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ITN Networks

ITN Networks. Board Meeting. June 04, 2008. “The 5 th Network”. Television & Multi-Video Platforms. At a Time When the Aggregation Model is Becoming Most Important, Through Our Management & Investments, ITN is in a Stronger Position for the Future. 2008-2009:

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ITN Networks

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  1. ITN Networks Board Meeting June 04, 2008

  2. “The 5th Network” Television & Multi-Video Platforms At a Time When the Aggregation Model is Becoming Most Important, Through Our Management & Investments, ITN is in a Stronger Position for the Future. 2008-2009: Strategic Opportunity to Re-Brand ITN:

  3. National “C3” Commercial Ratings Exact Break / 100% Verified Clearances Accountability • 3rd Party Electronic Commercial Verification • Commercial Ratings vs. Program Ratings Highest Level of Accountability in Television 50% SQL Based as of June 2008 80% SQL Based by December 2008 Technology Development • Move Legacy Systems to SQL Systems 10%+ of ITN’s Inventory in Non-Broadcast 15 Providers of Cable & Satellite Inventory Inventory Expansion • Cable & Satellite: National, Regional, Local Sustained Growth across News & Entertainment Continue Expanding on Custom Consumer Targets Actively Building ITN’s Online Strategy Internally Sales Development • News & Entertainment • Behavioral & Lifestyle Targeting • Online Expansion Investments in EV = Quicker Reaction Time Locally: Significantly Improved Station Profit Margins Nationally: “C3” Ratings within 3 weeks from Airdate Efficiency & Execution Time • Profitability • Operational Efficiency Original Television Content • Primetime in Broadcast and/or Cable • Secondary: Other Dayparts Significant Advances Since September 2006 2008-2009 Strategic Move to Add

  4. Online Division Presentation MaryAnn Halford Sr. VP of Broadband Original Television Content: The final missing ingredient to re-brand as a true full-service network Especially Primetime: Will drive significantly more activity across every ITN division “The 5th Network” Television & Multi-Video Platforms News Division Entertainment Division Consumer Division Early Morning News Evening News Noon News Prime-Late News Daytime Top-Talk Shows Early Fringe Weekend Prime Access Prime Extension Late Night The Simpsons Moms Teens African-Americans FT Working Women Beauty & Fashion Increasing Per Demand

  5. ABC, CBS, NBC FOX:4Q’07 - April ’08 vs. 4Q’06 – April ’07 A18-49 A18-49 W18-49 W18-49 W18-49 A18-49 W18-49 A18-49 W18-49 A18-49 A25-54 A25-54 W25-54 W25-54 W25-54 W25-54 A25-54 A25-54 A25-54 W25-54 Network Primetime Network Daytime Network LateNight -13% -17% -16% -11% -12% -11% -21% -21% - 7% - 8% -19% -15% -15% -18% -10% - 8% - 8% - 7% - 7% - 9% *Excludes Sports Network Morning News Network Evening News The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks

  6. 90% 10% 39% 61% 33% 67% 24% 76% 48% 52% Network Programs: Non-Network Programs: Network Programs: Non-Network Programs: Network Programs: Non-Network Programs: Network Newscasts: Local Newscasts: Network Newscasts: Local Newscasts: The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks Networks’ Share of Broadcast Television Viewing Network Primetime Network Daytime Network LateNight Represents a Large Majority of Total Network Ad Revenue 60%+ across ABC/CBS/NBC/FOX Network Morning News Network Evening News Non-Network Programs & Local Newscasts: 70%-100% of the Commercial Inventory Is Local – Not in the National Marketplace

  7. News Division:National Ratings Comparison Network Evening News Network Morning News W25-54 A25-54 W25-54 A25-54 1.6 1.3 1.9 2.0 NBCMorning News Average (Today Show 1,2,3, Sat. Today, Sun. Today, Early Today) NBCEvening News Average (NBC Nightly News Mon.-Sun.) 1.8 1.3 1.9 2.1 ABCMorning News Average (GMA, GMA Sat., GMA Sun., America this Morning) ABCEvening News Average (ABC Nightly News Mon.-Sun.) 1.0 0.9 1.5 1.7 CBSMorning News Average (Early Show 1&2,CBS Morn. News, Sat/Sun. Early Show) CBSEvening News Average (CBS Evening News Mon.-Sun.) Early Morning News Networks 1.7 1.5 Evening News Networks 2.3 2.1 Plus Non-Network News Dayparts Noon News Network11am-2pm Late News Network10pm-11:30pm The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks ITN Networks Provide Stronger Alternatives to Broadcast Network Television Outside of Prime, Plus Non-Network Dayparts

  8. Entertainment Division:National Ratings Comparison Network Late Night Network Daytime W18-49 A18-49 W25-54 W18-49 1.5 1.3 1.0 1.1 NBCDaytime Average (Days of Our Lives) NBCLate Night Average (Tonight Show, C. O’Brien, C. Daly, SNL) 1.6 1.3 0.7 0.9 ABCDaytime Average (All My Children, Gen. Hospital, One Life to Live, The View) ABCLate Night Average (ABC Nightline, J. Kimmel) 1.5 1.2 0.8 0.9 CBSDaytime Average (As World Turns, Bold-Beaut., Guid-Light, Price, Young-Rest) CBSLate Night Average (D. Letterman, C. Ferguson) 1.0 Daytime Networks 0.9 1.6 1.5 FOXLate Night Average (Mad TV, S. Feresten) Late Night Networks 1.5 1.4 Plus Non-Network Entertainment Dayparts Early Fringe/Prime Access4pm-8pm The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks ITN Networks Provide Stronger Alternatives to Broadcast Network Television Outside of Prime, Plus Non-Network Dayparts

  9. Entertainment Division:National Ratings Comparison Current Efforts Surround Primetime: Prime “Replacement” Network 6p-8p & 10p-12am Prime “Access” Network 6p-8p Prime “Extension ” Network 10p-12am • Top Syndicated Programs / 90%+ Off-Network Sitcoms / Key Daypart Control • Research: Less Channel Switching / Less DVR Recorded-Ad Skipping The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks ITN Networks Provide Stronger Alternatives to Broadcast Network Television Outside of Prime, Plus Non-Network Dayparts ITN Lacks A True Primetime Alternative …Yet Marketplace Interest Remains Strongly Focused on Original Primetime Content

  10. “CW” = “The best of WB & UPN” “MyNet” = “A new broadcast television network” Formed 2 Years Ago W18-34 1.8 1.7 521 A18-34 1.4 1.4 411 W18-49 1.7 1.5 471 A18-49 1.3 1.3 381 W25-54 1.6 1.4 439 A25-54 1.3 1.2 367 4Q’05 – April ’06 WB Avg. Ratings: UPN Avg. Ratings: Estimated Ad Inventory Total Weekly GRPs: 4Q’07 – April ’08 CW Avg. Ratings: MYN Avg. Ratings: 1.1 0.4 249 0.9 0.4 215 1.0 0.4 238 0.9 0.4 213 0.9 0.5 226 0.9 0.5 212 Estimated Ad Inventory Total Weekly GRPs: -48% -52% -49% -42% -48% -44% The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks • Failures of “CW” and “My Network” in Primetime Today, ITN Delivers More GRPs to Current Advertisers than are Available on CW & MYN Combined

  11. Annual Deal is Estimated at $10-$15 million • WPP Group owns 6.8% stake in Media Rights Capital (WPP Group Agencies: Mediacom, Mediaedge, Mindshare, etc) Beyond Next Season: New Speculation that CW & MYN may cease to exist beyond 2009 May Create Numerous Similar Opportunities to Gain Access to Broadcast Primetime Significant ITN Advantages: • ITN is already active across all other supporting News & Entertainment dayparts • Only ITN, at the outset, can immediately offer Prime with larger, multi-daypart upfront packages • Multi-daypart packages significantly minimizes risks of Primetime efforts – Enables Sustained Effort The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks • Failures of “CW” and “My Network” in Primetime Next Season 4Q’08-3Q’09: CW will no longer be programming Sunday nights Media Rights Capital(founded in 2004) purchased the rights to Sunday nights across CW affiliates to distribute their producers’ content (Reality Shows, Sitcoms)

  12. Syndication:4Q’07- April’08 vs. 4Q’06 - April’07 W18-34A18-34W18-49A18-49W25-54A25-54 Top 10 M-F Programs of the Season: (~1/3rd of All M-F Syndicated GRPs) -14% -12% -10% -17% -12% -14% - 4% -15% - 7% -15% - 9% -13% 123 Returning Programs in ’07-’08: Next season (4Q’08-3Q’09), for the first time, there are ZERO New Off-Network Sitcoms entering the Broadcast Syndication Market(Key to Top 10 Ratings Strength) 2008-’09 2009-’10 2007-’08 My Name is Earl The Office American Dad ----- Two & Half Men Family Guy George Lopez Half & Half The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks • Failures of “CW” and “My Network” in Primetime • Syndication: Significant Declines – Fewer New Programs

  13. W18-49 W18-49 W25-54 W25-54 A18-49 A18-49 A25-54 A25-54 Broadcast Network Primetime:Avg. Ratings 4Q07-1Q’08 ABC/CBS/NBC/FOX 3.16 3.75 2.66 3.18 ABC/CBS/NBC/FOX/CW 2.40 2.83 2.84 3.33 Cable Network Primetime To Replace 1 Average Prime Airing on a Broadcast Network 4-5x More Commercials Top 10 Cable Nets 0.65 0.67 0.60 0.59 7-8x More Commercials Ranked 11-20 0.40 0.39 0.39 0.40 23-26x More Commercials All Others 0.11 0.13 0.11 0.13 The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks • Failures of “CW” and “My Network” in Primetime • Syndication: Significant Declines – Fewer New Programs • Cable: Too Over-Saturated to Absorb All Broadcast Declines Greater Ratios of Broadcast Strength vs. Cable Exists Across All Other Dayparts

  14. Starcom Activity: Top Clients 6 Months Oct. '07 – Mar.'08 Number of National Commercial Units Airing by Advertiser ABC/CBS/NBC/FOX/CW Syndication Cable Networks All Programs Other Dayparts Other Dayparts Primetime Primetime Allstate 220 315 338 3,917 27,452 Best Buy 230 127 80 2,955 13,155 Discover Card 47 79 15 743 3,378 Hanesbrands 37 216 348 2,252 12,730 Applebees 500 437 140 1,542 7,291 Kellogg 317 2,272 1,269 8,528 61,435 Nintendo 259 458 37 2,669 20,012 PetSmart 167 85 134 1,017 5,643 Walgreen 90 230 250 1,626 10,397 Total: 1,867 4,219 2,611 25,249 161,493 The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks • Failures of “CW” and “My Network” in Primetime • Syndication: Significant Declines – Fewer New Programs • Cable: Too Over-Saturated to Absorb All Broadcast Declines Example:

  15. Original Premise: At a Time When the Aggregation Model is Becoming Most Important, Through Our Management & Investments, ITN is in a Stronger Position for the Future… The 5th Network: Market Dynamics • Ratings Erosion on 4 Major Broadcast Networks • Failures of “CW” and “My Network” in Primetime • Syndication: Significant Declines – Fewer New Programs • Cable: Too Over-Saturated to Absorb All Broadcast Declines • Agencies: Must Expand Reach with Greatest Ease-of-Use • Fragmented Media = More Work to Achieve Same Results • Increasingly Being Squeezed on Client Fees • Clients Are Demanding Greater Accountability & Consumer Targeting • New Growth Requires Expanding Services Across New Media • Reducing Costs by Reorganizing to Consolidate Labor

  16. Television & Multi-Video Platforms “The 5th Network” Broadcast Ratings & Reach Highest Level of Accountability Greater Consumer Targeting Client & Brand Flexibility Strong Track Record of Delivery Network-Time Turnaround Ease-0f-Use Aggregation Across Multiple Video Touch-Points News Division Entertainment Division Online Division Consumer Division 2008-2009: Strategic Move to Add the Component of Original Television Content

  17. Content Development • Content Distribution CW & MYN Affiliates, Cable Networks, Digital “Virtual” Channels • Public Relations Machine Potential Strategic Acquirers • Sony • Comcast • Time Warner • Cox Communications • Media Rights Capital • Dunne Capital • Major Independent Studios

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