1. NEXT#1 The Three-Screen Challenge Digital Distribution: The Key to a Multi-Platform Strategy Thursday 20th September 2007 Contact IDATE Florence LE BORGNE - BACHSCHMIDT Head of TV & New Media Practice +33 (0)4 67 14 44 43 f.leborgne@idate.fr

2. 2 2 …From the consumer side

3. 3 3 A few questions…

4. 4 4 What are the main concerns of a broadcaster? Addressing its consumers’ needs To increase their loyalty To maintain or even to increase its turnover

5. 5 5 What are the consumers’ needs? To access a TV offer… … more individualised… … more personalised… … more interactive To free themselves from the programming grid

6. 6 6 Towards personal TV? Source : IDATE, according to Simon Walker BBC Corporate Strategy Different phases of Europe’s TV industry

7. 7 7 What are the screens available?

8. 8 8 A multiplicity of screens… … inside the households  Example of the French market: on average, 4.4 screens per household Source : IDATE, Use-IT survey 2006 Average number of screens per HH

9. 9 9 Teenagers are well-equipped Beyond individual equipment, toward the development of a personal equipment  Half of the teenagers have a TV set in their bedroom Base : Teenagers Source : IDATE, Use-IT survey 2006 Personal equipment of Teenagers

10. 10 But TV is still the leading screen… TV still has the lion’s share An average French viewer spent :  Around 3h30 a day on a TV set  But only 52 mn a day on Internet Average weekly screen-time (in hours) Source : IDATE, Use-IT survey 2006

11. 11 … even if Internet/PC replaces TV gradually … but not in the short term! A generational trend introduced by the youngest  The 15-24 spend less time on TV but more on internet than the elderly  Teens are more inclined to consume recorded and on demand programs Source : IDATE, Use-IT survey 2006 0 5 10 15 20 25 30 35 15-24 ans 25-34 ans 35-44 ans 45-54 ans 55-64 ans 65 and + et + Temps Console de jeux Temps PC domicile Temps TV différé Temps TV direct Average weekly screen-time by age (in hours) Gaming time PC time – Home TV time - Recorded TV time - Live

12. 12 … and even if mobile screen will complement or compete with the TV set … but not in the short term! Interest for mobile TV depends on the knowledge :  Between 2/3 and 3/4 people who have tested the service intend to subscribe  But only 15% to 20% of people who have not tested the service intend to subscribe Source: CNES-IDATE Interest in the concept of mobile TV Source : IDATE, Use-IT survey 2006 Equipment rate in mobile phone by age

13. 13 What do consumers expect to find on each platform?

14. 14 On the TV screen A large free TV offer…  37% of French pay-TV subscribers would unsubscribe for a large free TV offer … complemented with VOD and SVOD services …  44% of French TV viewers would be interested in VOD services  And 2/3 of them would accept to pay around 3 EUR/film  57% of French TV viewers would be interested in a SVOD service … and with PVR functionalities …  1/4 French TV viewers would be interested in such functionalities  Among HH with PVR devices, recorded programs represents from 30% to 40% of the total TV time … and programs in HD quality Interest in HDTV according to the existing equipment Source : IDATE, Use-IT survey 2006

15. 15 On the PC PC becomes a new device for content storage and management  More than a third of PC HH listen to music on their PC  26% watch films or TV series on their PC But entertainment practices are still marginal on Internet in comparison to communication (e-mails, IM, etc.) and practical uses (banking, e- commerce, etc.)  E-mails: 80%  Banking: 48%  Live TV: 6% An obvious development of UGC  24% of French net surfers share their photos on line and 4% their personal videos  but are people really interested in UGC? What do people store on their PC? Source : IDATE, Use-IT survey 2006 What do people do on Internet?

16. 16 On the mobile screen What are consumers looking for?  Two main wishes : To find on the mobile screen the same content than on the TV set To access contents matching their personal interests  A large offer is preferable …  … but is not essential  The most wanted contents: News Sport Entertainment Music Documentaries  Extra functionalities : VOD PVR-like functionalities Interactive services Digital radio Source: CNES-IDATE The most wanted programs

17. 17 Conclusions: how to adapt to this evolving environment?

18. 18 How to adapt? TV is still the leading screen, but…  TV viewers want a large free TV offer  And will favour time-shifting To create new forms of advertising To develop live events Consumers need references  They want to find their favourite channels, their traditional brands To be present on mobile TV and on Internet But maybe with different formats (shorter programs, close-shots) New developments will generate extra-costs, but…  Will the consumers accept to pay?  Can the advertising market support alone the development of a multi- platform strategy?  And will consumers accept ads on their personal devices?

19. Thank you !