Changes in the TV Ecosystem April 2020 Jack Davison, Executive Vice President

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Proposition development Market research Free and pay programming Market analysis Business model evolution Trend analysis SVOD, AVOD, TVOD and EST Lead generation Competitor analysis Tracking tools Linear channel carriage Partnership negotiation Show Tracker Third party apps

2 Syndicated Research

Show Tracker Tracking all US and selected international scripted series across 20+ parameters in 14 markets, including data on 1st and 2nd window sales of 450+ TV series available on 280+ services Untangle the complex acquisition ecosystem with our Territory USA, Australia, Brazil, China, Canada, France, Germany, India, Italy, Mexico, Poland, Spain, Sweden, UK monthly data drops and Origin Production origin of the show Producer & Distributor All Production companies and the company selling rights to the show quarterly Show Tracker reports Genre A combination of 18 possible genres to provide a clear view - e.g. Drama, Comedy, Crime Format A sub-genre of Serial or Procedural for Drama titles and Single-Cam or Multi-Cam for Comedy titles Annual Season & Renewal Year when the show is released and the renewal status of a show Show Season & No. Episodes Season in the show’s run and number of episodes Service Name & Type Name and type of service that has licensed the show - Broadcast (free and pay) / VOD Service Owner The corporate owner of a service Window First and second window deals tracked Dates Date of first broadcast or VOD availability & date of US broadcast of the final episode of the show’s season Catch-up Number of episodes live at any one point- e.g. In-season-stacking, rolling 5 etc. Digital Access Temporary download rights where applicable Transactional Rights EST/Rental services and season pass limitations Original Branding Detailing where ‘Original’ labelling has been Included by an SVOD Service

3 Our Clients

We’ve worked with global players from every corner of the content industry…

Pay TV platforms Mobile Operators Broadcasters Producers Distributors VOD operators Trade Associations Technology Companies

4 Industry Webinar Five themes…

Direct to Pay TV Free TV Advertiser Content Consumer Innovation Innovation VOD (AVOD) Distribution

5 Industry Webinar In a crowded market for discussion SkinnyPayTV Aggregation AI Consolidation Social CoProductions DirectTo Targeted SecondWindows ConsumerAVOD Recommendations Addressable ReBundling SVOD StitchedChannels Discovery VirtualPayTV Short-formBVOD

6 Industry Webinar With significant COVID-19 impacts to consider

Pros Cons 5 Linear TV viewing!32% YOY - 16-34s !33%1 US linear TV Ad sales forecast "20% in 1H20 SVOD usage growing, 1st-time installs of 39% decline in Ad Spend across all media, 6 Netflix’s app!57% in Italy2 + _ 24% of buyers pausing all spend through Q2 YouTube, Twitch, Mixer & Facebook Live Production delays to shows (expected in Streaming!66% in Italy3 2020) hitting up-fronts and schedules HBO Now TV viewing !65%, movie!70%4 Pay TV shaving and cutting may get worse BVOD climbing - iPlayer viewing!30% YOY Loss of Sports impacting all stakeholders

7 Sources: (1) BARB (UK), (2) Sensor Tower, (3) StreamElements, (4) Company Releases, (5) Magna Global (6) IAB Industry Webinar With Netflix quietly announcing Q1’20 results

Netflix Subscriber Adds (Millions) 8

N. America 7.0 EMEA 6 LatAm AsiaPac

4.7 4.4 4 4.0 3.6 3.3 3.1 2.9 2.9 2.5 2.5 3 2.3 1.9 2.0 2.0 2.0 1.9 2.0 1.7 1.7 1.7 1.8 1.5 1.6 1.6 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.3 1.3 1.2 1.2 1.1 1.1 1.1 1.0 0.9 1.0 1.0 0.7 0.8 1 0.5 0.6 0.6 0.6 0.6 0.3

-0.1 -1 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1 '20

8 Sources: Netflix Releases Industry Webinar Five themes…

Direct to Pay TV Free TV Advertiser Content Consumer Innovation Innovation VOD (AVOD) Distribution

9 Direct-to-Consumer 2019 was a big years for D2C and more is to come...

Apple TV+ Disney+ HBO Max Peacock Apple Inc. Walt Disney Company WarnerMedia (AT&T) Comcast (NBCU) Nov 1st 2019 Nov 12th 2019 May 27th 2020 Apr 15th 2020 (Beta)

US$5 US$7 $15 $0 Peacock Free w/Ads Free for 12 months with any Selected bundles with international Added to selected HBO $5 Peacock Premium w/Ads Apple hardware purchase and domestic partners subscriptions for free in US (free to Comcast Subs) $10 Peacock Premium Ad-Free ($5 for Comcast subs)

10 Direct-to-Consumer Peacock starting to strut…

Only available to Xfinity X1 and Flex customers in Beta, with a full rollout coming in July

11 Direct-to-Consumer Many players extending, evolving and adjusting their business models

Multiple Motivations

Wall Street pressure

Strong segment/diaspora

Younger skewing

Territorial expansion

Free TV extension

Pay TV extension

Pay TV failures

12 Direct-to-Consumer VOD Aggregation - not just Apple and Amazon - a key area and not likely to be one winner

Roku Pay TV Varied Characteristics

Google Mobile Telco Hardware Revenues Service Revenues Billing

Content Bundles Exclusive Content Original Content

Amazon OTT TV Multi-device Integration ‘Powered by’ Solutions Services Funnel Smart Discovery Fixed Connectivity Mobile Connectivity Apple Smart TV

13 Direct-to-Consumer Partnerships….

Disney have approached partnerships differently, leveraging their current position and establishing relationships with operators in key territories and bundling with some operators whilst having merely a retail relationship in others

France UK UK Germany Spain Italy Canal+ O2 Sky Deutsche Telekom Movistar (Telefonica) Telecom Italia Exclusive Exclusive Non-Exclusive Exclusive Exclusive Exclusive Distribution partner Mobile Telco partner Distribution partner Distribution partner Distribution partner Distribution partner

Bundled in selected Six months free for new and Six months free, then €2 Three months free then Long Retailed through Canal+ Movistar Fusion bundles and upgrading customers Retailed through Sky saving for TV, fixed-line and term saving of €3 with added to new “Cine” pack Bundled in Ciné Séries Pack mobile subs* TIMVision & Fibre bundles £2 off for existing subs discounted for six months

14 * DT Magenta TV OTT Subs do not get a discounted price for Disney+ but can benefit from the 6M free promo Industry Webinar Five themes…

Direct to Pay TV Free TV Advertiser Content Consumer Innovation Innovation VOD (AVOD) Distribution

15 Pay TV Innovation Pay TV under threat, but it still dominates in absolute terms and trends and regionality are key

Global Pay TV and OTT Video Revenues 270 Pre-Pandemic numbers illustrate the pressures on Pay TV

Global numbers disguise regionality but all forms of pressure 216

Revenues (US$B) Revenues Historically Pay TV has survived recessions well 162 Unprecedented conditions we are in now may change this

108 Competitive market is completely different SVOD Pay TV Sport stoppage (although not long term) unique 54

0 2010 2012 2014 2016 2018 2020 2022 2024

16 Source: 3Vision Analysis of DTVR Data (June 2019) Pay TV Innovation Pay TV is evolving radically and the concept itself is changing

Content Features & Functionality Linear to On Demand Long-term contract to Pay as you Go Sales & Marketing Communication Bundles Wholesaler to Wholesaler and Retailer

Tiers & Tariffs 3rd Party Service Bundles Full Fat Pay TV to a la carte and Skinny Pay TV

17 Pay TV Innovation Evolving Pay TV proposition - current priorities very VOD focused

Pay TV Operator Priorities in Europe and Latin America

3rd Party SVOD 71%

Better TV Everywhere/Multiscreen 57%

Increased & Enhanced Catch-up 54%

Improved 4K Content 39%

Extended Library Content VOD 38%

Skinny Bundles/VPTV 30%

Varied Packaging (inc. cheaper) 27%

More Channel Exclusivities 23%

18 Source: 3Vision Platform Survey 2019 Pay TV Innovation Service provision OTT with thinner or no hardware requirements - ready to change quicker

19 Pay TV Innovation Virtual Pay TV seeing limited growth internationally after flattening out in the US

Some new initiatives, but it remains largely limited and not fully functional in many cases

20 Pay TV Innovation Re-Aggregation can take many forms

21 Industry Webinar Five themes…

Direct to Pay TV Free TV Advertiser Content Consumer Innovation Innovation VOD (AVOD) Distribution

22 Free TV Innovation A lot of areas for focus - rebalancing business away from a reliance on traditional advertising

Increasing non-traditional viewing Developing advanced advertising initiatives Exploring new models for consumption Maintaining access to content

Enhanced Catch-up Targeted Advertising

Digital Box Sets Production Investment

Premium Services Co-Production Alliances (SVOD and/or Ad Free)

Short Form Content Joint Venture Services

23 Free TV Innovation Free TV extending, collaborating or enhancing with OTT services

24 Free TV Innovation Enhancing catch-up offer

Global Free TV Broadcast Channel Exhibition (inc-US)

4% 9% 10% 39% 47% 66% 76% shows offered with enhanced catch-up 39%

29%

15% 18% 15% 9% 2016/17 2017/18 2018/19 Less than Rolling 5 Rolling 5 In-Season-Stack In-Season-Boxset

25 Source: Source: 3Vision Show Tracker (September 2019) Includes 1st season in first window only for 12 global markets Free TV Innovation Selected AVOD Boxset exclusives from the last six months

Market Show Service Local Premiere Blood & Treasure 10 Play 30-Mar-20 Beecham House 10 Play 29-Mar-20 Reverie 9Now 26-Mar-20 Brassic ABC iView 30-Dec-19 Defending the Guilty ABC iView 30-Dec-19 Australia Fartblinda SBS On Demand 11-Dec-19 Temple SBS On Demand 05-Dec-19 Enemy Within, The 9Now 30-Nov-19 Pearson 9Now 30-Nov-19 Fix, The 9Now 14-Nov-19 Red Line, The SBS On Demand 01-Nov-19 Brassic CBC Gem 21-Feb-20 Utopia Falls CBC Gem 14-Feb-20 Canada ABC Murders, The CBC Gem 07-Feb-20 Britannia CBC Gem 07-Feb-20 France 9JKL 6Play 02-Jan-20 Strangers TV4 Play 23-Mar-20 Cleaning Up TV4 Play 11-Nov-19 Sweden Five Bedrooms TV4 Play 04-Nov-19 Wild Bill TV4 Play 01-Nov-19 UK Shrill BBC Three 15-Dec-19

26 Source: 3Vision Show Tracker (Feb 2020) Industry Webinar Five themes…

Direct to Pay TV Free TV Advertiser Content Consumer Innovation Innovation VOD (AVOD) Distribution

27 AVOD Riding high on the hype curve… calmed by COVID-19?

28 AVOD The basics…

AVOD refers to a video service where content is made available to the end-user at no charge but with adverts

There are many types of AVOD service, with market calculations on value often based on different categories

Broadcasters Social & You Tube Online, Home Ent, C.E. & Specialists

29 AVOD Evolution

Roku Rakuten TV Tubi You Tube Tvigle Xumo Amazon Channel IMDb TV Pan-Euro acquired acquired 2007 (Panasonic & Viant) Tubi Go90 Video Direct Oct 2017 (Amazon) AVOD ($440M) by by Google 2011 2014 (Verizon) 2016 Jan 2019 Oct 2019 Fox Corp. Crackle TV Plus 2006 2015 Xumo Mar 2020 (Sony) Tencent Video (Samsung) Stirr iQiyi Pluto acquired by 2007 2011 Vudu AVOD Apr 2017 (Sinclair) Tubi (Baidu) 2013 Comcast Dailymotion 2010 (Walmart) Jan 2019 Australia Istikana Facebook launch Feb 2020 (Vivendi) 2011 2005 Watch Aug 2019 Aug 2017

Youku Joyn Hotstar (Pro7 & Discovery) (Alibaba) (Star India) 2006 Shahid Viafree 2019 Vudu ipla 2015 Pluto acquired by (Cfrowry (MBC) Consolidated 2010 catch-up acquired by Comcast Polsat) Viacom (NBCU/Fandango) 2008 All4 (UK) & (NENT) Multiple SBS (Aus) 2016 2019 Apr 2020 Hulu channel Voyo Re-launch 2007 Catch-up services (CME) AVOD 2008-2010 2011 2015

30 AVOD Legacy media buying in to AVOD as the sector grows

Viacom CBS NBC Comcast Fox Corporation & Pluto & Xumo & Tubi $340 million $Unknown (>$100) $440 million January 2019 February 2020 March 2020

>22 million monthly users (Feb 2020) 5-10 million monthly users (Feb 2020) 25 million monthly users (Dec 2019) 75% up year-on-year, forecas 30 million by year-end

Improve inventory value and efficiency Utilise Xumo streaming and AVOD technology Expand direct-to-consumer initiatives and viewers

Leverage and expand on Pluto’s reach/position Benefit from Xumo’s operational AVOD experience Enhance advertising business

Monetise large volumes of library through Pluto TV Support launch of own service Peacock Monetise large library on Tubi

Target Pay TV resistors - hedge own Pay TV position Leverage Xumo’s position on Smart TVs in the US Expand Tubi offer to include news and sports

Directly market own SVOD services on Pluto Leverage Tubi’s technical experience

International expansion

31 AVOD User base of online video services growing rapidly

U.S. Monthly Average Users of selected Online Services

170-180M 60M 25-30M 20-25M 20M15M 12M 10M 10M 5M

32 Sources: Company releases. Note; Size of Bubble represents estimated Monthly Average Users. AVOD Localised opportunities growing, whilst global players expand and improve

33 Industry Webinar Five themes…

Direct to Pay TV Free TV Advertiser Content Consumer Innovation Innovation VOD (AVOD) Distribution

34 Content Distribution Production volumes keep rising

US Scripted Original Series Netflix Scripted Digital Originals & Exclusive Acquisitions

Total Scripted Series 532 Exclusive Distribution 95 SVOD 495 487 Co-Production 51 455 Digital Original - Foreign Language 10 422 Digital Original 81* 389 349 65 5 57 288 5 45 266 12

216 19 15 160 30 5 8 117 20 90 6 15 49 39 24 33 6 24 4 6 15 2 18 7 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2016 2017 2018 2019

35 Source: 3Vision market analysis from FX Networks Research (January 2020), Netflix Releases and BMO Capital Markets (January 2020) Content Distribution Regional/Local Pay TV initiatives working for some and growing activity

Movistar Sky Studios Viaplay Youku (Telefonica) (Comcast Universal) (NENT) (Alibaba) Spain & LatAm Europe Nordics China (and S.E.Asia)

36 Content Distribution Distributors still finding homes for New Season TV shows

Number of Individual Services Licensing Shows by Market

VOD Pay TV 19 Free TV 9 10 8 13 8 11 5 12 15 15 18 12 16 24 4 19 10 4 16 24 9 15 15 15 13 12 11 9 6 6 6 5 6 2 5 US UK Italy India Brazil Spain China Poland France Mexico Canada Sweden Australia Germany

37 Source: 3Vision Show Tracker (Feb 2020) Content Distribution Local VOD players becoming a more important part of the sales ecosystem

Global (ex-US) First Exhibition of Shows by Type

1% 1% 3% AVOD Global SVOD 20% 14% 23% Local SVOD Pay TV 16% 26% Free TV 19%

45% 39% 38%

17% 17% 19%

2016/17 2017/18 2018/19

38 Source: 3Vision Show Tracker. Note: Includes 1st season only of all US scripted new season shows from US Networks, Basic and Premium Cable channels, in first window only. (Feb 2020) Content Distribution Broadcast channels - Enhanced Catch-up

% New Season Shows Premiered with Enhanced Catch-up (all forms of broadcasters) 2016/17 2017/18 2018/19 91% 85% 85% 84% 82%

73% 74% 70% 63% 61% 60% 56% 51% 53% 51% 52% 47% 48% 46% 39% 41% 34% 31% 30% 28% 27% 22%

Australia Canada France Germany Italy Mexico Spain Sweden UK

39 Data based on 1st season & 1st windows - Enhanced Catch-up includes shows with In-season Stacking and In-season Boxsets (Feb 2020) Content Distribution Second window experimentation growing

SVOD dominates 2nd window usage but individual market characteristics mean significant variation

1st Window Home 2nd Window Home

Free TV (30%) (19%) Free TV

(13%) Pay TV Pay TV (47%) (36%) SVOD (NFX & AMZ)

(32%) SVOD (Local) SVOD (NFX/AMZ) (12%)

SVOD (Local). (12%)

40 Source: 3Vision Show Tracker - Data based on previous three seasons (16/17 - 18/19) Content Distribution Production market seemingly unstoppable, impacting distribution

Significant demand for TV drama not slowing, competing for talent early, with more services, new partnerships, projects increasingly unique in structure

Local initiatives, combining resources and leverage, are increasing and the market is seeing more pre-sales, co-commissions and early involvement

Higher-end productions remain risky, and a group of financing partners harder to put together - with it hard to get many players to agree on a single vision

COVID-19 impacts will add risk and may play more in to the hands of global streamers when it comes to giving financial certainty to projects

Necessity driven structures arising from the pandemic could accelerate change with more players joining projects early and compromising on visions

41 Wrap-Up Key Themes Review Thank You

We’re ready to help your business build success Jack Davison in the content world. EVP Just let us know your ambitions. +44 1225 636 200 [email protected] @JackDavison @Jdavison3vision

We can help you. 3Vision help clients build highly successful content businesses through a range of expert consultancy services. We combine intelligent trend analysis and deep industry experience to give your business expert insight. Our strategic advice is drawn from first-had experience and real world success. If you would like a presentation of these results and our insights to your team, please get in touch.

+44 1225 636 200 [email protected] www.3vision.tv @3Vision

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