P R O V I D I N G I N - D E P T H I N S I G H T , D A T A , A N D A N A L Y S I S O F

E V E R Y T H I N G D I G I T A L .

THE FUTURE OF TV 2017TH I NKI NG O UTSI DE

TH E BO X ABO UT H O W WE CO NSUM E VI DE O

TRADITIONAL TV WAS LINEAR —A SET TIME, ON A SET NETWORK

BUT NEW MEDIA SOURCES CONTINUE TO GARNER A LARGER SHARE OF ATTENTION

Note: Other media includes time-shifted TV, TV-connected devices, radio, and total internet usageSource: Nielsen, Rentrak

P E R C E N T A G E O F T O T A L M E D I A U S A G E A M O N G U S A D U L T S

52% 48% 45% 40%

48% 52% 55% 60%

2013 2014 2015 2016

AllOtherMedia

LiveTV

Millennials43%

S H A R E O F C O R D - C U T T E R S O R C O R D - N E V E R S W H O A R E

M I L L E N N I A L S

WHICH IS A BIG REASON WHY MILLENNIALS ARE CUTTING THE CORD

n=25,000 US consumersSource: GfK MRI Survey of the American Consumer, Fall 2016

Cordless30%

S H A R E O F M I L L E N N I A L S W H O A R E C O R D - C U T T E R S O R

C O R D - N E V E R S

CONSUMERS OF ALMOST ALL AGE GROUPS ARE WATCHING LESS TRADITIONAL TV

Source: Nielsen, January 2016

2-11-26%

12-17-38%

18-24-39%

25-34-34%

35-49-19%

50-64-9%

65+2%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

Q32012 Q32013 Q32014 Q32015 Q32016

T I M E S P E N T W A T C H I N G T R A D I T I O N A L T V , B Y A G E G R O U P

THAT’S HURTING EVEN TV STRONGHOLDS, LIKE SPORTS

Source: Nielsen, WSJ

96.17

94.4

92.94

90.99

89.01 88.78

Jul'14 Feb'15 Jul'15 Feb'16 Jul'16 Aug'16

Lost7.4Mhouseholds in2

years

H O U S E H O L D S W I T H E S P N( M I L L I O N S )

NBCSundayNightFootball: -10%

FoxSunday: -7%

CBSSunday:-6%

CBSThursdayNight:-15%

ESPNMondayNight:-12%

N F L R A T I N G S( R E G U L A R S E A S O N 2 0 1 5 V S . 2 0 1 6 )

55 52 5045

5954 54

49

CBS ABC NBC FOX

2010 2015

MEANWHILE, TRADITIONAL TV AUDIENCES ARE GETTING OLDER

Source: The Sternberg Report, Nielsen

M E D I A N V I E W E R S H I P A G E O F B I G 4 B R O A D C A S T N E T W O R K S

209 212260 273

325357 375 362

2009 2010 2011 2012 2013 2014 2015 2016

LESS ORIGINAL CONTENT IS BEING MADE FOR THE FIRST TIME EVER

Source: FX Research, December 2016

S C R I P T E D O R I G I N A L S E R I E S O N T R A D I T I O N A L T V ( U S )The#ofbroadcast&cablescriptedoriginalseries

dipped forthefirsttimeYoY

$54$57

$61$63

$67$70

$74

2010 2011 2012 2013 2014 2015 2016

AND PAY-TV PRICES HAVE FINALLY SURPASSED WHAT CONSUMERS ARE WILLING TO PAY

$72

$60

Upperlimitconsumersarewillingtopay

Lowerlimitconsumersarewillingtopay

n=4,000Source: Activate

M O N T H L Y P R I C E O F E X P A N D E D B A S I C C A B L E ( U S )

THAT DOESN’T MEAN TV IS DYING — JUST THE DEFINITION IS CHANGING

Source: Gfk MRI Survey of the American Consumer, Fall 2016

“Millennials are most likely to define ‘TV’ as anything they can watch on any device — a TV,

laptop, smartphone, or tablet.”

IT’S NO LONGER JUST TV NETWORKS

n=1,309 US consumers who watch at least five hours of TV per weekSource: Hub Research, January 2017

75%

33%

45%

72%

TVNetworks

16-24YearsOld 55+YearsOld

Q : H E R E A R E S O M E T E R M S R E L A T E D T O T V . W H I C H O N E S C O M E C L O S E S T T O W H A T Y O U T H I N K O F W H E N Y O U T H I N K O F T V ?

IN FACT, LOYALTY TO TRADITIONAL TV NETWORKS IS DIMINISHING

n=1,309 US consumers who watch at least five hours of TV per weekSource: Hub Research, January 2017

Only13%saythatnetworkbrandsareabigfactorintheirdecisionaboutwhichshowtowatch

Lessthanhalf(41%)canidentify theoriginalnetworkofashowthatairedonanSVODservice

SO WHY IS THIS HAPPENING?

DIGITAL DISRUPTION

LiveTV47%

Digital28%

Other26%

DIGITAL IS EATING AWAY AT LIVE TV

Note: Other = time-shifted TV & radioSource: Nielsen

LiveTV39%

Digital39%

Other22%

Q32014 Q32016

S H A R E O F M E D I A T I M E S P E N T P E R D A Y P E R A D U L T , B Y F O R M A T ( U S )

IT’S STILL GROWING, UNLIKE TRADITIONAL TV

Source: eMarketer, BI Intelligence

C H A N G E I N A V E R A G E T I M E S P E N T P E R D A Y W I T H M E D I A ( U S )

17%15%

7%6%

5% 3%1%-2% -3% -4% -2% -2%

2012 2013 2014 2015 2016 2017

Digital TV

64%57%

53%

31%38% 40%

2014 2015 2016

Set-TopBox Online

AND IT’S BECOMING A TOP CHOICE FOR VIDEO CONSUMPTION

Q: What is the main source you use to watch your favorite program? Source: Hub Research, n=1,200

T O P S O U R C E F O R C O N S U M I N G V I D E O C O N T E N T ( U S )

49.5 49.3 49.2 49.0 48.8 49.1 49.1 48.9 48.8

51.2 52.053.0 53.5 54.3

55.356.3 57.0 57.8

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316

TV Broadband

MEANWHILE, CONSUMERS ARE SHIFTING FROM CABLE TV TO BROADBAND

Source: Leichtman Research Group

TotalSubscrib

ers(M

illions)

U S C A B L E S U B S C R I B E R S , B Y S E R V I C ETVdown1%,broadbandup13%fromQ314

CREATING AN INCREASE IN BROADBAND-ONLY HOUSEHOLDS

9.2 9.86 10.8912.09

14.816.3

18.019.9

21.9

2012 2013 2014 2015 2016 2017 2018 2019 2020

B R O A D B A N D - O N L Y H O U S E H O L D S I N T H E U S( M I L L I O N S )

Source: SNL Kagan

2016-2020:14%CAGR

4:104:48

5:095:28 5:43 5:53

4:38 4:31 4:22 4:11 4:05 4:00

2012 2013 2014 2015 2016 2017

Digital TV

SO DIGITAL MEDIA CONSUMPTION WILL CONTINUE TO GROW, WHILE TRADITIONAL STUMBLES

Source: eMarketer

A V E R A G E T I M E S P E N T P E R D A Y W I T H M E D I A ( U S )

+41%vs.2012

-14%vs.2012

$74.50$73.70

$42.80

$77.40

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

2013 2014 2015 2016 2017

WHICH IS CAUSING A SHIFT IN HOW MARKETERS SPEND THEIR MONEY

Source: IAB, PwC, BI Intelligence estimates

U S D I G I T A L V S . T V A D S P E N D ( B I L L I O N S )

Digitaladspendtosurpass TVforthe

firsttime

EXPLOSION OF SCREENS

72%

44%

18%12%

78%

54%

22% 19%

84%

61%

28% 25%

Smartphone Tablet MultimediaDevice SmartTV

2014 2015 2016

HOUSEHOLD PENETRATION OF MAJOR DEVICES CONTINUES TO INCREASE

Note: Multimedia Device = Apple TV, Amazon Fire Stick, Roku, Google Chromecast, etc.Source: Nielsen

D E V I C E S I N U S H O U S E H O L D S , B Y P E N E T R A T I O N

AND CONSUMERS ARE SPENDING MORE AND MORE TIME WATCHING VIDEO ON THESE DEVICES

Source: Ericsson

P E R C E N T A G E O F M O B I L E D A T A T R A F F I C V O L U M E F R O M V I D E O

2014 2016 2022

45% 50% 75%

WHICH IS SEEMINGLY EATING AWAY AT TRADITIONAL TV

Note: Digital TV = connected TVs, desktops, smartphones, and tabletsSource: Nielsen

1,455

1,143

1,3471,431

TraditionalTV DigitalTV

WeeklyaverageduringQ12015 WeeklyaverageduringQ12016

-7%YoY +25%YoY

V I E W I N G T I M E B Y U S A D U L T S ( M I N U T E S )

23%

15%17%

31%

20% 19%

Browsetheinternet,relatedtocontentI'mwatching

Watchaprogramonmymobile device

Online discussions aboutthecontentI'mwatching

2014 2016

AND EVEN CONSUMING ATTENTION DURING TRADITIONAL TV VIEWING TIME

Source: Ericsson, 2016

S E C O N D S C R E E N U S E W H I L E W A T C H I N G T V ( U S )

MOBILE IS TAKING OVER

OVERALL TIME SPENT ON MOBILE IS SKYROCKETING

Source: comScore, 2016

409,847

621,410778,954

864,32877,081

97,440

118,299124,787

June'13 June'14 June'15 June'16

MobileApp MobileBrowser

U S D I G I T A L M E D I A T I M E S P E N T O N M O B I L E( M I L L I O N S O F M I N U T E S )

AND CONSUMERS ARE SHIFTING THEIR DIGITAL VIDEO TIME TO MOBILE DEVICES

7%12%

27%

44%

51%

2012 2013 2014 2015 2016

U S M O B I L E V I D E O C O N S U M E R T I M E S P E N D, % O F T O TA L T I M E S P E N T O N O N L I N E V I D E O

Source: Ooyala Global Video Index

Mobilevideoviewingsurpasses

desktop forfirsttime

19%

23%

33%

34%

39%

50%

FileSharing

WebBrowsing

Downloads

Audio

Social

Video

IN FACT, MOBILE VIDEO GROWTH IS SET TO OUTPACE ALL OTHER APPLICATION CATEGORIES

Source: Ericsson Mobility Report, November 2016

M O B I L E T R A F F I C , B Y A P P L I C A T I O N C A T E G O R Y( C A G R 2 0 1 6 - 2 0 2 2 )

WHICH IS LEADING TO INCREASED CONTENT THAT IS TAILORED TO MOBILE SCREENS

33%

43%

33%

63%

75%

54%

Desktop Mobile Tablets

2014 2016

INCLUDING VIDEO CONTENT THAT IS 10 MINUTES OR LESS

How to read: Viewers watched desktop videos less than 10 minutes 33% of the timeSource: Ooyala

S H O R T - F O R M C O N T E N T S H A R E O F T I M E W A T C H E D , B Y D E V I C E( G L O B A L )

91%

74%

64%

10.1

1.9

8.3

3.2

ProfessionalContent Pro-AmandAmateurContent

2011 2016

AND AMATEUR PRODUCED CONTENT

n=266 millennials aged 19-30Source: Boston Consulting Group

M I L L E N N I A L S ’ A V E R A G E H O U R S V I E W E D

18%

68%

385

489

628

788

938

2012 2013 2014 2015 2016

G L O B A L C O N T E N T C R E A T O R S ( M I L L I O N S )

THE NEW TV IS DIGITAL, SOCIAL, AND CROSS-PLATFORM

DIGITAL PLAYERS ARE DOMINATING

SVOD IS CONTROLLING HOUSEHOLD PENETRATION GROWTH

Source: Nielsen, Leichtman Research Group, BI Intelligence estimates

88% 86% 83% 82% 80% 78% 76% 75%

35% 41%48%

55%61%

66%71% 75%

2013 2014 2015 2016 2017 2018 2019 2020

Pay-TV SVOD

U S H O U S E H O L D S W I T H P A Y -T V V S . S V O D

Ifthistrendcontinues,thesame%ofhomeswithPay-TVwillhaveaccesstoanSVODserviceby2020

$11.9

$10.2

$5.7$4.9

$3.8$2.9 $2.7 $2.5

$2.0$0.8

SVOD SPENDING IS R IGHT UP THERE WITH MAJOR TV NETWORKS

Note: Red denotes a pureplay SVOD providerSource: IHS Markit TV Programming Intelligence

2 0 1 5 G L O B A L P R O G R A M M I N G S P E N D ( B I L L I O N S )

209 212260 273

325 357 375 3621 4

6 15

2432

46 93

2009 2010 2011 2012 2013 2014 2015 2016

Broadcast/Cable Online TV

WHICH IS CONTRIBUTING TO AN INFLUX OF ONLINE VIDEO CONTENT

Online TV: Amazon Prime, Crackle, Hulu, Netflix, PlayStation, Seeso, Vimeo, Yahoo, and YouTube RedSource: FX Research, December 2016

E S T I M A T E D N U M B E R O F S C R I P T E D O R I G I N A L S E R I E S ( U S )

+102%YoY

-3%YoY

13,643,000

17,275,000

20,777,000

22,428,000

47,497,000

AND LEADING TO MASSIVE (GROWING) AUDIENCES

Source: Company filings

NetflixhasmoreUSsubs thanComcastand

DirecTVcombined

P A Y -T V A N D S V O D U S S U B S C R I B E R S ( Q 3 2 0 1 6 )

012%

134%

234%

314%

4,4%

5+1%

GIVING CONSUMERS THE CHANCE TO CREATE THEIR OWN DIGITAL TV BUNDLES

Q: “How many PAID streaming video subscriptions do you have?” Source: BI Intelligence Survey, October 2016, n=1,146

N U M B E R O F P A I D V I D E O S T R E A M I N G S E R V I C E S( U S A D U L T S )

53%ofrespondentshave2ormoreSVODservices

AND ALLOWING THEM TO WATCH WHATEVER, WHENEVER THEY WANT VIA OFFLINE VIEWING

Source: Company filings

Theoffline viewingfeatureenablesuserstodownloadandwatchfilmsandTVshowsinplaceswhereinternetislimitedorexpensive— likein

subways,carrides,andplanes.

SOCIAL NETWORKS ARE EMERGING VIDEO PLATFORMS

SOCIAL CHANNELS ARE LANDING MAJOR TV DEALS TO HOST VIDEO CONTENT ON THEIR PLATFORMS

R E C E N T S O C I A L P L A T F O R M T V D E A L S

Source: Company filings, BI Intelligence

September2016

December2016

January2017

February2017

August2016

July2016

April2016

$3.1

$3.0

$2.5

$1.6

$1.5

$1.2

$1.2

$1.2

$1.0

$1.0

BuzzFeed

NewYorkTimes

CNN

HuffingtonPost

NowThisMedia

NPR

VoxMedia

Hearst

ViceMedia

Tastemade

AND PLATFORMS LIKE FACEBOOK HAVE EVEN PAID MEDIA OUTLETS TO CREATE LIVE VIDEO

A M O U N T P A I D B Y F A C E B O O K F O R L I V E V I D E O C O N T E N T ( M I L L I O N S )

Source: Wall Street Journal, June 2016

WHICH IS CAUSING A SPIKE IN OVERALL SOCIAL VIDEO VIEWERSHIP

Source: Facebook, Snapchat, YouTube, WSJ, Bloomberg, BI Intelligence estimates

45

6

8

10

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

4

6

8

10

12

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16

6.0 6.3 6.5 7.08.0

Q2'14 Q3'14 Q4'14 Q2'15 Q4'15

+200%

+150% +33%

D A I L Y V I D E O V I E W S , B Y P L A T F O R M ( B I L L I O N S )

$5.1 $4.9 $5.4$6.3 $6.4 $6.7$6.9 $6.6 $7.6

$3.6$5.5

$9.1

$13.7

$16.8

$21.5

Q1-Q32014 Q1-Q32015 Q1-Q32016

CBS Disney Comcast Facebook Google

AND HELPING TO DRIVE AD REVENUE FOR THESE PLATFORMS

U S A D V E R T I S I N G R E V E N U E ( B I L L I O N S )

#5 #3#2

FBadrevsurpassesTVforthefirst

time

Source: The Information

WHILE TRADITIONAL PLATFORMS GROW MORE SLOWLY

Source: Company reports, UBS

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Millions

M O D E R N D I G I T A L A D R E V E N U E V S . T R A D I T I O N A L T V R E V E N U E

MODERN TV IS ON EVERY DEVICE

48%

EVEN SHORT-FORM VIDEO IS BECOMING INCREASINGLY POPULAR ON BIG SCREENS…

Source: Google, YouTube, December 2016

Y O U T U B E V I E W I N G T I M E O N T V S

Shareofviewersaged16-34whohavewatchedYouTubeontheirTV

screen

YouTubeviewingtimeonTVscreensmorethandoubled YoYin2016

2015 2016

Theaveragelengthofanonlinevideo:

4:20

…WHILE LONGER-FORM CONTENT IS DRAWING BIG AUDIENCES ON DIGITAL SCREENS

Source: NBC Sports Group

Over1Bminutes ofOlympics-relatedcontentconsumedon

YouTube

NBC digitalsitesdrew100Munique visitors, 29%higherthan2012LondonGames

2.2B snapsacrossLiveandDiscoverplatformsintheUS,with230M minofconsumed content

600MvideoviewsonNBCOlympics Page,with3.5Mlive

viewers consuming FBLivevideos

2 0 1 6 O L Y M P I C S D I G I T A L B R E A K D O W N

AND THE RISE OF INTERNET-CONNECTED DEVICES ALLOWS FOR ONLINE VIEWING ON TV SCREENS

Source: Digital TV Research, BI Intelligence estimates

115163

228307

397

487

584

673759

831870 896

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0100200300400500600700800900

1000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Millions

G L O B A L I N T E R N E T - C O N N E C T E D T V S I N S T A L L E D B A S E

Year-Over-YearG

rowth

6.6 6.24.6

0.5 1.1 4.3

0.15

2014 2015 2021

OtherSubscriptions LTE 5G

BUT IT WILL BE LTE & 5G NETWORKS THAT DRIVE MOBILE VIDEO GROWTH INTO THE FUTURE

Source: Ericsson

G L O B A L M O B I L E S U B S C R I P T I O N G R O W T H , B Y N E T W O R K ( B I L L I O N S )

MODERN TV ISEVERYWHERE,ANYTIME,ON ANY PLATFORM