SanomaWSOY’s New Electronic Media Initiative Tapio Kallioja, President

Capital Markets Day, September 7, 2000 Electronic Media Sector

• Operational as of July 1, 2000 • Legal structure in place on October 1 • Combines the electronic media units of Helsinki Media: • Channel Four Finland (Nelonen), Helsinki Television, Werne, Måndag, iMedia and digital terrestrial television • with units from SanomaWSOY: • 2ndhead and Virtual Portal Lumeveräjä Legal Structure

“Newco” Name to be launched “Newco” before October 1

86.02 % 100.00 % 100.00 %

OyOy Ruutunelonen Ruutunelonen Ab Ab HelsinkiHelsinki Televisio Televisio Oy Oy SwwapSwwap OyOy

59.32 % 10.17 % 24.23 % 75.77 %

OyOy Suomen Suomen TuotantotaloTuotantotalo MedianelonenMedianelonen Ab Ab WerneWerne Oy Oy

100.00 %

MåndagMåndag Oy Oy Activities

Present electronic media businesses: Commercial Television, Cable Television, Wireless Services, Terrestrial Pay Television Development and management of electronic distribution channels for SanomaWSOY Group: Broadband Internet, Wireless Portals, Internet, Digital Terrestrial Television Development and management of platforms and services for SanomaWSOY Group and others: Site management, Advertising, e-commerce, TV and Video Production, CD-ROM Production Operational Structure

Name to be launched “Newco” before October 1

Administration Nelonen

Technology Helsinki Televisio

2ndhead Lumeveräjä iMedia

Werne DTT Movie Channel Revenue Structure in 2000 FIM 470 million

Nelonen 61,9 %

others Helsinki 1,0 % Werne Televisio 12,4 % 24,7 % Commercial Television

Channel Four Finland (Nelonen) Nelonen

SATELLITE AND CABLE-TV • Covers 80% of the population with 11 high power transmitters, cable, & digital satellite

Oulu • Highly targeted at the urban

TERRESTRIAL population in the 25-44 age group in prime time (6-11 p.m.) Lapua Kuopio Jyväs- kylä • License for analogue trans- Tampere Mikkeli missions until 31.12.2006 and Eurajoki Lahti Anjalan- for digital transmissions until koski Turku Espoo 31.8.2010 Channel Profiles July 2000, prime time (6-11 p.m.)

0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 %

Nelonen 20 38 29 13

MTV3 15 29 29 27

YLE2 10 27 34 29

YLE1 10 24 37 29

10-24y 25-44y 45-64y 65+y Source: Finnpanel Audience Shares Rolling 12 Months

50 43,1 43,0 43,0 42,8 42,8 42,7

45 42,6 42,6 42,6 42,6 42,4 42,3 42,2 42,2 42,2 42,2 42,1 42,1 42,1 42,0 42,0 42,0 41,9 41,9 41,6 41,4 41,2 40,9 40,9 40,7 40 MTV3 YLE1 35 YLE2 Nelonen 30 25,7 25,5 25,6 25,6 25,4 25,3 25,3 25,2 25,2 25,0 25,0 24,7 24,6 24,1 24,0 23,9 23,7 23,3 23,2 23,2 23,0 22,9 22,8 22,8 22,7 22,8 22,6

25 22,5 22,5 22,5

20 22,9 22,5 22,2 21,9 21,7 21,7 21,6 21,4 21,3 21,2 21,0 21,0 21,0 21,0 20,9 20,9 20,9 20,8 20,5 20,5 20,4 20,3 20,3 20,3 20,3 20,3 20,2 20,2 15 20,0 20,0 10 11,1 11,1 11,0 10,7 9,7 9,5 10,4 9,2 10,1 10,0 8,9 8,7 8,4 8,1 8,2 7,9 7,8 7,5 7,2

5 6,9 6,6 6,3 6,0 5,7 5,5 5,2 4,8 4,4 3,9 0 3,6 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

Source: Finnpanel Nelonen’s Share of Commercial Viewing

0 5 10 15 20 25 30 35 40

10+ 23,8

10+, prime time 25,7 07/2000

25-44 prime time 32,9

25-44 urban, prime time 35,2

25-44 large cities, p.t. 36,7

Source: Finnpanel Television Advertising Rolling 12 months, MFIM

1200 1065 1100 1035 1015 983 1000 900 800 Nelonen 700 Others 600 500 400 300 260 200 200 134 100 47 0 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 Source: Gallup-Mainostieto Nelonen’s Market Share Commercial Viewing and Advertising Sales, %

30 28 26 24 22 20 Target 18 Group 16 Premium 14 12 10 of viewing 8 of revenues 6 4 2 0 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 Sources: Finnpanel, Gallup-Mainostieto Cable Television

Helsinki Television Helsinki Television Statistics as of 31.07.2000

• 206,000 connected households - additional 4,000 contracted, growth 4-5,000 / year • 160,000 digital & interactive connections - all connections digital before end of 2000 • 6,100 cable modem customers - commercial test soon followed by commercial launch - international reports estimate 20%+ penetration levels • Digital set-top-boxes in spring 2001 - new digital television services - additional users for broadband Internet Four Levels of Cable-TV Internet

Œ Fast (1 Mb/s) connection to the Internet - Always on-line, no connection time, push technology - Does not occupy phone lines, fixed charges • Services enabled by transmission speed - Fast downloading (graphics, programs, games, music, …) - Video on Demand (news, trailers, advertising,…) Ž Community portal - Targeted at households in the Greater Helsinki area - Content provided by SanomaWSOY and others • Digital television set-top-boxes - Large capacity compared to terrestrial television - Return path through cable network Wireless Services

2ndhead Underlying Trends in Wireless Communications

• Open standards allow easier utilization of mobile networks • Content and transmission are becoming separated from each other • Services are becoming increasingly sophisticated, requiring editorial skills • Ready-to-use technical platforms are commonly available Media Houses’ Key Assets

•Mobile operators - Existing customer relationships •Media houses - Supporting infrastructures - Strong technical skills - Strong media brands - Internet know-how - Existing content - Voice communication brands - Editorial skills - Media consumer know-how - Cross-promotion power 2ndhead is an Open Portal Closed portals

Content/ service partners Customers Open portal Mobile operator A Content/ Operator Mobile service portal operator B partners Customers

Mobile Mobile operator A operator C

Open Content/ wireless Mobile operator B service portal partners Customers Mobile operator A Media Mobile operator C house Mobile portal operator B Mobile operator C 2ndhead Operational Platform

Controlled by 2ndhead Other content and services

Partners’ Supporting website Internet content and ISP • Profiling services • Parallel services User interface server (WAP/web) MISP Support applications

• Publishing GPRS Content • Content Banks and Mobile service WAP and service mgmt credit card

• WAP service Mobile gateway applications • Billing companies Modem • SMS service net- PSTN • Ad mgmt • Mobile internet works pool • Customer/ SMS access usage gateway follow-up

Database server 2ndhead Progress

• Project started on March 6, 2000 • Commercial launch on June 16, 2000 • 5.300 registered users on August 27, 2000 - + 3,000 during the previous 30 days - + 2,200 during the previous 7 days • Version 2.0 launch in October 2000 • Version 3.0 launch in January 2001 Digital Terrestrial Television

Multiplex C: Channel Four Finland Movie Channel Why Digital Television?

• Moving from analogue to digital technology - Frequency allocation: compression (1:4), statistical multiplexing - Enhanced features: electronic program guide, super-teletext • New services for all television households - Thematic channels: news, sports, education, culture, ... - Pay television: movies, sports, premium entertainment,... • New platform for electronic services - Data broadcasting: supporting material, internet pages, PC programs, … - Interactive services: interactive advertising, e-mail, Internet,… DTT Licenses

Multiplex A: Multiplex B: Multiplex C: Yleisradio Alma Media SanomaWSOY

TV-1 D MTV3 D Nelonen D

TV-2 D Sports Movie Channel Channel YLE PLUS City-TV Educational YLE 24 Channel

FST D Wellnet Canal+

Yleisradio Alma Media SanomaWSOY others DTT Transmission Network

01.09.2000 31.12.2000 31.12.2001 • 3 stations • 5 stations • 10 stations • 2 multiplexes • 2 multiplexes • 3 multiplexes • 39 % reach • 50 % reach • 70 % reach • 3 mux’es 01.04.2001

Source: Digita Television Penetration

100 90

80 70 60

50 40

30 20

10 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

TV licenses B & W TV Colour TV Video Teletext Cable TV Satellite TV Source: Yleisradio Television Penetration

55 50 45 DTT ? 40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 TV licenses B & W TV Colour TV Video Teletext Cable TV Satellite TV Source: Yleisradio DTT for SanomaWSOY

• More effective distribution for Nelonen - Simulcasting with practically no additional cost - 100% technical reach at lower transmission cost • New revenue source: pay television - Pay television experience since 1978 - Significantly less critical to penetration development • New platform for our content - Electronic program guide, super-teletext - Broadcast Internet, interactive services Internet

Virtual Portal Lumeveräjä SanomaWSOY Internet Sites

More than 70 active web sites

- News and entertainment - Mapping services - Financial news - Company information - Event calendars - Services for advertisers - Electronic marketplaces - News databases - Communications services - Extranet services Virtual Portal Lumeveräjä

Internet services Mobile services DigiTV-services

User identification and session management

User Interface CRM Personalization

Services: Statistics, Advertising e-mail, chat profiling management

e-commerce Integration to Links operative systems

ALL SANOMAWSOY INTERNET SITES Lumeveräjä Infrastructure

Current www- services E-Commerce MQ applications

Current www-servers Lumeveräjä value adding applications

IMEI Customer DigiTV ident. MQ control Page integration Customer MQ Forward DB routing LV navigator ALS configuration Current Transfer Lumeveräjä MQ operative Login To www Customer database and MQ MQ systems Mobile Ident. history services LV navigator configuration CDMS

Session Lumeveräjä control Page history www -pages MQ (LV navigator) History DB control

Frontline Internet server: Users page identification, loading history session control and forward routing SanomaWSOY Internet Users

Trend of user volumes, 1,000 users 1000 900 May 2000: 560,000 unique visitors Monthly visitors 800 2.5 million visits 700 20 million page impressions 600 500 Weekly visitors 400 300 200 100 0 1999/09 2000 2001 2002 Sources: Taloustutkimus, WebTrafficMonitor, IDC Virtual Portal Progress

04/00-08/00 Pilot case: children & juvenile sites

09/00 Pilot case in use Roll-out to next sites starts

12/00 Virtual Portal implemented at all major sites

05/01 Entire Virtual Portal system in use Conclusion

The Leading Electronic Media Operator

Digital Virtual Open Digital Cable Internet Wireless Terrestrial Television Portal Portal Television

Four Strong Digital Platforms

SanomaWSOY strengths

Media Cross Content & Financial Business Promotion Editorial Skills Resources Know-how Power