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Mid-Range Plan for Fiscal Years 2009-2012

This plan outlines the strategic initiatives and financial goals for Sony Pictures Television for the years 2009 to 2012. It covers core programs, programming, digital networks, strategic investments, distribution and licensing, and ad sales.

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Mid-Range Plan for Fiscal Years 2009-2012

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  1. [DRAFT – as of 9/26] Mid Range PlanFiscal Years 2009 – 2012October 2008

  2. Executive Summary • Core Programs • Programming • Digital Networks • Strategic Investments • Distribution & Licensing • SPHE & SPTI Contribution to SPT Product • Ad Sales • Appendix

  3. Executive Summary • Adjust timing of broadcast sale of Seinfeld due to challenging local station economics • Create efficiencies and cost controls for soaps by moving to the lot and using new technology • Secure renewals for WOF / Jeopardy! and introduce new brand extensions • Aggressively pursue Jay Leno to be the cornerstone of our television business Core Programs Programming • Grow our reality / format business through Embassy Row, 2waytraffic, and other producers • Develop new hit syndication shows in partnership with Harpo Productions • Extend current partnership with Harpo to become the distributor of choice for all their shows • Create excitement and support for Crackle throughout SPE • Build Crackle.com into an online entertainment destination and attractive outlet for advertisers • Integrate Crackle into overall studio and leverage marketing and content resources • Expand existing base of managed network distribution partners Digital Networks • Expand FEARnet into a linear network • Create new, targeted shows on GSN and integrate skill-based gaming • Explore HD as an entry point for a broader Sony linear network Strategic Investments • Use the successful launch of Dr. Oz to become official distributor of all future Harpo shows • Seek extension of Starz deal • Distribute additional product through our digital distribution network Distribution & Licensing Ad Sales • Aggressively build our digital ad sales business with Crackle as the foundation • Continue to pursue third party representation and acquisition of complementary businesses • Leverage our content and ad sales assets to build a cross-platform Sony ad network

  4. [UPDATED 9/26] SPT Financial Summary EBIT Revenue ($ in MM) ($ in MM) $263 $223 $218 $211 $211 $197 $196 FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP NOTE: Traditional television excluding Digital Networks and Crackle

  5. [UPDATED 9/26] Digital Networks and Distribution Financial Summary EBIT Before Contribution Revenue ($ in MM) ($ in MM) FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP EBIT After Contribution ($ in MM) FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP

  6. [UPDATED 9/26] SPT Total Revenue From all sources of Domestic TV, Internet and Mobile revenue ($ in MM) $1,879 $1,670 $1,638 $1,610 $1,579 $1,504 $1,376 FY08 Q2/BDGT. FY09 MRP/PRIOR FY10 MRP/PRIOR FY11 MRP ($ in MM) $237 $267 $248 $285 Est. MPG/ACQ. Profit NOTE: Before Seinfeld producer share

  7. Net G&A Expenses & Headcount [UPDATED 9/26] Net G&A Headcount

  8. Executive Summary • Core Programs • Programming • Digital Networks • Strategic Investments • Distribution & Licensing • SPHE & SPTI Contribution to SPT Product • Ad Sales • Appendix

  9. Core Programs Strategy • Adjust timing of Seinfeld sale to approach broadcast partners under more favorable market conditions • Cultivate next generation of fans with digital / interactive offerings • Explore opportunities to move both shows to the Sony lot • Leverage digital technologies to produce daytime programming more efficiently CorePrograms • Secure station renewals and look to take back international distribution rights • Launch new mobile applications console games, and digital extensions to increase interactivity and drive viewership • Aggressively pursue Jay Leno to become the cornerstone of our TV business

  10. [UPDATED 9/26] “Seinfeld” Strategy EBIT • Closed 3rd cycle cable renewal with Turner • Digital rights are non-exclusive and SPT retains ad inventory • Approaching Fox, Tribune, and new media outlets for 4th cycle broadcast renewal • Launching cross country college tour and creating digital assets to connect the brand to a new generation of viewers • In near term, holding DST, VOD, and ad-supported to improve station renewals; over longer term looking to exploit digital windows, including • Releasing all 9 seasons on DST over two years starting as early as FY10 • Launching ad-supported with community features one year after initial DST • Expanded ad-supported and SVOD in later years ($ in MM) MRP Assumptions • Despite ad sales inventory being priced among highest in syndication, expect gradual ratings erosion • 3rd cycle cleared in 99% HH, guaranteed double run in 86% • Domestic DVD sales through FY08: $363MM since inception • Projected DVD sales: FY09: $12MM, FY10: $5MM, FY11: $3MM, FY12: $2MM • FY10 assumes 4th cycle station renewals of $500k per episode • FY11 assumes 4th cycle new sales of $500k per episode FY09 Q2/BDGT. FY11 MRP/PRIOR FY10 MRP/PRIOR FY12 MRP

  11. “The Young & the Restless” and “Days of our Lives” [UPDATED 9/26] Strategy EBIT Overall • Create operational efficiencies and lower overall production costs • Integrate new digital production technology / equipment • Move shows to the lot to improve coordination and cost control • Work closely with SPTI to secure renewals and international sales The Young & The Restless • Close CBS renewal by end of 2009 • Continue nationwide talent search to generate publicity and boost ratings in key markets • Build on success of online magazine Restlesstyle.com by incorporating advertising / merchandising • Shoot on location in international markets to help grow local audience Days of Our Lives • Close three-year license fee agreement with NBC • Upgrade show to Hi-Def and improve overall production quality ($ in MM) $43 $42 $40 $38 $36 $34 $34 MRP Assumptions The Young &The Restless: • Show renewed through August 2012 • License fees decrease by 15% to $85MM and costs decrease by 15% • Show moves to Sony lot and ATL and BTL cross-collateralized Days of Our Lives: • Show renewed through March 2012 • License fees equal costs throughout period FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP

  12. “Wheel of Fortune” and “Jeopardy!” [UPDATED 9/26] Strategy Overall • Wheel of Fortune celebrating its 5000th episode • Jeopardy! celebrating its 25th year in syndication • Both will be fully distributed in Canada under new 4-year deal • WOF was the #3 most watched show over the summer (Adults +18) and Jeopardy was #7 of all shows on TV • Look to take back int’l distribution rights from King World Wheel of Fortune: • Continue to use brand integrations for prizing, promotions, and production support • Launch new game element (One Million Dollar Bonus Round) and home viewing prizes to further engage audience and keep show fresh • Introduce new cross-platform games, including WOF on PS3, World Winner skill-based online game, and WOF “Road Trip” on mobile • Wheel Watcher’s Club now has over [4.5MM] active users Jeopardy! • Introduce new show elements highlighting 25th season, including 2th anniversary sweepstakes and new features and vignettes • Tape first ever TV show live from the floor of CES in 2009 • Launch new PS3 game, World Winner skill-based game, and new Rock & Roll Jeopardy! mobile game • Distribute new Airplay mobile application (Play Jeopardy! Live) enabling viewers to play real-time EBIT ($ in MM) $101 $96 $96 $94 $95 $92 $91 MRP Assumptions FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP • Wheel of Fortune production costs and CPM/ratings assumed at levels necessary to hold consistent profit margins • Jeopardy! experiencing strong CPM/ratings and increased International License Fees • Contractual licenses through 11/12

  13. Executive Summary • Core Programs • Programming • Digital Networks • Strategic Investments • Distribution & Licensing • SPHE & SPTI Contribution to SPT Product • Ad Sales • Appendix

  14. Overview of SPT Programming Drama Comedy Reality & Games Animation • Maintain portfolio approach to domestic development • Leverage int’l demand and distribution to sell shows globally Daytime Syndication Long Form Digital Mayflower

  15. TV Market Dynamics and SPT Initiatives Trends Initiatives • Reality is growing as a percentage of domestic primetime programming • International demand for reality continues to grow • Exploit SPE assets (library, 2waytraffic, and ER) to develop game and reality formats • Expand relationships with non-fiction executive producers and production companies • Comedies continue to have high off network syndication value • However, comedy makes up a decreasing percentage of broadcast network lineups • Maintain stable of top-tier writers, show-runners, and production entities • Build on SPT’s successful comedy brand to launch new cable and broadcast series • Local syndication markets looking for established brands, proven talent, and top-tier producers • Help ensure that Dr. Oz is a success in order to secure rights to future Harpo product • One-hour dramas dominate domestic primetime with 52% of total programming hours and have strong international demand • Continue to invest in the dramas on cable and broadcast and get additional shows on air • Leverage success in drama business to be highly selective in pursuing new projects • Digital quickly becoming a legitimate outlet for established talent • Expand overall deals into Digital Programming to help grow Crackle • Use Crackle as a place to test and launch new shows • Deficits are facing increasing pressure as production costs are generally rising faster than license fees • Focus on managing production costs and seek tax credits and other offsets

  16. SPT’s Current Program Lineup The Unusuals Mayflower (MOW) Peter Pan (mini) Shark Tank (pilot) All Star Mr. & Mrs. (pilot) Young & The Restless Rules of Engagement Stone Cold 6 (MOW) Untitled Mitch Hurwitz (pilot) ‘Til Death Sit Down Shut Up Lalola (pilot) Days of Our Lives Lost in the 80’s (pilot] Syndication Wheel of Fortune Jeopardy! Dr. Oz Judge Hatchett Judge David Young Judge Karen 10 Items or Less My Boys Dave Caplan Project (pilot) Gifted Hands (mow) Time Heals (pilot) Boondocks The Gong Show Gay Robot (presentation) Breaking Bad Drop Dead Diva (pilot) The Gathering (mini) Living Proof (MOW) The 10th Circle (MOW) Sex & Lies in Sin City (MOW) Flirting with Forty (MOW) The Shield Rescue Me Damages The Beast Untitled Matthew Perry / Peter Toland (pilot) Spectacular Spider-Man Dragon Tales

  17. 2008/2009 Scripted Development Snapshot

  18. SPT Alternative Programming Strategy Sony Assets • Harness the power of Sony assets to create shows with brand value • Refresh and re-launch proven game shows from SPT’s extensive TV library • Create new reality formats from film and TV properties • Source international formats for domestic production from 2waytraffic • Acquire Embassy Row • Expand on ER’s extensive development pipeline • Leverage Michael Davies’ international credibility to re-launch library product • Add professionals on the ground in int’l markets to acquire new formats Embassy Row 3rd Party • Acquire 3rd party formats for domestic and international production and distribution • Seek global rights (format and distribution) to feed 2waytraffic pipeline • Expand network of domestic producer partnership • Invest $7-$12MM per year (pre-recoupment) in additional overall deals • Target 2-3 overall reality deals • Invest in one production company Producer Relationships

  19. 2008/2009 Snapshot of Alternative Programming Sony Assets Embassy Row 3rd Party Producer Relationships

  20. The Power of a Format-Based Show WOF demonstrates the international and cross-platform potential for game show formats LinearProgram • Station license fees generated ~70% of total revenue • Brand integrations provide prizing, promotions, and production support • Reruns on cable / GSN • Currently licensed in 15 territories for broadcast (including new distribution deal in Canada) • Formatted in 22 countries, generating $81MM in revenues to-date DigitalExtensions InternationalSales • Online casual, console, portable, and PC games drive revenues and promote viewership • Launching PlayStation 3 and online skill-based game in FY09 • Currently #3 mobile game in US with new title (WOF Road Trip) launching this year Other • Slot machine license (IGT) generated $228MM lifetime to date • Rights also licensed for terminal-based state lotteries, board games, and various merchandise

  21. Overall Term Deal Financials [UPDATED 9/26] Net Cost Per Year # of Term Deals NOTE: Assumes 3 non-scripted deals for $7MM gross starting from FY10 through FY12

  22. SPT Production Assumptions [UPDATED 9/26] Network: • DAYS OF OUR LIVES / THE YOUNG & THE RESTLESS continuing throughout plan • RULES OF ENGAGEMENT and ‘TIL DEATH continue throughout the plan (6 seasons) • SIT DOWN, SHUT UP continues throughout the plan (4 seasons) • 7 pilots in 09/10 and 9 pilots per season thereafter, resulting in 3 series per year • One new series succeeds: 10/11 TBD Drama Cable: • RESCUE ME is ordered for a 6th season • THE BOONDOCKS continues throughout the plan (5 seasons) • DAMAGES and BREAKING BAD continue throughout the plan (5 seasons) • MY BOYS continues throughout the plan (6 seasons) • THE BEAST ends in 08/09 • 5 pilots per year, resulting in 2 series per year • One drama series succeeds in FY10 First-Run Syndication: • WHEEL OF FORTUNE & JEOPARDY! continue throughout plan • JUDGE KAREN MILLS and DAVID YOUNG continue throughout the plan (4 seasons and 5 seasons, respectively) • DR. OZ launches in 09/10 and continues throughout the plan (3 seasons) • TBD HARPO SYNDICATION launches in 10/11 and continues throughout the plan (2 seasons) Non-Scripted: $7MM Growth Development Spending: • 5 non-scripted cable series and 2 non-scripted broadcast network series across FY10 to FY12 MOW: • 9 movies and 1 miniseries per year

  23. Programming – New Series Investment & Development [UPDATED 9/26] ($97) ($88) ($85) ($75) Budget/Prior MRP ($95) ($95) ($79) Variance $1 $8 $4

  24. Executive Summary • Core Programs • Programming • Digital Networks • Strategic Investments • Distribution & Licensing • SPHE & SPTI Contribution to SPT Product • Ad Sales • Appendix

  25. Overview of Crackle.com Crackle leverages the studio’s strengths in content, programming, and marketing to provide an engaging online entertainment experience for males 18-34 • Take advantage of studio talent and production resources to create compelling original programming • Make Crackle the digital outlet for all forms of SPE content, including films, TV, clips, trailers, and exclusives • Enable users to interact with content in unique ways that are unavailable elsewhere on the web Content &Experience • Tap into studio’s marketing strength to promote site through multi-platform campaigns • Exploit digital distribution network to broadly syndicate Crackle across the web and mobile partners Grow Audience Drive Value • Increase revenue by offering advertisers high quality content, an engaged audience, and unique opportunities to sponsor content • Provide a unique promotional outlet for studio content

  26. Vault Crackle Content Strategy Digital Originals Film • High quality series and daily shows that define the voice of the network • High production value, talent-driven vehicles with significant revenues in ancillary markets (e.g., Angel of Death and Quentin Tarantino’s Video Village) • Anchor shows from studio-level talent (e.g., Dating Brad Garrett) • Shows from emerging talent with a proven audience (e.g., Owen Benjamin, David Faustino) TV Short-FormTV • Streaming premieres • Behind the scenes • HD Trailers Exclusives Take advantage of all of the studio’s content and production resources to create a robust, high-quality online video offering

  27. Example Programming Schedule: Winter ’09 Season Combines TV scheduling with the on-demand aspects of the web

  28. Crackle Experience Planned Improvements Crackle.com Today • Re-launching Q1 CY09 • Revising “look and feel” to simplify the user experience and make it easier to find content • Building community features that promote engagement around specific properties • Introducing immersive experiences around SPE movies

  29. Vault The Crackle Network Managed Network Partners • We own premium digital shelf space and ad inventory on all major distribution outlets • We program and control our content across partners and platforms • We syndicate the Crackle environment and, wherever possible, the Crackle player • Over 40online and mobile implementations Broadly distribute across partners and platforms to build scale Crackle.com Drive users back to site for deeper experience, additional content discovery, and greater monetization

  30. Vault Managed Network Footprint • 40 implementations to-date with 16 online and mobile partners • Expanding to include all scale players and more high growth sites Tier I Existing Tier II In-Process

  31. Traffic Forecasts

  32. [UPDATED 9/26] Digital Networks & Studio Financials EBIT Before Contribution Revenue ($ in MM) ($ in MM) FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP

  33. [UPDATED 9/26] Crackle Financial Summary EBIT Revenue ($ in MM) ($ in MM) FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP

  34. Executive Summary • Core Programs • Programming • Digital Networks • Strategic Investments • Distribution & Licensing • SPHE & SPTI Contribution to SPT Product • Ad Sales • Appendix

  35. GSN Summary Challenges • Strengthen programming with the introduction of new, hit shows • Add more general rate advertisers • Stronger management team in place • Strategy to embrace older female demo has halted ratings erosion and laid the foundation for growth in both ratings and VPVH • Close coordination with FUN Games has transformed GSN Digital into a profitable growth platform for the channel • Redesigned and expanded GSN Live programming getting traction with both viewers and advertisers Improvements • Continue close coordination with FUN Games (likely through merger) and build properties that increase interactivity and enable multiplatform sponsorship • Increase investment in original programming to drive ratings/demo improvement • Refresh aging prime strips with contemporary acquired programming to increase ratings and support original series launches • Invest significantly in re-branding the look and feel of the network to target core demo and embrace game show fans • Improve affiliate positioning and minimize migrations through pricing and marketing initiatives CompanyPlans Next Stepsfor SPT • Negotiate fair value at which to acquire 50% of FUN Games or structure an arms length partnership between FUN and GSN

  36. FEARnet Summary • VOD only model is not viable long-term • Limits potential viewers, ad opportunities, and distributors capable of VOD • Need to increase ad sales across all platforms • Dynamic ad insertion required to maximize revenues Challenges • Continue to exploit FEARnet’s recent move to LA to improve coordination • Launch FEARnet linear with DirecTV investment as the critical first step • Ensure Comcast also launches linear version • Significantly expand ad sales • Expand inventory through linear channels • Need Comcast to provide leadership in dynamic ad insertion Initiatives • Comcast’s #1 VOD provider for Free Movies • 5 of the top 10 free movie titles on Comcast in 2008 are FEARnet titles [# SPE titles] • 2Q08 VOD views increased 50% over 2Q07 (averaging 10MM views per month) • Currently in 30MM homes; adding Time Warner in August Cable VODRatings • America’s #1 horror site • Average unique users for 2Q08 up 226% over 2Q07 • Unique users hit a historic high in July 2008 (700k), up 250% from July 2007 • FEARnet.com ranked as one of the top 15 movie sites by PCMagazine.com Web Ratings

  37. HD Channel Opportunity • Near-term demand for HD has re-opened window for carriage of new networks • Increased capacity through new satellites and services (e.g., IPTV) • HD content being used as a differentiator among service providers • Limited window as more SDTV will become HDTV • Although HD could serve as an entry point, the opportunity lies in evolving to a true “Sony Entertainment Television Network” • Leverage the strength “Sony” as the brand for HD • Build on our expertise in original content, ad sales, and large film and TV library • Share programming with our digital assets, including Crackle and eventually PSN • We are evaluating three potential methods of entry • “Build” strategy: Use library to secure carriage and minimize investment; new channel on-par with MGM HD • “Partner” strategy: Invest in a smaller HD player (e.g., HD Net); use the Sony brand and library to reinvigorate and grow the channel • “Buy” strategy: Acquire a sizable channel and better define channel voice and grow audience by leveraging all Sony assets

  38. [UPDATED 9/26] Game Show Network – Financial Summary SPT Share of Net Income SPT Share of Dividends/(Funding) FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP

  39. [UPDATED 9/26] FEARnet Financial Summary SPT Share of Cash Funding SPT Share of Net Loss/Income FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP FY09 Q2/BDGT. FY10 MRP/PRIOR FY11 MRP/PRIOR FY12 MRP

  40. Executive Summary • Core Programs • Programming • Digital Networks • Strategic Investments • Distribution & Licensing • SPHE & SPTI Contribution to SPT Product • Ad Sales • Appendix

  41. Distribution Strategy Overview • Leverage “all rights under one roof” to create additional revenue opportunities through new assets, rights, and windows • Launch Dr. Oz as the anchor for our first run syndication business and grow partnership to include all future Harpo shows • Secure additional double runs and upgraded time slots for our court shows • Use marketing and new product offerings (HD, early windows) to grow demand for VOD and improve economics • Negotiate new Starz Pay TV deal to extend our above-market relationship • Expand footprint of digital product and partners; continue to outperform our competition in merchandising and operations

  42. World-Class Execution • Established systematic approach to maximizing value of assets across windows and partners • Evaluate each right separately to determine best use / windowing • Enabled negotiations of both digital and linear rights for third cycle cable sale for Seinfeld • Created comprehensive template to facilitate cable sales that addresses SPT’s digital offering and policies • Institutionalizing approach of managing “all rights under one roof” • Developing backend platform (Ventana) to manage avails • Launching dual windows, early / HD VOD, and digital extensions to drive revenue • Applying approach to an expanding base of content • Off broadcast (Rules of Engagement, ‘Til Death) • Off cable (Rescue Me, Damages, My Boys) • 1st run (Judge Karen Mills) • Internet developed shows (Angel of Death) • Library product online and on mobile (Who’s the Boss?, Monty Python) • Third party acquisitions (Just for Laughs) • New library strategies (Minisode network, Cinemactive)

  43. Distribution Sales – Total Licensing Revenue SPT will generate [$745] million in total current and library sales for SPE ($ in MM) $937 $799 $793 $748 $751 $745 $680 [$ TO BE UPDATED] FY08 Q2/BDGT. FY09 MRP/PRIOR FY10 MRP/PRIOR FY11 MRP

  44. Syndication Market Dynamic MRP Initiatives • Launch Dr. Oz in Fall ’09 as the cornerstone of our first run syndication business • Sell market-by-market to maximize show value (best time slot, station, etc) • Partner with stations to create a Dr. Oz network (combining linear, digital, and physical reach) • Already cleared in approx [45%] of the country with leading affiliates • Build off recent successes of court shows and secure additional double runs and upgraded time slots in key markets • Provide local stations with non-exclusive streaming rights (with inventory hold backs) • Leverage digital transition as opportunity to increase library sales • While national ad sales growth is flat, local advertising is struggling • Local station market is challenged with stations generally decreasing license fees • To succeed, new shows need to be established brands • Transition to digital (Feb ’09) opening up additional programming opportunities • Stations looking to build websites and create new revenue opportunities through sponsorable, streaming content

  45. Harpo / Dr. Oz [UPDATED 9/26] Strategy EBIT • SPT has entered into a distribution relationship with Harpo, one of the most successful independent producers in TV history • Dr. Oz will be the first Harpo show distributed by SPT • Show launch with leverage the power of the Oprah platform to build awareness and grow audience • Complemented by an immersive online experience that will generate meaningful traffic and revenues • Dr. Oz will serve as a foundation for a deeper partnership that has the potential to redefine SPT’s first run syndication business • Provides access to top talent and shows through MRP time horizon • Gets us in business with top affiliates $21 $19 MRP Assumptions • Dr. Oz launches in 09/10 and continues throughout the plan • TBD Harpo launches in 10/11 and continues throughout the plan

  46. Syndication – Revenues ($ in MM) [$ TO BE UPDATED] NOTE: Includes off-net and first run

  47. Free TV / Basic Cable Market Dynamic MRP Initiatives • Library product faces challenges • Networks are more selective in what library product they buy due to increased appetite for original programming • Our library continues to age • Increasing number of viewing opportunities in earlier windows limits ability to maintain value in Free TV • Network audiences continue to fragment • Continued growth in the number of cable platforms and original programming • Increased competition from emerging digital platforms and new entertainment options • To remain competitive, networks seeking new digital assets, rights, and windows • Continue to aggressively sell theatrical releases and library product • Sell King of Queens in second cable cycle • Use showcase packages to drive demand • Extend client base to include smaller cable networks (e.g., G4, ESPN) by offering tailored products • Use additional windows, assets, and rights to enhance offering and create new sales opportunities • Sell to multiple cable nets in same window (e.g., “The Jeffersons” on TV Land and BET) • Create new digital assets (e.g., Minisodes) to complement linear programs • Sell streaming rights to existing episodes and make simultaneously available on multiple platforms • Develop modern extensions of older library assets to monetize on emerging platforms (e.g., Cinemactive)

  48. Free TV / Basic Cable – Revenues ($ in MM) [$ TO BE UPDATED]

  49. Pay Per View / Video On Demand Market Dynamic Forecasted Market Growth • Cable VOD will continue to drive overall growth • Satellite providers aggressively competing against Cable VOD with push/pull products and HD • All cable and satellite players are enhancing offerings through IPVOD • Studios continue to explore Day-and-Date VOD as opportunity to increase margins • Telecos are rapidly expanding into VOD but only expected to contribute 10% of total market revenues $4,295 $3,870 17% CAGR $3,374 $2,820 $2,270 MRP Initiatives • Drive views with major partners (DirecTV, Dish, and iN Demand) through marketing initiatives • Exploit demand for 1080i and 1080p HD content to improve traditional VOD economics and studio copy protection / security • Continue to explore Day-and-Date as an opportunity to charge premiums and test earlier windows to determine price, timing, and other key terms • Benefits must outweigh DVD cannibalization Source: SNL Kagan, 2007; excludes adult content and events For notes, include how long PPV/VOD deals go; what HD rights we give

  50. Pay Per View / Video on Demand – Revenue ($ in MM) [$ TO BE UPDATED]

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