okay let's go ahead and get started welcome to session seven twenty one mobile success stories we have three great presenters for you here today uh... with the great stories to tell and in the mobile space we have jon philippe phunier from buick telecom we have alec hendry from mtv europe and we have uh... pierre barbeau from sprint so with that i would like to first introduce jon philippe phunier So try and work the clicker. So with that, I'll give this to you. - Okay, thank you. Good afternoon. I'm Jean-Philippe Fournier working for the Department for New Technologies at Bouygues Telecom. For those who attended the previous session, I'll try not to be too repetitive on some slides that my colleague presented.

A few words about Bouygues Telecom for those who might not know. We are a GSM French mobile carrier. We have six million customers. GSM GPRS network is available nationwide in France, so we achieved 99% population coverage. And for those of you who travel to Europe and have a GSM phone, you might know what's nationwide coverage. The feeling of nationwide coverage is pretty different than here. We launched iMode in 2002, and we happen to be the largest iMode carrier outside Japan. with 700,000 iMode users. That's a mark that we reached this week.

We are preparing an edge network rollout. I'll say a few words later on in the presentation about it. And we are not a public company. We are a subsidiary of a group, the Bouygues Group, which is a unique combination of a telco, a mobile carrier, and a media company. So in the Bouygues Group, you have TF1, which is the largest TV channel in France and Europe. You have subsidiaries of TF1 or Eurosport. If you want to look at the Super Bowl if you're in Europe, then you'll definitely switch to Eurosport. It's a Europe-wide sport channel. We also operate satellite TV bouquet with about 16 channels belonging to TF1. and many other media activities.

Few words about the mobile market in France. Two major players, Orange and SF4, are competing with us. SF4 is about to become Vodafone later this year. On the left side, you'll see the market share for voice users. So you see that Orange is the largest mobile courier in France with about 50% market share.

SFR has 30%, and both couriers, SFR and Orange, began operations in 1991, whereas we began in 1996. And that's why the difference, mainly. We have then about a 20-person market share for voice users. On the right side of the slides, I presented the data-only subscriptions. What's interesting is that despite the fact that we are the smallest courier regarding data services, we have a pretty good market share and very good penetration. And It's a fair competition between Orange, SFR, and us on these services.

One of the main reasons we could achieve as a small carrier to play an equal game with R-Range and SFR is that we rely on iMode, which give us possibilities we could not expect to have on our own. So a few words about iMode is that it's been launched, of course, in Japan by Docomo in 2000, I guess.

maybe not accurate, but 2000 and 2001. That was the first data services offering that has been popular. And during the time that European couriers were struggling with the web services, Docomo was doing very, very well in Japan. And they have now tens of millions of subscribers in Japan only.

So iMode services have expanded overseas. They've been rolled out by nine carriers around the world and outside Japan. And more carriers are joining every year. And all these carriers formed a group called the Alliance. which aim is to specify and to maybe adjust the iMODE systems to adapt it to their local markets.

iMode is based mainly on the clear separation of the roles between content providers and carriers. That's the point we want to be clear on, is that we are not a content provider. We don't want to provide our customers our own content. We can't do it. It's not our job.

And iMOD relies on standard technologies that we like, HTML, email. So no MMS, no telecom-originated standards. words. A few words about the iMode ecosystem, why iMode is pretty well working in Europe. The customer is, of course, the center of the place, the central role. And we as a courier, we... allow the content providers to distribute their contents to the end users through our network. That's just what we do. We don't do any content creation. We don't host any content providers, or we don't host any of our own content on our servers. It's really, we are offering a pipe for people to browse iMode sites, that's all. But we are trying to do it our best.

One thing where we are pretty good at and where we are trying to help our content providers is that we have a unique relationship to our customers. Our customers get a build from us, by us, each month. So they know who their carrier is. And at this point, we have also a huge... customer care and customer relationship department, so that's one of our strengths. And we want to allow the content providers, big ones or small ones, to benefit from this.

So we bill the customers on behalf of the content provider, and we share revenues on the subscription. the IMO model is pretty clear. We share the content providers get 86% of the subscription fees. So a typical subscription fee is about between 1 and 3 euros a month. So if you want to get weather for your location in France, then you would pay 1 euro a month to a weather content provider. So that's pretty fair. And we pay back 86% of this one euro to the content provider. And we keep the money for the packet traffic.

So the key for success of our iMode services is that through iMode, we have the ability to specify and to adjust handset specifications to our local market. That's something that our competitors are beginning to do. For example, you see Vodafone is working more and more closely with their handset providers, which give them the ability to do so as well, to control the handsets, control the features, and to specify, for example, the file formats they want to use.

It guarantees for the end users, it guarantees a consistent experience across all the handsets that they could buy from us. So you get, for example, on each iMode handset, you have a hard key, which is always the same place on the handset, and you'll find it on any iMode handset. So if I change my handset, if I upgrade, I'll still find the same navigation menu, always the same ergonomics. So we want to keep it simple for end users. And most of them don't have PCs at home. So that's maybe their unique data device. So we really want to make it a very simple experience so that they can enter the data world as easily as possible.

Something very important for our content providers is that we guarantee the content providers that their content will look exactly the same across all our handsets. I was discussing this with Alec from MTV right before the session. If MTV gives us a picture, then we guarantee them that the same picture will look exactly the same on our latest handsets and on the handset that we launched two years ago when we launched iMode. So that's a burden that the content providers don't have to take care of. And they pretty much appreciate the homogeneity of iMode handsets. That, of course, reduces drastically the content production costs for them. so they can concentrate on their job which is mainly produce produce content and That's that's building the success for for our data services One word about the the Copyright control management, iMode has a very simple but very efficient feature which allows a content provider to protect its content and we ensure the content provider that the content won't go out of the phone. It's stuck, it's as soon as you download a picture for example and the content provider protects it then you won't be able to take it out through infrared or Bluetooth.

list, non-exhaustive list of iMODE services. What you'll find are pretty interesting and practical information. You'll find weather, you'll find news, you'll find finance, stock quotes for those interested in it. You'll find real-time traffic information for Paris. For those who know Paris, that might be very interesting to have this information next time you come to France. There are more than 250 services and there are more than 200 content providers working with us on iMode.

We offer also Java-based services. We're using the slightly different version of Java from Docomo, which name is Dojo, but has almost the same capabilities than Java. And we also have email picture messaging capabilities on our latest handsets. That's really very well used by our customers. Very much used. Thank you. We've just launched video services beginning of June. Of course, it's MPEG-4 based.

That's why we are here working with QuickTime and Apple, because all the iMode handsets that are supporting videos are using the standard, supporting the standard. it. You can download, it's a download service, so you can download 100 kilobytes of video on our portal. Clips are approximately 15 seconds long. And you can then, oh, that's video mail, sorry. - Maybe I'll go through-- yeah, video clip download. So you can download clips that are 100 kilobytes long, and the duration is approximately 15 seconds. And the users pay for a subscription fee to be able to download three or four or five clips each month from the same content provider. And the users pays the traffic.

In addition to the subscription, the users pay traffic, 1 euro cent per kilobyte. So we've been trying to help our content providers to make the best videos for our video download service. And we've been giving them guidelines, tools, to help them encode efficiently their content into our MPEG-4 file format. And that's why we recommended QuickTime Pro for all our content providers. Because we found it's a very simple and easy to use tool that also allows directly to set the content protection feature supported by iMode.

Yeah, video mail. Besides video download, you can capture a movie mail. You can capture a small movie on your phone and send it through email as an attachment to any compatible phone or to any email address you want on the web. On the other side, the Mac user or the PC user just needs to have QuickTime installed on his desktop and can see your movies.

A few words about network evolutions for mobile data. So the first network that-- that the first network is GSM with very limited data support. It evolves to GPRS. That's what we've deployed and now we are there are two after gprs deployment There are two alternatives you can go either for a network upgrade and go for edge Or you can go for whole completely new network that is UMTS Thanks. So you have two options, Edge versus UMTS or 3G.

So to have a better throughput than with the current GPRS network, you have to deploy one of these two networks. UMTS networks offer very high capacity, pretty high speeds, but there's a but. They assume a huge upfront deployment cost because it's a brand new network. You have to deploy your network from zero. You can't just upgrade your radio sites. You have to make new radio sites, and you have to build new hardware on top of it. Uh... To give you an idea, if we are to deploy a 3G UMTS network in France, we have to pay 6 billion euro, 6 billion bit more than six billion dollars for it. That's exactly what our GSM, the whole GSM network cost to us about six years ago when we deployed it. So that's something that's still, it's still very money demanding.

The problem is, if you go today for a 3G deployment, you have very few you don't know what the user benefit will be. So you have to put 6 billion euros on the table and assume or suppose that in the next years you will get your money back somewhere, somehow. So it's pretty difficult for us at this time. So the smart economic alternative we found is to upgrade our network to Edge. Edge gives us a better throughput, a better capacity in the same radio cell. Nationwide coverage, something you won't have in UMTS first because of the price of the deployment. So our competitors are deploying UMTS in France. Vodafone is deploying UMTS in different countries across Europe, our range also. But they are able only to deploy it in metropolitan areas.

So as soon as you leave a city, you fall down to a GPRS network when you are using our competitor's network. So you go down from 128 kbps throughput to 40 kbps. That might be a shock for some of the users first. Whereas on our network, you will have the ability to have 128 or more kbps throughput all across France. That's something that might make a huge difference in the first years of UMTS deployment between us and our competitors. That's our strength.

So, of course, UMTS is an option for us, but in a few years from now, we expect to increase our revenues first using the edge network, and then we'll think again what we'll be doing for a UMTS deployment. Thank you. uh... a table where few of the main features of uh... compared features of uh... three g_u_ and tsn edge so the bandwidth is For the first deployments of 3G is 128 kbps, what you'll get in a radio cell. It will evolve, of course, up to 384 kbps. That might evolve in the next month or next year. But on the edge side, you will get 200 kbps from the first day the edge is deployed.

The coverage, as I said, for 3G, it's more focused on metropolitan areas because of the huge investment to deploy the network, whereas Edge will be available nationwide. And the handsets, that might still be an issue for 3G carriers because they're still pretty expensive. They're new. It's a brand new network, brand new technologies. So as you know, brand new technologies are sometimes difficult to start with. So they're pretty expensive this time as well. Whereas for Edge, only asks for a radio upgrade of the handsets. And you can use your today's very stable GPRS handsets and upgrade them to Edge, if you're a handset manufacturer, of course.

Multimedia services evolutions. What we will use Edge for is to allow for longer video clips, better quality. You will be able to have larger pictures, larger videos. You will be able to go from QCIF to QVGA. Video streaming is also an alternative on which we are currently working.

And of course, you might as well increase the quality together with picture size and duration. You'll be able to allow higher bit rates for your video and codes. An alternative we are also looking at is MPEG-4 H.264 support, also called AVC. something we are currently looking at to reduce the bandwidth for a given quality.

And something that we see coming also is stereo handsets. You'll get a better audio, but also you'll have a two-channel sound on the coming handsets. So for us, it requires more network bandwidth to download two channels instead of one. So for example, currently we play-- if you're using an AAC device, mono, you are able to download 32 kbps encoded audio files. But with Tereo, you have simply to double it. The future?

As we speak about today, we speak about download services. We're speaking for tomorrow about streaming services that might allow you to see real-time video coming to your phone. But there's also another path to follow, which is broadcast networks are coming to mobile handsets. That's something that we will see happening in the next two years. There's a standard that's been specified currently, which name is DVB-H, Digital Video Broadcast for Handhelds. And that's a possible candidate for these mobile broadcast networks. The point for us is we make money using video download. We make money using video streaming on our networks because the packets simply go through our pipes, our network. The day that a broadcast network will be on and you'll be able to watch TV on your handsets, it might change two things. The first one is that our users might not download the videos from our iMode site, but rather watch it directly on the TV channels. And the other one is also since customers will spend more time watching TV on their phones, revenues will, they will spend less time using our iMode services. So that's something today that we see as a possible threat, but we also see this as a very exciting alternative to, and a very exciting way of expanding business for us. We just need to find new business models, but we're sure we'll find some interesting ways to use it.

A few words about what we're doing with QuickTime. So as I said, QuickTime Pro has been recommended for MPEG-4 content creation because of its ease of use, first of all. It has a very large audience as an MPEG-4 player. If you receive a video mail sent from an iMode handset on your PC or Mac, it's always better if you have QuickTime to be able to read it. That's why it's a player of choice for us. It's an inexpensive encoder that does a very good job compared to some more expensive encoders. And of course, it's a free player. Thank you, Apple.

And it has this nice feature that our content providers love, that is they can protect their content using this MPEG-4 encoder. We are also evaluating with time streaming architecture because streaming might be a service that we could roll out on an edge network and We found out it's a highly interoperable solution. For example, we can stream videos in PIC4 format on these small Nokia handsets.

It's not an Apple handset, and it's not a Nokia server, so that's things that we just love. Before this, you had to buy a packet video streaming server and a packet video client on your handsets, something that's not always very easy to do. It's a very reliable hardware platform. I won't tell you too much about this, but I'm pretty sure you agree. And it's a telco-grade architecture.

What's next with QuickTime? Of course, we'd love to evaluate the first MPEG-4, 264 encoders from QuickTime as soon as they're on the market. And something we could work together on also is DVB-H digital video broadcast is coming. DVB-H is an IP-based broadcast network. So the hardware you would use to operate a DVB-H network is pretty close to what you're using today to stream video on a cellular network. And so QuickTime could be the architecture we might use to operate these kind of networks. And also-- Since TF1 is one of our sister companies in the BRIC group, they are very much focused on TV. And they are promoting very heavily HDTV in France. And their point is to go for MPEG-4 AVC or 264 for HDTV very, very soon. And for them, it's also very interesting to have the same end cutters, the same tools, ranging from HD broadcasts down to mobile broadcast. So these are directions we would love to go into to look into with our Apple fellows. OK. That's it. Thank you.

Thank you, Jean-Philippe. Next, we're going to invite Ella Kendry to come up and speak. Excuse me. And-- He will speak about his experience as a content provider in the mobile space. Thank you. There you go. Thanks, it's great to be here today to show you some of the services we're offering in the UK for MTV Mobile. We're doing quite a lot of different stuff, which I'm hoping you'll find quite interesting. I'm going to show you some of the different services we've got, give a quick overview of some of the mobile technology, but I think we've covered some of that already, so I'll try and skip through that to get through the session. Mobile usage, what people are doing with mobile in the UK, and then try and move on to some of the more new technologies we're doing with video production for 3G services. So I'm the operations manager for MTV UK in Ireland, and I look after the services we run on websites, interactive TV, and mobile phones.

In MTV Europe, we've got a wide set of distribution across the regions, and we've got multiple genre channels, so we can quite target specific audiences with different tastes of music. It's actually grown since last week when we bought some new music stations. But there's around 27 different music feeds across Europe, all originating from London, and with different regions around Europe contributing local feeds. There's actually nine specific to the UK. So we've got quite a big task dealing with our music channels, MTV Hits, MTV 2, MTV Bass Dance, TMF, VH1, VH1 Classic, and the newest of which is VH2. Thank you.

And we're in just under 120 million households across Europe. So we've got a really wide distribution. So anything we do on air with our promotions, we can really target mobile users by discussing our services on air. Thank you. I'm having to look at the screen, by the way, because I've left my glasses back in England, and I can't see that one down there. We offer quite a wide range of multi-platform services. Currently, the latest statistics are that 53% of UK homes have digital services to receive our TV transmissions, whether that's on digital satellite, which is the predominant platform, digital cable, and the most recent platform, which is digital terrestrial, which is on a free view service and has about 4 million viewers on digital terrestrial, and that was a real drive over Christmas on set-top boxes. It's a crowded music market. There's 25 different music channels in the UK alone, nine of which are MTV. So we have a real tough time competing in the market. So the interactive services we offer are kind of a big differentiator to our competitors.

I think it's only the Sky platform who have their own three music channels which also have interactive services. We also use it to extend the viewing experience. So we're not just targeting people who are sat in front of the TV, but they can go away with their phone or go online afterwards after they're watching the channel and interact with MTV that way. So we've got various websites for the different channels.

And we've got a very advanced interactive TV service that lets people enter competitions, read the latest news, all while they're sitting there watching the TV. And we've got games. There's one in the middle. There's our Seymour's Turbo Couch, which you actually play over the videos while you're watching the channel. And on the end there is our Ringtones app that lets people, while they're watching the TV, find out about what ringtones we've got available, and they can text straight off the screen and receive their ringtone to their phone. on a whole range of mobile services, which I'll go in depth with in a moment. I think we've covered the main technologies. In the UK we've mainly got GSM, GPRS, WAP, and 3G services are just sort of starting and some interesting stuff happening there. Data speeds, which is a bit ridiculous, but it shows that the fact that the 3G services are way ahead and we can do some really fun stuff with video.

There's over 50 million mobile subscribers in the UK, so it's got quite high penetration across the UK region. There's six major network operators, so it's quite competitive market. There's Orange, O2, T-Mobile, Virgin Mobile, Vodafone, and the newest of which is 3, which is a dedicated 3G service provider. And-- out of those, Vodafone launched a 3G data card for business users earlier on this year, and 3 launched over a year ago. And they've now got, the figures are probably about a month or two old, but around 400,000 subscribers on the 3 network. work.

Data usage is definitely increasing in the UK. Text messaging in the UK and across Europe is really quite a mad phenomenon. In the UK alone, we've got 21 billion messages sent per month, and that just keeps increasing. Data's usage has certainly increased after GPRS, with MMS technologies from camera phones where people are sending their pictures around to each other or other mobile content, such as little video clips. We've seen a kind of little resurgence in the use of WAP because of the increased speed you get over GPRS. So there's now little WAP portals that a lot of the operators are operating. MTV have our own sort of slimmed-down version. And it's currently estimated that only around 12% of UK mobile users are data users. So there's room for growth there.

So we've kind of got a two-pronged approach to mobile for MTV. We've got everything we do for our on-air channel. We could do a wide range of things here. We've got voting, chat, on-screen games, competitions, and feedback. And I'll show you a quick video in a sec which shows some of those services that we use where people can actually interact with what's happening on the screen. I think the first one in this video clash where people can actually vote which video is going to play next on the channel. There's Matchmaker, which is a kind of interactive game where you text your name and the person you like, and it gives you a percentage score based on how matched you are. It's all based on numerology, but not quite sure about that. And it comes back with a little statement about how much you're in love with them or something like that.

And you also get it sent back to your phone at the same time, so you get the instant response and something on screen. As an example of our presenters promoting use of a competition, And there's text drugs on rock and roll, which is on MTV2, where you can text in messages and they appear on the screen over the program. And I'll run that now. We've had some volume? - No.

music television 20 years ago. And now MTV is shaping music television of the future. Okay, so that's just an example of a few of the different services. I mean, they've been really successful. We've now rolled those out all the way across Europe. Matchmaker, for instance, there's getting around 3,000 or 4,000 SMSs an hour just in the UK. So we've been really pleased with that. And we're just sort of extending the Text Drugs Rock and Roll format there into photo chat.

So you can go online to our websites, upload your photo. You put in your mobile number, and it stores all that information about you. And then when you text your message into the screen, it'll bring a little picture up in the corner. And people seem to be really liking that. We also do subscription services via SMS, so advertisers who we have partnered with, if you've opted in to receive messages, we can send out messages on behalf of them. We also send out mail alerts, so when an artist that you've signed up with comes onto TRL or one of our shows, we'll text our audience to let them know what's happening. We've also got a sort of, I mentioned, a sort of products area where we're doing stuff that isn't directly affecting what happens on air. So we've got business-to-business deals with most of the operators in the UK, And if we haven't, we're in talks with them. So that's where we're doing video content for various mobile portals and providing sort of chart information. I think we provide charts to O2, who have a digital media player, which downloads MP3s. We've also been doing deals with handset manufacturers such as Motorola, where we deliver content that comes on the phone when you buy it out of the shop directly. you And then we've got our business-to-consumer services, so we're selling ringtones off our own websites, through interactive TV and through on-air promotions. questions.

So our business model originally was just do some cool stuff that supports the channels, make them look really good, give the viewers a reason to come back to MTV instead of all these other channels that are out there. And the second attempt was to try and increase ratings. And we found that that really works.

People stay engaged with the channel while they're watching these things. They're waiting for their message to come up, or they want to see what other people are commenting on. And then the markets were changing in the UK, and short codes came along, and premium rate short codes came along. So we can actually charge our viewers about 50p, which is about 90 cents every time they send a message to us. And we're probably on the cheaper end of the scale. The other providers are charging sort of a pound, a pound fifty a time to send a message. And you've got no guarantee that it's actually going to appear on the channel. Some of the other content we're doing, and you'll see the prices here, and I always get quite shocked when I get down to the ringtones, but wallpapers are doing really well for us in terms of our own programming, like Jackass and the Osbournes. And we'll charge sort of £1.75 for those. Videos, depending on which partner we're sending them out through, if you're going, say, through three, you can pay up to £2.50 per sort of video item that you download. But then some of them have packages so that you have a certain amount of video downloads available each month. And ringtones, we're probably priced fairly cheap in the market, again, at that £3 for a sort of polyphonic ringtone. There are some extortionate prices out there now. But we're finding ringtones are just huge. The actual record label seems to be putting out adverts on our channels at the moment that don't actually promote the single release of an artist. They actually put out a ringtone advert. And on the back of that they say, Oh, by the way, the single is out at the end of the month. We've also been producing some of our own unique ringtones. And MTV Germany have produced one recently, and I'll show you the ad for it. And it generated something like 2 million debt sales within about a three-week period. So I'll roll this, and this will lead down as well. Thanks. Thank you.

So they've done really well for us. So some of the other products here, wallpapers. So actually I've got an example there of how we actually have to format some of these sometimes for the different layouts on the phones. So there's a typical jackass wallpaper. And there's some of our MTV UK presenters. People just love to personalize their phone with this kind of stuff and show it off to their friends. Now I'm going to move on to sort of more of the video content, which is the stuff that I'm having quite a lot of fun with at the moment. And just a little montage of some of the kind of content we're putting out on two and a half networks and 3G phones.

This is our brand new video, The Way You Move on MTV What's Hot. Hello, I'm Tim Cash and this is MTV News. We went on the set of the video for an exclusive MTV look. ♪ ♪ ♪ ♪ Catch more MTV news on your mobile tomorrow, only on 3.

So, yeah, one of the main things we've been trying to do is create a really good user experience by putting little packages together of content, reversioning some of the MTV shows, producing specific content for the mobile, and it's doing really well for us. I'll just run you through some of the packages so you can kind of see what kind of content we offer. This is the MTV What's Hot package. This is all on 3G, these ones. It's two minutes. We do two a week. And it's kind of reviews and recommendations of new artists that are coming out, new singles, what's going on tour, fashion, hot topics.

We've got the best of MTV, which is about a minute and a half to two minutes. We do three of these a week, and we use a lot of stuff that's been out from the channel, say, from the previous week. So if there's a guest that's been on a show, we'll edit together a little package with them, either from the show itself or after the show's gone out, we'll do a little backstage interview with them. So it's kind of unique content that you can only get on the phone. Thank you.

We've got Live Lounge, which is a longer piece. It's up to four minutes. And we deliver around 12 of these a month. And these are all exclusive MTV Live performances, either from our archives, and we've got stuff going back years and years, or the latest performances, either from America, which we've licensed over to the UK, or from our own TRL UK shows. We also do specials, such as the MTV Europe Music Awards, the MTV Video Music Awards, basically any awards that are going. There's always something fun happening.

And probably the most updated one is the MTV News package, which is a two-minute package. It goes out every day, Monday to Friday. And that normally consists of around three news items. And I thought it would be interesting to sort of just walk you through how we produce some of this content. So for MTV News, the normal MTV News team goes and produces that on behalf of us. So they'll use the same news format that they use on air. So to the viewer, it's the same kind of look and feel. It's the same presenter, they understand what's going on. But we reshoot it in the studio just after they've done the normal news. Tighter head shot to kind of maintain the action. And they remove a lot of the smaller crawls and the moving backgrounds. It's recorded live, and we get it delivered on a DigiBeater to us to manipulate. And I've got a short clip here that just shows that process. Now with money comes fast cars and of course women. Well, not if you're 14 years old and known as Harry Potter.

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And that generally goes out to the viewers about 6 o'clock each day as a single package. And the actual news item, generally the same news package on air goes out an hour later. So they kind of get exclusive to their phone first. But all our other packages that I showed you, we edit all that in-house.

We do our own shooting. We go out with DV and shoot all our interviews. We use a desktop Final Cut system, which has really impressed the business because they've suddenly gone, wow, you can do all of this on that machine and we don't have to go into Soho and spend a fortune with an editing house. So it's a G5 Blackmagic 10-bit uncompressed. We come in at the highest quality we can because if we want to archive this kind of content for later use, we want to make sure that we've got it in the highest quality possible. We can come in direct off DV cameras, which means we don't have to dub from one format to another. We use DigiBeater and SP as the main tape source and laying off for archiving. Thank you.

I probably won't go into this too much detail, but you need to say we've got to do some work to make sure the content looks right on the phone, so we've got to make sure that we reframe the shot so that there's not so much going on in the frame. We try and avoid fast cutting where possible, but we have actually found with the 3G services that the picture quality is so good that we can do a lot of that kind of MTV style zooming in action. One of the biggest things we do do, though, is redo any titling, because normally if it's too small, it won't show up. So instead of it being a lower third, it's the lower half of the screen on the phones. One of the biggest issues we've found is the devices don't have that much storage capacity at the moment. So that's why we're only doing two or three minute packages. The sound is not great on the phones themselves. The speakers aren't really designed for that kind of playback. But if you plug in the headphones, you get pretty good audio quality. But most people don't do that when they're showing it to their friends and correcting video levels to make sure it looks good.

Okay, so this is a brief bit about how we get it onto the phone. All our 2.5G content, we encode directly out of Final Cut using the QuickTime 3G. As I mentioned previously, for some of the download options on the 2.5 phones, we have to make sure the file size is quite small, otherwise the viewer has to wait quite a long time for the file to come down. So I think we've seen a few of these already today, some sort of video rates, equivalent frames per second and the lengths. But T-Mobile are sort of trying to open up that format at the moment. And they've sort of said, let's try and see if we can make a bigger file format to give longer content. So we're playing around with that at the moment. I'll try and give you a quick demo, if we can go over to that.

was reset. Okay, this is a clip from one of our shows called Dirty Sanchez, and they're a little bit like the Jackass guys, but they're from the UK and they're Welsh. So they're a little bit madder, actually. This is only like a 10, 15 second clip, so I'll run this.

So it's just weird little clips that people seem to like to download and show to their friends. The actual show itself is a little bit ruder than that, but thankfully on the phone we've only got a little short space of time to show stuff, so we cut a lot of that out. If we can switch back to the slides. Thank you. For 3 in the UK, what they've actually done is they've appointed BBC Technology as a sort of gatekeeper towards all the content providers.

So we actually currently, we go out as an MPEG-2 format at a really high data rate. And we send that over to them and they check it over for us and do the encoding and pass it off to the phones. It's an MPEG-4 format on the 3G phones.

And there's a little bit here about the differences between the 3G and 2G content, which I think is just basically obvious if I show you the actual footage. So I will now move on to a 3G example. There's a few different phones in the UK for 3 at the moment. This is the sort of original one, which is the sort of clamshell design, quite bulky. But this one's even bulkier. This is the sort of more business phone with a little touch screen. But the video quality on the screen is pretty good. So I'll try and show you an example of this.

So that's a little clip from the news there. You see the motion is quite good. It moves along quite well. Frame rate keeps up. Obviously these aren't streaming from here because I can't do that, but back in the UK you've got the choice of either downloading it to the phone and storing it to watch later or streaming it in real time. And the quality comes down at just about the same rate. We'll switch back to the slides.

So what have been our main findings? Well, we found that mobile is integral to our viewers' lives. It's their main source of what they get out and what they do. Most of our viewers are quite young, they're demanding, and now the scary thought is some don't even remember a time before SMS. And the latest stats show that 25% of UK 7 to 10-year-olds now actually own a mobile phone. We don't actively target under 16. We can't under XTIS rules, under Ofcom, but we can't help it sometimes. they're going to text in and it's down to their parents to make sure they're using it in the right way.

The demographic research has been very strange. Three subscribers are generally 25 to 35-year-old males. They're all downloading pop music. So they're the kind of people who tell everyone, yeah, I really like cool music. And then they're secretly going off and downloading a bit of Britney Spears to chill out on. Device constraints, we found that, as I've mentioned before, the sound isn't so good on the devices. For instance, on this one, the speaker is at the back. So if you're looking at it, you're not getting the sound in your face. So people are using their headphones, but they don't.

So we're trying to make sure that just the video quality is there so that people can show it off. Thank you. They've got short attention spans, so they don't like to sit there and wait for it to download. But even more so, the content itself has to be quite snappy, very visually appealing. And thankfully, that's something we can deliver. The other very important thing we found is the navigation to the content. It's all very well having this great content on your system, but if people can't get to it, then they're never going to find it. So we've got our editorial team in place. We've done a lot of work to work out how people in one line of text are going to understand what this content is and therefore how they're going to go and download it.

the status symbols of the moment, the phones. They're not sort of widespread as yet. These are the two sort of very strange-looking phones, the Nokia, very strange-fashion-looking phone. But they want content they can show their friends. They want up-to-date content. And the kind of content you've downloaded on the phone does make a statement about who you are. If you've got loads of jackass and Daddy Sanchez clips, then you're probably going to be kind of funky and a bit crazy, whereas if you've got a whole load of live lounges by Queens of the Stone Age a whole load of old content, then that kind of says something about you as well.

We've done very well. We're second only to football in the UK. There was a slide earlier that sort of showed football and then adult entertainment, but thankfully we're actually beating adult entertainment in the UK, which is quite pleasing. The download estimates have been up. I can't give you exact figures. We can't release those, but the percentage each month is just going up and up as new subscribers come on board, and the awareness of the 3G phones is happening. It's just been announced today, I believe, that Orange are launching a 3G service towards the end of this month in the UK. Vodafone is going to be September. So as the main operators come on board, it's going to become more and more common. And subscribers do seem willing to pay for the extra content. And we've seen a lot of requests from other regions around the world who've seen our content within MTV and now would like to use that. So we're trying to help them build their 3G businesses.

The future, well, it's standards-based, and thankfully QuickTime is definitely looking towards that, and there's a good workflow at the moment we get out with using Final Cut and QuickTime. The handsets are going to get better. I mean, the biggest stumbling block seems to be battery life at the moment. I've had to change my phone battery twice today when I've been showing people video clips, and the storage is going to hopefully improve as well. As I said, the main networks seem to be deploying towards the end of this year in the UK, and it's going to be a big market. That's it. Thank you.

So we've talked a little bit about professional mobile success, mobile content, and now I'd like to invite Pierre Barbeau to talk a little bit about the success that Sprint has had with their consumer messaging service. So with that, Pierre. Thank you, Elisa. And I'm not sure if I've ever been in a tighter spot. I sit between MTV and I'm told there's a party at the Apple campus tonight. So we'll try to be brief and walk through a few of these slides here with you. Essentially, we're here to share with you a little of our learnings from picture mail and, more importantly, video mail as it applies to our experiences with QuickTime. And I hope at the end of the day leave you with the impression that our relationship with Apple and particularly around the QuickTime product, has been very helpful to us and to our customers. - Yes. Give you a sense of where the camera phone has been and where it's going.

And, of course, here we assume camera and in part of these, of course, are video-enabled handsets. We got excited about what happened last year into this year. Going forward, there's a lot more growth ahead. And the side of the company I come from, we're really focused on the personal communication, visual communication aspect of our business. So this is really kind of the path that we're following. in the coming few years if you look at video messaging as a segment it too has a great deal of growth ahead we're really just getting started in 2004 as you can see we launched our service in November of last year and by the end of two thousand nine uh... it's estimated will be over thirty million users in the united states of video messaging had said based video messaging In that same period, it's expected the potential market associated with video messaging will reach over $2 billion. So it's really something of importance to us, and we're quite committed to it. Thank you.

These would be, this would be a, give you a sense, some of you, let me perhaps pause here for a moment. How many of you have a camera phone or use a camera phone, special hand? So I'd say more than, well more than half, maybe 60%, 70% of the audience here. So that's good news for us. Some of you may have seen us report in the United States last quarter. So program to date. We had over 100 million picture messages or transactions on the Sprint network. We still believe that is a leadership position in the US marketplace. Of course, I'm unfortunately not in a position to tell you how we did this quarter, but you can see the trend to give you a sense of where things are continually headed.

This is actually a much better improvement to my original slides, so thanks for doing that. Basically a timeline of kind of where we've been. Launched our services in August of '02, first camera attachment in the United States. Arguably there were more camera attachments launched in the United States than perhaps any market in the world. I'm not quite sure what caused that, but there seemed to have been a lot of those. And we quickly followed with our first integrated camera phone in November of '02. and most of you, again, have seen the progression from there. So now we are very much into an integrated device. Still images, video now are becoming one and the same, becoming pretty much a standard across our image capturing devices. Any questions on this? No?

So what is the value proposition of video mail to Sprint consumers? It really is about first foremost the device is always with you. And those of you who have these devices know that. It's a very compelling proposition. You know, for the unexpected moments, some of us went to the Redwood Forest yesterday late afternoon. We all had cameras with us, which was fantastic. And we made good use of them. And as well, we are integrating the video mail experience with the picture mail experience. So we're not looking at the service as a video versus a still image, but rather really trying to provide the users with the highest quality in integration and ease of use, because really that is a major driver of the service. And, of course, it's about fun. I think as the resolution increases, as more and more consumer, as we penetrate the market base even further, it'll become something else, a little more than just fun. But for now, I think for the most part, people are using these devices for entertainment. It's personal entertainment associated with their personal content. It's a richer way to visually communicate. You can make the phone call or you can send the picture and follow up with the phone call. A lot of folks are doing that. For video at Sprint, we're currently supporting 15 frames per second, total approximately 15 second videos. Pretty consistent. For those other services that are out there today, I'd say that's pretty much the norm. And going forward, I think you can expect this to improve. The length and the quality, I think it was said earlier, will improve as well in the United States in pretty short order.

Flexibility is something very important to us. and our customers more importantly the ability to not only send a picture or a video but annotate it with text or with an audio file so we we actually have the ability to send two video clips one picture add an audio clip to annotate what you just did send and it comes to the user as a slideshow if you wish where they can skip from a still image into a video back to an image into a video and so forth and of course make the pricing affordable and predictable I was stunned by the five dollar ringtones that's fantastic in the United States we get that a month for video messaging so I think the Americans market the American market has really responded very well to our price plans which are basically unlimited it's a subscribership model you pay a five dollar a month fee for video mail on top of your picture mail plan and there are no restrictions then we also provide storage and online access features with the service We have three models in the market today that support video. Some of you may have some of these just out of curiosity. How many of you might have one of these models? We have one customer, two. Okay. You work for the company, that doesn't count.

I think the gee whiz here and what really is exciting, as Elisa and I talked about some months ago, is there's going to be an unprecedented amount of personal videos taken as a result of these devices. I think in history, never before will there have been so many personal videos captured on an electronic device, far beyond the camcorders or anything like that. So it really presents quite an opportunity and opens up new markets and new ways that you can use these videos.

The overall experience, again, has to be very tight, very integrated. Those of you who have the Sprint camera phones will know, you know, we like to think there are some parallels in our approach to how I think Apple does certain things with your devices. We really spend a lot of time and energy to make them better as far as the user experience goes. Everything we do, we design with the customer in mind first. The technology, in many instances, comes second.

And of course in the United States, unlike Europe, the presence of the personal computer continues to play a dominant role in what's going on. So if I look at the picture mail service, so primarily the still picture sharing, the PC continues to be a, you know, it's holding its own.

Some people thought by now its share of the picture messaging would have diminished much more than it has. I never thought that. I really believe that it will hold its own. This comes with video, of course. There are not a lot of video phones out there to share to. So you can just imagine the lion's share of what's being shared now is done to email. So, and PC email for that matter.

So Lisa got a phone call from us, I don't know, Lisa, was it sometime last summer, in that time frame, as we were preparing to launch Video Mail. And Video Mail and Picture Mail are also off the platform by a company called LightSurf that we work hand-in-hand. They're our partner in our design and our implementation. And as we were designing and building the product, But our engineering teams were faced with a challenge. The challenge was, here we had MPEG-4 files, what clients, what PC-based client or software should we use and recommend to customers to support the ability to receive and view the videos? And the decision was made really based on the quality and the, I would also say, the willingness of Apple to work with us to really, again, go the extra step to make the user experience of making it possible to download the software better, easier. And in turn, today, when you receive a video from Sprint Video Mail, what we do is we'll sniff out and find out if we'll determine if you do or don't have QuickTime on your PC if you don't that's the next thing you see automatically the recommendation of you we recommend you download this particular software Lisa tells me that it's it's a successful engagement not knowing exactly how successful it is it's something that that's been good for Apple as it has been for us. Again going forward what we're trying to really achieve is create a mass market for these devices for these applications you're going to start seeing us do more with the technology again providing customers what they want better quality longer videos you're going to see us also drive down the prices of the handsets which will in turn make it possible for more folks to get involved and as you know some there are some improvements coming to the wide area networks which will increase the bandwidth as well we're also corner of I work looking at the PC and how it is directly going to play with the device as well you talked about memory I think a lot of the things are going to get addressed in the near future so we're really very much in tune with we're trying to bring again at the end of the day a better user experience and a better product. That is it and that was yours actually.