Please check out this exclusive presentation from Cisco's Pankaj Gupta, Director of Video Solutions for SP Marketing, on "Achieving Video Nirvana!" presented at OTTcon. Consumer behavior, content consumption and business models are changing across the video ecosystem, and online video appears to be the primary source of disruption. In fact, Cisco's annual market research report discloses that, by 2013, ninety percent of all consumer IP traffic will be video. In this presentation, the Cisco speaker will address the real-world dilemmas for service provider company executives as they confront the transformations taking place in the video market. The speaker will cite real-world examples of how service providers and their ecosystem partners are developing strategies to address and profit from the coming dominance of online video.

1. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1
Achieving Video
Nirvana!
Pankaj Gupta pagupta@cisco.com

2. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 2
Achieving Video Nirvana

3. © 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential
Broadcasters and Media
Hulu
27%
Owner
12GB/sec. 2XOnline
Video
Brand
Visibility
$$
Consumer Electronics
Internet on
TV
Opportunity to Leverage Online Video for Differentiated UserOpportunity to Leverage Online Video for Differentiated UserOpportunity to Create Revenue Generating Services Using theOpportunity to Create Revenue Generating Services Using the
Network as a PlatformNetwork as a Platform
Opportunity to Increase Popularity of the Content and RevenueOpportunity to Increase Popularity of the Content and Revenue
Through CollaborationThrough Collaboration
Innovate to Transform Consumer Experience
Growing Video Consumption
Dominated by Online Video
Online Video
Video = 90% of
consumer IP traffic
by 2012
Cisco VNI Study
Revenue from $598 million
to $3.4 billion annually
By 2014
Web
In 24 million
Households
By 2014
44%
5 billion5 billion
5B Videos Viewed Online
in UK in April 2009
Service Provider
“TV Everywhere”
CDN
ISP
ISP
ISP
33% iPlayer Traffic
Market
Dynamics

4. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 4
Consumers Want Unified Experience Despite Video
Ecosystem Fragmentation
Consumer Experience
Content Fragmentation
Broadcast, Premium, UGC
Device & Screen Fragmentation
TV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation
Lean back, Lean forward, Social
Subscription Fragmentation
Broadband, TV, Mobile, Movie rentals, OTT
Free vs. Paid
Ad Dollars Fragmentation
Transition from linear TV to online
Business Models

5. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 5
Profitable Path Is To Turn This Challenge Into
Opportunity
Online video seems like replacement of TV experience
...killer of content business
But…
Online video can enhance the TV experience
….grow the content business models
If…
Carefully done right !

6. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 6
Expand
Reach & Monetization
The Transformation Strategy
Unify
Experience & Platform
Rejuvenate
Better TV experience

7. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 7
Expand The Audience Reach
Demographics, Footprint, Any Screen, Anytime
Expand
Reach & Monetization
Extend TV Experience To PC & Mobile For Current TV Subs
Enhance value of current TV services, Higher stickiness, Brand retention
Any device, Anywhere, Anytime online catch-up service
Examples : “TV Everywhere” by Comcast, Time Warner, Verizon & others, USA
“Yalp” Online TV services by Telecom Italia, Italy
“SKY Play “ online TV service by BSkyB, UK
“Canal Plus a la Demande” catch-up online service by Canal Plus, France
“Now.Com.HK” service by PCCW, Hong Kong

8. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 8
Internet Video In Tune With All Generations
PC is dominant with all, Young like mobile and gaming consoles too
Total 18-34 Age 35-54 Age 55+ Age
Computer with Internet Access 67% 85% 67% 53%
TV with VoD Capabilities 45% 49% 45% 43%
TV with DVR/TiVo 60% 65% 60% 55%
TV with Video Extender Device 5% 12% 5% 2%
TV with Gaming Device 8% 16% 8% 2%
Mobile Phone 12% 22% 12% 6%
MP3 Player 11% 19% 11% 4%
Portable Gaming Device 2% 4% 2% 1%
None of above 11% 4% 10% 18%
Source : CBS Entertainment Panel Survey, July 2009
N=3461 N=704 N=1732 N=995
In past 3 Months, Have you used any of the following technologies to watch digital
videos?

9. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 9
Expand Monetization Opportunities
Online Video Subscription, Advertising, Transaction, Up Sell
Expand
Reach & Monetization
Offer Subscription Online & Mobile Video Services
Monetize your video assets beyond your network footprint
Attract new demographic subscribers (students, cord cutters, niche
content)
Up sell top tier TV and broadband subscriptions
Examples : “MLB.COM” had half a million online subscribers in 2008 with $120/Year ARPU
“Hulu” & “Disney” announced plans to offer online subscription service in future
“SKY Play “ online TV service ( 4 subscription packages) by BSkyB, UK
“StarzPlay” for PC & Mobile ; and “V-Cast “ for Mobile customers by Verizon, USA
Advertising For Online Video Portal
TV advertising dollars are shifting to online advertising
Online video ads has ~2X CPM of broadcast TV ads, but not gross revenue
Consumers’ tolerance to online ads is not fully exploited yet
Targeted advertising has much higher CPM potential
Examples : “Simpsons” had higher CPM on Hulu than on Fox
“TV Everywhere” by Comcast will carry “optimal” advertising
“Hulu” and “TV Everywhere” may offer ads based on viewer profile in future
Integrated Content Store: Download To Rent Or Own
Integral part of online video portal & revenue share with content providers
Examples : “Yalp” video portal by Telecom Italia offers download to rent
“Canal Play” online video store with 6,000 videos & movies by CanalSat

10. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 10
Sky Player : 4 Online Packages To Address
Diverse Demographics

11. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 11
MLB.TV Monetized Online TV service for Out
of Market Games Successfully
 Online TV service for out of market games
Preserving exclusivity of its existing TV deals
Supports PC, Roku, Boxee, iPhone
768Kb for MLB.TV, 1.5Mb for MLB.TV Premium, 3.0Mb for MLB.TV Premium with HD
 For in-market games, working with MSOs and RSNs to make content online
Yankees, YES Network, and Cablevision deal for in-market online streaming $49.99 for remaining 2009
season, $19.99 per month, similar deal with Cox Communications and the San Diego Padres
 In 2008, half a million online subscribers with $120 ARPU
Highly interactive, feature rich online streaming

12. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 12
90+% Viewers Willing to Watch More Ads For
Free Online Videos: Both CBS & Disney Study Confirm
96% 90%
Users did not mind seeing double the
number of Ads (eight vs four) during
an hour long online streaming.
Users did not mind seeing if
online video had same number of
Ads as TV
For details, Please see back up slide

13. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 13
But…
Not enough new revenue
from online advertising & subscription

14. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 14
Bring Them Back to TV & Rejuvenate
The Experience

15. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 15
Immerse Viewers with Better TV
Experience for Increased Revenue
Leverage Online video to drive viewers back to TV
Viewers like immersive experience on TV
Internet viewing drives TV viewing (CBS study)
Most viewers watch missed or not available on TV episodes online (CBS
study)
Examples : Disney only shares shorts clips of programming on YouTube.
NBC, Disney, CBS only share few episodes (4-6) on Hulu
Virgin Media STB supports BBC iPlayer, generating 1/3 traffic for iPlayer
Many content providers use online videos to create demand for new shows
“TV Everywhere” will only provide select programs online
Rejuvenate TV : Web 2.0 experiences on TV
Create new immersive TV experiences
Make TV more social, personal, Interactive
UGC and online video integration in TV experience
Examples : “Verizon FioS” TV service will have 7 Million web clips from DailyMotion, BlipTV & more
“ATT U-verse” TV service’s enhanced experience for 2009 Masters Tournament (Golf)
“ATT U-bar” provides personalized weather, stock, traffic info on TV, also share Flickr
“Project Canvas “ by BBC, ITV, Channel 4, BT joint venture
“HbbTV” initiative by pan-European broadcasters
“SkyPlay” IP based TV service enhancements with Microsoft Xbox by BSkyB
Rejuvenate
Better TV experience

16. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 16
Consumers Watch Mostly Missed
Episodes Online
Total 18-34 Age 35-54 Age 55+ Age
Missed episodes of shows I watch on TV 88% 89% 88% 86%
Episodes of TV shows I do NOT watch on TV 27% 36% 26% 20%
Episodes of TV shows I have ALREADY watched on
TV
16% 21% 16% 11%
Episodes of past shows that are not on TV now 39% 44% 40% 31%
None of these 4% 2% 4% 7%
Source : CBS Entertainment Panel Survey, July 2009
N=2229 N=606 N=1122 N=476
What Kind of TV Programs do you Stream or Download and Watch on a PC?

17. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 17
Deliver Unified Experiences Using Network
As Platform
Unify
Experience & Platform
Monetize new transaction services
Application store for TV and other devices (revenue share)
Micro payment and billing services
Examples : “TV Widget Bazaar “ by Verizon
Monetize new value added services on network platform
Retail and wholesale content delivery (CDN) services
Network personal video recorder service
Managed consumer TelePresence service
Examples : BT (Wholesale), DT, Verizon plans to offer CDN services
Cablevision offers Network PVR services
Unify experiences across devices, content providers
Cross platform advertising across PC & TV : Measure, Deliver, Monetize
Single sign-on across services and screens
Cross platform targeted adverting for very high CPMs
Metadata aggregation across multiple content providers
Examples : “TV Everywhere” initiative plans to offer single sign-on and unified cross platform ads
“Project Canvas” will provide unified metadata aggregation across content providers

18. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 18
ATT Case Study: U-verse Keeps Getting Better!
Expand
Reach & Monetization
Unify
Experience & Platform
Rejuvenate
Better TV experience
Launch in San Antonio: 06/06
U-verse OnTheGo on PC: 02/07
1 Million Subs: 12/08
1.8+ M Subs, 100+ markets, >75%
Triple/Quad Play Subs: 09/09
U-bar application: 09/06
Yellowpages.com on TV: 09/06
Yahoo Games Apps: 09/06
Flickr App on TV: 04/08
NBC Olympics TV App : 07/08
Y! Fantasy Football App: 08/08
Total Home DVR: 09/08
HD VoD: 09/08
Y! College Basketball App: 03/09
Golf Masters 2009: 04/09
OnDemand Top Picks App: 08/09
Multiview App: 09/09
TV Awards & New Show App:
09/09
Web remote access to DVR: 11/06
Mobile remote access to DVR: 04/07
U-verse Voice: 02/08
Remote Access on iPhone: 06/09
Media Share: 09/09
Data Source : ATT.com

19. © 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 19
Expand
Reach & Monetization
Achieving Video Nirvana
Unify
Experience & Platform
Rejuvenate
Better TV experience

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