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1 Broadband TV: Bridging the Gap Between OTT and IPTV presented by

2 Broadband TV: Bridging the Gap Between OTT and IPTV Andrew Morton VP of Broadband TV (May 2013)

3 Entone Company Snapshot Background: Formed by team that launched PCCW IPTV service in Hong Kong in 1999 (presently 1M+ subscribers) Core Business: Consumer Premise Equipment and Software for IPTV, Hybrid Television and OTT Company Locations: Headquarters in Cupertino, CA Offices in Hong Kong and Europe Representative Customers: Fairpoint Communications, CenturyLink, Consolidated Communications, Volia, Telekom Srbija, Sunrise, Caiway, TSTT, C&W, 100+ others 3

4 Complete Video Solutions Advanced Set Top Box Broadband TV Hybrid IPTV Hybrid CATV Content Partners Remote Manage Tools Flexible Ecosystem Integration 4

5 World Class Partners 5

6 Representative Deployments 130+ PayTV Operators Deploy Entone 6

7 Pay TV Has Enjoyed 40+ Years of Growth Source: Entone Extrapolation of Nielsen Data 7

8 But a Parallel Universe Has Evolved The concept of over the top video threatens to marginalize the role of managed network service providers 8

9 Resulting in The Cord Cutting Threat 9

10 Beginning of the End for Operators? One in eight consumers will eliminate or scale back their cable, satellite or other pay-tv service Yankee Group Netflix, the cable killer Fast Company The future of TV is not on Cable NewTeeVee Netflix, Cable s biggest nightmare BusinessWeek Resistance is futile Boxee 10

11 Monthly Usage (hh:mm) Some Perspective Monthly Time (hh:mm) Spent on Various Activities 168:00 154:05 153:19 156:24 144:00 120:00 96: : :00 24:00 12:38 10:27 11:44 25:49 28:55 29:23 7:43 5:15 4:24 4:20 4:54 5:23 0:00 Watching TV at Home Watching Timeshifted TV Using the Internet on a PC Watching Internet Video Watching Video on Mobile Phone Source: Nielsen, The Cross-Platform Report, March

12 Advertising Revenue Shift 12

13 TV s Middle Class Cordless Don t watch TV, Watch Over the Air (OTA) or OTT only, or watch a mix of OTA and online video Opportunity in the Middle: 80% of the Market Concerned with growing costs of premium Pay TV services, intrigued by the concept of cord cutting but thus far unwilling to give up timeliness and quality of Pay TV. OTT pricing is appealing if they can still get some live TV. Premium Value and willing to pay for premium PayTV services and consider $1,500 / year a fair price for what they are getting 13

14 Video Service Value Gap Premium PayTV Premium Pay TV OTT Basic CATV Value Gap OTT Value Gap OTA DBS Resale Customer Engagement 14

15 The Opportunity Value Gap Opportunity Value Gap Customer Engagement 15

16 The Opportunity Opportunity 16

17 Elements of a Winning TV Offering Live Television Anytime, Anywhere Access to Premium Content Favorable Economics 17

18 Operator Option 1: Linear TV Service Pros: Strong top line revenue contribution Strong branded Input 1 consumer relationship Most popular video service & content by far Opportunity to increase loyalty through bundling Cons: Expensive for both operator & consumers Does not leverage OTT service innovations 1:1 relationship between network & market size 18

19 Operator Option 2: Retail OTT Offerings Pros: Low capex & opex compared to IPTV / PayTV On-demand content & services Addressable market not tethered to network reach Cons: High bandwidth consumption without corresponding revenue stream Dilutes Input 1 relationship with consumer Limited control over software platform Limited Content in regions outside continental US/Europe Single TV solution in Multi-TV market Enables Commoditization of Broadband Access 19

20 Broadband TV Pros: Lower capex & opex for operator Low bandwidth requirements Appeals to TV s under-served middle class Preserves Input 1 relationship with consumer Available to all broadband homes passed Retains subscriber base for future services Cons: Less top line revenue opportunity Less control over full content lineup 20

21 Use OTT to Capture a Larger Subscriber Base IPTV Customer Base Premium customers, high ARPU and full linear channels Shorter loops and fiber Managed OTT Capture subscribers Works in most parts of your market ~1.5Mbps and up Inexpensive to deploy Profitable business Can be upgraded to IPTV Telco 21

22 Monetize OTT: Broadband TV Quickly increase broadband market share & reduce churn Deliver a seamless user experience by offering a richer service that combines traditional TV & OTT services without a separate device Leverage broadband as the anchor service for upsell to your base in the future Carrier Broadband Network 22

23 Upgrade Captured Customers to IPTV In the Future IPTV Service Leverage your infrastructure investment Keep a Hybrid of OTT content and Connected Home services with IPTV linear channels Keep competition out Carrier Broadband Network Full Service IPTV or CATV 23

24 Ensight Remote Diagnostic Tool View On-screen Graphics over Any IP Network Customer service agents can see what subscribers sees on screen CSA can send remote control events to STB via network Save time and increase customer satisfaction Works with All Entone Products and Middleware Security Features Protect Privacy and Prevent Abuse 24

25 Case Studies 25

26 Case Studies (Headquarters) Profile (Illinois, US) Top 15 incumbent US telco 110 years old Services (Subscribers) TV Service Summary Fixed line voice (785K), fixed line broadand (340K), television (113K) IPTV with 300+ channels (65 in HD), optional DVR, Wi-Fi distribution up to 5 TVs per home (Bridgetown, Barbados) Pan Caribbean full-service incumbent telecom operator Mobile phone (1.2M), fixed line voice (603K), fixed line broadband (207K) 40+ channels of linear TV delivered via ABR (Port of Spain) Trinidad and Tabago full-service incumbent telecom operator Mobile phone (860K), fixed line voice (290K), fixed line broadband (145K) DVB-T hybrid service via various IP delivery types Entone products in use Amulet, Kamai Kamai Kamai Ecosystem Partners Minerva (middleware), Verimatrix (DRM) Minerva (middleware) Minerva (middleware), Verimatrix (DRM) Pre-existing TV Operators Serves 5 geographical areas across US. Competes with Comcast, TimeWarner, DirecTV and Echostar Fragmented and largely free-to-air DVB-T or DVB-S Competing DVB-T network, DVB-S popular 26

27 Consolidated TV 27

28 Overview of Consolidated TV Strategic Objectives for Video Offering Intense competitive pressure from cable companies Increase revenue per subscriber Fund high-speed network upgrades to remain competitive with cable Summary of Offers and Pricing Two tiers of service: standard (80 channels) and enhanced (300+ channels) Fixed line phone, broadband and TV service ($70-$125 per month) Monthly rental fees for DVR ($15) and extra STB ($7) Whole-home DVR included with DVR offering How Entone Supports Consolidated TV Dedicated on-site field support engineer for system upgrades Customized software builds to integrate with customer care systems Reduce installation time and expense for multi-room deployments 28

29 LIME TV 29

30 Overview of LIME TV Strategic Objectives for Video Offering Increase broadband market share and reduce churn Increase revenue per subscriber Establish three screen video offering to thwart competition Summary of Offers and Pricing Three tiers of service: Starter, Premiere and Signature Unbundled TV service at $13 (10 channels), $35 (60 channels) or $48 (100 channels) All programming delivered as Adaptive Bit Rate, no HD yet Unified multi-screen offering in development How Entone Supports LIME TV Custom integration with selected middleware (Minerva), DRM (SecureMedia), TR-069 (ClearAccess) and QoE management (Mirifice) providers Developed HLS client with trickplay and secure content support First ever HLS deployment with Quality of Experience measurement 30

31 TSTT s Blink Entertainment 31

32 Overview of Blink Entertainment Strategic Objectives for Video Offering Increase broadband market share Increase revenue per subscriber Supplement spotty xdsl coverage with DVB-T Summary of Offers and Pricing Three tiers of service: Lite, Basic and Advanced Unbundled TV service at $15 (30 channels), $30 (80 channels) or $45 (100 channels) Variety of IP return paths including xdsl, WiMAX and GPRS How Entone Supports Blink Entertainment Developed support for delivery of linear programs over DVB T and IP Developed custom over-the-air firmware upgrade process Wrote custom drivers for USB GPRS modems 32

33 Why Entone Extensive global IPTV experience 100+ Customers; more IPTV deployments than Cisco or Motorola Ready-to-deploy solution Fully integrated Middleware, DRM and Content Complete range of platforms with flexible hardware options Future-proof and low risk IPTV, Hybrid and OTT options on common platforms Robust solution for enabling new broadband-centric services No need to replace equipment as services change Fully managed solutions for IPTV and OTT 33

34 For more information, contact

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