A webinar from TRACTBIlling that explains how to offer subscription options to customers, pitfalls to avoid and economics of various subscription business models. Businesses that implement subscription billing will eventually go through the same trials, tribulations, proliferation of service offerings and evolution of price plans as experienced by telecommunication service providers. To grow and identify new sources of revenue and compete effectively, these companies will need Dynamic Revenue Management - a single system that can handle quotes, account creation, orders, pricing, payments, settlement, subscriber management, analytics, and business intelligence. TRACT is an integrated billing system that delivers Dynamic Revenue Management seamlessly from the cloud, on demand. TRACT helps companies identify new sources of revenue through improved billing AND increase sales by dynamically tailoring pricing packages to customers’ usage patterns and preferences. TRACT integrates quickly and speeds the launch of new offers, promotions and bundles. Why offer subscription options to your customers? Create multiple price plans Inject relevant promotions Longer-term, more predictablerevenues Market Differentiation! Customer convenience Attract a new breed of customer Build relationships with customers Understand customer buying behaviors for smarter product management Available on the web at www.tractbilling.com

1. Page © Copyright 2011 Build Better Customer Relationships with Subscription Options Susan McNeice September 28, 2011

3. © Copyright 2011 Susan McNeice is VP of software research with Yankee Group, driving the company's research in the areas of marketing, operations and operations software strategy. Her areas of expertise include telecom operations, subscriber and policy management, customer care, self-service, real-time charging, dynamic cataloging, business intelligence/analytics, revenue assurance and service assurance. Susan has more than 30 years' experience in IT. Prior to joining Yankee Group, she led a global research group at Stratecast, a division of Frost & Sullivan. Before that, she was director of marketing at Vibrant Solutions (now Teoco). She also led several teams for AT&T in software strategic planning, software definition and program management. Susan holds an M.S. from the George Washington University School of Business and a B.A. from the University of Delaware. She has been quoted in The Wall Street Journal, Dow Jones' Market Watch and the San Jose Mercury News , and has published articles in several industry publications. Susan McNeice Your Speakers Today

4. © Copyright 2011 Chris Couch is Transverse's COO and Co-Founder. He spent 18 years as a professional focused on telecommunications softwaree solutions. Most recently, Chris served as Senior Vice President and Chief Marketing Officer at ACE*COMM Corp., a leading provider of wireless OSS, BSS and value-add services platforms. He also led consulting practices at American Management Systems and Logica, where he oversaw or participated in the ground-up launch of several wireless carriers around the world. Your Speakers Today Chris Couch COO and Co-Founder Transverse

9. Subscriptions Mean Sticky Revenue © Copyright 2011 Source: Yankee Group 2011 Consumer Survey, Waves 1-6

12. Subscriber and Revenue Trends © Copyright 2011 Time Revenue Early in the development of a subscription business model uptake and revenues tend to ramp quickly.

13. Subscriber and Revenue Trends © Copyright 2011 Revenue Time As competition enters and the market approaches saturation revenues begin to decline. Once the decline begins it is usually rapid.

14. ARPU Trends © Copyright 2011 Time ARPU The same trend holds true for Average Revenue per User (ARPU) - which measures on average how much each subscriber is buying. However the decline in ARPU usually happens earlier and at a much faster pace.

15. ARPU Trends © Copyright 2011 Time ARPU ARPU can be positively effected by changes to the product mix or price.

16. ARPU Trends © Copyright 2011 Time ARPU The introduction of new products or offers can also have a positive effect on total ARPU.

21. Subscription Maturity Model Business Stage Business Emphasis Billing Capabilities Stage 0 “ Ground Zero” Roll-out of subscription services usually as a test market Ad hoc - No formal definition of billing capabilities exists and activities are most frequently performed in a manual inconsistent and event driven manner. Stage 1 “ Simple Subscriptions” Simple subscriptions with transactional based pricing. Subscriptions characterized by ‘unlimited’ and ‘one-size-fits-all’. Awareness - Billing starts to become complex, more costly. Typically implemented as a set of point solutions ’. The definition and scope varies and is often driven by organizational structure or alignment. Stage 2 “ Activity Management” Caps and charges on usage are added to subscriptions. Market segmentation becomes more prevalent. Managing - The organization recognizes the need for, and understands the benefits of, performing and managing billing activities in a formal and consistent manner. Stage 3 “ Entitlements” Pre-authorization of the use of services based on prior consumption or purchases Improving - The organization proactively manages the function for improvement and is deploying quantified functional performance measurements. ‘Light’ integrations. Stage 4 “ Personalization” Micro-segmentation of your customer base with individualized offers Optimizing - The organization proactively redefines billing activities, processes and outcomes to optimize the function's performance based on changing needs of the business. ‘Heavy’ enterprise integration.

23. Customer adds a basic subscription. © Copyright 2011 IPTV Service Basic Plan Includes channels 1 - 10 Movies are a la carte & paid in advance One Time: - Recurring $20.00 per month Rule | Specification | UoM | Limit | Rate -no rules -

24. Customer adds the ability to buy movies on on credit (in arrears). © Copyright 2011 IPTV Service Basic Plan Includes channels 1 - 10 Movies are a la carte & paid in advance One Time: - Recurring $20.00 per month Post-pay Movies Allow movies to be purchased on credit Add-on Type: Append One Time: - Recurring: $0 per month Appended Add-Ons No overrides exist 1. Movie Purchase Event is guided to Parent Service No matching rules Matches “ Purchased Movies ” Chg = $3.00 Event is consumed, stop. Customer Purchases 1 movie. Rule | Specification | UoM | Limit | Rate -no rules - Rule | Specification | UoM | Limit | Rate Purchased Movies | If event.field1 = movie return true | Event | unl | 3.00 2. Process Overrides 3. Process Parent Subscription 3. Process Appended 3.1. “ Post-Pay Movies ”

25. Customer adds a bucket of 5 movies. © Copyright 2011 IPTV Service Basic Plan Includes channels 1 - 10 Movies are a la carte & paid in advance One Time: - Recurring $20.00 per month Post-pay Movies Allow movies to be purchased on credit Add-on Type: Append One Time: - Recurring: $0 per month Appended Add-Ons 1. Movie Purchase Event is guided to Parent Service Event is consumed, stop. 5 Movie Bucket Any 5 movies Add-on Type: Override One Time: $10.00 Recurring: NULL Override Add-Ons Matches “ Free Movies ” Chg = $0.00 / Bucket = 1 Customer Purchases 1 movie. Rule | Specification | UoM | Limit | Rate -no rules - Rule | Specification | UoM | Limit | Rate Purchased Movies | If event.field1 = movie return true | Event | unl | 3.00 2. Process Overrides Rule | Specification | UoM | Limit | Rate Free Movies | If event.field1 = movie return true | Event | 5 | 0.00 2.1. 5 Movie Bucket

26. Customer purchases movie after 5 movie purchases. © Copyright 2011 IPTV Service Basic Plan Includes channels 1 - 10 Movies are a la carte & paid in advance One Time: - Recurring $20.00 per month Post-pay Movies Allow movies to be purchased on credit Add-on Type: Append One Time: - Recurring: $0 per month Appended Add-Ons 1. Movie Purchase Event is guided to Parent Service 5 Movie Bucket Any 5 movies Add-on Type: Override One Time: $10.00 Recurring: NULL Override Add-Ons Bucket = 5 No match. No matching rules Matches “ Purchased Movies ” Chg = $3.00 Customer Purchases 6th movie. Rule | Specification | UoM | Limit | Rate -no rules - Rule | Specification | UoM | Limit | Rate Purchased Movies | If event.field1 = movie return true | Event | unl | 3.00 2. Process Overrides Rule | Specification | UoM | Limit | Rate Free Movies | If event.field1 = movie return true | Event | 5 | 0.00 2.1. 5 Movie Bucket 3. Process Parent Subscription 3. Process Appended 3.1. “ Post-Pay Movies ” Event is consumed, stop.

27. Customer adds 10 movie bucket with 5 movie bucket. © Copyright 2011 IPTV Service Basic Plan Includes channels 1 - 10 Movies are a la carte & paid in advance One Time: - Recurring $20.00 per month Post-pay Movies Allow movies to be purchased on credit Add-on Type: Append One Time: - Recurring: $0 per month Appended Add-Ons 1. Movie Purchase Event is guided to Parent Service 5 Movie Bucket Any 5 movies Add-on Type: Override One Time: $10.00 Recurring: NULL Override Add-Ons Bucket = 5 Match ‘ Free Movie ’ Chg = 0 / Bucket =6 Customer Purchases 6th movie. 10 Movie Bucket Any 10 movies Add-on Type: Override One Time: $15.00 Recurring:NULL Rule | Specification | UoM | Limit | Rate -no rules - Rule | Specification | UoM | Limit | Rate Purchased Movies | If event.field1 = movie return true | Event | unl | 3.00 2. Process Overrides Rule | Specification | UoM | Limit | Rate Free Movies | If event.field1 = movie return true | Event | 5 | 0.00 2.1. 5 Movie Bucket 3. Process Parent Subscription 3. Process Appended 3.1. “ Post-Pay Movies ” Event is consumed, stop. Rule | Specification | UoM | Limit | Rate Free Movies | If event.field1 = movie return true | Event | 10 | 0.00 2.1. 10 Movie Bucket

29. Let us show you how Dynamic Revenue Management can help evolve your subscription business. Contact: [email_address] W ebsite: www.tractbilli ng.com Can your billing system do this?