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ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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MEDIA

N O V E M B E R 1 0 , 2 0 1 6 N E W Y O R K

Investor update 2016

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ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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H e a d o f B u s i n e s s U n i t M e d i a

Per Borgklint

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ΆΈΉΊΌΎΏΐΑΒΓΕΖΗΘΙΚΛΜΝΞΟΠΡΣΤΥΦΧΨΪΫΆΈΉΊΰαβγδεζηθικλνξορςΣΤΥΦΧΨΩΪΫΌΎΏ

ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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Segment media

Compression, software and hardware

Media and Content delivery

P R O D U C T S

Playout operations and Media management

Access

Consulting and Systems Integration related to own portfolio

S E RV I C E S

Video processing and Storage

Cloud based TV-platforms Content discovery

Sports graphic

Advertisement and analytics

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ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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“Mobile video consumption is by far outgrowing traditional linear”

“35% of all video consumption today is happening on a mobile device”

“BY 2019, 80% of the traffic going through the networks will be video”

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ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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›  Divergence in buying behaviour between the Tier 1s and Tier 2-3s ›  Large customers are considering in-house development for their video offerings ›  Uncertainty in business models between traditonal managed Pay-TV and advertisement

funded TV

›  The Cable market is moving towards all IP delivery. This plays directly to Ericsson’s strengths in IPTV

›  Convergence of industry requires new skills and opens opportunities for Ericsson´s broad capabilities

›  Increased openess for outsourcing of media operations – plays well into our platform-based strategy for our broadcast business

›  The Internet of Things and the Connected Home are growing markets providing attractive synergies for Ericsson TV & Media offerings

Market realities

9-11% CAGR 2016-2018 in Media market

Addressable market USD 12 b.

Highly fragmented market – Leader with 8% market share

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Media industry Is converging

Verizon acquiring AOL and Yahoo

AT&T to acquire Time

Warner

Charter acquired

Time Warner Cable Telefonica

acquiring Canal + Spain

LGI acquiring BASE

Belgium

Vodafone acquiring Kabel

Deutchland

-  AT&T acquiring content to break the value chain

-  Telefonica moving into Pay-TV cable

-  Vodafone moving into Pay-TV cable

-  Verizon making big bets on mobile advertising

Our customers are investing boldly and are breaking the media value chain

Highlights

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ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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Our media transformation

Legacy •  Hardware-based

•  Compression •  IP-TV •  Network video

storage

•  On-premise

•  Single-tenant

•  Systems integration driven delivery

•  One size fits all

Product portfolio

Today •  Fragmented

Go-to-market with high Opex spend

•  Large number of customers

•  Low profitability

•  180+ countries

•  Mainly direct Go-to-market

Going forward •  Focused

Go-to-market with smart Opex spend

•  Focus on top accounts

•  Profitable growth

•  Geographical prioritization

•  Direct and partner

Go-to-market strategy

Transfer investments from Legacy to Next-Gen

Next-Generation •  Software-based

•  Compression and Video delivery

•  TV-platform •  Cloud video storage

•  Cloud based •  As-a-Service •  DevOps •  Component-based

offering

•  Advertisement

Focused Go-to-market to drive profitable growth!

Growing low triple digits Declining low double digit

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ЁЂЃЄЅІЇЈЉЊЋЌЎЏАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯАБВГДЕЖЗИЙКЛМНОПРСТУФХЦЧШЩЪЫЬЭЮЯЁЂЃЄЅІЇЈЉЊЋЌЎЏѢѢѲѲѴѴҐҐәǽẀẁẂẃẄẅỲỳ№

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Media going forward

Transform to capture synergies from new organization and

increase focus in Go-to-market Be the Video transformation

partner of our customers

Transform broadcast business model to platform based

services