- Assessment of 'Three Screen' strategies incorporating Mobile, TV and Internet - NB: 'Three Screen' does NOT mean 'Third Screen' - Prepared for Verisign - Highlight's AT&T efforts to create seamless experience across Mobile, Internet and TV - May 2008

1. Profitable Three-Screen Services:
Creating Value for Three-Screen Customers
Presenter: Mead Alexander Eblan
Date: May 4, 2008
Assessing the Screenscape

2. Objective
+ The purpose of this presentation is to provide a high-level overview
of the ‘three-screen’ momentum behind the consumption of digital
media across TV, PC and mobile devices.
+ By exploring the red shift in technologies, drivers and consumer
behaviors, we can better understand what opportunities and
challenges are facing the mobile service provider to better unlock
the keys to success for a profitable three-screen strategy.
Television -- a medium. So called because it is neither rare nor well-done.
- Ernie Kovacs
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3. Introduction
What constitutes a Three-Screen Service?
Definitions
Background
Time to Get Serious…

4. What is a Three Screen Service?
+ What ‘Three Screen’ means…
▪ Any service, application, or bundle providing access to digital
media across the Television, Computer and Mobile handset
landscape.
▪ Three Screen Service delivers on the ‘digital lifestyle’ by
leveraging applications and content across TV, Internet, and
wireless landscapes.
+ And what it is not…
▪ A Three Screen Strategy is NOT:
– Merely a ‘Triple Play Strategy’ offering bundled billing across
television, Internet access and landline or cellular services.
▪ A Three Screen Strategy is NOT:
– A service focusing solely on repurposing content from television
and/or the Internet onto the ‘third screen’ of mobile/cellular devices.
+ What this means to the consumer.
▪ Anywhere, anytime access to content across the screenscape
from a single subscription service.
▪ An experience that binds and ties across any and all devices
offering access to or consumption of digital content.
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5. Background – Disconnected Forces Converge
+ Telecom Act of 1996
▪ Prior to 1996 telecommunications carriers were restricted from providing content-
related services.
▪ Since then operators have been slowly shifting away from the common carrier
model with network infrastructure pricing to multi-tiered/premium-priced content
discriminators.
+ The Success of Subscription Television
▪ Deployment of regional basic-rate ‘advertiser-free’ cable offerings has mushroomed
to near-universal mode of television consumption.
▪ Cable operators now intruding on telecom services (VoIP).
+ From Analog to Digital
▪ Content is increasingly digital where codec is more important than playback device.
▪ RF and Television signalling both porting over to digital.
▪ The Emerging dominance of IP.
+ Cellular adoption
▪ Over 85% of US now using cellular phones.
▪ Cellular phone revenues now exceeding landline.
+ 3G Economics
▪ As voice pricing deteriorates, carriers need to seek out new sources of revenue to
more effectively monetize 3G network and spectrum investments.
5

6. The Evolving Landscape
Video over Telephony is Not New
Why Today is Different
We Write. You Wrong.

7. Yesterday…
+ Image over Telephony is not New
▪ 1878 – Punch Magazine features cartoon with 1st imagining of picturephone.
▪ 1914 – “Tom Swift and his Photo-Telephone” is published.
▪ Late 1950s – Bell Labs develops 1st prototypes for Picturephone
▪ 1964 – Western Electric introduces 1st PicturePhone at NY Worlds Fair.
▪ 1970 – AT&T reintroduces improved PicturePhone predicting 3M subscribers by
mid-eighties. Key selling feature includes ability to ‘turn picture off’
▪ 1973 – AT&T abandons PicturePhone
▪ 1992 – AT&T reintroduces color VideoPhone, which flops
▪ 2000 – Wireless version of VideoPhone is launched and meets same fate.
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8. … and Why Today is Different
+ Our Environment is Changing
▪ Services: Broadband yet personalized
▪ Convergence: Applications and Devices
▪ Operators: Consolidation, New Players, and Overlapping
▪ Equipment Ecosystem: CPU, Storage, Chipsets,
multimedia capabilities, LCD, Codec, Smarter UI
▪ Networks: Converging around IP, paradigm shift from
dedicated network services to layered architecture using
common network technologies
Voice, TV, Messaging,
+ The Stars are Aligned Internet – all orbiting the
▪ Would you like that video Switched, Streamed or Stored? same galaxy…
▪ Demand and the new Video Opportunity
▪ Business Models need Bandwidth, too
▪ The Consumer’s Propensity to Purchase
▪ Digital Democratization and IP
+ And the Paradigm is Shifting
▪ Out with ‘Tele’ (‘at a distance’) and in with ‘Omni’ (in all ways and places)
▪ Voice service is one more content application
▪ From Network Services to Personalized Services
▪ Behaviors seek Always on and Always Mobile
▪ Value of Digital Content Delivery: Witness the Writers Strike
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9. The Evolving Consumer
Mobility
Consumption
Personalization
Content + Community +
Collaboration + Communication
More Gawk, Less Talk.

10. The Evolving Consumer
+ Mobility
▪ Not restricted to space, time or place
▪ The Ubiquitous Self
+ Consumption
▪ Devices may merge, yet tastes are diverging
▪ The Long Tail effect
▪ Balkanization of the commons
▪ Regular meals give way to snacking
+ Personalization
▪ You are what you watch
▪ Navigation is key
▪ Experience is tailored
The Black Hole is in your palm…
▪ The MeMe Generation
+ The 4-Cs are Converging
▪ Common platform for Content, Community, Content,
and Collaboration
▪ Open networks lead to open networking
▪ Agnostic technologies blur the demarcation between
content, community, collaboration and communication
▪ Social Networking a fabric, not a fad
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11. Challenges & Opportunities
Looking Back: Amp’d
Looking Forward: Google
Implications for the Carrier
Case Study in Creating
Consumer Value - AT&T
From Set-top to Hand-top.

12. Challenges and Opportunities
+ Amp’d – What Happened?
▪ MVNO with clear focus on target youth market
▪ Strong alignment with MTV for content
▪ Value proposition anchored on mobile content
▪ Disconnect between marketing and market
▪ Singular experience pivoted on mobile device
+ Google – Looking Forward
▪ Recognized the ‘portal’ wasn’t the cul-de-sac Not enough protection
▪ Keeping the user interface simple against creditors…
▪ Strong mobile play
▪ Drawn into 700 Mhz auction
▪ Open Handset Alliance and Android
▪ Extending the advertizer’s reach
▪ Concern over Internet’s ability to scale up for WebTV
▪ Positioning as content aggregator for online / on-
demand video.
▪ Is Content really King – or does creating a better way
to access it rule? Eyeing all
Opportunities.
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13. Implications for the Carrier
+ Telecom Carriers
▪ Legacy telephony business models evaporating.
▪ Cheap bandwidth means that VOIP is more robust
– and VoIP gains are smoothing the way for Video
over IP.
▪ Old per-minute billing model is dead.
▪ Broadband is commoditized.
▪ Competitive pricing is impacting network
investment infrastructure.
▪ Carriers are developing video services to better
retain customers and bolster revenues.
+ Mobile Operators
▪ Cellular services increasingly commoditized.
▪ Marketplace is saturated.
▪ UMA and VoIP over Wireless surfacing as
additional threat to existing revenues. Source: “Future Video”,
▪ Mobile operators forced to consider video and http://www.nativ.tv
mobile TV as a viable option to offset voice
revenue decline.
▪ Hopes are pinned on mobile video to help
monetize investments in 3G spectrum.
13

14. Creating Consumer Value – AT&T
+ A Carrier’s Approach: AT&T
▪ Leveraging its local access, Internet access, and
AT&T Mobility services with AT&T Homezone and
U-VerseTV
▪ Three-Screen focus: The TV, The PC, and the
Wireless handset
▪ Positioning itself around the ‘digital lifestyle’
▪ Touting the benefits of ‘anytime, anywhere’
▪ Promoted through Masters Golf Tournament
▪ Advertising deal with Chase Card Services
▪ Partners include Vongo, MobiTV, TotalVid,
Akimbo
▪ Platform for a ‘quad-play’ of services: voice, video,
broadband and wireless
▪ Three-Screen strategy is motivated to differentiate
itself from cable service providers
▪ Plans to spend about $4.6 billion on its Project
Lightspeed initiative to reach nearly 19 million
homes in its legacy 13 state territory by EOY2008.
14 Source: AT&T Collateral, “Delivering the Digital Lifestyle”

15. AT&T’s Three Screen Offering
+ The Breakdown
▪ Content experience across the Screenscape
▪ Creating pull and push between screens
▪ Single universe for advertising across three galaxies
+ AT&T Uverse TV + AT&T Yahoo High-Speed + Cingular (now AT&T
Internet Access Mobility)
+ AT&T HomeZone
+ Downloadable film and + MobiTV, offering live
+ AT&T | Dish Network television content sports, news and
+ AT&T Yahoo entertainment
+ Content deals with
+ Over 320 Channels TotalVid, Vongo, MobiTV + iPhone integration
+ Over 26 HD Channels + Entertainment and Sports + Content deals with major
portals (Blueroom.att.com) broadcasters (NBC, CNBC,
+ VOD ABC, Fox, Discovery, etc.)
+ DVR + Home Monitoring Service
+ Web and Remote Access + AT&T Unity calling plan
15 Source: AT&T Collateral, “Delivering the Digital Lifestyle”

16. Conclusions & Recommendations
Defining the Semantic Screen
Assessing the Screenscape
Understanding its Implications
Finding Common Goals
Grasping the Future.

17. Defining the Semantic Screen
+ The Semantic Screen is about common formats for integration
and combination of digital content drawn from diverse sources,
allowing the consumer to start off in one screen, and then
move through an unending set of devices connected not by
wires but by the experience. Uses include:
+ Interactive Gaming
+ Interactive Advertising
▪ AT&T plans to make advertising a “key revenue stream”
▪ Per Yankee Group, advertising will be a key revenue source for
service providers, especially with the capability to target consumers
more effectively through addressable advertising Eye on the Future
+ HD On Demand
+ Caller ID on the TV
+ Mpeg4’s untapped promise of interactive sprites
+ Widgets driving activity across all three screens
+ Enhanced personalization with per user customization
+ True integration across telecommunications services
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18. So What does this All Mean?
+ Accessing the Screenscape
▪ Understanding your customers
– Young Influentials, Business Makers, Mobile Moms, Urban
trendsetters, Techno Sophisticates
▪ Tailoring their experience across all three screens
▪ Understanding the content and production ecosystem
▪ Value pricing replaced by price on value
+ Understanding its Implications
▪ 3G Economics and the Imminent Chokepoint
▪ Proprioception impacting applications Connecting the Digits.
▪ User Interface and Navigation – the greatest challenge
▪ Matching the right content to the audience via the right
device
▪ Networks and Cablecos hiring wireless experience
▪ Lean Forward (LF) or Lean Back consumption (LB):
– Escape (LB)
– Educate (LF / LB)
– Absorb (LF / LB)
– Enlighten (LF)
– Interact (LF)
– Experience (LF)
TV’s New Media Guns
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19. Convergence of Goals
Summary – Sprint + Google
What’s in it for the Carrier? What’s in it for the Content Partner?
+ Extend market reach + Deeper wireless / mobile play
+ Access to advertiser model + Additional venue for ad-insertion
+ Increase value and extend brand + Bandwidth capacity
+ Bring content to 3G/4G services + Potential for 4G partnering (e.g. WiMAX)
+ Increase data ARPU + Differentiate against competition
Common Goal - Ubiquity, affordability, omnipresence, brand, value, profit.
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20. Questions + Answers
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21. Thank You
mead.eblan@verizon.net