From Primetime to Lifetime

Dick Gerbrands

2

Content provider’s situation

ContentProvidersales &

development

Internet

Mobile

TV

Other

OperatorsNL

Unilever

HeinekenAhold

OperatorsNL

OperatorsNL

OperatorsNL

OperatorsNL

Billing?

Capacity?

Connectivity?

Uniformity?

3

Traditional Value-Chain for content

Writer

Publisher

Whole-Sale

Bookshop

Reader

4

Mobile Value-Chain for content

Content owner

Content aggregator

MASP

Operator

Consumer

5

MASP Model: Content Provider’s situation

ContentProvidersales &

development

Internet

Mobile

TV

Other

OperatorsNL

Unilever

MASP

HeinekenAhold

OperatorsNL

OperatorsNL

OperatorsNL

OperatorsNL

6

The mobile value chain…

Content Aggregator Boxes

BSCCells

Content Aggregator MASP telecom operator user

smsvoice

7

8

Endemol’s situation

9

10

11

12

13

Basic Business model concept

MASP

Goal: Increase $ and %S through the values input of MASP controlled by own business goals/plans

MASP: Mobile Application Service Provider: facilitates fast, innovative and cost effective in the mobile service provisioning for MASP

Endemol: Leader in content; CMG: Leader in mobile data service solutions

Endemol

CMG

Carrier

Carrier

Carrier

End-user

End-user

B2C

(Brand owner)

$

%$%$ - ESP unit price% (%$ - ESP unit price)

Content related to m-service

Facilitating m-service

technology

B2C may buy or have own m-service infrastructure

= user rights = revenue streams

Back to back link in risk and payment taking

14

P&L Example

P & L (€M) Revenues Customer Revenues 2002 2003 2004 2005 Non-recurring Revenues: From content creation, SI, SW development and

service is not included Recuring Revenues After revenue share with operator and brand owner Mob. Service Provider 3,04 15,15 50,74 105,87 Total Revenues 3 15 51 106 Costs 2002 2003 2004 2005 Non-Recurring Costs Equipment & Network Costs 0,97 3,75 6,11 6,11 Recurring Costs Personnel Costs (incl. Hosting) 3,45 7,19 23,33 47,94 Network Costs ,76 2,80 4,58 4,58 Total Costs 5 14 34 59 Total Margin -2 1 17 47 % of Revenue -70% 9% 33% 45%

15

NetworkEquipmentNetwork

Equipment

Application provider

Application provider

Device

Portal

NetworkoperatorNetworkoperator

Application DeveloperApplication Developer

VirtualOperatorVirtual

OperatorContentProviderContentProvider

EnablingTechnology

EnablingTechnology

ConsumerConsumer

BusinessBusiness

End-User

Mobile DataValue Web

Reasons to partner

16

Cell Broadcast (CBS) (1)

• Cell broadcast is broadcasting through the mobile telephone. An SMS-like message to be send in real-time to all users, who have activated the channel. Various (info) channels can be activated and messages can vary by the region (up to the cell level).

• Complications: - CBS is in principal a cost: revenues are to be generated through

broadcast time charging or return paths as SMS, voice response or other venues (see attachment for business model & expected revenues)

- Education: Informing the end-user about the service (content) and the required telephone settings for service access

- Mobile operators are still struggling with the commercial model

• From the content perspective opportunities seem present, but given small user base, we need a paying client.

• In Germany, France and Portugal the operators have commercial CB operations. Endemol/CMG could scan opportunities there.

17

Cell Broadcast (CBS) (2)

• Some operators were visited

• Main outcome:

- All agreed on the before mentioned business model, but have not yet communicated how they intend to commercialise CBS. They are defining the strategy to manage the CBS key complications and to maximise the indirect revenue.

- Agree that services should be present at all operators in order to have real impact on the market. They have seen this in Big Brother (Loft Story) SMS, where the operators all had the service.

- Paying for content is not an established concept.

• Conclusions:

- Opportunity is present, but Endemol needs to get local commitment from it’s local operations.

18

Business assessment of Cell Broadcast

Gross estimates for France

• 12 mil. Mobile subscribers

• CBS users: 2002 1-3% and in 2005 15-25%

• Soft and heavy users (85% : 15%)

• 1-2 advertising messages/week soft users; 1-2 adv.messages to heavy users

- 15-25% of CBS messages being read;heavy users 15% more

- cost per read advertisement message (at least) 0,03 euro

• 2-3 reaction type messages-soft users; 5-9 reaction messages to heavy users

- 20-30% of CBS messages being read; heavy users 15% more

- reaction on 4-10% of read messages, continues dialogue 1,25-2,5 times

- revenue share on standard and premium priced SMS

And voice response (+ other applicable services)

www.cmg.com

© 2001