TU Media Corp'

1
Business Plans for Satellite DMB
Sep. 7, 2004
TU Media Corp.
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Table of Contents

• Service Concept
• Network Architecture
• Foundation of TU Media Corp.

I
Service Outline

• Paths to Convergence
• Outlook of Ubiquitous Network
• Significance of Contents
• Value Chain Analysis

II
Convergence Ubiquitous
III
Business Plans

• Targets Goals
• Market Outlook
• Long-term Biz Models
• Programming Strategy
• Marketing Strategy

3
?. Service Outline
1. Service Concept

• Satellite DMB is a new venture in broadcasting
  service, characterized by 3 key differentiators
  Mobile, Personal, Interactive.

Satellite DMB (Satellite Digital Multimedia
Broadcasting)
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?. Service Outline
2. Network Architecture

• Satellite DMB signals will be delivered via
  multiple paths Gap Fillers as well as directly
  from Satellite.
• Wireless carriers network provides for the
  return path for DMB service

Satellite
( East longitude 144 ?)
Ku-Band 13.82413.883GHz
Ku-Band 12.21412.239GHz
Gap Filler
Contents
S-band 2.630 2.655GHz
Program Provider
Satellite DMB Broadcasting Center
S-band
Vehicle Receiver
Mobile Receiver
VOD services
SK Telecom
Wireless Return Path
Terminal
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?. Service Outline
3. Foundation of TU Media Corp.

• TU Media Corp. is established on a strong
  business foundation by aggregating rich resources
  from diverse shareholders.

Toshiba/MBCO
SK Telecom

• Jointly Owns Satellite
• Cross-investment
• Shares Intellectual Property Right

• Provides Transmission Network
• - Operates the Satellite
• Supports the Infrastructure
• - Shares Distribution N/W
• - Provides Technology

TU Media Corp.

• Operates the Platform
• - Installs and operates Broadcasting
• Center, Gap Filler, etc.
• - Performs Marketing
• - Promotes Relevant Business
• New Contents Distribution Window
• - Expands Customers Accessibility

Terrestrial PP, CP
Equipment Manufacturer

• Provides Programs and Contents
• Expands Business Opportunity
• by Inception of New Platform

• Produces and supplies
• Mobile Receivers
• Provides Equipment
• including Gap Fillers

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?. Convergence and Ubiquitous
1. Paths to Convergence

• Key Drivers for Convergence include Technology,
  Market and Public Policies.
• Digitalization evolves toward Convergence through
  either Bundle or Integration of services and
  products, Creating New Values for the Consumer.

Key Drivers in Convergence
Evolution in Convergence
Bundle
Convergence
Value Chain Bonding Level

• Effect of Economies of Scale depending on Bond in
  Value Chain
• Cost Reduction of Customers

Creation of New Value
Digitalization
Integration

• Increase of Process Speed
• Expansion of Memory Capacity
• Improvement of IO Equipment

• Providing of Multi-service followed by
  High-performance
• Multi-function
• Equipment, Platform and Network

Service Integration Level
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?. Convergence and Ubiquitous
2. Outlook of Ubiquitous Network

• Ubiquitous network provides Seamless
  communication environments anywhere, anytime for
  any device such as Mobile phone, TV, Game device
  and PC by networking every type of terminals

TV
PC
Broadband
STB
Ubiquitous network exceeds the technical
limitation of conventional networking and
provides audio, video and information services
through various forms of terminal devices.
Mobile Environments
Lap top
Constant Network Environments
PC
Barrier-free Interface
Lap top
Game
Server
PC
IPv6
Mobile Phone
PDA
Mobile PC
Internet
Main Frame
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?. Convergence and Ubiquitous
3. Significance of Contents

• Competitive Struggle among many Platforms will
  enhance the significance of Contents, while
  Technological Advance will increase the
  importance of Personalized Interactive services

One-Source Multi-Use over Multi-Platform
Personalized Interactive Services
Concept
Active User
Passive Audience

• Diverse Targeted Contents Offering through
  Increased Channels
• Users Choice of Contents based on their Needs
  Preferences

Example

• Personalization - EPG (Electronic Program
  Guide)
• ? Easy Personalized Retrieval/Selection
• - PVR(Personal Video Recorder) ? Provides
  Flexible Viewing Environment
• Interactive - Game, Quiz, Betting etc ?
  Participatory Serivce - VOD ? Users Active
  Control

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?. Convergence and Ubiquitous
4. Value Chain Analysis

• Satellite DMB service service represents a good
  example of Convergence and Ubiquitous Network
• Players in the Broadcasting Industry are
  predicted to trigger more Vertical Horizontal
  Integration in an attempt to gain competitive
  edges thru Economies of Scale/Scope

Broadcasting PP

• Economies of Scale
• Synergy Enhancement with Operation

TV Radio
Wire Wireless
MSP
MPP
PC
MSO
PDA
OTA
VMT
DBS
Satellite DMB
Mobile Phone

• Contents Sharing
• Merchandising, Production Capabilities

Bundling with Telecom
High Speed Internet, VoIP
Is Mobile Broadcasting Something that people
would be willing to pay for? If so, How Much?
Key Questions
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?. Business Plans
1. Targets Goals

• Main target at the initial stage includes young
  office workers, and the number of subscribers is
  expected to reach 8 millions by 2010.

Target Customer
Sub Target
Main Target
Mid thirties Mid forties Office Workers
Middle High School Students
Early twentieth Early thirties Office Workers
College Students
Receiver Preference
High-Tier Mobile Phone-combined with Wireless
Internet Function
Low-Tier Mobile Phone-combined Vehicle
Receiver
Expected Number of Subscribers
(Unit Ten thousand)
2010
2009
2008
2007
2006
2005
800
720
600
400
220
105
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?. Business Plans
2. Market Outlook

• Demand for broadcasting service for individuals
  is increasing according to market research data.

Market Research
JUNEs Broadcasting Channel Occupation Rate
S-DMBs Subscription Intention Rate
32.3
61
57
20.4
20.5
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First (Sep-01)
Second (Feb-02)
Third (Nov-02)
(Feb-03)
(Mar-03)
(Apr-03)
Source From SKT research
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?. Business Plans
3. Long-term Business Models

• Short-Term Successful Build-up of Mobile
  Broadcasting Industry
• Long-Term Establish solid position as a media
  company through competence in platform and
  differentiated contents power, creating various
  business models

Phase ? (2008 )
Phase ? (2006 2007)
Phase ? (2004 2005)
Product
Video Audio Data Service Related to Wireless
Internet
Differentiated Contents Power Introduce and
Expand Data Broadcasting
Stabilize Profitability of Other Additional
Services (Ads, Shopping, etc.)
Mobile Phone-combined Vehicle Receiver After
Market Portable Receiver
Various Mobile Phone-combined Vehicle Receiver
Before Market
Expand Advanced Receiver Considering
Convergence and Ubiquitous Environment
Receiver
Monthly Fee- Basic Fee- Pay Channel
Monthly Fee PPV Films, Downloading, etc. Ads
Shopping, etc.
Monthly Fee, PPV Increase Profits in
Ads/Shopping T-Commerce
Profit Model
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?. Business Plans
4. Programming Strategy

• It is compelling to produce and distribute
  programs that fit the attributes of Sate DMB ?
  Requires Cooperation between Operators,
  Producers, and Distributors

Programming Triple U Strategy

Product Differentiation thru Mobile Contents
Universal Competitive Programs

• Recycle of Proven Popular Contents Power

• Target, TPO, Mobile Characteristics

Universal
Unique
OTA Signals PP
TU Owned Operated Channel

• Popular Over-the-Air Programs and Cable Channels

• Key Concept Convergence, Personal Use,
  Exclusivity

Unified
Differentiated Contents by PP
Enhancement of Audio Channels

• New Audio Programming for various Target
  Segments, Genres, Tastes

• Encourage production for Mobile contexts

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?. Business Plans
4. Programming Strategy - Packages

• TU Media Corp. will deliver unique contents
  suitable for mobile broadcasting (TU Channel)
  as well as existing programs provided by
  terrestrial TV.
• Offers 13 Video channels, 25 Audio channels, 3
  Data channels

Video Programming
Audio Programming
Terrestrial TV
PP Channel
TU Channel
Contents
Programming
4 Channels KBS1, KBS2, MBC, SBS Utilizing
Black Out Time
8 Channels News, Music, (film),Drama, Sports,
Education, Entertainment Pay Channel Pay per
View Maximize Customer Satisfaction
1 Channel Entertainment Information Secure
Competitiveness
Non-stop Music Genre

• Age and Moody
• Priority Given to Popular
• Genres
• 1012 Channels

Music
DJ Music Entertain

• Star DJ / Amateur DJ
• 5 Channels

Strategic Audio

• Comedy Channel
• Audio Book
• 5 7 Channels

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?. Business Plans
5. Marketing Strategy - Pricing

• TU Media Corp. offers competitive and simple
  pricing schemes based on consumers willingness
  to pay and competitive pricing for substitutes.

• Only impose onetime fee of around 20,000 won
  on each new subscriber

Basic Pricing Scheme
Subscription Fee
New Subscription
B A S I C
Video
Basic Channel

• Monthly Fee 12,000 won

Audio
Premium Channel

• Additional fee on a monthly basis
• Prospective fee 5,000 won/month

PPC
Pay Per View

• 7,000 won per Movie

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?. Business Plans
5. Marketing Strategy - Terminals

• Users have access to satellite DMB service in
  four ways mobile phones, stand-alone portables,
  VMT and PDAs.

Vehicle Mounted Terminals
Mobile phone-combined
Maximize consumers convenience with diverse
forms of devices
PDA-combined
Portable stand-alone
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?. Business Plans
5. Marketing Strategy - Distribution

• Maximize synergy with wireless carriers
• Gradually expand from After-Market to
  Before-Market in the vehicle market

Receiver Type
Mobile Receiver (Mobile Phone-combined, PDA-combin
ed and stand-alone)
Vehicle Receiver
After Market
Before Market
Contract Type
Comprehensive Service Consignment Contract
Contractor
Telecommunication Company
Manufacturer
Vehicle Maker
Sales
Telecommunication Companies Agent
Manufacturer Agent(A/V Shop)
Vehicle Maker Agent (Branch/Dealer)
Subscription
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?. Business Plans
5. Marketing Strategy - Coverage

• Focus on Seoul area and other metropolitan
  cities at the initial stage
• Blanket entire commuting routes for seamless
  coverage of service
• Expand the coverage gradually from metropolitan
  areas to the entire country

Greater Seoul Areas 26 Major Cities
The rest 58 Cities
Other Areas
Ground (Main Streets)
Out-door
Subway
Highways
Tunnels
In-door
Ground (Indoor)
Underground (Under the Building)
Phase 1( 05)
Phase 2(06)
Phase 3(0708)
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• End of document
• Thank U