January 23, 2017

Mark Contreras, CEO, Calkins Media

OTT Summit

Strategy SignalsWhere are the eyeballs and dollars going?

Most Legacy Media Has Lost Time and Dollars Spent...Internet & Mobile Have Grown Both

Source: Source: Nielsen, Media Dynamics, comScore, ZenithOptimedia forecastseMarketer, The Diffusion Group

Time with OTT is projected to be 2 hours and 42 minutes a day per person by 2020.

OTT Consumption is Rapidly Growing, While Traditional Media Sees Declines

2008 2009 2010 2011 2012 2013 2014 2015 2016 201705

10152025303540

Newspapers Consumption per Day(minutes)

2008 2009 2010 2011 2012 2013 2014 2015 2016 20170:00

1:12

2:24

3:36

4:48

6:00

TV

Newspapers

OTT

Average Media Consumption per Day(HH:MM)

Mobile Desktop/laptop TV Radio Newspapers Magazines OTT

Media Consumption

AVERAGE DAILY CONSUMPTION (HH:MM)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2017 v. 2008

% Change

Mobile 0:32 0:39 0:50 0:46 1:28 2:15 2:37 2:54 3:08 3:18 519%Desktop/laptop 2:17 2:26 2:35 2:30 2:24 2:16 2:14 2:12 2:11 2:10 -5%

TV 4:14 4:27 4:24 4:34 4:38 4:31 4:22 4:11 4:03 3:58 -6%

Radio 1:42 1:38 1:36 1:34 1:32 1:30 1:28 1:27 1:25 1:24 -18%

Newspapers 0:38 0:33 0:30 0:28 0:24 0:20 0:18 0:17 0:16 0:15 -61%

Magazines 0:25 0:22 0:20 0:19 0:17 0:15 0:13 0:13 0:12 0:11 -56%

OTT 0:30 0:59 1:21 1:43 236%*Source: Source: Nielsen, Media Dynamics, comScore, ZenithOptimedia forecastseMarketer, The Diffusion Group

The Audience HAS Shifted

By 2020, there will be 97.7

million US connected TV

households, up from 88.7

million in 2016.

2015 2016 2017 2018 2019 20200

20

40

60

80

100

120

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

73.8

88.792.5 94.9 96.3 97.7

60.7%

72.5% 75.1% 76.6% 77.3% 77.9%

Connected TV households % of total households

Note: Connected TVs are TV sets connected to the internet through built-in internet capability or through another device such as a Blu-ray player, game console or set-top box (e.g., Apple TV, Google Chromecast, Roku).

Source: eMarketer, Oct 2016

CONTENTtext, photo, video,

audio

LEGACY NEO-LEGACY OTT SMART

TVGAME

CONSOLES

Audio

Cable TV Web/Tablet Roku Samsun

g X Box Alexa

Print Mobile Fire Vizio PlayStation

Google Home

Apple LG WIISonyOpera

Calkins Media Content Distribution Strategy

Currently or soon to be publishing on these platforms

Why Video? Why Now?Video advertising spend is growing

Source: Borrell

2011 2012 2013 2014 2015 2016 2018

$22.

97

$32.

62

$48.

26

$69.

50

$82.

68

$98.

58

$112

.10

Video Advertising (in millions)Calkins Media Markets

Source: webtrends, Nov 2016

Time Spent with OTT is SIGNIFICANT

95%OTT

202,199 Hours

2%Mobile

3,280 Hours3%

Desktop6,985 Hours

Total Time Spent Viewing Video by Platform

November 2016

OTT devices TV Set-top boxes

2.1

1.8

Average Number of Devices in U.S. Households

Source: Leichtman Research GroupFebruary-March 2016

Note: OTT devices include smart TVs and streaming media devices that connect a television to the Internet. Set-top boxes are the boxes that pay TV companies rent out to subscribers.

Among all U.S. households, the mean number of streaming-capable devices is 2.1 per household, compared to 1.8 pay TV set-top boxes.

OTT Devices Outnumber Cable Boxes

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

56.5 57.2 57.6 56.2 55.1 54.8 54.5 53.9 53.2 52.4

18.0 21.727.0

41.2

56.0

73.8

88.7 92.5 94.9 96.3

Cable and Connected Households (in millions)

Cable TV households Connected TV households

Streaming Households Surpass the Number of US Cable Households

Source: eMarketer, Oct 2016Note: Cable TV: households with a subscription to cable TV service Connected TV: households with at least one connected TV set, where at least one person of any age uses the internet through a connected TV at least once per month

Among Households in the Calkins Media Markets

Source: Scarborough, 2016; Simmons, Spring 2016

Streaming Has Caught Up to Cable in the Calkins Media Markets as Well

Cable Company #2

Cable Company #1

Uses a Streaming Service

202,531

446,379

726,776

Content Strategy

BIG IDEA 1

To take a print-centered newsroom and transform it

into a video-driven newsroom using existing people and

dollars.

Newsroom PeopleTraining & Development

Drew Berry & Associates, LLC300 E. Lombard St.Suite 840Baltimore, MD 21202410-814-7555 drew@drewberryassociates.com

Drew Berry

A two-time Emmy Award-winning President of Drew Berry & Associates, LLC, which is a media consulting agency

Berry has more than 25 years of experience in the television news industry in numerous markets including New York City, Philadelphia, Dallas, Atlanta and New Orleans.  He won his Emmys in his role as news director for CBS in Philadelphia  

Berry's experience includes teaching and practicing journalism as well as major involvement on various boards and committees

Nuts and Bolts

iPhones for newsroom staff HD cameras Editing stations Portable lights Microphones Tripods In-house studio Tricaster editing station Consultant for shows Consultant for news video In-house development of journalists Journalists trained to date; 100+

Show DevelopmentJames Andrew Miller

Award-winning journalist who has worked in politics, media, and entertainment in a career spanning more than 30 years

Executive VP of Original Programming for USA Network

Producer with CBS News and Senior Executive Producer of both Anderson Cooper 360 & Paula Zahn Now 

Author of the recently released NYT best selling book Powerhouse, The Untold Story of Hollywood’s Creative Artists Agency, Those Guys Have All the Fun, Inside the World of ESPN, and Live From New York, An Uncensored History of Saturday Night Live, His first book, RUNNING IN PLACE: Inside the Senate, was also a bestseller.

64 Hours of Video Published in October

Source: Limelight Analytics

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-160

100

200

300

400

500

600

700

800

0

10

20

30

40

50

60

70

80

90

393 396 398 415

620 613

526

437

539

649688

13.0 14.3 14.5 15.7

32.1

25.9 24.3 23.026.0

30.4

64.3

Videos Published Hours of Content

# Vi

deos

Pub

lishe

d

Hour

s of V

ideo

Con

tent

Calkins Print Video Plays Across All Devices

Source: Webtrends

Jan-14

Feb-14

Mar-14Apr-

14

May-14

Jun-14

Jul-14Aug

-14Se

p-14Oct-

14Nov

-14Dec

-14Jan

-15Feb

-15Mar-

15Apr-

15

May-15

Jun-15

Jul-15Aug

-15Se

p-15Oct-

15Nov

-15Dec

-15Jan

-16Feb

-16Mar-

16Apr-

16

May-16

Jun-16

Jul-16Aug

-16Se

p-16Oct-

160

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Total Video PlaysCalkins Print Properties

Calkins OTT AppsDistribution platforms for digital video streamed to your TV via the internet

Roku Amazon FireTV Apple TV

Calkins Philly: Comcast & Verizon VOD PartnershipDistribution is for entire Philadelphia DMA

BIG IDEA 2

Creating an OTT linear stream at a local broadcast TV station to

generate additional audience and revenue using existing resources.

VOD/Video on Demand Math Example• 100,000 monthly video views• $25/CPM, 100% sold out• Monthly Revenue - $2,500, Annualized Revenue -

$30,000

Business Models: VOD vs Linear Math

Linear TV Math Example: Based on 40 content minutes/20 (30 sec) ad minutes per hour

Ad Units/Hour

Ad Units/Day

Ad Units/Year

Revenue/Year

@$1/Spot 40 960 350,400 $350,400

@$5/Spot 40 960 350,400 $1,752,000

Business Model: VOD vs Linear Math

Trend of Roku, Amazon Fire and Apple TV Cumulative Downloads at One Local TV Station

Source: webtrends, iTunes, Amazon Developer, Roku Developer

Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-160

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

0

50,000

100,000

150,000

200,000

250,000DOWNLOADS AND TOTAL VIEW TIME

DOWNLOADS TOTAL TIME

DO

WN

LOAD

S

TOTA

L VI

EW T

IME

(HO

URS)

Linear ChannelSoft Launched 10/15

Linear ChannelHard Launch Jan

Source: Webtrends, November 2016

Mobile12%

Desktop9%

OTT79%

Share of Total Plays

Mobile1%

(3M, 40S)

Desktop2%

( 11M, 1S)

OTT97%

(1H, 37M)

Share of Total Time (with avg. view time per session)

Linear Drives Engagement

Source: Webtrends, November, 2016

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3,000LIVE STREAM PLAYS BY HOUR

OTT Live Stream PlaysWebsite Live Stream Plays

OTT

Pla

ys

Web

site

Pla

ys

TV is the NEW TV

AM PM

Good News

• Gateway to cable carriage, low power OTA, virtual MVPDs• Legacy TV sales reps can sell it• Preserves legacy TV pricing model

Bad News

• Traditional TV syndicators don’t have rules yet• It’s hard and requires a lot of planning• There is a hard cost (bandwidth) associated with delivery that scales quickly

Linear OTT Facts

Questions?