1. Pivot. Adapt.
And Improvise.
“Adapt what is useful,
reject what is useless,
and add what is
specifically your own.”
-Bruce Lee
Richard Matsumoto
VP of Regional Business Development
APACJ and Greater China
Telstra Software Group (TSG)

2. The Dragon Loves Online Video:
Why Online Video Is Big Now..But Will Become
Colossal In China.
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3. Online Video
In China Is

4. How

5. Big

6. Total Addressable Market of
China’s Online Video Market:
$1 Billion USD by 2020
$76M USD
Beach HeadTAM by
2020 (Representing Projected
TAM In 2015)
Assumptions:
• Subscription model will be 30% size of Ad funded Excludes
• Excludes traditional IPTV market
• Online Video Only
• Long run platforming will be 8% of revenues
$1B USD $740M USD $468M USD
TAM by
2018
TAM in
2010

7. China’s Online Video Market: Quarterly Revenue
Surging 83.2% YoY, Revenue Approached 6.82 Billion Yuan
(USD 1.11 Billion) in Q3 2014
Source: iResearch

8. 7
Number of online video users in China from December 2007 to December
2013 (in millions)
Number of online video users in China in 2013
Source: CNNIC;
161.49
202
240.44
283.98
325.31
371.83
428.2
0
50
100
150
200
250
300
350
400
450
Dec. 2007 Dec. 2008 Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2012 Dec. 2013
Usersinmillions

9. 8
Penetration rate of online video use in China from December 2007 to
December 2013
Penetration rate of online video use in China 2007-2013
Source: CNNIC
76.9%
67.7%
62.6% 62.1%
63.4%
65.9%
69.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Dec. 2007 Dec. 2008 Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2012 Dec. 2013
Shareofinternetuserswatchingonlinevideos

10. Possible China Strategies
1. Strategic partnerships with global online ad agency & digital marketing
ecosystem in China.
2. Global consumer brands seeking to harness the power of online video
3. Strategic partnerships with film and TV content
creators/owners/producers: (Chinese and western/foreign)
4. Strategic partnership between Ooyala and Autohome (China’s largest
e-commerce site for buying & selling cars
(Note: Autohome is a 100% wholly owned subsidiary of Telstra.)
5. Chinese smart phone/tablet manufacturers
6. Chinese telecom & mobile operators
7. Chinese private equity (PE) firms
8. China’s Tier 2 TV Broadcasters

11. Ooyala +
Autohome:
‘THE PATH OF LEAST RESISTANCE’
IS ALSO THE PATH OF BEST SYNERGY
A Match Made In
Heaven and…

12. Why Ooyala +
Autohome?
‘THE PATH OF LEAST RESISTANCE’
IS ALSO THE PATH OF BEST SYNERGY
What Makes This
A Very Special And
Strategic Partnership?

13. Number of views for advertisement on comprehensive online video
websites* in China in the 2nd quarter 2012, by product
Number of views of ads on comprehensive online video websites in China 2012, by product
Source: iResearch;
8,461
8,461
8,397
8,202
6,498
6,180
6,007
5,771
5,347
5,203
0 1000 2000 3000 4000 5000 6000 7000 8000 9000
Passenger car
Shampoo/hair care article
Supplements for medical use
Milk beverage
Face cleansing/skin care product
Men's products
Oral hygience product
Online shopping
Juice
Medicine
Number of views
Note

14. Strategic Partnerships In
China’s Booming
Content Ecosystem
Content is
Not King ...
It’s Empress!:

15. Pattern A - Inbound:
Strategic Partnerships Between Foreign
Content Producers Seeking &
Chinese Online Video Companies
• Online video has become a major battleground in China as the main platforms race to
acquire top content, expand the usability of their platforms, and become marketing
and promotional tools alongside the theatrical business.
• Time Warner's HBO and Chinese Internet giant Tencent on Nov 25, 2014 Tuesday a
content deal that will make the latter's streaming video service the official online home
of HBO films and series in China.
• Under the deal, Tencent Video will be the exclusive Chinese online provider of HBO
series including Game of Thrones, True Detective, The Newsroom and Boardwalk
Empire. The firm will also show HBO films.
• Chinese online video players, such as Tencent, Youku Tudou (backed by e-commerce
giant Ali Baba Group, which has also struck content deals), Baidu's iQiyi and Sohu.com,
have all announced they will spend more on international content.

16. "This partnership with Tencent Video ensures that Chinese fans will now be able to enjoy our dramas at the
high level of quality they were meant to be experienced.”
- Charles Schreger, HBO’s president of programming sales.

17. “This partnership enables us to distribute some of the most ground-breaking programming in the world
through our robust technology platform, to the benefit of Chinese Internet users.”
- Martin Lau, President of Tencent Holdings

18. Pattern A - Inbound:
Strategic Partnerships Between Foreign
Content Producers Seeking &
Chinese Online Video Companies
• AliBaba Group Holding Ltd. (BABA) teamed with Lions Gate Entertainment Corp (LGF) to
stream Hollywood movies and television shows as China’s biggest e-commerce
operator expands its video content.
• Alibaba, which filed for an IPO in May 2014, and has a valuation of $168 billion, is
adding content as consumer living rooms turn into a new battleground for technology
companies. In April 2014, Ali Baba led a $1.22 billion investment in online video site
Youku Tudou (YOKU) after agreeing in March to pay HK$6.24 billion ($805 million) for a
60 percent stake in ChinaVision Media Group (1060).
• “It’s another way for us to get content into the China market with a great partner.
We’re always exploring opportunities in China, it’s a growing content market, it’s a
content market you have to be in.”
- Jim Packer, Lions Gate president of worldwide television
and digital distribution

19. Strategic
Partnerships In China’s
Online & Mobile
Advertising
Ecosystem
Mad Men
in China:

20. Online advertising revenue in China 2012
Online advertising revenue in China from 2006 to 2015 (in billion U.S.
dollars)
Source: iResearch;
0.96
1.68
2.69 3.28
5.15
8.1
12.52
16.95
22.59
29.65
0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011* 2012* 2013* 2014* 2015*
AdvertisingrevenueinbillionU.S.dollars

21. Number of views for advertisement on comprehensive online video
websites* in China in the 2nd quarter 2012, by product
Number of views of ads on comprehensive online video websites in China 2012, by product
Source: iResearch;
8,461
8,461
8,397
8,202
6,498
6,180
6,007
5,771
5,347
5,203
0 1000 2000 3000 4000 5000 6000 7000 8000 9000
Passenger car
Shampoo/hair care article
Supplements for medical use
Milk beverage
Face cleansing/skin care product
Men's products
Oral hygience product
Online shopping
Juice
Medicine
Number of views

22. Partner
Network
& Profiles
Value for Partner
Partner
Relationship
Management
Partner
Selection
Criteria
Partnering
Go to Market Strategy - Partnering
Understand the
industry network
and the value chain
to build
relationships.
How does the
relationship help
achieve win-win goals?
Create a checklist to
assess the value of a
partnership.
Provide significant value.
Manage the relationship and partnership for
mutual success.

23. Go to Market Strategy – The Partner Process
 Identify areas for
partnering
 Define partner
capabilities
 Identify potential
partner profiles
by using partner
selection criteria
 Create interest
among the
potetnial
partners
 Apply partner
selection criteria
for value of
partner
 Develop a
win/win value
propostion
 Develop a
mutual
agreement on
technology,
sales,
marketing,
implementation
and support
Define Identify Market Screen Propose Plan & Agree
A living process driven by a strategic agreement that is lead and managed for
mutual long term win-win relationships, which is crucial in China

24. Conclusion

25. “Empty your mind.
Be formless, shapeless.
Like water. You put water
into a cup, it becomes the
cup. Put it in a teapot, it
becomes the teapot. Water
can flow or creep
or drip or crash.
Be water my friend.”
-Bruce Lee