Covering Entertainment in the Digital Age

1

• Covering Entertainment in the Digital Age
• Western Knight Center
• Verizon Wireless
• Gregg YacovoneDirector of Marketing
• June 2005

2
Wireless Trends

• Market penetration growth from youth and credit
  challenged
• Wireless Product usage is becoming more
  widespread
• B2B
• High speed data access
• Consumer
• Text/Picture/video messaging
• Gaming
• Video Content
• Mobile Music
• Location Based Services
• Content differentiation will become more
  significant
• MVNOs entering wireless market
• New distribution model for entertainment industry

3
Youth and Wireless Growth

• 8 million new wireless customers from the youth
  segment expected over the next three years

4
The Wireless Industry is (Still) Changing
Insert pic
Convergence and Multi-media
Horizontal Vertical Productivity Applications
Voice Only
Painful Data
2G
2.5G
3G
1G
1980s
2000
2004
2005
Wireless Broadband services will do for the
mobile device what landline broadband did for the
desktop
5
Voice Still Dominates Revenues, But Industry ARPU
Expected to Decline
Data ARPU expected to offset the decline in voice
but not completely
U.S. Wireless Monthly ARPU Forecast
Data as of Revs
1.4 2.6 4.4 6.3 8.4 10.4 12.5 15.0 16.6
Are the U.S. analysts correct?
Source Analyst Composites.
6
Korea Has Shown What is Possible in Just 4 Years
Data as a Percent of Total Service Revenues (SKT
Telecom)
7
And We Are Tracking Well with Their Results
Cumulative Active BREW Users (Time-adjusted)
Active Subscribers
Subscribers by Quarter After Initial Launch of
BREW Services
8
Our 3G Network Open the Floodgates for Richer
Services and Content
9
Transforming the Wireless Experience
VIDEO Play video-on-demand at TV-like quality.
MUSIC (Future) Store and play hundreds of
MP3-quality songs.
GAMING Play 3D and multiplayer games.
IMAGING Take store multi-mega-pixel digital
photos video.
MESSAGING Send multi-media messages, IM and email
on the go.
GPS LOCATION SERVICES (Future) Find whats nearby
and get turn-by-turn directions.
10

• Entertainment
• Music Videos VCast Encore
• E! Entertainment
• TV Time Movie Trailers
• Desperate Housewives
• 24
• Soap 411
• Simple Life 3
• Sesame Street Nickelodeon
• Comedy Central Just for Laughs
• Daily Show with Jon Stewart

11

• Sports
• Fox Sportswire
• ESPN News
• ESPN Original Entertainment
• Sportscenter
• NFL Sunday Countdown
• Nascar ToGo
• NBA TV

12

• News Information
• NBC Mobile
• News updates
• Today Show Interviews
• CNNtoGo
• Updated Hourly
• CBS MarketWatch
• Market Updates
• Interviews
• AccuWeather
• National Weather
• City Forecasts

13

• 3D Gaming
• Urban Asphalt GT
• Kingdom Hearts
• Tom Clancys Splinter Cell
• Tony Hawk Pro Skater
• Spiderman 2
• SWAT the movie
• Evil Knievel
• The Incredibles
• Grizzly Hunting
• Etc.

14
Mobile Music Ring Back Tones

• Callers hear music or voice instead of
  traditional ring
• Allows personalization
• Customization options
• All music types

15
Mobile Music Multimedia Player

• MP3 market is hot!
• Singles being released over wireless
• Mobile phones provide music service capability
• Capable of storing hundreds of songs
• Removable memory

16
The Landscape is changing

• Mobile Virtual Network Operators (MVNOs)
• Boost Mobile
• Virgin Mobile
• ESPN
• Disney
• Ampd
• Movida
• Etc.

17
Closing

• Growth in wireless is driven by
• Youth segment
• Content and products
• Content and MVNOs will drive greater
  segmentation
• Entertainment industry and wireless will
  integrate
• New distribution vehicle for the entertainment
  industry
• Alternate revenue source for the industry
• Things to watch
• Location Based Services
• Music Services