THE GLOBAL TRANSITION TO DIGITAL ENTERTAINMENT

THE GLOBAL TRANSITION TO DIGITAL ENTERTAINMENT Ph.D. Mathias Giloth Digital Media Pipeline 17 New York GfK 2017 Digital Media Pipeline 17 New York 1

Who we are - Charts and Insights in more than 20 countries Services for Home Video, Video Digital, Games, Book, Music and Music Digital Games 23 Video Digital 17 Home Video 15 Book 11 Music 10 Music Digital 10 Countries Countries Countries Countries Countries Countries GfK 2017 Digital Media Pipeline 17 New York 2

Global Overview Physical Sell-Through Market Value YTD 2016/2017 2017/ 2016 CW 1-39 2017 Euro 2016 Euro YoY Growth AT 67 85-21. -23.7% -23. -14.5% -10. -24.5% -11.7% -11. -16.7% -19.5% -25.7% -10.9% -21. -9.3% -7.5% -14.6% AU 305 337-9.3% BE 48 56-14.5% CH 49 65-24.5% ES 52 59-11.7% FI 21 26-19.5% FR 340 378-10. DE 622 698-10.9% IT 126 142-11. JP 936 1012-7.5% NL 44 57-23. NO 23 30-23.7% NZ 22 25-14.6% SE 41 56-25.7% 2017/ 2016 MO 1-9 2017 Euro 2016 Euro YoY Growth BR 52 62-16.7% * Brazil YTD up to September Physical video market is continuing its downward trend throughout all territories. GfK 2017 Digital Media Pipeline 17 New York Basis: Retailpanel 10 Value YTD CW 01. 39.2016/2017 Source: GfK Entertainment 2017 3

Global* Overview Top 5 Products (DVD/Blu-ray) Based On Units UNITS Top 5 2017 YTD Top 5 2016 FY All top 3 titles in 2017 YTD with more than 1.6 million units sold. In 2017 YTD one local production (Kimi no na wa./your Name) from Japan reaches the top 5. Basis: Retailpanel 10 Units CW 01-39.2017/CW 01-52.2016 Source: GfK Entertainment 2017 all SQUs GfK 2017 Digital Media Pipeline 17 New York * Countries: DE, AT, FR, BE, NL, IT, CH, ES, SE, NO, JP, AU, NZ 4

Blu-ray share Overall market per country YTD 2017 (vs. YTD 2016) Million Units 50 45 40 35 30 25 20 15 10 5 0 48.9 25.5 24.8 24.1 11.4 5.3 4.7 4.2 3.8 3.4 2.8 2.7 1.7 Germany France Australia Japan Italy Austria Sweden Spain Belgium Netherlands Switzerland New Zealand Norway BD % 34% 2 14% 4 23% 3 24% 35% 18% 19% 32% 13% 44% DVD % 66% 8 86% 6 77% 7 76% 65% 82% 8 68% 87% 56% BD % YoY Change Mkt % Chg +3. +1.9% +0.6% +3.8% +2.5% +2.2% +4.8% +3.7% +1.6% +1.5% +1.9% ±0. +4.9% -8% -12% -1-8% -1-2 -25% -1-14% -27% -23% -14% -24% In all countries except New Zealand the share of Blu-Ray Units has increased. Norway and Sweden with the highest percentage growth rate. GfK 2017 Digital Media Pipeline 17 New York Basis: Retailpanel 10 Units CW 01. 39.2016/2017 Source: GfK Entertainment 2017 all SQUs 5

Blu-ray 4K share 4K market per country YTD 2017 (vs. YTD 2016) 4K Thsd. Units 300 250 200 150 100 50 0 264.8 193.3 155.0 95.1 52.4 35.3 20.9 17.6 12.9 12.5 11.9 10.2 8.5 Japan Germany Australia France Italy Spain Austria Switzerland Sweden Netherlands Belgium New Zealand Norway 4K % 1.02% 0.4 0.62% 0.36% 0.46% 0.84% 0.4 0.5 0.28% 0.36% 0.3 0.39% 0.28% 4K % YoY Change 4K ASP 2017 in +0.96% +0.3 +0.54% +0.27% +0.38% +0.73% +0.3 +0.39% +0.24% +0.28% +0.23% +0.34% +0.24% 71.53 28.33 20.32 28.16 22.81 21.27 28.89 31.15 29.67 30.30 27.52 22.99 26.24 In all countries the share of 4K Units has increased. Australia and Spain with the highest percentage growth rate. GfK 2017 Digital Media Pipeline 17 New York Basis: Retailpanel 10 Units CW 01-39.2016/2017 Source: GfK Entertainment 2017 all SQUs 6

Physical Sell-Through Market Prices 2017 YTD in comparison to 2016 YTD Price in Country DVD YoY Change ( ) Blu-ray YoY Change ( ) Blu-ray 4K YoY Change ( ) JP* 31,21 +0,01 50,02-0,82 71,53 +18,85 CH* 16,28-0,43 19,27-0,68 31,15-0,81 NO* 13,30 +0,10 13,73-0,31 26,24-6,42 BE 12,13-0,12 14,87-0,16 27,52 +1,13 FR 12,06 +0,20 18,33-0,44 28,16-0,52 DE 11,93-0,31 14,22-0,80 28,33-0,51 AT 11,86-0,18 14,86-0,54 28,89-0,29 AU* 11,85 +0,13 15,03 +0,39 20,32-2,82 NL 11,77 +0,52 16,87 +0,74 30,30 +2,13 ES 11,12-0,08 14,92-0,58 21,27-0,01 IT 10,26-0,06 13,66-0,78 22,81-4,63 FI 8,72-0,84 10,91-0,33 27,20-1,45 SE* 7,97-0,27 11,59-0,29 29,67-0,63 NZ* 7,42-0,07 12,11 +0,22 22,99 +0,71 Japan topping the list of DVD prices as well as Blu-ray prices. * Currency exchange rates might have an influence on non-euro regions. GfK 2017 Digital Media Pipeline 17 New York Basis: Retailpanel 10 Value YTD CW 01. 39.2017 Source: GfK Entertainment 2017 7

MadeFor Shares in Units In Key Markets AUS, FRA, GER, JPN AU JP * FR DE Total: 24.8 Mio Total: 17.9 Mio Total: 26.3 Mio Total: 48.9 Mio 2 4 6 8 10 Theatrical TV Direct to Video Germany with the highest share of theatrical products. DTV has the largest shares in Japan. * Note: Local Products for Japan excluded. GfK 2017 Digital Media Pipeline 17 New York Basis: Retailpanel 10 Units CW 01. 39.2017 Source: GfK Entertainment 2017 all SQUs 8

GfK Entertainment Digital Project Digital Video Data of 19 countries* Australia Iceland New Zealand Belgium Ireland Norway Denmark Italy Austria France Japan Switzerland Finland Luxembourg Spain *more countries to come in 2nd half of 2017 Germany Netherlands Sweden GfK 2017 Digital Media Pipeline 17 New York UK 9

Digital Video Data Studios currently included Data currently included (2017) Following in 2018 The digital panel is continuously being expanded to display a complete picture of the market. GfK 2017 Digital Media Pipeline 17 New York 10

Format Shares Physical/Digital Video 10 8 6 4 2 24% 23% 4 36% 27% 15% 14% 4 76% 77% 6 64% 73% 85% 86% 6 Units Value Units Value Units Value Units Value Germany Australia France Japan Digital Physical 10 8 6 4 2 25% 15% 12% 7% 2 39% 4 35% 75% 85% 88% 93% 79% 6 59% 65% Units Value Units Value Units Value Units Value Italy Benelux Spain Nordics Digital Physical Basis physical data: Retailpanel Units/Value CW 01. 39.2017 GfK 2017 Digital Media Pipeline 17 New York Basis digital data: DEG project digital video data CW 01. 39.2017 (Please note: no full market represented!) 11

Format Shares Physical/Digital Video Germany Australia France Japan 7% 19% 27% Total Units: 3% 39,8 1 33% 1 7% 8% 9% 1 Total Units: 16,3 53% 4% 8% 7% 8% 2 Total Units: 10,1 52% 26% 4% 9% Total Units: 6,6 3 28% 1 8% 3% 2% Total Value: 388,6 38% 9% 2% 5% 5%4% 15% Total Value: 154,8 7%3%3%2% 2% Total Value: 119,8 3 3% 5%7%2% 3 Total Value: 72,9 52% 37% 6 53% Physical market is still dominating. Australia with high DVD shares, in Japan the share of Blu- Ray is remarkable. On the digital side, VOD is more popular than EST. The new high-resolution 4K format is still in a niche role. Basis physical data: Retailpanel Units/Value CW 01. 39.2017 GfK 2017 Digital Media Pipeline 17 New York Basis digital data: DEG project digital video data CW 01. 39.2017 (Please note: no full market represented!) 12

Format Shares Physical/Digital Video Italy Spain Benelux Nordics 8% 2% 7% 8% Total Units: 4,0 49% 25% 15% 2% 6% 2% 15% Total Units: 2,1 34% 26% 3%5%3% Total Units: 1,5 63% 25% 29% 5% 6% Total Units: 1,8 3 28% 7%2%4%3% 2% 5 Total Value: 37,2 32% 2% 7% 5% 4% 7% 37% Total Value: 19,0 38% 58% 2% 3%3% Total Value: 15,0 32% 14% 7% 13% 2% Total Value: 16,9 32% 3 DVD is playing a major role in Italy and Benelux. In the Nordics Blu-Ray has high shares in units as well as value. Again, the new high-resolution 4K format is playing a minor role. Basis physical data: Retailpanel Units/Value CW 01. 39.2017 GfK 2017 Digital Media Pipeline 17 New York Basis digital data: DEG project digital video data CW 01. 39.2017 (Please note: no full market represented!) 13

International* Top 5 titles (in thsd. Units) Theatrical products physical vs digital 1,604 843 825 810 782 Physical 1 2 3 4 5 Digital 720 499 497 489 473 Fantastic Beasts and Where to Find Them as the most successful title in physical as well as digital. Two animation titles reach the physical Top 5. Basis physical data: Retailpanel extrapolated Units/Value CW 01. 39.2017 Basis digital data: DEG project digital video data CW 01. 39.2017 (Please note: no full market represented!) GfK 2017 Digital Media Pipeline 17 New York * Countries included: BE, DE, ES, FI, FR, IT, NL, NO, SE, AU, NZ, JP 14

International* Top 5 titles (in thsd. Units) TV products physical vs digital 443 227 188 179 176 Physical 1 2 3 4 5 Digital 1009 241 227 210 197 Game of Thrones dominates the TV segment. GoT 7 th series has not been released physically yet. In digital Homeland and Big Bang Theory manage to break down the dominance. Basis physical data: Retailpanel extrapolated Units/Value CW 01. 39.2017 Basis digital data: DEG project digital video data CW 01. 39.2017 (Please note: no full market represented!) GfK 2017 Digital Media Pipeline 17 New York * Countries included: BE, DE, ES, FI, FR, IT, NL, NO, SE, AU, NZ, JP 15

International* Top 3 titles combined (physical+digital) Physical/Digital and country share AU NZ JP FR DE IT ES BLX Nordics TOTAL 2,324 th.units Physical 69% Digital 3 9% 4% 7% 4% 12% 2% 27% 16% 5% 2% 4% 4% 3% TOTAL 1,306 th.units Physical 65% Digital 35% 16% 9% 8% 4% 8% 3% 17% 16% 5% 3% 5% TOTAL 1,172 th.units Physical 7 Digital 3 1 6% 13% 4% 33% 17% 5% 3% 5% For all Top 3 titles around two third of the total units are sold physically. Germany with the highest share, physical as well as digital. Basis physical data: Retailpanel extrapolated Units/Value CW 01. 39.2017 Basis digital data: DEG project digital video data CW 01. 39.2017 (Please note: no full market represented!) GfK 2017 Digital Media Pipeline 17 New York * Countries included: BE, DE, ES, FI, FR, IT, NL, NO, SE, AU, NZ, JP 16

Devices throughout the territories (Total Market Units) Smart TVs, Smart Players/Recorders, 4K Players/Recorders, 4K Consoles Units 10 Total (in Ths. Units) 1600 1400 1200 1000 800 600 400 +19% SD TV deactivation in 2016 causing high level in 2016 Smart TV sales; 2017 market normalization Analog TV deactivation in 2017 causing high level in 2017 Smart TV sales -16% +18% -3 +13% -2 TVs Smart Rec 4K Rec 4K Consoles 200-14% -29% 0 Australia France Germany Japan Germany with the highest number of Smart TVs in the key territories. 4K Consoles are more successful than 4K Recorders/Players. Basis: Retailpanel/Consumer Panel 10 Units CW 01. 21.2016/2017 GfK 2017 Digital Media Pipeline 17 New York Note: No consoles data for AU and JP 17

Devices throughout the territories (Total Market Units) Smart TVs, Smart Players/Recorders, 4K Players/Recorders, 4K Consoles Units 10 Total (in Ths. Units) Units 10 Total (in Ths. Units) 250 200 150 100 50 0 600 500 400 300 200 100 0 +12% -2 +4% Belgium Netherlands Finland Norway Sweden +22% +16% -25% +2% -2 +1-24% - Negative situation during this period last year (2016) - Economic situation in Finland (and Nordics in general) has been improving +4 +6% Switzerland Austria Italy Spain Smart TVs with a positive trend throughout most of the territories. Smart players/recorders have become less important in most of the countries. GfK 2017 Digital Media Pipeline 17 New York 18 Basis: Retailpanel/Consumer Panel 10 Units CW 01. 21.2016/2017 +4% +24% +29% +2-23% -18% TVs Smart Rec 4K Rec 4K Consoles TVs Smart Rec 4K Rec 4K Consoles

GER: Despite continuous shift towards digital, physical formats are still responsible for two thirds of total revenues. Development (w/o Cinema) by formats Format split by formats 1.HJ 2017 2013 2014 2015 2016 2017 Subscriptions for Online-/ Browsergames since 2013 In-App / In-Game Acquisitions since 2013 Subscriptions for Online Networks since 2015 Streaming since 2015 Books Music Home Video Games 2 86 81 74 69 64 21 19 18 12 17 11 16 7 Physical Digital transactional Digital subscriptional 3,884 3,771 4,036 4,161 4,271 Basis in m 30 52 58 91 12 54 14 36 27 6 16 3 1,728 668 798 1,077 Books incl. Audio books; Music incl. Music videos; Home Video; Games; All periods: January-June; Spending in % GfK 2017 Digital Media Pipeline 17 New York 19

GER: Streaming continues its increasing importance. 12m people (= 18% of population) spend money on streaming services. Books Home Video Music 218 m Streamer total: (Books, Home Video, Music) 2015: 142 6.0 m pers. 2016: 10.4 m pers. 2017: 12.0 m pers. 101 m 83 m 154 m 238 m 27 m 41 m 45 m 1.9 m pers. 1.4 m pers. 2.3 m pers. 4.2 m pers. 7.6 m pers. 8.9 m pers. 1.9 m pers. 5.4 m pers. 6.9 m pers. 2015 2016 2017 2015 2016 2017 2015 2016 2017 Books incl. Audio books; Music incl. Music videos; Home Video; All periods: January-June; Spending in m / Persons in m n (persons) total 2017 = 2888 GfK 2017 Digital Media Pipeline 17 New York 20

GER: Less free time for the consumer. Growing competition for the limited time budget. There are times when I am jaded, I don t get anything to work and I just want to sleep. Therefore I cancel any appointment. (25-39) Felt lack of time, increasing tendency FAMILY LIVING WORLDS YOUNGER MIDDLE AGED OLDER 44% 49% 37% 4 9% 9% 2011 2015 2011 2015 2011 2015 Time for videos (Status: January 2017) User watch 5-6 22 Time for gaming (Status: Januar of each years) Ø hours per week (men <30 years) 13.3 2013 Source: GfK Media*Scope Deutschland Personen in % GfK 2017 Digital Media Pipeline 17 New York 21 Movies TV episodes 14.1 2014 14.3 2016 14.6 2017

THANK YOU GfK 2017 Digital Media Pipeline 17 New York 22