OTTandnewdigitalopportuni1es

EgorYakovlev,FounderandBoardMember,TvigleMedia

October28,DigitalTVCEE,Warsaw

Globalconsumerinternetvideotraffic

Source:CiscoVNIglobalforecast2011-2016

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TVmarket,howweknowitforthelast50years,

approachingtheend?

What is changing?

•  End-user devices and distribution form-factors

•  Characteristics and content formats

•  Places, time of the day and video duration and how people consuming video

•  Form and context–  Fragmented–  Instant–  Actual

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NewOTTworld:whatitbringstothetable?•  Opportuni=es

–  Newaudienceanddistribu1onchannels–  Newmone1za1onstreams–  Reducedcostofdistribu1on–  Opportuni1estodoitnewway–  …?

•  Challenges

–  Cannibaliza1onofthecorebusinessesbythenewchannels–  Piracyeverywhere–  Lostofcontentdistribu1oncontrol–  Disappearedcompe11veadvantagesinnichesegments–  Technologicalsophis1ca1onofdistribu1onchannels–  Raiseddemandforaqualityofthecontent–  Thoughtcompe11onforthevieweraYen1onfromnon-TVsegments–  Interna1onalOTTmonstersapproachinglocalmarkets

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Wehavetolearnhowtocoopwiththisnewworld,

ordie,likeaprintpress.

ANDwehavetodoitFAST

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OnlinevideoboominginRussia

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0 50000 100000 150000 200000 250000 300000 350000

China

USA

Russia

Brazil

Japan

India

Germany

France

UK

Italy

TotalUniqueVisitors(000)

Onlinevideoaudienceacrosstheworld(top-10)

Source:comScoreVideoMetrix,December2014,15+

ü  ~63mlnviewers–audienceinDecember2014(15+)

ü  94%fromallonlineaudienceinRussia

ü  4,5%fromworldwideonlinevideoaudience

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InternetdynamicsinRussiaInternet-82millionsusers(66%ofpopula1on)+5%fromlastyear

BasedonTNSRussiadata,2015

67%/55mln

67%/21mln 67%/9mln

67%/34mln

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ConnectedTValreadyhere!

Isit’sbecameamagicwandfortheOTTsegment?

WhatissogoodwithSmartTV?•  Purelyconsumerstaffpeoplefamiliartobuyanduse

•  Easytouseandinstall•  Locatedatlivingroom–morethanoneviewer•  Longervideoviewingdura1on•  Willingnesstoseecataloguecontent,notonly“latestandgreatest”

•  Willingnesstopay,ifitsimpleandeasy•  Olderandmorea-laclassicalTVaudience•  Piracyprotected(almost,asoftoday)

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Smart TV overtaking traditional TVs

===

75

101

124

148

172

152

128

107

86

64

30 33 36 38 36

0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017

Smart TV Традиционное ТВ приставки

Global TV shipments

По данным Strategy Analytics, IHS, Bll Estimates

StreamingdevicesTradi1onalTV

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Growth dynamic of connected TV (world)

===

0,00

200 000 000,00

400 000 000,00

600 000 000,00

800 000 000,00

1 000 000 000,00

1 200 000 000,00

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

We are here

Overall number of connected Smart-TV

According to data BI Intelligence Estimates 12

TVsalesinRussia2011-2017

In2013RussiabecameN1marketofSmartTVsalesforLG

BasedonLGprognosisonRussianmarket 13

Socio-demographicprofileofSmart-TVusersinRussia

41% 59%

4%

30% 43%

16%

6%

2%

under 18

25-34

35-44

45-54

55+

18-24

DatafromGemius,June2015 14

WhatisaSmart-TVchallenges?

•  Userexperiencewithappsandinterface•  Closedmul1–plaqormenvironmentsfromdifferentproviders

•  Absenceoftradi1onalTVusagemodes,aszappingforVODlibraries

•  Absenceofasingleapplica1onstorewithextendedofferings

•  Difficul1eswithpromotoolsforappproviders•  Poorrecommenda1onengines

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HowOTTandSmart-TVmarketlookslikein3yearsinRussia?

•  Morethan65%allvideoviewswillbeonmobile,set-top-boxandSmart-TVdevices

•  OverallaudienceofOTT-videoreached100mlninRussiaonly

•  Monthlyview1mereached80hours•  AD-sponsoredOTT-marketreached$800mln•  70%ofvideocontent–local/russianlanguageproduc1on•  Upto25%ofit–specificallyproducedforOTT/secondscreen

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EgorYakovlevFounderandBoardmember,TvigleMediaSkype:egor.yakovlevEmail:egor.yakovlev@gmx.comTwiYer:@eyakovlevfacebook.com/egor.yakovlev

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