What does OTT mean in 2017 households, and how will it impact tomorrow s homes? Sylvain Thevenot - June 2017

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1 What does OTT mean in 2017 households, and how will it impact tomorrow s homes? Sylvain Thevenot - June 2017

2 Netgem - key facts 22 TV deployments in 15 countries, 4 continents Over 5M users of Hybrid TV, IPTV, OTT, Mobile TV 20+ years of experience in Digital/Entertainment Financially sound & profitable company Key milestones: 1996 : Founded with vision of bringing TV over Internet 2000 : IPO on NYSE / Euronext Paris stock exchange 2005 : One of first large scale IPTV deployment in French market focus on SFR/Vivendi 2010 : International expansion T-Box Hybrid-TV with PVR launch in Australia 2013 : Acquisition of Videofutur VOD platform in France 2014: Launch of very innovative EE TV with Multiscreen & OTT TV in the UK 2015 : Transition from STB vendor to End to End TV Services provider #TelcoTV 2017: Voice Control integration with Amazon Alexa, launch of SoundBox family of smart devices 9/10/ Netgem

3 Our values: the best User experience for Connected Entertainment Our mission: deliver long-term value to Service Providers / Telcos *14 Awards nominations since 2015 Best TV Experience Enhancement

4 What does OTT mean in 2017 households, and how will it impact tomorrow s homes? Implications on: Consumers: experience? Service Providers: value? OTT Content providers: penetration and stickiness? Broadcasters: long-term value? 8 trends across 15+ markets (European TelcoTV services) 9/10/ Netgem

5 1 OTT Content: a very crowded and competitive market...but Telcos have an opportunity to bring the best Content in one place 300 IPTV Broadcast Channels...also available as OTT Channels All npvr content available across multiple devices (OTT delivery) Own VOD store, but OTT Partners are core to the proposition (Netflix, HBO Go ) The Digital Shopping Mall of Entertainment

1/3 are Netflix users Impact of Netflix OTT on Elisa TV Business (2016 Full year):

6 2 How a major OTT Brand is impacting a Telco TV service? 300K+ active TV households Number 1 in Finland ca. 1/3 are Netflix users Impact of Netflix OTT on Elisa TV Business (2016 Full year): Sales up Churn flat Customer Satisfaction (NPS): impacted if Netflix App not working well No Cannibalisation of VOD Store No (material) incremental ARPU

7 3 Comprehensive & unified access to Catch-up boosts overall TV usage Post TV (new version launched in May 16) 250 catch-up channels (7 day) Most popular recommendations Across TV and Mobile with npvr *Average variation across 10 European Telcos between

8 4 SVOD and Non-Linear are key to younger segments, but Content titles and simplicity of discovery drive usage not Apps... *Source: OFCOM 2016

5 Combining mass-market Linear content with -optional-

user base and revenue ARPU variation Catch-up

launched in Feb 17) Blending SVOD and catch-up (eg.

.....and mass-market usage (FTA catch-up) with one

+12% +3% Catch-up (FTA) +20% +2% Net Adds variation

9 5 Combining mass-market Linear content with -optional- OTT premium content is key to grow both the active user base and revenue ARPU variation Catch-up (Premium) +8% +11 % Netia Hybrid-TV (new version launched in Feb 17) Blending SVOD and catch-up (eg. Kids home) Capturing both Premium revenue (TVOD)......and mass-market usage (FTA catch-up) with one discovery experience (Linear + OD) TVOD +3% +5% SVOD +12% +3% Catch-up (FTA) +20% +2% Net Adds variation *Average variation across 10 European Telcos between K+ IPTV customers

2012-2017 Ooredoo Go TV (launched in Mar

10 6 Mobile TV is key today, but only to complement the main screen TV usage (companion in-home and out-of-home snacking usage): EE TV Mobile Companion Watch-with-Twitter *Average variation across 10 European Telcos between Ooredoo Go TV (launched in Mar 17) Mobile first before launching OTT TV in home Cloud based TV experience

11 7 Voice controls are adding a new dimension to the TV experience Netgem Entertainment Voice Control (Amazon Alexa in UK & Germany) *Source: Amazon Simple voice commands (eg. Programme guide) 2. Shortcuts (eg. Search with keywords) 3. Enhanced discovery (eg. What s on tonight)

12 8 There is true digital clutter that can be simplified... The average household has 10+ connected devices 40% of Music streamed is from... TV screens are getting slimmer so the sound quality is getting worse!

13 8 Opportunity for a new category of Connected Entertainment : SoundBox brings Music and Video together with a simplified experience - Quality and Simplicity

14 What will OTT Homes of the future look like? Simplified (Mobile Companion, Voice controls) Comprehensive Entertainment (Music & all Video sources) Relevant (Personalised, Recommendations) Radios, Music... etc... etc...

Days of channel hopping are over as the average TV viewer only watches 12 of the 215 channels they sign up to

Days of channel hopping are over as the average TV viewer only watches 12 of the 215 channels they sign up to New study by netgem.tv reveals how people s viewing habits are rapidly changing Streaming platforms