Preben Schack, Sr. Director. Shift Happens!, From Service Provider to Experience Provider.

1. SHIFT HAPPENS!
From Service Provider to Experience Provider
Preben Schack, Sr. Director
Cisco Service Provider Video Technologies
CANITC, Monterrey 29 April 2010
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2. Who am I...
Name: Preben Schack
Nationality: Denmark
Profession: Sr. Director Cisco Systems
Experience: 18 years Cable-TV industry
Focus: Service Provider
Video Technologies E-mail: schackp@cisco.com
Hobbies: Fishing, Cooking, Bicycling
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3. Video Changes Everything…
Changing Market
Environment…
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4. The World is Changing
Recession
Consumerization Globalization
Social Networking Sustainable
and Mass Development
Collaboration
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5. Driving the Technology Revolution
Delivery Technology Revolution
1 2 3
Fiber Deep All Digital Video IP Convergence / IPTV
The Future Video Experience
Personalized Video: “Infinite” Content (HD, Advanced Advertising
DVR, VOD, Time-Shift Internet Video, 3-Screen) and Targeting
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6. Shifts Happening ! Fast & All Around
Online Video Service Provider
Cisco VNI Study
Cisco VNI Study Unique monthly
viewers
7 million
7 million “TV Everywhere”
Video = 90% of 100 million
100 million
consumer IP traffic by
2012
CDN
CDN
Web
ISP
ISP
In 24 million
In 24 million Revenue from $598 million ISP
ISP
Households
Households to $3.4 billion annually ISP
By 2014 ISP
By 2014 By 2014
Market
Broadcasters and Media Dynamics Consumer Electronics
Internet on
Internet on
27%
27% TV
TV
Owner
Owner
Hulu
Hulu
Brand
Brand
Visibility
12GB/sec.
12GB/sec.
2X
2X Visibility
Online
Video
$$
Opportunity to Increase Popularity of the Content and Expthe
Opportunity to Create Revenue Generating Services Using eriences
Opportunity toInnovate to Transform Consumer Experience Revenue
Leverage Online Video for Differentiated User
Network as a Platform
Through Collaboration
© 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential

7. Evolution to IP Video for unified experience
and enhanced monetization
Traditional – First Wave IPTV - Second Wave IP Video – Third Wave
On-net only On-net only On-net or Off-net
TV TV TV, PC, mobile, etc.
Limited User Extended User WEB like User
experience Experience Experience
Business Model: B2C Business Model: B2C Business Model: B2B2C
More Open, More Flexible, More Monetization Opportunities
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8. Video is driving explosive growth
Video to
reach 87%
of Consumer
IP in 2012
Other Media
Source: Cisco Visual Networking Index – Forecast, 2007-2012
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9. YouTube and Hulu Generate 2X More Traffic
than the Entire Internet Backbone in 2000
50
Petabytes per month
Hulu
25
Entire YouTube
Internet
Backbone
0
Internet Backbone in Internet Video Sites in
2000 (U.S.) 2008 (U.S.)
Source: Cisco Visual Networking Index — Forecast, 2007 – 2012
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10. Video Changes Everything…
Transformation of the
Video Value Chain
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11. Consumers Want Unified Experience Despite
Video Ecosystem Fragmentation
Consumer Experience Business Models
Content Fragmentation Subscription Fragmentation
Broadcast, Premium, User Generated Content Broadband, TV, Mobile, Movie rentals, OTT
Device & Screen Fragmentation Free vs. Paid
TV, PC, Mobile, Gaming, PDA
Interactivity Fragmentation Ad Dollars Fragmentation
Lean back, Lean forward, Social Transition from linear TV to online
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12. Non-TV Devices Increasingly Important
Relevance is becoming a multi-device proposition
Younger consumers
embrace multiple media
devices
Fewer consumers are
satisfied with the status quo
Would enjoy watching content on a PC
Would enjoy watching content on a mobile device
Happy with current TV
Source: “Television in Transition”, Accenture, 2008
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13. 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 !
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14. The Transformation Strategy
Expand Experience Unify
Reach & Monetization Better TV experience Experience & Platform
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15. Expand The Audience Reach
Demographics, Footprint, Any Screen, Anytime
Service Providers
Extend TV Experience To PC & Mobile For
Current TV Subscribers
Expand
Reach 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
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16. Transforming the End User Experience:
Unrestricted by Time, Space, or Device
Web 2.0 Personal
Broadcast & More
Social Rich Media
Consumer Experiences
More Visual, More Social, More Personal
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17. Internet Video
Simultaneous TV and Internet Use
May 2009
Age 2+ 30.2%
Age 12-17 39.5%
Age 18-34 32.7%
Age 35-54 30.8%
Age 55-64 33.8%
Age 65+ 24.8%
Source : Nielsen Convergence Summit
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1

18. Internet Video In Tune With All Generations
PC is dominant with all, Young like mobile and gaming
consoles too
In past 3 Months, Have you used any of the following technologies to watch
digital videos?
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%
N=3461 N=704 N=1732 N=995
Source : CBS Entertainment Panel Survey, July 2009
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19. Expand Monetization Opportunities
Online Video Subscription, Advertising, Transaction, Up Sell
Service Providers
Offer Subscription Online & Mobile Video
Services
Monetize your video assets beyond your network footprint
Expand
Monetization
Advertising For Online Video Portal
TV advertising dollars are shifting to online advertising
Integrated Content Store: Download To
Rent Or Own
Integral part of online video portal & revenue share with
content providers
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20. Video Changes Everything…
The New
“Experience Provider”
Strategy
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21. Provide Viewers with Better TV Experience for
Increased Revenue
Leverage Online video to drive viewers
Experience back to TV
Better TV experience Viewers like extended experience on TV
Internet viewing drives TV viewing (CBS study)
Most viewers watch missed or not available on TV
episodes online (CBS study)
Experience TV : Web 2.0 experiences on TV
Make TV more social, personal, Interactive
User generated content and online video integration in TV
experience
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22. Does internet video drive TV viewing?
Yes!
Have you ever watched an episode of a continuing television series on internet before
you watched any of episode of that program on TV?
Total 18-34 age 35-54 age 55+ age
No 78% 64% 79% 88%
Yes 22% 36% 21% 12%
Source : CBS Entertainment Panel Survey, July 2009 N=3495 N=711 N=1742 N=1012
When you watch an episode of a continuing television series on Internet before you
watched any episode of that program on TV. Have you then later watched one or more
episodes of that shows on TV?
Total 18-34 age 35-54 age 55+ age
No 28% 19% 31% 39%
Yes 72% 81% 69% 61%
Source : CBS Entertainment Panel Survey, July 2009 N=762 N=254 N=369 N=124
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23. Consumers Watch Mostly Missed Episodes
Online
What Kind of TV Programs do you Stream or Download and Watch on a PC?
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 16% 21% 16% 11%
TV
Episodes of past shows that are not on TV now 39% 44% 40% 31%
None of these 4% 2% 4% 7%
N=2229 N=606 N=1122 N=476
Source : CBS Entertainment Panel Survey, July 2009
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24. AT&T 2009 Masters Tournament
TV, PC and mobile
devices allow use of web
elements, tools, and
plug-ins
Consumers “create”
their own experience
Advanced remote control
…unique – or use your
iPhone
Access content anytime,
anyplace, any device
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25. Deliver Unified Experiences Using Network As
Platform
Unify experiences across devices, content
providers
Cross platform advertising across PC & TV : Measure,
Unify Deliver, Monetize
Experience & Platform Single sign-on across services and screens
Cross platform targeted adverting
Monetize new value added services on
network platform
Retail and wholesale content delivery (CDN) services
Network personal video recorder service
Managed consumer TelePresence service
Monetize new transaction services
Application store for TV and other devices (revenue share)
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26. IP Video: Enabling New Business Models
and Services
Value Added Services
B
$$
2 $
B Wholesale Services
Business
Models
Consumer Services
Consumer Services
B
2 $$
C
Experience Provider Platform
Presentation_ID
Leverage Network and Data Assets
© 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential 26

27. Next Generation Video Service Trends
Driving network and in-home architectures…
More HD Channels
Massive VoD Libraries
Time Shifted TV
Internet Video
Any Stream to Any Screen
Targeted Advertising
Next Generation User Interfaces
Service Velocity
3DTV (impossible to avoid at CES 2010)
“The vision is to give customers the ability to watch ANY movie, television show, user
generated content or other video that a producer wants to make available On Demand”
Presentation_ID
– Brian Roberts, CEO Comcast – CES 2008
© 2009 Cisco Systems, Inc. All rights reserved.
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28. The Transformation Strategy
Expand Experience Unify
Reach & Monetization Better TV experience Experience & Platform
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29. C25-452149-01 © 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential 29

30. BACK-UP
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31. BSkyB – UK : Monetizing Online TV
SKY Player: Online TV service
Linear 34 channels simulcast online for PC or MAC
On-demand online : 500+ movies, 1000+ hit TV episodes
3 picture quality levels to suit broadband connection
Current SkyTV subs watch linear online channels free as per their
subscribed package
Non Sky-TV subscribers can subscribe online packages – see next slide
Using online service to up-sell its top-tier TV
and broadband subscriptions
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32. Sky Play and Microsoft XBox
Upcoming enhanced online service on
Microsoft XBox
Channel line up, pricing, dates to be announced
20+ Live Pay TV Channels, On-Demand Content & Interactive Sports
Fans can communicate, check news & access fixtures, league tables
& other on-demand information
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33. Sky Player : 4 Online Packages To Address
Diverse Demographics
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34. CanalSat – France: 3 On Demand Services
Available soon on Microsoft Xbox360
1. Canal Plus a la Demande catch-up online service
Bundled with Canal Plus' Le Bouquet pay TV package
TV shows, movies (~30 per month) and sports events – including highlights for the major
European football leagues and the UEFA Champions League
Currently available on PC, 10 Million VoD streams from March 08 to March 09,
1 million streams/per month run rate. 6000 titles library
2. CanalPlay
A transactional online video store with 6,000 videos, including 3,000 movies for XBox
Limited availability with Sony PSP and PC
3. Foot+
Watch Ligue One (8 live per week, 2 delayed) and Champions League matches
Xbox Live party feature allows users to watch matches in a virtual stadium with other Xbox Live
members, communicating via voice chat.
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35. Starz Plays Wholesale Affiliation Strategy
Subscription based service with Verizon Starz Play
$5.99 per month for Verizon FiOS / Internet subscribers-single bill , otherwise $9.99
2500+ high-quality video selection with 1000 movies -first-run hit, independent films and classics
Spider-Man 3, Ratatouille, Pirates of the Caribbean, Hannah Montana/Miley Cyrus: Best of Both Worlds Concert
Also a live stream of the linear Starz channel
Unlimited downloads, playback and streaming
One membership powers up to 3 devices so for the entire
Recently joined Comcast-TW-Verizon “TV Everywhere” trials with 300
movies and shows
Offered in Netflix $8.99 and above subscription packages ( does not include
linear channels)
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36. MLB.TV Monetized Online TV service for
Out of Market Games Successfully
Highly interactive, feature rich online streaming
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
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37. BBC iPlayer
Market Disrupter
Interesting Statistics
Hours encoded each week: 400+
Servers needed for the job: 60
Video formats encoded: 15
Minutes taken for shows to appear online: 15
Data transfer of an evening: 12.5Gbps
7 petabytes per month
Streaming peak: 10pm
iPhone peak: midnight
Weekend peak: 8am-10am
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