Motricity Analyst Presentation

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Connected and Mobile 2006
Elizabeth Mackey VP/GM eReader/Motricity IDPF
2006
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Motricity Corporate Overview
World leader in Mobile Marketplace Management
delivering the right content, to the right
device, at the right time EVERY TIME
What We Do
Leading Customer Base

• 120MM consumer footprint
• 600,000 digital media files
• 10,000 content providers in our Network

Large Footprint

• Global Presence North Carolina (HQ), London,
  Beijing, Munich, San Diego
• 300 Employees

Growing Team
StrongInvestors
ExternalValidation
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Leading the Mobile Market

• Enabling more than 120 million subscribers
  worldwide
• Delivered over 200 million paid downloads in 2005
• Powered over 500 million in content revenues
• Over 10,000 content providers
• Over 600,000 applications and digital media
• Over 200 handsets models have been tested and
  certified by Motricity

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Case Study Raising the Bar at Cingular
Powering more than 1 million per day in mobile
content revenues for the Worlds 3rd Largest GSM
carrier with 51 million subscribers
Cingular 1Q05 Financial Release
Data ARPU
Cingular introduces Motricitys Fuel Platform
quarterly Data ARPU increases from 1.10 to 3.70
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• Longtime leader in ebooks
• 0ver 17,000 titles
• Supports
• PCs/laptops Windows, Macs
• PDAs Palm, Windows Mobile, Pocket PC
• Phones Symbian Series 60
• and UIQ
• Own ecommerce site eReader.com

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Annual Renewal of Devices is Strong

• Mobile Phone Shipments reached 120 mill in 2005
  and roughly remain at this level in subsequent
  years

million
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Leaps in Smartphone User Growth

• Smartphone users increase from 2 of wireless
  subscribers in 2005 to over 25 of base by 2010

million
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User Base Grows Incrementally

• On the user side, subscriber penetration will
  reach 70 by 2006 and 75 by 2010

million
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Access to a Diverse Mix of Users
Age
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We Live in a Mobile Universe

• 14 million users download ringtones, 70 are
  under 35
• 10 million users download games, 50 are under 35
• Downloading is EASY

• Add photos of users

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2006 Premium Content Sales Mix
Information Services Applications
Personalization Games
Entertainment
The North American premium content market is
projected to finish 2006 at 2.8 billion.
Source Strategy Analytics, 2005
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North American Premium Content Market
Personalization Entertainment Information
Services Applications
2.8 Billion
35 CAGR from 2006 to 2010
In 2010, North America will grow to a 9.1
billion dollar market.
Source Strategy Analytics, 2005
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Portability creates demand

• iPods music anywhere, anytime
• Video iPods video anywhere, anytime
• Play stations gaming anywhere, anytime
• DVR not quite, but they watch more TV
• Web reading anywhere, anytime

And this TREND started in PRINT!
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More time spent with mobile mediaPER DAY
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If Youre Not on Their Screen, Youre Not in
Their World

• The one item we never leave home without
• Communication
• Information
• Entertainment
• Work applications
• Productivity
• Camera

In the US, in 2005 31 million users downloaded
575 million games, graphics and
ringtones totaling 1.3 billion in revenue
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Approaching the Final Frontier of Portable
Convergence
Multiple types of Infotainment
Multiple types of Communication
Multiple types of mCommerce
Music Video Browsing Games Books
Calls Text messaging Picture messaging Email
A la carte Subscription Premium SMS


All in ONE place
And improvements in screen size, pixels and
color depth for video . this all is GOOD for
BOOKS too.
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Some Challenges We Still Face

• Multiple operating systems
• Palm
• Windows
• Symbian
• SONY
• ETI
• RIM
• iPod
• PCs
• Macs

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And More Challenges

• And multiple devices from multiple manufacturers
• Treos
• Blackberries
• New entrants SONY, IREX, Hitachi

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The Killer device

• Its what we all want
• We arent there yet
• The 100 computer one laptop per child
• In production March 2007, with ebook screen
• 7 million units, 7 countries WW

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The Killer Device

• Apples iPod
• For perspective
• 13.5 million iPods sold vs. 120 million phones
  (US, 2005)
• 50 years of technology in portable music
• Consume music differently
• By song, Over and over
• How many times have you heard your favorite song,
  how many times have you read your favorite book
• Set trends for music and videos, but proprietary

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What we can do Enhance the functionality

• OTA delivery
• MP3 support
• Search inside the book
• Multiple language support
• Downloadable catalogs
• Support standards

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What Publishers can do

• More titles
• Good Filters are critical
• Info Snacks - shorter and smaller
• Niche markets and the long tail
• New models subscriptions

Chris Anderson John Kilcullen
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Marketing opportunities

• Critical to reaching the mobile user
• Community programs
• social networking
• Loyalty programs
• Subscriptions
• iAmplify audio and video
• direct to the consumer
• _at_ 10 month

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More Marketing Opportunities

• Bundles
• EVERY mobile device should come with a free book
• Title bundles

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Even More Marketing Opportunities

• Push technology direct delivery to the device
• Harlequin on the GO
• Chapter a day
• Subscription based/
• 2.49 a month
• SMS alerts

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Not to be forgotten

• Libraries remember when libraries were dying?
  Now I cant find a parking space
• Opportunity to try before you buy
• Need to work out better model among publishers,
  libraries and software and hardware vendors

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Online Marketing Snapshot

• eCommerce has grown 25 annually in prior 2
  years, but at 143 billion less than 2.5 of
  total US retail sales HUGE Growth potential
• Best Sources for Website visitors
• Paid Search
• Search Engine Optimization
• online advertising

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eBooks Today

• 72 of ebook readers shop for books at least 3x a
  month
• 92 have never been able to borrow an ebook from
  a library
• 99 say GOOD SELECTION is critical, but only half
  of them find the selection above average
• Pricing and DRM remains a challenge

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But keep in mind

• Online shopping is directed activity
• Online shoppers price compare, but they dont
  window shop
• Use online stores as a search tool rather than
  shopping as entertainment
• 20-30 of sales online are web exclusive products
  NOT available in stores

Marketing Sherpa ecommerce benchmark guide 2006
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eBooks Tomorrow

• There is tremendous upside potential for eBooks
• The market and devices are ready
• Together we can take it to the next level

35 CAGR from 2006 to 2010
2.8 Billion
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Connected and Mobile 2006
Elizabeth Mackey VP/GM eReader/Motricity IDPF
2006