© 2010 KUDELSKI GROUP / All rights reserved.

© 2010 KUDELSKI GROUP / All rights reserved.2

Kudelski Group – History in a nutshell

History in a nutshell…

Founded in 1951

A solid reputation built on professional audio

Over 50 years innovation in media technology

Today a world leader in digital security

© 2010 KUDELSKI GROUP / All rights reserved.3

STRATEGIC AXES

Comprehensive digital TV security

Converged content protection

Cross-network and cross-media

Applications & Interactivity

Logical & physical access

THE GROUP

2,000+ employees

2009 revenues of 1.05B CHF

Global presence

210MCHF invested in R&D

Accelerating investment in IPTV, hybrid DVB-IPTV & mobile TV

BUSINESS LINESSMART CARD TECHNOLOGY

PHYSICAL ACCESS SOLUTIONS

PROFESSIONAL AUDIO & HI-FI

DIGITAL TV SOLUTIONS

AT A GLANCE

© 2010 KUDELSKI GROUP / All rights reserved.4

Digital Television Business Lines

TRADITIONAL DTV BUSINESS LINES

RFI

RFI

RFI

AD1 Copy AD2 Copy AD3 Copy

Single Renter+$100K

Married w/Kids$50-$75K

Retired w/RV$75-$100K

Conditional Access and DRM Middleware and User Experience Advanced Advertising

© 2010 KUDELSKI GROUP / All rights reserved.5

Worldwide customer base

EchoStarBell ExpressVuLook Com.MicrospacePanAmSatGlobecastCraig WirelessWatch TVAtlantic Telecom CableEtc…

Digital+ (E)SkyItalia (I)Virgin Media (UK)Sogecable (E)TV Cabo (P)Mediaset (I)Etc…

Astro (Mal.)Hong Kong CableShanghai Cable (C) Beijing Cable TV (C)Starhub (Sing.)IMCL (India)PMSI (Phil.) C&M (Kor.)Qrix (Kor.)EMC (Taiw.)Space Com. (Jap.)IndoSat (Indon.)ZeeTV (India)Etc…

ACOM (Br.)Teleserv (Br.)TV Show (Br.)Supercable (Ven.)CBCWestStarAntilles&WirelessEtc…

Premiere (D) Kabel Deutschland (D)Canal+(F)Canal Satellite (F)NC Numéricâble (F)Canal Digitaal (NL)Telenet (B)Neuf CegetelJazztelHansenetEtc…

Polsat (Pol)Cyfra+ (Pol)Cablecom (CH) Teleclub (CH)Golden Channels (Isr.)Orbit (M-E)Etc…

• Serving over 120 TV operators worldwide• Kudelski technologies in more than 200 m STB• Exceeding 1B USD revenues

© 2010 KUDELSKI GROUP / All rights reserved.6

Hybrid & OTT

User Experience (UEX)

Multi-Screen

Change Drivers

- Leverage 2-way network

- Federate OTT elements

- Highly intuitive

- Short innovation cycles

- Blend web2.0 and TV

- TV Widgets

- Own & control the H-GW

- Whole content life cycle

- Horizontal CE devices

- Cloud- and client-centric

Success Drivers

- Seamless coexistence of card/cardless

- Most hybrid references in the industry

- Modular federated architecture

- Innovative multi-screen user experience

- Extreme flexibility through state-of-the-art run-time environment

- TV-centric workflow for widgets

- Relevant advertising

- Clean decoupling of Home Domain

- PRM as flexible fan-out into the home

- Nagra Media Player on PC/Mac

- Removable security solutions (CI, CI+)

- Broadest Mobile TV solution

Our Contribution

CHANGE DRIVERS, OPPORTUNITIES

© 2010 KUDELSKI GROUP / All rights reserved.7

MONETIZING MEDIA

SECURITY HEADEND

FE

DE

RA

TE

D S

ER

VIC

ES

SERVICES HEADEND

NAGRA Media CMS

NAGRA Media SDP/IMS

END TO END SOLUTIONS

NAGRA Media DTH

NAGRA Media CABLE

NAGRA Media DTT

NAGRA Media IPTV

NAGRA Media MOBILE

NAGRA Media ON DEMAND

NAGRA Media CONNECT

END TO END SOLUTIONS

CO

NS

UM

ER

RE

AL

M

USER EXPERIENCE CLIENT DEVICES

NAGRA Media PRM

OpenTV Middleware

NAGRA Media Player

CAM

DE

LIV

ER

Y

META DATA

Eclipse

NAGRA Media STUDIO

OSS/BSS

NAGRA Media STORE

RECOMMENDATIONS

OpenTV nX

WIDGETS

NAGRA Media ACCESS

CLK ELK SLKCARD EMBEDDED SOFTWARE

NAGRA Media PRM

NASC

OSF/OMAMOBILE

© 2010 KUDELSKI GROUP / All rights reserved.8

Marking Time

1990 2000 2010

Persistent Truths10+ years

Movements8-10 years

Trends3-7 years

Fads0-2 years

8

© 2010 KUDELSKI GROUP / All rights reserved.9 99

Industry Trends…

■ High Definition Content» Akin to shift from black & white to color» Moving from early adoption to mass

market» MPEG2 to MPEG4» Component to HDMI/HDCP

■ IPTV– Telco and hybrid deployments– Off-net cable strategies– IPTV over DOCSIS

■ Personal Video Recorders– Time-shifting becoming a mass

market activity– PVR is becoming a must have item– HD PVR becoming standard– Bigger disk, expandable solutions

■ Home Networking/Connected Home– Personal content access– Personal media players– Place shifting– Long-tail/broadband content access– Multi-room PVR– Any content, any device,

anywhere

■ On Demand Content– Push, pull and streamed VOD– Pay-per-view, subscriptions and

free VOD– Start-over, Catch-Up TV and

Network PVR

© 2010 KUDELSKI GROUP / All rights reserved.10

CONTENT IS STILL KINGViewers are overwhelmed with content choices, they need help finding relevant content among all the noise.

Each viewer has unique content preferences, but premium content continues to drive viewing desires.

Sophisticated, digital technologies deliver premium content faster and better than ever.

IT’S PERSONALViewers build a television identity profile which enables a truly personalized viewing experience.

Intelligent profiles allow for improved content discovery throughout the network, both global and among friends.

CONTENT ACCESS ANYTIME, ANYWHEREViewers have the choice to watch WHAT they want, WHEN they want, and WHERE they want.

Video On Demand surpasses broadcast to become the primary source of content consumption.

Viewers are able to access their content from any connected device

Long Term Market Assumptions

© 2010 KUDELSKI GROUP / All rights reserved.11

» Flexibility is not an option but a requirement – content anytime, anywhere, on any device

» People will still prefer to watch sports, movies, and most dramas as a large screen experience – but only news, sports, award shows, and ‘live’ events will be viewed in ‘real time’.

» There will continue to be the need for a content aggregator – PayTV operators today…could be new players tomorrow

» Content will be funded by advertising delivered through technically enhanced methodology

» Content and Advertising will become more integrated and often inseparable

» Key challenges will include DRM integration, Standardization, and Home Network Infrastructure

» 76% of TV Households will be outside the Western world in 2013 – creating a challenging mix of basic and advanced technologies

11

Guiding Principles for the next 10 Years

© 2010 KUDELSKI GROUP / All rights reserved.12

Driven By the User Experience Evolution

SURFLittle choice of what to watch,

when to watch

Broadcast Only, Standard Def, No

Search, No Personalization, No

Recommendations

SEARCHLots more content choices,

but too much noise

Broadcast, On Demand, PVR,

Home Network, Web Applications

Digital, High Definition, Better

Search, Time Shifted Viewing,

Primitive Recommendations

CONNECTNext Generation Services enable

advanced content discovery

• Complete Search

Search across all content sources

from any connected device.

• Social Recommendations

Share and receive recommendations

with a community of trusted friends.

• Content Heatmap

Access a real-time listing of the most

popular content, both globally and

among your friends.