1. The DVR Revolution Michael Ramsay Chairman & CEO Driving Change in the TV Industry

2. Topics What is DVR? What does it do? Does DVR change the way people watch TV? What are the issues and opportunities for the TV industry? Where is it all going? What can we expect in the future?

3. What is DVR? TV on demand- “It changes my life!” Those that do have itThose that don’t have it Hard-disk-based VCR- “Do I really need it?”

4. TiVo’s Role Personal TV Service provider, using DVR technology Licensee of DVR technology to the industry Business model is a combination of subscription revenues and license fees Approx. 500,000 subscribers. 40%-50% of the market Key partners are SONY and DIRECTV Provider of unique services to the TV and advertising industry for promotions and audience research

5. DVR Does Change The Way You Watch TV Viewers:  Self-select their favorite programs  Watch mostly recorded TV  Never miss their favorite series  Schedule their kids time better (and their own)  Makes TV interactive  Yes, they skip ads (mostly)  Watch more TV, and like it better

6. We Know Because We Measure It

7. (Roughly 470 times per household per day) TiVo viewers are clicking their remotes 240,000,000 times a day! No More Couch Potatoes

8. Super Bowl Winner: Good Entertainment Approximate average of 44 pause/replay during game One click every 2-minutes in game’s final moments Just 3% of TiVo audience moved to other programming Most replayed segment…

10. Before TiVo: TV Viewing

11. Industry comparison After TiVo: Primetime is Anytime

12. TiVo Subs Still Love Primetime Shows Top 5 Season Passes™

13. And The Winners This Season? (New Season Passes added as of 9/25)

14. DVR Changes the Economics of Home Entertainment Viewers:  Buy more premium channels from cable/satellite  Buy more PPV movies  Cancel their service less often  Watch more TV  Rent fewer videos

15. Challenges for the Industry What is primetime? How do you value the disk real estate in the home? How do you price ad inventory? What happens to traditional ratings systems? How do you assure content security without restricting fair use?

16. Advertisers now have a new palette of creative tools  Long form content  Interactive, multimedia campaigns Powerful audience measurement capability Viewer feedback on content Predictive ratings And Opportunities….

17. The Possibilities are Limitless

18. 66% of TiVo viewers watched the Austin Powers Showcase for an average of 6-7 minutes! Austin Powers in Goldmember

19. And you learn some things too…

20. A Look at Push Nevada

21. A Look At The Sopranos

22. A Look at the Sopranos

23. Who’s Doing it?

24. And… Video on Demand Starz on Demand subscription VOD via TiVo is up-and- running  DirecTV/TiVo subs and Starz Super Pak subs Opt-in for service  Every week, up to five movies are automatically recorded High initial take rates

25. What Happens When… A satellite or cable company replaces all set-tops with DVR? DVR is in the majority of homes? You get 500 movies on a smart card? Broadband becomes a viable content delivery channel for television?

26. Nothing short of a revolution!