Everywhere dominates usage when in parallel
Yomvi Share of Viewing by Device
iPlus STB
22%
PC/Mac
29% Phone
5%
Tablet
44%
Source: Rentrack, Feb 2014, and Prisa Investor Releases
Yomvi Usage is growing, but 95% usage is from DTH subscribers and OTT offer limited in uptake
21
Yomvi Views by Device - Jan 2012 to Jan 2014

22. HBO was holding out, so what does the Amazon deal mean?
7.37.3
8.3
9.3
10.310.710.9
1313.6
14.4
Source: Available content from Amazon and HBO releases, May 2014, HBO viewership as published by HBO from Nielsen data
6/6 0 3/7 0 1/4 0 0 0 3/3 2/2
2007 n/a 2010 n/a 2010 n/a n/a n/a 2006 2007
Average viewers of best
performing season (all forms)
Most recent Amazon season
Seasons available on Amazon
HBO Series
22
Are HBO relaxing their resistance or is the Amazon deal an easy way to create a second tier service

23. End
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