Georgia Tech – Broadband Institute Industry Advisory Board Dallas Clement, SVP Strategy and Development May 2nd 2006

2 New Business Models Evolving Technologies Disruptive Events Customer Expectations Changing Video Market

3 Disruptive Events Regulatory –Family friendly tiers (a la carte) –Plug and Play CableCARDS DCAS PCs –Digital Transition Multiple Standards –UPnP (Universal Plug and Play) –DLNA (Digital Living Network Alliance) –Mobile Device Committee –HomePlug –MoCA

4 The Digital Transition Maze Digital Transition You are Here Internet = Television Analog Hole Solved Competitive Parity $pectrum Auction$ Economic Prosperity Digital = Analog Unlimited Bandwidth

5 The Digital Transition Cox ConsumersBroadcastersContent SA / Motorola Consumer Electronics PC Industry RetailersDBS ILECs “IPTV” FCC / Congress

6 Value price propositions Intuitive Safe and secure Choice and control Seamless Device agnostic Available Easy to do business with Customer Expectations Communications and Information Services Entertainment Services Cable/ BB Networ k Home Management Services Connectivity Customer expectations are rapidly evolving with the advent of new technologies enabling new competitors and new business models

Video Initiatives User Interface (IPG) On Demand –More footprint –New content models –Advertising Interactive –Bundle Utility (CallerID, , cox.com) –Operational efficiency (FAQs, lead generation, etc.) –Competitive positioning and new revenue Get ready for OpenCable

8 Interactive Home Page

9 Cox Video Mosaic …DBS satellites mysteriously fall from sky…World peace declared…

10 Going online is as common as watching TV Reading magazines Reading newspapers Listening to radio Going onlineWatching TV Hours Spent per Week (median) Online usersIntensive TV viewers Intensive newspaper readersIntensive online users Source: Jupiter Research 2006

11 Online consumption is now entertainment-centric Source: Jupiter Research 2005

12 Annual spending by US Households on Online Content Source: Parks Associates 2006 $ billions On-line is Already Here

13 Disney Will Offer Many TV Shows Free on the Web By BROOKS BARNES, WSJ, April 10 th ABC's Prime-Time Hits And Zap-Proof Commercials Are Pillars of Bold Strategy Fox to Share Revenue From Reruns On Web With Affiliated Stations WSJ, April 14 th Fox can finally join its TV rivals on the Web. The network said yesterday it had signed a six-year agreement with its 187 affiliated stations to share revenue from reruns of its programs on the Web. New Frontier: To Blunt the Web's Impact, TV Tries Building Online Fences By AMY SCHATZ WSJ, March 16 th Undermined by a 'Slingbox' Groundbreaking High Definition Digital Cable PC Receiver Press Release, January 5 th ATI Technologies Inc. today announced a preview of the revolutionary (HD) digital cable PC receiver. Available later this year, the ATI OCUR (open cable uni-directional receiver) product will allow Media Center PCs that run on the forthcoming Microsoft Windows Vista operating system, to receive High Definition premium digital cable TV content on the PC. Microsoft's 'Massive' Move Into Game Ads WSJ, April 26 th Microsoft Corp. plans to acquire Massive Inc., a closely held start-up that places ads in videogames, in a deal that highlights the growing flow of advertising into nontraditional media. Broadcast networks, PC industry leaders, and startups are changing the business models for content and advertising Liberty Media, EchoStar Invest In Start-Up for New TV Device By REBECCA BUCKMAN, WSJ, January 31 st... investing in a small Silicon Valley company that lets people watch TV on their computers away from home. The high-profile start-up, Sling Media Inc. of San Mateo, Calif., said... Tech Firms Scramble to Provide Easy Ways to Connect PCs to TVs By NICK WINGFIELD, WSJ, April 11 th Some in the technology industry hold out hope that a new initiative called "Viiv" from Intel Corp. will help resolve some of these complexities. Viiv-compliant devices, including PCs and gadgets that directly connect to television sets, are designed to more easily discover and share content with each other and to work with a broad range of online services. Some of these devices are now coming to market. Content in the News Apple Unveils the New iPod Fifth Generation iPod Now Plays Music, Photos & Video SAN JOSE, California—October 12, 2005 Apple today introduced the new iPod®, featuring a gorgeous 2.5-inch color screen

14 New Content and Application Models Download Services Music, TV shows, and movies downloaded to the PC or other device Broadband Channels Internet versions of popular cable channels with more in- depth video and information Streaming Services Music videos and other TV content streamed to a PC User Generated Content Web sites that allow users to upload their own content and share with others Internet Telephony Low cost telephone service with advanced features, delivered over the Internet New Consumer Tech CE leveraging broadband for new entertainment solutions

15 Search Internet navigation, presented as sponsored links and results sorted by relevancy Local Broadcast Redistribution of local broadcast content via the Internet, with new inventory of commercials Video on Demand Sponsored content or sections of a site, including options for direct response Digital Video Recorders Tracking and aggregation of user behavior Customized Video and Rich Media Leveraging customization capability of PC yet breadth of broadband New Advertising Models

16 Conclusion Technology is advancing enabling sophisticated, converged applications. With the advent of broadband, consumers are expecting more –Personalization –Mobility –Portability –Convenience –Consistency Markets will continue to evolve and television will not longer be the same