Connected TV and Capablue

Home , BBC iPlayer, Internet Channel, TalkTalk TV Store, TV Genius, Video on demand

Craig Chuter November 2010 Agenda

1. Capablue Background

2. Connected Device Opportunity

3. Device and Platform Review

4. Market dynamics

5. Connected Introduction

Capablue are a pioneering Video on Demand (VoD) Agency. It has designed, defined and delivered the UKs leading VoD projects:

Abacus

Capablue have been involved in the development of Connected TV VoD from the start, including the following initiatives:

• YouView – core platform specification for (Channel) Five

• YouView – Managing Set-top box specification and development work stream on core project team

• Abacus – joint UK broadcaster account and payment solution for OTT VoD

• BBC IDCP - Putting BBC iPlayer and other services on multiple connected TV devices

• HBBTV – ‘Supporter’ of the European HbbTV project

• Connected TVs - relationships with Samsung, Sony, LG and Phillips

1. Capablue Background

2. Connected Device Opportunity

3. Device and Platform Review

4. Market dynamics

5. Connected Introduction

Currently around 115M views per month:

• 2% or 2 million views on Wii • 5% or 5 million views on PS3 • 6% or 7 Million views were on mobile

• Gaming consoles have become a major route for iPlayer content consumption • PS3 content Consumption suggests a living room shift

• One third of the UK population are ‘very interested’ in the connected home

• Game consoles becoming a ‘connected home’ entertainment hub1

• Internet connected TVs predicted to exceed 320 million devices globally by 20131

• European Games Consoles penetration: 20 million Wiis in Europe (August 2010) 16 million PS3s in Europe (August 2010)

6 Million Xbox in Europe (August 2010)2

• YouView forecast 3.3 million YouView boxes by the end of 20123

1Ericsson UK Study 2 Nielsen 3 VGChartz.com 4 BBC Trust

1. Capablue Background

2. Opportunity

3. Device & Platform Review

4. Market dynamics

5. Connected Introduction

Copyright © 2010 Capablue Ltd. 8 Overview • RAM: 512MB YouView, formerly known as Project Canvas is • Flash Memory a set-top box or an embedded solution backed • Dual Freeview TV tuner by the BBC, ITV, Channel 4 and Channel 5 – • Broadband connection as well as BT, TalkTalk and Arqiva. The boxes • USB or devices using it will support catch-up • HDMI and SCART (peritel) streamed TV, pay-per-view on-demand content • Digital audio output and DVR capabilities for regular free-to-air • MHEG 5 Freeview digital TV broadcasts. • Video format up to HD 720p • Flash (may be reconsidered) Technology • HTML 5 The set-top box is connected to both an aerial • Javascript (AJAX) and an internet broadband connection. Hardware will vary and depend on providers. Software Colour coded remote control EPG System management Hardware • Processor: ARM processor How to get on platform • OS: Linux Open platform • Bandwidth: up to 3Gbps Process not clear at this stage

You View Discovery

‘EPG’ - Search - Recommendations (to follow)

Retail: Bespoke Linear TV Video on Demand SeeSaw / BT Vision / Applications Freeview Portals Tiscali (in scope ph 1?)

Linear TV Linking VoD Linear? VoD Linear VoD Apps

Adverts Adverts Adverts Adverts

Pay? Pay Pay

Key: • YouView discovery focussed on ‘Freeview’ and own VoD area. Discoverable in EPG • Opportunity to develop own portal to spec – Linear, VoD, Apps etc Not discoverable in EPG • VoD Retailers provide an additional layer of discover and packaging

Copyright © 2010 Capablue Ltd. 10 Overview • Connectivity: Ethernet and WiFi Google TV is an open platform for TV-related • Video dependant on hardware (up to 1080p) devices bringing together Television and the Internet through a 10-foot unified user Software interface. It will be powered by Android and • Customised Google Chrome web browser Google Chrome (web browser). Associated with integrated Google search with manufacturers offerings GoogleTV provides access to TV, Internet as well as Platform Access networked content. The device is currently closed. However, the platform will be open after the release of a Hardware GoogleTV SDK. Applications developed for • GoogleTV is an Freeware OS GoogleTV will have to go through the Android • Multitude of provider and implementations Marketplace.

Example implementation: Google has indicated that the OS will be Open Logitech GoogleTV Companion box Sourced in 2011 allowing future custom • Small form factor implementations, development and possibly • Processor: 1.2-GHz Atom processor other embedded devices. • Dual HDMI out • Dual USB (open connectivity) • Optical Digital Audio

Copyright © 2010 Capablue Ltd. 11 Overview is possible to develop websites tailored for PS3 The PS3 incorporates a web browser which delivery and can take advantage of the allows users to access interactive internet consoles feature. content including flash video. Limitations Hardware The included browser is limited and integrates • Processor: Cell Broadband Engine an older version of the flash plugin. • Memory 256 MB XDR RAM, 256 MB GDDR3 Video delivery is limited to the formats allowed VRAM on the platform including MP4/H.264. • Graphics nVidia RSX @ 550 MHz • Max Resolution up to HD 1080p • Connectivity Wi-Fi and Ethernet • USB • HDMI

Software • XMB • Web Browser

Platform Access Access to the device XMB is closed however it

Overview streaming video services. Access to the Samsung's offering consists primarily of Yahoo platform requires approval from Yahoo! and the Widgets through its internet@tv service. These manufacturer for inclusion within an Application widgets are similar to the applications that can store. be downloaded for the iPhone or Android devices. Original widgets included weather, news, finance, and Flickr however new ones have been introduced since launch of the platform including games, Twitter and YouTube.

Hardware The feature is available on all TVs with Internet@tv feature

Platform Access The real appeal of Yahoo! widgets is its openness to developers. Yahoo predicts availability of about 100 widgets by year's end, including Netflix in the US and other top-tier

Copyright © 2010 Capablue Ltd. 13 Overview accessed. However, Opera on the Wii only Nintendo recently made the Wii Internet incorporates Flash lite (equivalent to Flash 7). Channel application free for all users allowing owners of Wii consoles to access the internet Example of implementation and stream interactive video content. The Wii BBC iPlayer: browser is based on Opera, which is available http://www.bbc.co.uk/iplayer/bigscreen/ on desktop computers as well as mobile Youtube: http://www.youtube.com/xl devices.

Technology • Content channels are accessed via the Internet Channel

Platform Access Content accessed via the internet channel can be developed using standard HTML technologies including javascript.

Limitations Flash content and streaming video maybe

Copyright © 2010 Capablue Ltd. 14 Overview • Micro-USB Recently revamped, the Apple TV provides • Optical Digital Audio functionality of a Home Theater system. The • Connectivity: Ethernet and WiFi device has purposely been developed with • Video up to HD 720p limited storage. This means that all content must be streamed. There are two streaming Software sources for Apple TV: • FrontRow • From a series of interconnected devices (computer, iPhone, iPod touch, or iPad using Platform Access Airplay via iTunes) The device is currently closed. However, • From a large array of content free or because the platform is iOS powered, it is commercial (including video and audio rumored that applications running on other iOS podcats - RSS Feeds) devices will be able to be easily ported and distributed via the Apple app store. Hardware This will open the door to • Small form factor: 2.29cm x 9.91cm x virtually any 9.91cm content provider. • Processor: Apple A4 chip at 1Ghz • Storage: Unknown • HDMI out

Copyright © 2010 Capablue Ltd. 15 Overview Software LG recently announced that their new Netcast • PLEX Media Centre televisions will be powered by the well known freeware PLEXmedia centre software. Platform Access Compatible devices will connect to a cloud Thanks to PLEX, the LG Netcast devices will version of Plex’s platform for online content be open through PLEX Plugins (Python (think Netflix, Hulu, BBC iPlayer) and will also based). Apps will be available through the be able to pull content across the local network plugins store and will undergo a review from a device running Plex Media Server. process. PLEX provides a clear selection process but it is anticipated that there Hardware will be a second approval • Multiple type of Netcast devices available layer with LG. including Blu Ray • HDMI out • USB • Optical Digital Audio • Ethernet ports • Video up to HD 1080p

Copyright © 2010 Capablue Ltd. 16 Overview Connectors Boxee box is a set-top box incorporating the • HDMI with HD 1080p support freeware Media centre software designed for • Ethernet and WiFi the TV by Boxee. Boxee is a branch of XBMC • USB media center software and is also known as • SD Card the first "Social Media Centre” enabling users • HTML5 / Flash to view, rate and recommend content to their friends through all major social network Software services and interactive media related Media management features. How to get on platform Technology Open platform (Extensions) The set-top box is connected an internet Web Browser broadband connection. Hardware is built by D-Link

Hardware • Processor: Intel Atom CE4100 • Optical Digital Audio and Compositie Audio

Copyright © 2010 Capablue Ltd. 17 Overview Additionally, CE-HTML describes specific Philips recently started offering Net Connected extensions for TV use, including Media object Televisions. Such televisions can access the (for A/V rendering control), spatial navigation approved internet portals reformatted for the (up-down/left-right/OK) and guidance for text big screen. The same Internet assets that are input with a simple TV remote control (SMS used for standard websites can be used. style).

Hardware Content must be reviewed by • Net Televisions line Philips in order to be • Video up to HD 1080p incorporated in the user’s country portal. Platform Access TV sets with the Net TV feature have a full Limitations browser on board. It is based on the open CE- Flash Lite player only HTML specification, which is a subset of existing open Internet standards, such as XHTML1.0, CSS TV Profile 1.0, DOM level 2 (the Core, Style, Events, and a subset of the HTML modules), ECMAScript 262 (3rd edition) and XMLHttpRequest (AJAX).

1. Capablue Background

2. Opportunity

3. Device & Platform Review

4. Market dynamics

5. ‘Connected’ Solution

Option Category Deployment Launch Easy to UK Market Re-usability Interactive Summary Demography date deploy Penetration (proprietary) use Google TV STB All TVs ? Young

Apple Apps Apps iPhone, iPad, ? Young iTV? Wii Console All TVs ? Young

PS3 Console All TVs ? Male Young Youview STB Freeview TVs ? General

Yahoo! Widgets Apps Samsung TV ? General Sony TV Phillips TV Phillips TVs ? General

Xbox Console All TVs ? Male Young Samsung TV Samsung TVs ? General

Sony TV Sony TVs ? General

LG TV LG TVs ? General

Fetch STB All TVs ? General

Direction of travel: • Multiple devices – Rapidly evolving – high risk to build

• Move to open web technologies - browser

• Dominance of server site deployment - thin client YouView – Google

• Large format sites with device specific rendering ‘on the fly’ (iPlayer ‘Bigscreen’ strategy)

• ‘MY EPG’ discovery

Suggested Product Strategy:

• Avoid long term commitment including Capital investment

• Maximum device coverage - many current options – more coming

• Avoid bespoke build or dependency on 1 platform

• Develop generic ‘large screen’ solutions - ‘Open’ W3C standards based around HTML 5

• Mobile, web and TV single solution

• Customer management behind, not in front of brand - ‘My EPG’

1. Capablue Background

2. Opportunity

3. Device & Platform Review

4. Market dynamics

5. ‘Connected’ Solution

• Utilising Capablue’s VoD experience

• Best in class technologies

• OTT single VoD solution

• ‘Turnkey’ solution - from video ingest to a branded site

• Multiple device delivery to large screen formats for TV delivery

• Shared service reduces set-up and ongoing operation costs

• Direct customer engagement

• Connected sites can share accounts and payment reducing registration barriers

Bespoke site design and development to the specific brand, manage overall implementation

Discovery – all European TV metadata in place, provides personalisation and search

Leading Global Video management, delivery and play out platform

Connected Connected Connected Connected PC Device Device Device Device Mobile

Device Identification and Presentation Management Account Presentation layer management Site Page templates : Discovery : Personalisation : Monetisation

Product Management Account Management Editorial

Payment Gateway Reporting Social Media Integration

The Video Platform TV Genius Platform Video Player TV Metadata Content Protection Recommendations Asset and Metadata management Personalisation Copyright © 2010 Capablue Ltd. 26 Connected - Content Level Options

1. Platform / Aggregation – provided as an aggregated solution across several broadcasters. Includes a top-level, cross- Platform / Aggregator Navigation Layer broadcaster EPG / discovery layer

Broadcaster Broadcaster Broadcaster 2. Broadcaster – single broadcaster solution, multiple channels under one brand, Channels Channels Channels provided within a platform environment such as Canvas, Samsung

3. Brand/Channel – single channel or brand solution provided within a platform environment such as Canvas, Samsung

Developed for the delivery of Connected TV VoD services:  PC: Standard VoD websites  Consoles: PS3 and Wii  TV Apps: Yahoo!, Samsung, Sony, LG, Phillips  Apple Apps: iPhone, iPad YouView: (‘YouView ready’ for launch) Coming soon . Google TV – Q4 2010 . Apple (i)TV (Apple Apps?) – Q4 2010? Near future . HbbTV – estimate mid 2011 .

Retail Model UK Example Pros Cons

• Editorial control • Higher R&D costs • iPlayer • Brand prominence • Higher operational costs • ITV Player • Direct customer relationship • High registration and pay barrier BCaster • 4oD

‘Stovepipe’ • No revenue sharing • Weaker up-sell and cross-sell • Control development roadmap • Risk of ‘self build’

• See Saw • Lower (shared) R&D costs • Aggregator’s brand is primary Account, Payment and • Lower (shared) operational costs • 3rd party editorial control Related Services • BT Vision • Sky Player • Lower registration and pay barrier • Limited customer engagement

‘Aggregator’ • Stronger up-sell and cross-sell • Share revenue with aggregator BCaster BCaster BCaster • Shared development roadmap

• Editorial control • Brand prominence • Direct customer relationship

BCaster BCaster BCaster • ‘Connected’ • No revenue sharing • Shared development roadmap • Lower (shared) R&D costs

Account, Payment and • Shared operational costs ‘Shared Services’ ‘Shared Related Services • Low registration and pay barrier • Stronger up-sell and cross-sell Copyright © 2010 Capablue Ltd. 29 Summary

 Connected TV – Mobile – Console - Web

 Cost Effective

 Fast Deployment

 Shared Intelligence

 Global Leading technologies

 Working with YouView to be “YouView ready” for launch

For further information or to request a proposal, please contact:

Craig Chuter Head of Business Development

Capablue +44 20 7620 0909 [email protected]

Option – Name of option Category – Type of service Deployment – devices content displayed on Launch date – date launched / to be launched to the public Ease to deploy – how easy to get agreement from platform to carry services UK market penetration – number in homes in the UK W3C vs. proprietary – how standard (web based) vs. proprietary is the software Take-up of interactive – even though deployed, how much is interactive actually used Capablue rating – our rating for how worthy is it for consideration (as at Sept 2011) Demography – likely target market on service