1. Digital Convergence Implications Global Summit of Women 2004

2. 1 DIGITAL CONVERGENCE IS ALREADY HAPPENING SK Telecom, DMB Satellite The boundaries between traditionally distinctive industries are blurring I.e. broadcasting, banking, mobile communication New industry areas are emerging as a result I.e. Digital Media Broadcasting, Mobile Commerce, Mobile Banking,etc.

3. 2 COMPETITION IS FIERCER THAN EVER PipelinesDevices Applications Broadband (Cable, DSL, satellite) Set-top box Modem Satellite Cable Order Casablanca Here ITV VOD PVR Content

4. 3 iPOD WAS THE BEST SELLING CHRISTMAS GIFT ITEM IN YEAR 2003 AND SOLD OUT AT MOST OF THE SHOPS AT LEAST IN THE US Key Features 300~500 USD 40GB memory that can store up ~10,000 songs Supports AAC/MP3/AVI files Easy to extract music from existing CD’s Seamless integration to iTunes music store which sells 400,000 music Concurrent PC synchronization and re-charging "Most stores in New York have sold out of the larger capacity models and do not expect to get more before the holidays... shortages are forcing many Christmas shoppers to hunt around or settle for one of iPod's many imitators. While most rival machines cost less, aficionados consider them to lack the vital quality of 'coolness.'“ – Financial Times (December 14th, 2003)

5. 4 MORE THAN 80% OF LEGAL ON-LINE MUSIC TRADING IS BEING HELD THROUGH iTUNES iTunes Music Store (ITMS) Snap shot *It corresponds to 80% of Napster online trade About 40,000 songs are registered and being sold as of December 2003, which is four months after its launch About 100 thousand songs are sold per week at 99 cents (as of December 13th, 2003) Five major music labels agreed to provide their content to iTunes Contributes 5% of Apple’s revenue within 1 year of its launch iTunes to Music portal then a media specialized in music?

6. 5 APPLE BECAME A POWER PLAYER OF THE MUSIC INDUSTRY Singers, composers, etc Music labels, publishers Content Creator Packager Gateway On- premise Distributor Cable, wireless network, broadband and other distribution channels PortalsLAN, telephony Devices Home network, wireless devices, cars, PC Digital Network Traditional Dist. iTunes iPod Apple’s entry pointApple’s range of influence Music Industry Value Chain Apple’s Key Success Factors Perspective on music industry and understanding in consumer needs – provides maximum flexibility to the end-users Adopted the newest technology such as Fairplay (Digital Rights Management Tool), Rendezvous (Multiplatform Access Provider) and massive personalization Effective marketing campaign

7. 6 VARIOUS FORMS OF “PERSONAL MEDIA OBJECTS” ARE EMERGING “Build your own bag” project iCom

8. 7 MEDIA ‘AUTHORITY’ IS SHIFTING FROM THAT OF UNDERWRITER TO END-USER EXPOSURE www.cyworld.com “Should I post it to Cy [ssa-I]?” Frequency of use resulted in unexpected digital ‘generation’ divide

9. 8 QUESTIONS FOR EXISTING BUSINESSES AND NEW ENTRANTS What should be our anchor point? Is distribution privileged asset? Is all or part of our asset more valuable to another owner? What partner network should we design and lead? How do we evaluate our business opportunities? –Attractive stand-alone businesses –Share within a geographic market –Scale across markets/globalization –Vertical integration within the sector –Cross-sector diversification

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