1 1 executive summary core assets programming networks distribution ad sales financial appendix...
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11
• Executive Summary
• Core Assets
• Programming
• Networks
• Distribution
• Ad Sales
• Financial Appendix
Agenda
22
Short-form Programming by Channel and Content TypeShort-form Programming by Channel and Content Type
Library
New Access
Acquisition
Original
UGV
[Emphasize that Minisode and Screening Room will leverage library; most original content will be against
Funny Bone / AXN; Crackle will be mostly UGV with potential for some
premium content]
33
• Executive Summary
• Core Assets
• Programming
• Networks: Digital
• Distribution
• Ad Sales
• Financial Appendix
AgendaAgenda
[CONSOLIDATION OF 5-6 MARKET SLIDES IN “DIGITAL NETWORKS” SECTION PROCESS]
44
ContentContent
Without Digital Networks, SPT Loses Influence and RevenueWithout Digital Networks, SPT Loses Influence and Revenue
DistributionDistribution
AdvertisingAdvertising
• Traditional networks aggressively build online & mobile audiences, replicating position & distribution advantage in the digital world
• Difficult to secure real estate on digital MSOs for SPT’s a la carte content, with limited spots available in digital MSO tiers
• Digital MSOs increasingly dictate business models and product development without SPT input
• SPT content continues to build and benefit other parties’ networks, replicating the current creation-distribution ecosystem
• Talent, seeking multi-platform exposure and marketing of productions, turns elsewhere
• Opportunity cost to not making library available online
$0
$500
$1,000
$1,500
$2,000
2005 2006 2007 2008 2009 2010 2011
Source: Adams Media Research, 2007
TV: $568 m
MusicVideo: $447 m
News &Sports: $433 m
Other: $145 m
UGV: $137 m
• Ad dollars shifting from traditional TV to online
• By 2011, TV content captures largest share of online ad spending:
55
Strategy: Create Digital Networks to Address Digital LandscapeStrategy: Create Digital Networks to Address Digital Landscape
Why Digital Networks?Why Digital Networks?
Generate RevenueBuild Assets
• Capture share of developing revenue streams (IP and mobile)
• Unlock and monetize SPT’s vast library
• Give SPT seat at table to shape digital products and business models
• Create program franchises with follow-on windows (e.g. DVD, Direct to Mobile)
• Establish 21st century network / distribution assets for SPT
• Build foundation for SPTAS to bring-in new partners and expand lines of business
• Provide long-term distribution leverage for SPT content
• Provide outlets for new content and talent
66
Four Networks Will Activate SPT’s Multi-Billion Dollar Library*Four Networks Will Activate SPT’s Multi-Billion Dollar Library*
Your favorite feature length, contemporary classic films across all major genres: comedy, action, drama, family, sci-fi and cult
• Episodes from the heyday of sit-coms
• Outrageous shorts and busted pilots
• Originals by contemporary comedians
• SPT’s “middle tail” content is hard to find
• Deep classic comedy library
• Demand for short form, original comedy exploding online
Classic hard-hitting action TV series and original takes on today’s favorite action movies and stars
• Deep action-themed library
• SPE relationships with
celebrity action stars and film franchises
• Key young male action demo also early adopter of digital tech- nology
• SPE’s 3,500+ feature library
What: 2 Popular Genres, 2 Popular FormatsWhat: 2 Popular Genres, 2 Popular Formats
Why: We matched our assets with market demandWhy: We matched our assets with market demand
Favorite retro TV shows told in in 4-6 minute “minisodes”
• Extensive library of much-loved shows
• Format appeals to today’s “bite sized” video consumption
• Edited to meet the demo’s ironic, camp sensibility
• Popular TV format (Turner, USA, AMC, etc.) embraced by audiences but not yet translated to digital
*Five including SPT’s investment in FearNet and SPT Mobile’s distribution of FearNet Mobile
77
Programming Philosophy Based on 4 Building BlocksProgramming Philosophy Based on 4 Building Blocks
Acquisition
Original Production
Library
New Shows
Star-Driven
Branded Ent.
Traffic Creating
New Access
SPE Film
SPT TV
Prosumer
Short & longform
Credence WalkerWTF with
Penn Jillette
Busted Pilots
Short-Lived Series
88
Distribution PhilosophyDistribution Philosophy
Network Distribution Approach
Partners D2C
Online Mobile Online Mobile
• Portals / Aggregators
• Syndicators
• Social Networks
• Virtual Worlds
• Carriers
• Non-Carrier Aggregators
Other
• MSOs & IPTV
• SCE: PS3, PSP
• SEL: Bravia, VAIO
• Vertical sites
• Originals sites
• WAP
• Application
• Text
Emphasis on Syndication
99
Digital Networks Digital Networks andand Crackle Complete SPT’s Offering Crackle Complete SPT’s Offering
Distribution
Networks are syndicated to digital “MSOs” (e.g., Joost, AOL, MySpace, Yahoo, MSN) in their player/environment
Distribution
Crackle’s website and Crackle player central to the strategy
Originals
Original programming is more linear in nature, uses high-end talent and is professionally selected and produced
Originals
Short-form programming is largely meant to spur UGV development for the purposes of individual exposure / fame
Content - selection
Content is all pre-screened for quality (like a network) – an “upfront” mentality where we are the buyer
Content - selection
Editorial and user-based rankings of content drive pyramid
•Library play•Original
programming will also appear on Grouper
•User involvement play
•User involvement occurs on and is enabled by Grouper
1010
Digital Networks FinancialsDigital Networks Financials
$2.0
$6.0
$8.0
$4.0
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
FY07 FY08 FY09 FY10
($ in MM)
$10.0
$20.0
$25.0
$15.0
$0
$5
$10
$15
$20
$25
$30
FY07 FY08 FY09 FY10
($ in MM)
EBIT Revenue
[Placeholder Numbers]
1111
• Executive Summary
• Core Assets
• Programming
• Networks: Crackle
• Distribution
• Ad Sales
• Financial Appendix
AgendaAgenda
[CONSOLIDATION OF 5-6 MARKET SLIDES IN “CRACKLE” SECTION PROCESS]
1212
Crackle’s Strategic FocusCrackle’s Strategic Focus
• Discuss high-level market issues / trends
• Outline Crackle’s position in marketplace
1313
Crackle Strategy OverviewCrackle Strategy Overview
Content / ChannelsContent / Channels
Platform / ProductPlatform / Product
Partners / DistributionPartners / Distribution
MonetizationMonetization
Differentiate service
Build audience
Generate revenue
Goals
Summary level strategy for
these key issues
1414
Evolution of Crackle ChannelsEvolution of Crackle Channels
FY07 FY09 FY08 FY10
Channels
FamePartners
TheLine-Up
ImprovSPASPT
Identify Specific
Channels / Concepts
Discuss evolution of content on Crackle
(e.g. premium content?)
Identify Specific Partners
1515
Crackle Platform DevelopmentCrackle Platform Development
Device Support
New Features
FY07
• Expansion of embedded player
–Integrate search, upload, comments and “shoutout” features into player
• Syndication via 1-Click publishing (e.g., Digg, EBay)
• Online editing functionality
• Branded channel templates (framework for premium producers, sponsors)
• Family Filter
• Initial camera integration (Pure Digital)
• Initial R&D for Sony devices: PS3, VAIO
FY08/09
• Continue expansion of embedded player
–Add real-time community features including chat
• Add geographic data and search
• Personalized recommendations/channel
• Customized functionality
–User profiles, instant messaging
• Mobile phone integration
• Hardware integration (e.g., PCs, Cameras, Camcorders, Cell Phones, Set-top Boxes)
1616
Expansion of Crackle’s Distribution NetworkExpansion of Crackle’s Distribution Network
Cross-Sony Partnerships
MarketingDistribution Partners
User Driven “1 Click”
Digital Imaging
• Power video uploads
• Embed screensaver and software
• Users syndicate playlists via embedded player
• Embed Grouper player on partner sites
• Distribute content “pyramids”
• Purchase advertising on high traffic web sites
• Drive users back to Grouper.com
1717
Crackle Revenue PlanCrackle Revenue Plan
• Overall trends in sales of advertising against UGV content
• Ad units (pre-roll / post-roll, overlays, banners)
• Sales strategy
• Sponsorship concepts
• Traction to-date with advertisers
1919
Crackle FinancialsCrackle Financials
-$18.0
$5.0
$15.0
-$15.0
-$20
-$15
-$10
-$5
$0
$5
$10
$15
$20
FY07 FY08 FY09 FY10
($ in MM)
$13.0
$40.0
$60.0
$20.0
$0
$10
$20
$30
$40
$50
$60
$70
FY07 FY08 FY09 FY10
($ in MM)
EBIT Revenue
[Placeholder Numbers]
2020
• Executive Summary
• Core Assets
• Programming
• Channels
• Distribution
• Ad Sales
• Financial Appendix
AgendaAgenda
2121
Digital Distribution Landscape: Growing DemandDigital Distribution Landscape: Growing Demand
• Media conglomerates have licensed their content for digital sell-through
• Networks/labels have extended their brands online
– ABC.com: ad-supported full episodes of primetime shows
– Launched AOL In2TV, ad-supported classic TV episodes
– Warner Music Group to distribute library of music videos via YouTube
– CBS to offer wide variety of short-form video programming (news, sports, entertainment) on YouTube
102
527
1,086
1,864
64
171
348
558
23
45
106
242
6401,070
1,500
2,271
433
2006 2007 2008 2009 2010
U.S. Consumer/Advertiser Spending ($M) CAGR%
$477$477
$829$829
$4,934$4,934
Online videoadvertising
DST
IP-VOD
Subscription VOD
$1,812$1,812
$3,040$3,040
131%131%
120%120%
51%51%
254%254%
Total 79%79%
Source: Adams Media Research, Veronis Suhler, eMarketer
2222
Digital DistributionDigital Distribution
SPT Strategy & Financials
Total Revenue
• Aggressively build the distribution network– Strike partnerships across the complete spectrum of traditional and on-line players
• Continue to expand the overall content offering– Broaden selection of film and TV product– Introduce the most compelling short-form/original content into the offering
• Continue to lead the market in innovating the digital product offering and usage models– Focus on Digital Sell-Through as foundational/core product
• Build a strong, retail-focused organization – Create innovative marketing and promotional programs – Continue to lead the industry with respect to asset delivery and digital operations
2323
Mobile OverviewMobile Overview
• Taken responsibility for game development from SPDE and coordinating greenlights with SPTI– Slating 8 games per year
• Now directly responsible for personalization products focusing on– Tones/graphics based on film/TV properties– Packages based on compelling brands/themes
• Market approach– Close carrier relationships and marketing support– Consistent product development– Reinvigorate the library
SPT Strategy & Financials
$2.0
$6.0
$8.0
$2.0
$4.0
$6.0
$8.0
$4.0
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
Q2/ BGT FY08 FY09 FY10
($ in MM)
$15.0
$25.0
$30.0
$15.0
$20.0
$25.0
$30.0
$20.0
$0
$5
$10
$15
$20
$25
$30
$35
FY07 FY08 FY09 FY10
($ in MM)EBIT Total Revenue
[Placeholder Numbers]
Budget/Prior MRPQ2/MRP
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