1. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 1 ©Strategy & Technology, 2011 Connected TV Developments Colin Prior Director of International Sales Strategy & Technology

2. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 2 ©Strategy & Technology, 2011 Agenda Introduction to S&T Connected TV – What is it and what does if offer? What is happening in the market? Public Standards choices Business issues: Security Audience Measurement Control of content use Summary

3. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 3 ©Strategy & Technology, 2011 S&T Overview Independent company Offices in London & Bristol (UK), Denver (USA), Hong Kong (SAR) Worked exclusively in digital TV since 1996 On council of UK DTG, leading MHEG-5 specification activity; previously on DVB Steering Board Products provide a complete interactive TV solution: Redkey TM MHEG-5 engines to receiver manufacturers MHEG-5 applications to broadcasters and operators Interactive playout equipment (Object Carousels) Customers include Sky, Arqiva (UK), Freeview NZ, Kordia, Canwest, TVNZ (NZ), TVB (HK), Digicable (India), ABC, SBS, Seven, Nine, Ten, Win, Broadcast Australia, Prime, Southern Cross (Australia), RAI (Italy), Mediacorp (Singapore), RTM (Malaysia), Time Warner Cable, Comcast, Weather Channel, Videotron, Cisco, Rogers, NBC, Motorola (USA) Also provide consulting services to broadcasters operators and regulators

4. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 4 ©Strategy & Technology, 2011 Connected TV – What is it and what does it offer? TV delivered via the open Internet to TVs, games consoles, tablets and other devices From both Free-to-Air and Pay TV operators Catch-up TV services such as BBC iPlayer Advertising, PPV and subscription funded Broadcasters have largest share of advertising funded on-line TV revenues in Europe (Screen Digest) What it is not: Delivery via a managed network (i.e. IPTV) Screen Digest predict that Connected TV users will overtake IPTV subscribers by 2014

5. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 5 ©Strategy & Technology, 2011 BBC iPlayer – Catch-up TV on Freeview HD

6. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 6 ©Strategy & Technology, 2011 CI+ On-demand applications

7. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 7 ©Strategy & Technology, 2011 ARD Mediatek - Catch-up TV on HbbTV

8. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 8 ©Strategy & Technology, 2011 Shopping – QVC

9. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 9 ©Strategy & Technology, 2011 Freeview Australia EPG

10. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 10 ©Strategy & Technology, 2011 Freeview Australia EPG

11. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 11 ©Strategy & Technology, 2011 Connected TV Connected TV is the delivery of content via both broadcast (DVB-x) and broadband (IP) Uses both delivery technologies for maximum benefit: Broadcast for live, high definition, first-run content Broadband for on-demand, lower resolution, catch-up or niche content Primary consumer take-up so far is in existing Free- to-Air markets viewing mainstream broadcast content

12. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 12 ©Strategy & Technology, 2011 Hybrid TV Architecture – MHEG & HbbTV DSMCC Object Carousel Middleware Receiver Program Video & Audio (e.g. Video Server playout) Application TV Display VOD Catalogue Mux TX VoD Catalogue DVB-SI Other apps ASI or IP VOD Launch Application Back Office Catalogue Transform Web Server Internet or IP network Content Delivery Network VOD Application

13. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 13 ©Strategy & Technology, 2011 Whats happening in the market Public standards based solutions in free to air markets such as UK, Germany, France, New Zealand using either: MHEG Interaction Channel HbbTV CE Manufacturers Connected TV solutions from Samsung, Sony, Panasonic, Humax, etc Proprietary solutions (although all HTML browser-based) Major CE manufacturers own content portals, often with exclusive content ….but expensive for broadcasters to support/maintain multiple implementations ….and do not extend over multiple devices

14. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 14 ©Strategy & Technology, 2011 Connected TV receiver growth 90% of TVs sold in Europe will be Connectable by 2014 (Source – Screen Digest)

15. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 15 ©Strategy & Technology, 2011 Public Standards Status / Comparison MHEG-ICHbbTV SpecificationComplete (DBook 6.2.1 and ETSI 202 184) Still in development (ETSI 102 796) IPRNone knownLicense fees still to be determined for Sony and Philips patents Receiver Conformance Testing Complete DTG Testing test suite In development Broadcaster control of content Yes – complete controlNo – does not restrict use of broadcast content Broadcast-only use (with no IP connection) YesYes – but content is much larger so requires more capacity

16. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 16 ©Strategy & Technology, 2011 Hybrid TV Business Models Free to view – license fee funded e.g. BBC But need to protect content against piracy/theft Free to view - advertising funded But how to measure in a way that is acceptable to advertisers? Subscription / Pay Need secure transactional model

17. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 17 ©Strategy & Technology, 2011 Content Protection Content delivered over IP / public internet needs to be protected against piracy Content owners will not allow in the clear distribution of content Tools such as 128 bit AES encryption of the transport stream, combined with secure key management are required Receiver devices must not store or redistribute streamed content

18. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 18 ©Strategy & Technology, 2011 Advertising requirements Advertising-funded business models require: Playlist support – delivering a list of commercials and programme content to a receiver that it plays back to back in sequence Tag commercials to optionally prevent ad-skipping Playback reporting – logging viewer playback to measure consumption and advertising views Possibility of personalised advertising on a per viewer basis

19. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 19 ©Strategy & Technology, 2011 But what about the advertisers? TV advertising sales are driven by ratings On-demand viewing offers much greater accuracy In most markets the independent TV ratings figures are trusted and set the rate card TV advertisers want the same independent measurement for catch up TV (as they do for time- shifted PVR viewing) Also consider the impact if catch-up TV services shift viewers from broadcast to catch-up consumption...

20. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 20 ©Strategy & Technology, 2011 Broadcaster Control of content display Broadcasters need to keep control of their content and how it is used Need to prevent third-parties using broadcaster- owned content with their applications Could superimpose inappropriate advertising or associate other material with broadcast content Security models are needed to ensure that only authorised applications run and only connect to allowed application servers

21. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 21 ©Strategy & Technology, 2011 MHEG-IC Security features Always launch from broadcast Signed applications Allowed server White List delivered via broadcast carousel Security keys delivered using broadcast carousel to ensure receiver is connected to broadcast Streamed AV content only – no storage or redistribution Optional AES encryption of AV content no embedded secrets in receiver, keys not available to MHEG applications

22. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 22 ©Strategy & Technology, 2011 MHEG-IC Deployment Every UK free-to-air broadcast HD receiver (STB, PVR and iDTV) now has an IP connection with MHEG Interaction Channel All New Zealand receivers will have MHEG-IC from mid-2011 Every such receiver will have free-to-air catch-up TV capability Core broadcaster on-demand commercial requirements have been met with this solution

23. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 23 ©Strategy & Technology, 2011 HbbTV deployment Pilot services from all German broadcasters Test service underway in France Holland, Czech and other European countries have announced they will adopt HbbTV specification Additional commercial requirements from French broadcasters have to be incorporated into the specification When conformance tests are developed then alll HbbTV receivers will have Connected TV capability

24. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 24 ©Strategy & Technology, 2011 Summary Connected TV is now mainstream and coming to a TV near you very soon! Business models are evolving, but primarily advertising funded at present At the current time, MHEG-5 is the most mature and market ready public standard to support Connected TV, and is already integrated into iDTVs from all major manufacturers HbbTV is coming, but is still some way from being market ready Security and content protection are major business issue that have to be addressed

25. Strengthening Digital Broadcasting Experience ITU-AIDB–ABU Regional Workshop – Hanoi – 23-24 May 2011 25 ©Strategy & Technology, 2011 Thank you! Web sites: www.s-and-t.comwww.s-and-t.com Colin Prior Director of International Sales colin.prior@s-and-t.com