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  • 1. Convergence A global media companys perspective Kevin Obi Senior Vice President Digital Assets NBC Universal International

2.

  • Introduction to NBC Universal
  • Media convergence trends in mature markets
  • Response from a global media company

3. The Power of GE and NBC Universal

  • One of the worlds leading media and entertainment companies in the development, production and marketing of entertainment, news and information to a global audience (Circa 10% of GEs revenues)
  • A division of one of the most respected global companies:
    • Revenue $173Bn
    • Net Income $22Bn
    • Market Cap. $317Bn
    • 300,000 employees

4. NBC International Universal brands TV Production & Distribution Film International Channels Diva TV Some content brands 5. Views on Convergence Media Telecoms Revenue enhancement Cost savings & Cash-in Customer Benefits?Churn reduction Technology

  • Industry view
  • Fixed mobile convergence
  • Device convergence
  • Multi-services convergence (bundling)
  • Network convergence
  • Media/telecoms/technology
  • industry convergence

Are we putting the customer first? 6.

  • Introduction to NBC Universal
  • Media convergence trends in mature markets
  • Response from a global media company

7. Huge changes in media technology in recent years. Streaming Video Digital Cable 2000-2007VOD EPGs Broadband Portable Devices HDTV 1950s 1960s 1970s Internet Digital Satellite 1990s DVD PPV email 1980s Iphone Sling box HDDVD Blu-ray disc Satellite 8. .. accompanied by changes in the media consumer Now 1950s 9. ..have resulted in current media trends

  • Choice proliferation and fragmentation of audiences
  • More time shifting of TV content through PVRs
  • Bigger TV screens, higher definition, PC monitors becoming TVs and vice versa
  • Experimentation with windowing of theatrical releases
  • Rise of content on the internet UGC, video, illegal TV and Films (mostly for free)
  • Advertising money shifting from TV to the internet and advertiser move to greater targetability
  • 6.Consumers are more technology savvy

10. Convergence of video content and the Internet is the most pressing near term trend

  • Internet and media convergence was a major
  • theme CES Las Vegas in January 2008
  • IPTV services being launched across the world
    • France is IPTV market leader
    • Japan and Hong Kong are Asian market leaders, followed by places like South Korea
    • Early days of IPTV services in India
  • Mobile internet and video on mobile is still
  • relatively immature, except in Japan and Korea
  • Examples from Europe & USA
  • UK Internet traffic to online video websites increased
  • by 178% between February 2007 and 2008.
  • BBCiPlayer(catch-up TV) increased its market share
  • of UK Internet visits by423% between Feb & Dec 07
  • MSN announced in April 08 that video streaming in
  • Europe is growing atover 60% every month
  • SRG's study " Prime Time is Anytime "surveyed Americans aged 12 and over
    • Internet TV viewers nearly doubled from 25% to 43% between 2006 and 2007
    • 20% of the American online population watchesTV on the internet every week

11. Possible future scenarios Audience inertia and existing barriers prevent mass shift to new media platforms except for short form content 1 - Status Quo Internet enabled long form content on-demand gains traction and a significant proportion of the linear TV audience, but sits alongside and complements linear TV 2 On demand TV 3 -True Anywhere / Anytime TV The norm becomes for consumers go around traditional broadcasters and search for content on the internet, obtain this directly from content owners (or illegally) rather than watch linear TV 12. but barriers exist to true anytime/anywhere TV Home Broadband Connection Port PC TV Internet 2. Connection fromBB port to TV or the last 10 feet 3. Viewer inertia low desire towatch TV on PC1. Pipe thickness needs to be 6 Mbps+ Only 6% of US viewers haveeverconnected a computer to a TV to watch internet video Harris Interactive Entertainment, 2007 US survey Diagram: LEK Consulting Others barriers include:licensing, windowing, business models 13. Can we see the future in younger audiences? 14. New competitors have also emerged UK example Examples Competitive Advantage Challenges Category Major broadcasters Internet companies Device driven players Telcoms/IPTV Emerging Web TV/Video companies Others NBC Universal, BBC, ITV, Chanel 4, BskyB Amazon Unbox, Google Video, Yahoo, AOL, MSN iTunes, Xbox live, Sony PSP, TV manufacturersBT Vision, Orange, Tiscali Joost, Babelgum Vudu Customer memory, making partnerships work, Licensing Dont own content, PC solution Access to content, installed base, customer experience Limited content, closed system, critical mass of customers Premium content, brand,audience, PC solution, Technology Another set-top box Own content, customer facing brands, cross-promotion capability, audience shares, catch-up TV Online audience share, deep pockets, internet experience Installed base of devices (which drive adoption), partnerships with DTH/IPTV players, TV solution Control broadband infrastructure,deep pockets, usability Internet experience, involvement of some major content owners TV solution, clever technology, content deals 15.

  • Introduction to NBC Universal
  • Media convergence trends in mature markets
  • Response from a global media company

16. The major challenge for media companies How do we make the transition from our businesses of today to the future businesses of tomorrow, without destroying the businesses of today? 17. Response from a traditional media company Content is king - continue to make great contentCompete against increasing power of Internet distributors - control distribution, branding and the user experienceBuild stand-alone value in online destination sitesTake a few bets on thedigital media stars of tomorrow 1 2 3 4 18. Internet TV - hulu

  • Joint Venture by NBC Universal and News Corp created to aggregate premium video content for the U.S. Market
  • Founded in March 2007 with a $100 million investment from private equity firm Providence Equity Partners.
  • Consumers:Aggregate Digital Content, With Great User Experience
    • Build the best consumer video experience online
    • Premium video content TV, film (both short and long-form), Internet originals
    • Highest levels of content protection
  • Scale:Distribute to give scale while monetizing content and branding Hulu
    • Distribution partners in US include:AOL, Comcast, MSN, MySpace and Yahoo
  • Monetization: Attractive Business Model for Content Owners
    • Primarily ad supported with commitments from major brand advertisers
  • Advertisers: Premium video content
    • Largest video advertising network ever assembled on the web
  • International Expansion

19. 20. Convergence on mobile

  • Financial news and info on WAP, "live" channel streaming and on the Nokia catalogue in Europe & Asia
  • Licensing content applications (games, personalisation) based on our Film and TV IP; D2C platforms; pre-loaded films onto micro-SD
  • Made for mobile content production stand-up comedy clips, animation, wallpapers, screensavers, voice tones
  • Simulcast of 3G Mobile TV services in Germany& Austria, seeking to do more across Europe
  • NBC2Go mobile TV channel on media flow;2,200 hours of live, wireless coverage of the 2008 Olympics the biggest wireless event to date in the US.

NBC Universal has made content available on mobile platforms, including long-form and short-form content, WAP sites, text-based applications & services 21. Taking bets - NBCU/GE Peacock Equity Fund

    • $250MM Fund launched 1Q07
    • JV between GEs Media, Communications & Entertainment Group & NBC Universal
    • Investment Round: Series B or later
    • Sector Focuses: Digital Advertising, Digital Content, New Platforms, Mobile, Interactive Entertainment, Media Technologies

Seeking to make further investments in India 22. Conclusion

  • Convergence is now a reality
  • Presents both a great opportunity and a major threat to media organisations
  • Smart media companies will follow the audiences
  • NBC Universal is well ahead of the curve!

23. Thank you!