OTT EXECUTIVE SUMMIT You Decide Top OTT Trends

OTT EXECUTIVE SUMMIT You Decide - Top OTT Trends in 2015 Jim Turner - Moderator SVP, Market Development and CRO Net 2 TV Chris Walters Martijn van Horssen Matt Smith James Norman CEO Encompass Digital Media CEO 24 i Media Chief Evangelist Anvato CEO Pilotly

OTT Penetration Growing UPDATE: • 56% US HH have TV connected to the Internet (44% in 2013, 24% in 2010) • 29% have multiple devices connected (17% in 2010) Leichtman Research Group: Emerging Video Services IX, May 2015

Viewing is shifting • 29% of adults watch video via the Internet at least weekly (17% in 2013, 5% in 2010) • 85% of Netflix viewers watch on a TV • 52% of HH have an SVOD subscription Leichtman Research Group: Emerging Video Services IX, May 2015

“Pay-tv” is becoming “Broadband Services”

Ad Money is moving $90, 0 Ad Revenue in billions $80, 0 $70, 0 $60, 0 $79. 0 +15. 6% $31, 5 +275% $68. 3 $8, 4 OTT TV $50, 0 $40, 0 $30, 0 $59, 9 Legacy TV -20. 7% $47, 5 $20, 0 $10, 0 $0, 0 2015 2018 Source: The Diffusion Group, 2015

Many more shows being produced

Subscribers are sharing passwords Netflix 7

8 Top Trends - Candidates Consumer Behavior Monetization Content Technology A. Cord cutting B. Login sharing by SVOD users C. Ad dollars shifting to digital seeking targetable audiences D. Measurement of OTT viewing for advertisers E. Explosive growth of scripted programs – and the associated costs F. Low cost, high volume content production from “non-TV” sources G. Operators getting into OTT services H. Programmers getting into OTT services I. Personalization of content, data driven content J. Penetration of smart tvs and streaming media boxes growing rapidly K. Penetration of 4 K sets growing and 4 K content available on OTT services L. New streaming media boxes – new features, lower prices M. Higher speed broadband proliferation Regulation N. Operating and distribution expenses O. Wi. Fi seamless hotspot deployments by operators P. Net Neutrality issues