The Coming of Age: Internet VOD

Todd Johnson

VP of Broadband Services

VeriSign, Inc.

Former CEO of Kontiki

2

The VeriSign Mission

Enable and Protect the World’s Networked Interactions

3

Information Security

VeriSign Portfolio of Services

Communications

Intelligent Infrastructure Services

Directory Connectivity Security Mediation

+ Content Distribution

+ Intelligent Messaging

+ Network Connectivity

+ Internet Naming

+ Real-Time Publishing

+ Intelligent Supply Chain

+Website Authentication

+ User/Content Authentication

+ Network Security

4

Mobile

Global Media Enablement Leader!

+ Video content delivery system for consumer and enterprise applications

+ Peer delivery capability across DSL, Cable, WiFi, Fiber and 3G networks

+ 30+ million PC peer client downloads across U.S. and UK

+ 40,000+ pieces long-form video content

+ 6 years of commercial experience

+ Mobile services: music, commerce, messaging and personalization

+ 600+ million accessible mobile subscribers globally

+ 75+ direct carrier connections for SMS, PSMS, content delivery

+ 400,000+ mobile content catalog items+ 7+ years of commercial experience

Broadband

5

The Evolving Set of Challenges+ Cost Effective vs. Profitable

▪ Moving from cost centers or marketing expenses to PL’s▪ Managing the remix of content licensing▪ Settling on a business model: ad supported, pay per view, subscription

+ Content Quality – Not about short crappy content… in most places▪ Delivering TV/DVD/HD Quality Content▪ Optimize delivery for wide range of uses

+ Scalability - Meeting the 5x-10x-10x scalability challenge in less than 2 years▪ 5x higher encode rate; 1.5-3Mbps instead of 300-600kbps▪ 10x more views; millions per day▪ 10x in average video length; 22-44 minutes instead of 1-3 minutes

+ Managing the End User Experience▪ Path to the Plasma TV▪ Disc space usage▪ Local content management (consumer desktop)

+ These are Global Businesses

6

Online Video Consumers by Region - Asia?

0

50

100

150

200

250

300

350

400

2005 2006 2007 2008 2009 2010 2011

APAC N. America L. America W. Europe E. Europe MEA

Source: ABIresearch, 3Q 2006

Su

bs

cri

be

rs (

mil

lio

ns

)CAGR

(2006-11)

APAC 8%

N. America 8%

L. America 14%

W. Europe 9%

E. Europe 32%

MEA 18%

Note: Aggressive forecast. Some of these will be dial-up users, as many dial users view video today in Flash format, etc.

7

Online Videos Viewed by Region

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2005 2006 2007 2008 2009 2010 2011

APAC N. America L. America W. Europe E. Europe MEA

Source: ABIresearch, 3Q 2006

Vid

eo

s V

iew

ed

(m

illi

on

s)

Note: Aggressive forecast.

CAGR (2006-11)

APAC 24%

N. America 23%

L. America 30%

W. Europe 25%

E. Europe 50%

MEA 35%

8

Online Videos by Revenue Model - Ads, Ads, Ads!

0

50,000

100,000

150,000

200,000

250,000

2005 2006 2007 2008 2009 2010 2011

Ad Pay Free

Source: ABIresearch, 3Q 2006

Re

ve

nu

e

(mil

lio

ns

)

Note: Aggressive forecast.

CAGR (2006-11)

Ad 33%Pay 80%Free -16%

9

Online Video Users by Device

0

1000

2000

3000

4000

5000

6000

7000

2005 2006 2007 2008 2009 2010 2011

PC TV Portable

Source: ABIresearch, 3Q 2006

Us

ers

(m

illi

on

s)

Note: Aggressive forecast.

10

The 3-Screen Experience – Not One Piece, 3 Screens

PCTV

Mobile

Mobile StorefrontContestant Voice Tones Performance Ringtones

Contestant Graphics

iTV CampaignsVoting, PollingSweepstakes

Broadcast Integration

Internet VODHD Broadcast Replays

Contestant ProfilesHD Performance Archive

11

US Broadband Video Landscape Matrix

Source: ABIresearch, 3Q 2006

12

BBC

> > HIGHLIGHTS+ All the BBC’s popular TV shows are made

available online at the time of original broadcast

+ Electronic Program Guide (EPG) is very sophisticated and allows for user rating, meta tag search, etc.

+ Service will initially be a free service for UK residents (uses IP blocking for geography filtering)

+ Ultimately similar services will be rolled out under ad supported and premium subscription business models

+ Kontiki powers the complete delivery and end–user experience infrastructure

13

AOL Hi-Q and In2TV

> > HIGHLIGHTS+ 100s of TV Quality downloads from Warner Bros,

Nickelodeon, Comedy Central, A&E, MTV, …

+ Kontiki is the delivery infrastructure that powers the AOL Hi-Q system and the more recently launched In2TV content portal

+ Kontiki is fully integrated with the ad serving solution at the point of origin

+ Kontiki is also integrated with the DRM facility used to protect the rights held content distributed through Hi-Q/In2TV

+ AOL Hi-Q supports a mix of business models including: free, ads supported free, pay per download and subscription based models

14

British Sky Broadcasting

> > HIGHLIGHTS+ Sky service built as a cross-medium

experience offered free to their premium satellite TV customers

+ Offers over 300+ movie titles and 100+ unique pieces of sports content on a regular basis

+ User experience/EPG is very smooth and was built in flash on top of the extensible Kontiki framework

+ Users are authenticated via the Sky billing system in place for satellite subscribers

+ Kontiki fully integrates with the Microsoft DRM system at the point content origin

15

Why It Is Still Hard….

16

Thanks

+ Questions?