The Next 5 years of dynamic content The massive catalogue of digital music available through streaming services needs more than just sorting. Mainstream services currently offer radio style streaming curated by algorithms, traditional linear radio made digital or some type of on-demand peer recommendation mixed with editorial selection. The blend of spoken content, expert playlists and unique live recordings traditionally found in linear radio is not innovating or even migrating well into dynamic radio style streaming products. How will next generation radio offer a mixture of these experiences and a sophisticated content offering that goes beyond just a massive catalogue of music sorted in different ways?

1. Strictly Private & Confidential 1
Smart Radio
23rd September 2014
Simon Cole, CEO 7digital
@uksimon

2. Strictly Private & Confidential 2
The consumption of music: change in UK retail value
35
30
25
20
15
10
5
0
-5
Singles Albums
Subscription
streams
% change
Source: BPI

3. Strictly Private & Confidential 3
The consumption of radio: listening via mobile streams
25
20
15
10
5
0
Q1 2012
Q1 2013
Q1 2014
% listening
Source: RAJAR

4. Strictly Private & Confidential 4
US streaming services audience penetration
3%
2%
2%
2%
8%
6%
9%
31%
Source: Edison Research (2014); percentage of US over 12 years that listened to the services in the past month

5. Strictly Private & Confidential 5
The nature of the audience is changing
7%
Distribution of listener types (1)
21%
32%
40%
To date
Savants Enthusiasts Casuals Lean back
(1) Echonest presentation at SXSW March 2014
Significant growth potential
The mass market

6. Mobile Consumption Increasingly Diverse (1) Multiple Connected Device Opportunities
Strictly Private & Confidential 6
The connected market becoming ‘lean back’
Users have more than one
music app on their device
12.5
25.0
50.0
90%
2010 2015 2020
(1) Tapjoy 2013
(2) Cisco IBSG 2011
‘10-’20 CAGR: 15%
1 in 3
Prefer mobile devices
when listening to music
Rapid Increase in Global Connected Devices (2)
Units (bn)

7. Strictly Private C O& NCFoInDfEidNeTnItAiaLl 7
Where people listen to audio

8. Strictly Private C O& NCFoInDfEidNeTnItAiaLl 8
Where people listen to audio

9. Strictly Private C O& NCFoInDfEidNeTnItAiaLl 9
What audio people listen to

10. Strictly Private & Confidential 10
The music on Lenovo handsets
! Ad-supported streamed music
service
! Guvera deal with Lenovo to
bundle on all handsets
! Curated channels with targeted
advertising
! Middle East and India already
signed
! Expected roll-out to other
territories in 2014

11. Strictly Private & Confidential 11
‘Comes with music’ SIM card
! ROK mobile innovative new
business model
! Contract free service on Sprint
and T mobile in USA
! Unlimited text, data and music
service
! Radio channels ‘seeded’
through track selection
! US launch followed by
international roll-out

12. Strictly Private & Confidential 12
The connected car solution
! Working with Pioneer, the
world’s largest after market
brand for in-car music systems
! Developing next generation in-car
radio and music platform
! Pioneer lead customer; other
major brands in discussion for
same platform.

13. Strictly Private & Confidential 13
Developing the content model

14. Strictly Private & Confidential 14
Simon Cole
simon.cole@7digital.com
@uksimon
about.7digital.com