The document discusses trends and insights in the evolving online video landscape, focusing on audience metrics, demographics, content mix, and monetization strategies. It highlights the growth of online video viewership, case studies of major platforms such as YouTube, Netflix, and Hulu, and the shifting priorities towards paid and hybrid monetization models. As technology converges between traditional TV and internet-based platforms, the landscape is expected to continually change with numerous opportunities for innovation.

1. Unica OnDemand The Evolving Online Video Landscape: Trends & Insights The Webinar will begin at 1:00 PM EST You will be connected to audio using your computer’s microphone and speakers (VoIP). A headset is recommended. Or you may select Use Telephone after joining the Webinar. Dial-in phone: 916 – 233 – 3088 Access code: 523 – 429 – 565 Presented by: Paul Verna eMarketer Senior Analyst Sponsored by:

2. Welcome Webinar Attendees Your GoToWebinar Attendee Viewer is made of 2 parts: 1. Viewer Window 2. Control Panel Type your question here

3. J U L Y 2 0 1 0 The Evolving Online Video Landscape: Trends & Insights

4. Agenda Online Video Audience Metrics & Demographics Content Mix & Venues Case Studies: YouTube, Netflix, Hulu, Break Media, ooyala Monetization Syndication Technology Convergence: From TV to Internet Tips & Takeaways

5. Overview We’re in a transitional time Consumer behavior, technology, monetization models, and the relationship between digital and transitional media are all in flux The landscape will change significantly in the next few years Opportunities about for those willing to take risks and embrace new paradigms

6. Online Video Audience Metrics 147.5 million people in the US watch online video, which translates to 2/3 of Internet users

7. Online Video Audience Metrics By 2014, this number will increase to 193.1 million, or 77% of Internet users. 7% CAGR

8. Audience Demographics The largest clusters of viewers are ages 18 to 44

9. Audience Demographics The largest clusters of viewers are ages 18 to 44

10. Women outnumber men in the overall online video audience, but men outnumber women among heavy TV online viewers

11. Those under 25 are most inclined to watch ‘all’ or ‘most’ of their TV online

12. TV Online Increasing numbers of video viewers are watching full-length TV shows online

13. Content Mix: Movies Online Downloading and streaming of full-length movies rose dramatically in 2009

14. User-generated clips still lead the pack of online video types watched regularly by US viewers

15. Case Study: YouTube

16. YouTube was the undisputed leader by unique viewers, with over 100 million in May 2010 Case Study: YouTube US Unique Viewers to Google Video Sites, May 2010 (millions)

17. Source: Nielsen Case Study: YouTube Top Online Video Properties by Videos Viewed, May 2010 (billions)

18. Source: comScore Case Study: YouTube Top Online Video Properties by Videos Viewed, May 2010 (billions)

19. Case Study: Netflix Case Study: YouTube Business Highlights 43% market share in May 2010 (comScore) Third-most-visited site on the web 24 hours of video uploaded every minute Over 2 billion clips served every day Cost and technical barriers lower than ever Preferred hosting destination for media firms Partnerships with top content owners

20. Case Study: Netflix Case Study: YouTube Challenges DNA is in user-generated video Interface needs improvement Stiff competition from Hulu in TV space Stiff competition from Netflix in movie space Integration between Google TV and YouTube a question mark Monetization strategy unclear

21. Case Study: YouTube “ With respect to how it’ll get monetized, our first priority is on the advertising side. We do expect over time to see micropayments and other forms of subscription models coming as well, but our initial focus is on advertising.” — Eric Schmidt, CEO, Google, in CNET Case Study: YouTube

22. Case Study: Netflix Case Study: Netflix

23. Case Study: Netflix Case Study: Netflix Business Highlights 15 million subscribers in Q2 2010, which is up 42% year-over-year 61% of subscribers stream content Expansion into Canada and other territories Three platform strategy: game consoles, Blu-ray players, Internet TVs

24. Case Study: Netflix “ We focus on three categories: videogame consoles, Blu-ray and Internet TV, which is just emerging. We’ve been very happy with the early progress from Sony, VIZIO and others, but that category in the very long term is likely to be the leading category.” — Reed Hastings, CEO, Netflix, Q2 2010 earnings call Case Study: Netflix

25. Technology Integration “ The recession has increased demand for in-home entertainment, enhancing the TV experience. This, combined with new flat-panel models that access content from the Internet, will further blur the lines between TV and the Internet.” — Ed Moran, director of insights and innovation, Deloitte Case Study: Netflix

26. Case Study: Netflix Case Study: Netflix Challenges Direct competition from Hulu, YouTube, Blockbuster, Apple, Amazon, etc. Limitations on content availability Long ramp time for Internet TVs to penetrate market

27. Case Study: Hulu Case Study: Hulu Plus

28. Case Study: Netflix Case Study: Hulu Plus Hulu founded on an ad-supported model Company has crossed the profit threshold Revenue guidance of $100M in 1H 2010 Joint-venture partners long interested in exploring paid-content

29. Case Study: Netflix Case Study: Hulu Plus Business Highlights $10/month subscription Available on Windows, Mac, iPhone, iPad, Blu-ray, Internet TVs PS3, Android support in the future Despite fee, service will carry advertising load similar to current free Hulu

30. Case Study: Netflix Case Study: Hulu Plus Challenges High price, no pricing tiers Service carries ads despite monthly fee Competition from other paywalls, including newspapers, music services, data plans Content offerings limited to JV partners

31. Case Study: Hulu Plus “ If your ambition is to bring the world’s premium content to users, and to do so in a way that produces fair returns to content owners—and it is our ambition—there isn’t one single bullet…you’re going to see a tremendous number of experiments.” — Jason Kilar, CEO, Hulu, in The New York Times

32. The video content mix is shifting from ad-funded to paid and hybrid models

33. Case Study: Hulu Plus “ Our research suggests that viewers have a higher tolerance for advertising than they are currently receiving. There’s revenue being left on the table and media companies have not yet extracted full value out of the medium.” — Tania Yuki, director of online video and cross-platform product, comScore

34. YouTube Promoted Videos Leverages branded video campaigns Similar to AdWords for YouTube CPMs between $100 and $400 YouTube attributes CPMs to higher engagement levels with online video vs. TV

35. Case Study: Ooyala

36. Case Study: Ooyala Using Ooyala’s multi-variate testing framework (currently in beta), a top media company doubled paid-content revenues twice Extended clip preview length from 2 minutes to 3 minutes Reduced download price from 99 cents to 49 cents Ooyala expects monetization income to contribute 20% of revenue in 2011

37. Case Study: Ooyala Another Ooyala client increased ad engagement by changing formats A single 15-second pre-roll produced abandonment rates of 20% to 25% Spreading out the ad load and using shorter spots brought rates to single digits

38. Case Study: Ooyala “ There are more and more opportunities to hit a consumer with advertising, but it’s not just about more advertising but better targeted ads.” — Bismarck Lepe, President of Products, Ooyala, in an interview with eMarketer

39. Case Study: Ooyala Business Highlights Customer dashboard enables instant syndication to all screens Specific moments or entire clips can be shared via popular social platforms YouTube playback gives customers access to world’s largest online video library Flexible technology detects playback environment and scales accordingly Product features enable testing of multiple monetization options (ads vs PPV) to determine best mix for viewer engagement and revenue

40. Case Study: Ooyala Challenges Competition from other players in the online video platform space (Brightcove) Competition from in-house solutions Social venues provide ample free syndication opportunities

41. Case Study: Break Media Case Study: Break Media

42. Case Study: Break Media Business Highlights Well-defined demographic target Expertise in producing, licensing and distributing content Branded websites that cater to niches within the target demo Ad network leverages company’s content expertise with its advertising muscle

43. Case Study: Break Media “ We’ve created a vertically integrated machine that’s self-sufficient in the sense that we can produce content, monetize it and distribute it….That’s really important, and most important is to do it at the right price points.” — Keith Richman, CEO, Break Media, in an interview with eMarketer Case Study: Break Media

44. Case Study: Break Media Challenges Very competitive space on the professional content side Equally crowded field in user-generated media Also competitive on the ad-network side

45. Facebook is now a key player in online video, proving the importance of social venues in the content syndication loop

46. Technology Convergence: From TV to the internet

47. Technology Convergence: More users connecting TVs to the internet

48. Technology Convergence: Sharp increases in streaming devices

49. The US will see an explosion in TVs and other devices with integrated web-video widgets

50. Technology Convergence Phase 1: Set-top boxes, game consoles

51. Technology Convergence Phase 2: Internet-connected TVs

52. The online video audience is growing and becoming more demographically homogenous. The content mix is shifting toward professional, full-length programming. Monetization models are moving toward paid & hybrid systems but content owners must convince skeptical consumers of the value of paying for video. Ad-supported models will remain strong. Technology convergence will be key to the continued success of online video. Content syndication is expanding the video audience. Tips & Takeaways

53. J U L Y 2 0 1 0 eMarketer would like to thank DoubleClick for sponsoring today’s webinar.

54. There is an advertiser for every video

57. Thank you for tuning in to the eMarketer Webinar: The Evolving Online Video Landscape Presented by: Paul Verna eMarketer Senior Analyst Questions & Answers Registrants will receive a copy of the slide deck and the playback link in a follow up email within 24 hours of this presentation. Sponsored by:

58. eMarketer Online Video Coverage Learn more about the online video landscape with eMarketer Total Access. Visit: www.emarketer.com/products Call: 800-405-0844 Email: [email_address] Recent Reports: Video E-Commerce: Innovative Models Drive Sales UK Digital News and Information Convergence Consumer Packaged Goods Sector Taps Into Online Video Paid Video Content: Focus on Movies and TV Marketing to the Online Video Audience Digital Video Advertising: Where’s the Money? Video Content: A Premium Opportunity All reports are available to Total Access clients.