Digital Media in Japan Why and how a

Digital Media in Japan Why and how a US start-up entered Japan

Mobile or PC – or Both? double. Twist CONFIDENTIAL 2

Digital Music in Japan double. Twist CONFIDENTIAL 3

Digital Music in Japan 4 double. Twist CONFIDENTIAL How popular is online music? – Nearly 40% of online population in Japan visited an entertainment music site in Aug. 2008 – 21. 9 million out of 57. 4 million online users – 1 out of 4 broadband users use i. Tunes software - 13. 6 million i. Tunes users in Japan • That’s a higher penetration than in the US, UK, France or Germany and more than twice the global average penetration – Yet i. Tunes music is relatively unpopular – Japan Record Association states that for first half of 2008: 20 million paid Internet downloads vs. 220 million paid mobile downloads (US $800 million for all of 2008) – Also estimates US$1. 4 billion of illegal mobile downloads in 2008 What are all these PC users doing?

Digital Music in Japan 5 double. Twist CONFIDENTIAL Answer: ripping CDs! – Users pay something to try music and then buy what they like – Tsutaya is a major retailer of music in Japan, so “try before you buy” does work – Sales of physical music (not online) in Japan exceeded sales in the US in 2008, despite being more expensive

Digital Video in Japan 6 double. Twist CONFIDENTIAL Online video content is extremely popular in Japan – You. Tube is by far the most popular entertainment site with over 21 million users (35% of total Internet users) – Niki Niko Doga, with 11 million users, has the longest average time per spent month (193 mn, compared with You. Tube’s 187 mn; US You. Tube data is 134 mn/month) The potential for video on phones is strong – Most new phones are designed for viewing digital TV – Both You. Tube and Niko Doga have mobile video but it suffers from low quality Japan mobile data & media are expensive – Average price of a mobile song is approximately $4 – Highest wireless data ARPU in the world – Strong user demand for video sync: 2 million downloads of video sync utilities in 2008

A Perfect Fit 7 double. Twist CONFIDENTIAL double. Twist makes transferring media to phones effortless – i. Tunes-like experience for music, video and photos for many devices Paid content on the PC can be grown via mobile – Paid Internet downloads could easily grow by 10 X just to equal paid mobile downloads – Piracy in mobile downloads is a massive and growing problem double. Twist bridges PC and mobile media – Nearly 40% of online population in Japan visited an entertainment music site in Aug. 2008 – 21. 9 million out of 57. 4 million online users – 13. 6 million i. Tunes users in Japan – double. Twist provides access to more than half the mobile phones in Japan from the PC – double. Twist’s PC/mobile overlap for digital media could be 10 -20 million users – There is a lot of free content on the PC that can be enjoyed on mobile

Wide Footprint of Supported Devices double. Twist CONFIDENTIAL Nearly all (80+) Do. Co. Mo phones from the past two years – Video support is consistent and universal – Music support is excellent through MTP connection mode – Roughly half the mobile market in Japan or 40 million users 60+ phones on KDDI au – Roughly half of KDDI devices are supported for video and music – au accounts for 25% of the mobile market 20+ phones on Soft. Bank – Music support – i. Phone support Other devices – Game (Sony PSP, Nintendo DSi), MP 3 player (i. Pod, etc. ) 8

Launch Plan double. Twist CONFIDENTIAL Consumer launch: July 09 – Early preview meetings with key journalists the week of July 6 th – double. Twist Japan media list covers 150 editorial contacts from a wide range of consumer-oriented publications – Press conference with 25 journalists – Several press interviews are planned for in-depth coverage – Dead simple message: Load video to your phone – i. Tunes & Music sync to be presented as secondary messages Key distribution sites – Windows Forest: the top free software site – Windows Forest reported 2 million downloads of video transfer utilities in 2008 9

The double. Twist Open Media Platform 10 double. Twist CONFIDENTIAL double. Twist provides seamless movement and enjoyment of media between desktop, devices and friends

Keep 11 What you need to load video to your phone double. Twist CONFIDENTIAL 0円 1000円 OR 1000円 You need a cable or micro. SD card reader to load videos using double. Twist

Keep 12 Leave your i. Pod behind double. Twist CONFIDENTIAL Using your existing phone: 2000円 Buying a new i. Pod: 17, 800円 Use a single device to enjoy your music and video and leave your i. Pod at home

Keep 13 double. Twist in action: Play double. Twist CONFIDENTIAL

Keep 14 double. Twist in action: Sync with simple drag & drop double. Twist CONFIDENTIAL

Keep 15 double. Twist: Drag and drop videos from You. Tube double. Twist CONFIDENTIAL

16 double. Twist in action: Premium Content double. Twist CONFIDENTIAL Coming soon

In Summary 17 double. Twist CONFIDENTIAL Bridging between the PC and mobile devices is an undeveloped area The media ecosystem in Japan is unique but full of opportunity A note on DRM – DRM for audio is going away in the US – DRM in Japan is still firmly entrenched – double. Twist leaves DRM alone and is looking for better solutions Popular use of video on phones is still undeveloped An experience that rivals i. Tunes experience is now available for many devices, including more than half of all Japanese phones

Keep 18 double. Twist history double. Twist CONFIDENTIAL • Founded in Norway mid ‘ 07; headquartered in San Francisco • $2. 5 million Series A round mid ‘ 07 by Index Ventures (Skype, Last. fm) and Northzone ventures • $5 million Series B round in late ’ 08 by Li Ka-shing, Solina Chau, Michael Ovitz and Alex Zubillaga • 02/09: double. Twist Mac beta released – enthusiastic reception by the Mac community • 04/09: double. Twist PC beta release – major press coverage • Company has been covered by the BBC, WSJ, Guardian, Techcrunch, Sydney Morning Herald, CNET and dozens of other publications and tech blogs

Keep 19 Exec bios – CEO, CTO double. Twist CONFIDENTIAL Monique Farantzos is the co-founder and CEO of double. Twist. Prior to double. Twist, she was the Managing Director of Double. Twist Ventures, a DRM interoperability company that advised Fortune 500 companies on DRM technologies. She has also been a consultant for Intellectual Ventures, one of the largest IP holding companies in the world. Ms Farantzos has been a Director at the Miller Porter Group, a consulting firm focused on the Life Sciences and Biotechnology industries. Ms Farantzos holds an MS in Applied Science with emphasis on Bioengineering from UC Davis and worked as a Physicist at the Lawrence Livermore National Laboratory. Jon Lech Johansen is double. Twist's CTO and responsible for all technology and architecture decisions. His background is in digital media interoperability, having worked on making proprietary systems such as DVD CSS interoperable with any device. Prior to co-founding double. Twist, Jon worked for Double. Twist Ventures and MP 3 Tunes, a digital music startup in San Diego. He is a self-taught software engineer whose passion is making technology accessible to ordinary users through polished and intuitive user interfaces. Jon received the EFF Pioneer Award in 2002 and was profiled on the front page of the Wall Street Journal at the age of 21.