Scenarios - a helpful backdrop to China 2.0?

Graham Kill Irdeto CEO 24 May 2010

1

Irdeto – a global media technology company

Naspers FY09:

•  Revenue ZAR 27B ($3.4B)

•  Op Profit ZAR 5B ($0.6B)

•  2.5M subscribers

Irdeto:

•  Secures 45% Naspers revenue

•  900 people, 26 countries

•  Dual HQ - NL and PRC

MEDIA 1.0 MEDIA 2.0 MEDIA 3.0

Media 3.0 – powered by broadband

Traditional media Advertisers and content Consumers New Media

Media 3.0 – focus on the individual

Convergence of Video, Data and Voice Services

All services billed on a single bill

Introduction of the PVR.

Time shifting starts

Customers want access to their

content no matter where

they are.

Place shifting starts

Focus shifts from

Households to Individuals.

Targeted experience

starts

Channels no longer sold individually

Channel bundling starts

BUSINESS FOCUS

ANY… THING + HOW + TIME + WHERE + ONE

TIMEFRAME 1985-1995 1995-2000 2000-2005 2005-2010 2010-2015

Stories that could happen & surprise us

The trick is not to ask if they will happen but,

What we do if this happens?

Challenge our assumptions They help us prepare for the

unthinkable

Scenarios are meant to

Generic scenarios for Media 3.0

World of proprietary technologies and controlled access by powerful middlemen using their controlled networks

Advertising and data exchange to access content via powerful middlemen

World of DRM and Content ecosystems

Artists in charge via an open web without proprietary controlling technologies

FREE FOR ALL

STRINGS ATTACHED

VALUE FOR MONEY

SOMETHING FOR NOTHING

Irdeto scenarios 2004

10Mbps and 20% : game changing speed and penetration

- Social Networking - Low quality video/TV - Basic video chat - Small files shared - SD IPTV

10Mb/s down / 5Mb/s up Low latency

-  Video networking -  Large files shared -  High Definition video/TV

2008 to 2009 big step in quality in a number of countries to be ready for tomorrow

Source: Irdeto and Broadband Leadership Quality Study 2009, Said School of Business, Oxford University

CO

MP

THR

EAT

TO

INC

UM

BEN

TS

4G O

FFER

S LE

AP-

FR

OG

O

PPO

RTU

NIT

Y

How divided is the Digital Divide?

Source: The Broadband Quality Index 2009, Said Business School, Oxford and Research World, Issue 19, April 2010

BB leaders have government backed strategies to invest in infrastructure, e.g. Japan, Sweden

Penetration (% Households)

100= BQS ACTUAL

VALUE 66

BQ

S (N

orm

aliz

ed)

BRICs catching up fast: Brazil : 66M users – average 44 hours use/month - higher than the US, Japan and Australia

Developing nations move to mobile BB due to lack of infrastructure

Turning the world inside out?

Changes (Technology + Audience Behavior) = Different future value chain

Digital Assets

CONSUMERS CONSUMERS

Content Provision

Aggregation

Distribution Fixed and mobile

networks

Internet based

Source: Ofcom, “Entertainment in the UK in 2028” modified by Irdeto

AUDIO etc.. NEWS VIDEO

RADIO etc..

NEWS PAPERS TV

Digital assets

Strings Attached

Value for money

Free for All

Something for nothing

An Explosion of Choice Power blocks forming around DRM to

balance consumer power around “free”

Hybrid services position themselves as legal alternatives for “free” with premium content paid for e.g Voddler -

video version of Spotify

Service innovation to retain customers. Sports makes the

business tick.

Free for all mainly FTV catch-up

services, UGC, or pirate

A vital part of the consumer’s connected day