The Future of Packaged Media Plastic Disks or

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Moderator: Steven B. Cohen COO & CTO Raging River Corporation

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Websites: www. redbox. com www. moviegallery. com www. ncrentertainment. com www. blockbuster. com www. dvdstation. com www. zoomsystems. com www. sonic. com www. dvdnow. com www. ragingriver. com www. imozi. com www. digiboo. com www. dvmatic. com www. modsystems. com www. mixandburn. com www. polarfrogdigital. com www. mediaport. com www. rimage. com www. primera. com www. decellc. com 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 2

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 3

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Year VHS Studio Revenue in Billions $ 1993 1997 2002 2003 2004 2005 2006 2007 2/17/2010 DVD 5. 9 9. 8 5. 9 4 2. 1 0. 6 0. 2 0. 1 Total 10 15 19 21 19 18 HPA Tech Retreat 2010: The Future of Packaged Media 5. 9 9. 8 16. 3 18. 9 20. 9 21. 4 19. 3 17. 9 4

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 5

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Dec. 31 (1 DAY) Kiosk Sales +2, 000 units 80% 70% 30% 20% Kiosks Video Stores Kiosks 2009 Video Rentals 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media Video Stores 2010 Video Rentals 6

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 8 unit trial in Washington Dc in 2002 20, 000+ kiosks in 2009 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 7

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 8

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 6¢/hr New Release 4¢/hr Back Catalogue 9¢/hr Bluray 1, 000 DVD in Stock 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 9

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Planning for 10, 000+ kiosks by end of 2010 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 10

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 11

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 12

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 13

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 14

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 15

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 16

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks In 2010 up to 40, 000 kiosks in play SDXC Cards 2/17/2010 Keychest DECE HPA Tech Retreat 2010: The Future of Packaged Media USB 3. 0 Sticks 17

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Ratnakur Lavu, CTO & SVP, Redbox Franz Kuehnrich, VP Engineering, Redbox 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 18

Redbox History 200 1 2/17/2010 200 2 200 3 200 4 200 5 200 6 HPA Tech Retreat 2010: The Future of Packaged Media 200 7 200 8 19

Accelerated Growth (22 k Kiosks) 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 20

The Secret – That is Not! 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 21

Convenience 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 22

Value Proposition 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 23

Exceptional Customer experience 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 24

Inside Redbox Technology 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 25

Inside Redbox Technology 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 26

Final Thoughts – Disk has staying power 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 27

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Tim Hogan, President, DVD Station 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 28

Brick & Mortar + Digital = ?

Moore’s Law… for storage

Future of Packaged Media Kiosks vs. Brick & Mortar vs. Bits & Pipes Jim Taylor, SVP & Chief Technologists, Sonic Solutions Chairman, International Digital Media Alliance (IDMA) 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 32

DVD On Demand Scenarios Enterprise manufacturing on demand (MOD) Rapid, custom publishing of DVD titles Retail managed recording (RMR) On-demand DVD creation at point -of-purchase Direct-to-consumer download and burn (CDB) Download & burn MPEG-2 DVD’s and printable collateral at home on PC or set-top box 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 33

Protection for Premium Content Recordable CSS Equivalent to replicated discs Qflix • Developed by Sonic and Pioneer • DVD Forum specification (“DVD Download Disc for CSS Managed Recording”) • Approved by all Hollywood studios Anti-rip Attempts to block ripping software May not provide legal protection under DMCA 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 34

Managing the Transition to “Electronic” Media Digital copy Managed copy Digital locker

EXAMPLES 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 36

Not just Long Tail hit #2 on Amazon’s DVD sales chart! Guaranteed “in stock. ”

Custom-build your own DVD from a huge vault of broadcast material Use brick and mortar retail stores for distribution/fulfillment www. ina. fr

Summary Online delivery will not become dominant for many years -DVD and BD will be around for decades -Kiosks and MOD may be last bastion for packaged discs -Intriguing ways to hybridize kiosks and MOD with online delivery Rapid growth should continue for years 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 43

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Jens Horstmann, VP Entertainment Technology, NCR Entertainment 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 44

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Planning for 10, 000+ kiosks by end of 2010 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 45

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 46

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks In 2010 up to 40, 000 kiosks in play 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 47

NCR Digital Music Solution A new offer that allows customers to download music albums, tracks and playlists quickly in-store at competitive digital prices. • Fast Download speeds on everyday devices • Ideal for consumers who want to download without using the net or a credit card • Over 5 million tracks now available • NCR standalone digital music only kiosk • Ideal for high traffic locations

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 49

The Future of Packaged Media 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 50

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Steven B. Cohen, COO & CTO, Raging River Corporation 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 51

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Developed first mobile, hard drive video players - 2003 Dig. Eplayer product introduction - 2004 Dig. Eplayer was awarded "IFE product of the year 2004” London, IPEC/LARA Annual Conference On Board 32 airlines, worldwide 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 52

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks • Best of Breed Technology Partners • Custom technology solutions for clients • Several Media formats available • Flexible platforms enables migration to digital downloads • Support for emerging platforms: Smartphones e. Book Readers Tablets 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 53

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Best of Breed Technology Partners 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 54

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Custom technology solutions for clients 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 55

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Several Media formats available 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 56

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Flexible platforms enables migration to digital downloads 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 57

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Support for emerging platforms: Smartphones e. Book Readers Tablets 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 58

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Multimedia Players and DRM 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 59

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Mo-DV Solution: Enabling Technology for Broadband Mobile video The Mo-DV content player is inexpensive to implement, self-contained and platform independent with cross-platform DRM for seamless content playback on most computers and cell phones. 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 60

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Mo-DV: a Cross-Platform Solution Competition Proprietary OS/Handset: Windows Media Player, Actimagine, Nokia Multimedia Player, etc. Cross-platform: Adobe Flash Light, Java (smart phones only) Multiple video players required to support smart phones Do not support feature phones DRM scheme tied to device Must maintain multiple encodings per title – very costly!! 2/17/2010 vs Mo-DV Single player works across most PCs, smart and feature phones DRM tied to storage device and not the phone Content interchangeable across platforms/devices One encoding per title works across all small screens (feature and smart phones) One encoding per title works across all large screens (PCs, TVs, projectors). Dramatically simplified user experience HPA Tech Retreat 2010: The Future of Packaged Media 61

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Content Distribution on Flash Media • Ultra Compact and Durable for Mobile Usage • HD Video, no costly Blu-ray Drives Required • HD Video streams directly from the card: No waiting time or large file management • Memory cards perfect for netbook applications without optical drives • Complete secure user experience with custom web integration, interactive • gaming, and video playback. 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 62

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Easy to Implement Hardware Level Security • Implementation only involves minor software modification to host • ATP includes full technical support and SDK for this modification: • In most cases only 300 lines of code to be added. • Sn. S software implementation WON’T affect any other functionality of the host device or playback of unprotected content • Compatible with all FAT/FAT 32 Devices: micro. SD(HC), USB drives • Can have both protected and unprotected content: USB with protected content PLUS free space 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 63

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks X-1 flash controller allows for a hidden, secure space in flash memory allowing you to store important data separated from the public space This area can not be detected by the operating system. Hack free Virus free No more accidental deletes/formats Seamless processing preformed at hardware level Supported by all SD and USB form factors SIP Manufacturing Process, no tampering or chip swapping Hardware level security with easy implementation 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 64

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks DVD + Blu-ray + Downloads XIMD: Xona Instant Media Download USB 3. 0 Optional Qflix MOD Solution Small Footprint: only 27’ across & 200 lbs. Rich Features Redefining Retail Economics 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 65

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 66

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 67

The Future of Packaged Media: Plastic Disks or Solid State/Brick & Mortar or Kiosks Summary • Open software architecture: Plug in APIs • Custom hardware Configurations • Future proof media format capability • Content delivered by combination of wireless, satellite and hard drive 2/17/2010 HPA Tech Retreat 2010: The Future of Packaged Media 68