Universal Music On-Line

1
Universal Music On-Line

• Barney Wragg
• VP eLabs
• Universal Music International

2
Over 130 licensed services live with Universal
content in Feb 05

• 7Digital
• Alapage.com
• AOL Germany
• AonMusicdownload
• Apple iTunes
• Asendis
• Belgacom
• Bild
• CDON
• Chello
• Conrad
• CTS Eventim
• Dansk Supermarket
• DirectMedia
• eCompil
• Eircom
• EUK

• Fame.nl
• FNAC
• Free Record Shop
• GWR
• HMV
• Home Entertainment
• ILSE Media
• i-m
• Karstadt
• KPN
• M6
• Media World Compra
• Mediamarkt
• Medion
• Messaggerie Digitale
• Mixery
• MSN

• Musicbrigade
• Musicload
• musiczone
• mycokemusic
• Napster
• ninemsn
• NTL Broadband Plus
• O2
• OD2
• Optus
• Orange
• Oxfam
• Packard Bell
• Planet Internet
• PRO7
• ProMarkt
• pt.com
• Quelle

• RTL
• Sony Connect
• Telecom Italia
• Telefonica (Terra Networks)
• Tesco
• Tiscali
• UM-105 Mega Store
• UM-RADIOMONTECARLO
• UnitedMusic Mega Store
• van Leest
• Veronica
• Video Networks
• Vidzone
• Virgin Megastores UK
• VirginMega France
• Wanadoo
• Wippit
• WOM

3
Through which..

• Universal is currently working with services in
  19 countries
• 16 in Western Europe
• 3 in Asia-Pacific
• Ongoing discussions in numerous further
  territories
• Universal content is legitimately available on
  over 130 stores
• Provided by digital music-specific brands, CE
  vendors, traditional music retailers, cross-media
  groups, FMCG brands etc.
• Over 6 million audio tracks delivered in total to
  business partners

4
Content availability

• Major invested in ex-US content management
  systems
• Large investment in on-line clearance to ensure
  accurate artist payments
• The entire active catalogue is available in each
  country
• Deleted and important product is being added all
  the time
• All new releases are available on or before
  physical release date
• A large number of digital special products are
  available on a weekly basis

5
Growing Business

• On-line sales week of December 25th 2004
• On-line sales for all of 2003!
• Growth continues into January and February 05

6
Multiple Business Models

• A La Carte Downloads, Mobile and Internet
• Subscription
• Video-on-Demand
• Interactive Television
• Back Ground Music for Web-logs
• Universal has a policy license all business
  models provided
• It is secure meets reasonable DRM requirements
• Is a commercially viable

7
Key factors for success

• Ease of use
• Good user interface
• Marketing
• Traditional market channels are the most
  effective
• Simple pricing model
• Part of a good user interface
• Range and knowledge of repertoire
• Attractive music store, offering product people
  are looking for local and international product
  is key

8
Challenges for future development

• Lack of secure interoperability
• People expect purchased music to play on all
  devices
• Lack of interoperability confuses and deters
  consumers
• Rampant Piracy
• Distorts the economics of the market when product
  is widely available for free
• Discourages investment in legitimate propositions

9
Summary

• On-line music market is only just beginning
• Universal embracing all new business models
• On-line shows major growth, but is still a small
  part of the traditional record company
• Growth in the market means potential for others
  to benefit
• Europes major on-line retailers do not come from
  the traditional retail sector
• Growth is hampered by lack of interoperable
  systems
• Piracy is major inhibitor to growth of the
  business