Georgia Tech – Broadband InstituteIndustry Advisory Board

Dallas Clement, SVP Strategy and Development

May 2nd 2006

2

New Business

Models

Evolving

Technologies

Disruptive Events

CustomerExpectations

Changing Video Market

3

Disruptive Events

• Regulatory– Family friendly tiers (a la carte) – Plug and Play

• CableCARDS• DCAS• PCs

– Digital Transition

• Multiple Standards– UPnP (Universal Plug and Play) – DLNA (Digital Living Network Alliance)– Mobile Device Committee – HomePlug – MoCA

4

The Digital Transition Maze

DigitalTransition

You areHere

Internet = Television

Analog Hole Solved

Competitive Parity

$pectrum Auction$

Economic Prosperity

Digital = Analog

Unlimited Bandwidth

5

The Digital Transition

FCC / Congress

ILECs“IPTV”

DBS

Retailers

PCIndustry

ConsumerElectronics

SA /Motorola

Content

Broadcasters

Consumers

Cox

6

•Value price propositions•Intuitive•Safe and secure•Choice and control•Seamless•Device agnostic•Available•Easy to do business with

Customer Expectations

Customer Expectations

Communications and Information Services

Entertainment Services

Cable/BB

Network

Hom

e M

an

age

men

t S

ervi

ces

Connectivity

Customer expectations are rapidly evolving with the advent of new technologies enabling new competitors and new business models

7

2006 Video Initiatives

• User Interface (IPG)• On Demand

– More footprint– New content models– Advertising

• Interactive– Bundle Utility (CallerID, E-mail, cox.com)– Operational efficiency (FAQs, lead generation, etc.)– Competitive positioning and new revenue

• Get ready for OpenCable

8

Interactive Home Page

9

Cox Video Mosaic

…DBS satellites mysteriously fall from sky…World peace declared…

10

Going online is as common as watching TV

1 2

5

14 14

2 2

5

20

35

2

86

15

20

1 2

5

30

20

0

5

10

15

20

25

30

35

Readingmagazines

Readingnewspapers

Listening toradio

Going online Watching TVHo

urs

Sp

en

t p

er

We

ek

(m

ed

ian

)

Online users Intensive TV viewers

Intensive newspaper readers Intensive online users

Source: Jupiter Research 2006

11

Online consumption is now entertainment-centric

0% 10% 20% 30% 40% 50%

DownloadedVideo

Viewed OnlineVideo

Used FileSharing App

DownloadedMusic

Used DigitalPhoto Service

Listened toOnline Audio

Dial-up

Broadband

Source: Jupiter Research 2005

12

$-

$2

$4

$6

$8

$10

2006 2007 2008 2009 2010

Online Video

Online Music

Online Gaming

Annual spending by US Households on Online Content

Source: Parks Associates 2006

$ b

illi

on

s

On-line is Already Here

13

Disney Will Offer Many TV Shows Free on the WebBy BROOKS BARNES, WSJ, April 10th

ABC's Prime-Time Hits And Zap-Proof CommercialsAre Pillars of Bold Strategy

Fox to Share Revenue From Reruns On Web With Affiliated StationsWSJ, April 14th

Fox can finally join its TV rivals on the Web. The network said yesterday it had signed a six-year agreement with its 187 affiliated stations to share revenue from reruns of its programs on the Web.

New Frontier: To Blunt the Web's Impact, TV Tries Building Online FencesBy AMY SCHATZ WSJ, March 16th

Undermined by a 'Slingbox'

Groundbreaking High Definition Digital Cable PC Receiver Press Release, January 5th

ATI Technologies Inc. today announced a preview of the revolutionary (HD) digital cable PC receiver. Available later this year, the ATI OCUR (open cable uni-directional receiver) product will allow Media Center PCs that run on the forthcoming Microsoft Windows Vista operating system, to receive High Definition premium digital cable TV content on the PC.

Microsoft's 'Massive' Move Into Game AdsWSJ, April 26th

Microsoft Corp. plans to acquire Massive Inc., a closely held start-up that places ads in videogames, in a deal that highlights the growing flow of advertising into nontraditional media.

Broadcast networks, PC industry leaders, and startups are changing the business models for content and advertising

Liberty Media, EchoStar Invest In Start-Up for New TV DeviceBy REBECCA BUCKMAN, WSJ, January 31st

. . . investing in a small Silicon Valley company that lets people watch TV on their computers away from home. The high-profile start-up, Sling Media Inc. of San Mateo, Calif., said . . .

Tech Firms Scramble to ProvideEasy Ways to Connect PCs to TVsBy NICK WINGFIELD, WSJ, April 11th

Some in the technology industry hold out hope that a new initiative called "Viiv" from Intel Corp. will help resolve some of these complexities. Viiv-compliant devices, including PCs and gadgets that directly connect to television sets, are designed to more easily discover and share content with each other and to work with a broad range of online services. Some of these devices are now coming to market.

Content in the News

Apple Unveils the New iPodFifth Generation iPod Now Plays Music, Photos & VideoSAN JOSE, California—October 12, 2005

Apple today introduced the new iPod®, featuring a gorgeous 2.5-inch color screen

14

New Content and Application Models

Download Services Music, TV shows, and movies downloaded to the PC or other device

Broadband Channels Internet versions of popular cable channels with more in- depth video and information

Streaming Services Music videos and other TV content streamed to a PC

User Generated Content Web sites that allow users to upload their own content and share with others

Internet Telephony Low cost telephone service with advanced features, delivered over the Internet

New Consumer Tech CE leveraging broadband for new entertainment solutions

15

Search Internet navigation, presented as sponsored links and results sorted by relevancy

Local Broadcast Redistribution of local broadcast content via the Internet, with new inventory of commercials

Video on Demand Sponsored content or sections of a site, including options for direct response

Digital Video Recorders Tracking and aggregation of user behavior

Customized Video and Rich Media

Leveraging customization capability of PC yet breadth of broadband

New Advertising Models

16

Conclusion

• Technology is advancing enabling sophisticated, converged applications.

• With the advent of broadband, consumers are expecting more– Personalization– Mobility– Portability– Convenience– Consistency

• Markets will continue to evolve and television will not longer be the same