1. Strategy to Tap into the Digital Era by Ruigang Li May 25, 2011

2. 1 2.1 Strategy to tap into the evolutions Media consumption evolutions in the digital era 2.2 SMG as it is SMG’s digital strategy Content 2

3. Traditional TV Portal Search Engine APP store Android market Media Consumption Evolution in Digital Era

4. Broadband life IPTV Mobile TV Web-iTV e-Paper WAP SNS Changes in TV Viewer Demand: Multiplied Platforms

5. Changes in TV Viewer Demand: Diversified Venues Media Consumption Evolution in Digital Era Home TV IPTV Digital TV Internet… On the Move MP3/MP4… Magazine Newspaper Radio Office Internet Web TV Building TV MSN/QQ… TV consumption

6. Changes in TV Viewer Demand: Fragmented Time Media Consumption Evolution in the Digital Era Online and digital viewing has become a challenge to traditional television In IPTV accessible households

7. Changes in TV Viewer Demand: Upgraded Terminals Media Consumption Evolution in the Digital Era Smart phone eBook 、 eMagazine Pad Smart TV Connected TV IPTV Family smart media terminal laptop

8. Media Consumption Evolution in the Digital Era Passive Receiver Active Creator and Distributor Changes in Role of TV Viewer:

9. Most complete media & related business portfolio in China Talent Agency Print media Digital Media Content distribution Home shopping e-commerce Television Education Radio Advertising sales Entertainment events SMG Live theatre entertainment SMG As It Is

10. 8 newspapers & magazines 35 digital TV channels IPTV Broadband Internet TV Connect TV, Mobile TV IPTV Broadband Internet TV Connect TV, Mobile TV 15 Analogue TV Channels 300 hrs telecast daily, 70% of local TV market 15 Analogue TV Channels 300 hrs telecast daily, 70% of local TV market 11Radio Frequencies 200 hrs radiocast daily, 90% of local radio market 11Radio Frequencies 200 hrs radiocast daily, 90% of local radio market SMG As It Is

11. SMG Digital SMG As It Is Triple-play system operator & program provider Internet-protocol TV Internet broadband TV mobile phone TV 4 mln IPTV subscribers 400 mln RMB revenue in 2009 Listed on China’s A-Share market System operator & content aggregator of digital interactive TV & VOD service 65 mln subscribers Operate in 220 cities NGB system provider Cable network ownership investment Network capacity upgrading service

12. SMG Digital Strategy Our Goal Reconstruct the Value Chain of the Broadcasting Industry Our Approaches -Redefine the role of SMG -Reinvent business model -Repurpose content production -Optimize user experience

13. BesTV Model Interactive and Value-added service XDSL FTTH DRM 、 EPG 、 user data and billing, content Customer service, billing, operation, maintenance and management Broadcasting management live VOD IPTV transmission platform Content Aggregator Network Operator User Content Provider CCTV SMG Hunan TV Guangdong TV JiangSu TV Huayi Bros. etc. FTTB+LAN IPTV access equipment IPTV content operation platform IPTV service platform Set-top box Content Integration Communications and value-added applications SMG Digital Strategy

14. Reinvent Business Model: TV Store Large volume of content and application in TV Store Intelligent search & relevance –based recommendation TV payment solution, intelligent life

15. The end-end TV Payment Solution TV Shopping … Content Aggregation User management Service center Integrated system & platform TV Bank Pay Programs TV Applications 银联核心 电视支付前置 China Union Pay System End User Bank Service Provider System & Platform Provider SMG Digital Strategy Terminal

16. The Future Of Smart TV Smart Search provides information of best relevance. Smart terminal monitors health condition and advises on diet, exercises and etc. accordingly. Smart TV Life on the Move Work Health & Wellbeing Entertainment Mobile Terminal Applications Internet of Things （ IOT ） Purchase via IOT. Smart TV records the viewing preference of family members, pushes contents, applications and games with instant online payment. ShoppingGamingInteraction SMG Digital Strategy

17. Experience Watch SMG Digital Strategy Repurpose content production to create new media experience Content SNS IPTV Time-shifting, VOD, Playback PAD Connect TV VOD Smart Push TV-Shopping Broadband TV BBS Community Digital cable TV HDTV Live Mobile TV