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November 30, 2011
SAFE HARBOUR DISCLOSURESAFE HARBOUR DISCLOSURETo the extent any statements made in this presentation contain information that is not historical; thesestatements are forward-looking statements within the meaning of applicable securities laws. These forward-looking statements related to, among other things, our objectives, goals, strategies, intentions, plans, estimatesg , g g , j , g , g , , p ,and outlook and can generally be identified by the use of the words such as "believe", "anticipate", "expect","intend", "plan", "will", "may" and other similar expressions. In addition, any statements that refer toexpectations, projections or other characterizations of future events or circumstances are forward-lookingstatements. Although Corus believes that the expectations reflected in such forward-looking statements arereasonable, such statements involve risks and uncertainties and undue reliance should not be placed on suchstatements. Certain material factors or assumptions are applied in making forward-looking statements and
t l lt diff t i ll f th d i li d i h t t t I t t f t th tactual results may differ materially from those expressed or implied in such statements. Important factors thatcould cause actual results to differ materially from these expectations include, among other things: our ability toattract and retain advertising revenues; audience acceptance of our television programs and cable networks;our ability to recoup production costs, the availability of tax credits and the existence of co-production treaties;our ability to compete in any of the industries in which we do business; the opportunities (or lack thereof) thatmay be presented to and pursued by us; conditions in the entertainment, information and communicationsind stries and technological de elopments therein changes in la s or reg lations or the interpretation orindustries and technological developments therein; changes in laws or regulations or the interpretation orapplication of those laws and regulations; our ability to integrate and realize anticipated benefits from ouracquisitions and to effectively manage our growth; our ability to successfully defend ourselves against litigationmatters arising out of the ordinary course of business; and changes in accounting standards. Additionalinformation about these factors and about the material assumptions underlying such forward-looking statementsmay be found in our Annual Information Form. Corus cautions that the foregoing list of important factors thatmay affect future results is not exhaustive When relying on our forward looking statements to make decisionsmay affect future results is not exhaustive. When relying on our forward-looking statements to make decisionswith respect to Corus, investors and others should carefully consider the foregoing factors and otheruncertainties and potential events. Unless otherwise required by applicable securities laws, we disclaim anyintention or obligation to publicly update or revise any forward-looking statements whether as a result of newinformation, events or circumstances that arises after the date thereof or otherwise.
2
INVESTOR DAYNOVEMBER 30, 2011
TECHNOLOGY IN ACTION
Vision: To be globally recognized as Canada’s most influential entertainment company
CORUS QUAY IS COMPLETE!CORUS QUAY IS COMPLETE!
• All Toronto staff and services are now operating from Corus Quay
• Major capital investment peaked in fiscal 2010 and 2011• More than 99% of building costs paid by end of fiscal 2011• Construction and fit-out costs 6% below budget at
approximately 95 million
• Technology upgrade cycle is complete and behind us nowgy pg y p
We have shifted our focus to maximizing the effectiveness of our state-of-the-art facility and our technology – enabling new sources of synergythe art facility and our technology enabling new sources of synergy,
process cost savings, new products and new service revenues
4
CORUS QUAY: INNOVATION IN ACTIONCORUS QUAY: INNOVATION IN ACTION
We asked a cross-section of Radio and Television senior managers four questions:
Caitlin O'DonovanDirector, TV Interactive
Dan Voglersenior managers four questions:
1. What does innovation in action mean to
Technical Director, InteractiveKaren Phillips
VP, Network Program Operations
Vic TorossianManager Business Systems
you?
2. How has Corus Quay affected your work?
Manager, Business SystemsGlen Pollock
Director, Operations, Production and AV
Andrea GabourieDirector, Live Action Production
J li Ed d
3. How has new technology affected your work?
Julie EdwardsVP, Facilities and Admin
Neal BilowDirector, Digital Asset Management Systems
Robyn Stevenson
4. What are you excited about?
yProject Manager, Non Linear
Bruce CowanDirector of Engineering
Mike ReidDirector, IT Operations
D F hDave FaroughVP, Brands, Programming & Content, Corus Radio
Elliott HurstCEO, Supernova 5
OUR INVESTMENT IN TECHNOLOGY CREATES OPERATIONAL EFFICIENCIESCREATES OPERATIONAL EFFICIENCIES
• IT-based infrastructure for broadcast and operations are in place L i l d i l i h C di• Lower capital and operational costs – with Canadian partners
• Automation is paying dividends in efficiency and consistency• Inbound and outbound digital content delivery
• Increased capacity with minimal additional operational costs• In fiscal 2011, Corus added nine HD signals, three new networks
and increased the delivery of non-linear materials by five times• The partner of choice for origination and broadcast services
6
NEW MEDIA:THREE FOCUSED SEGMENTS
• New Media encompasses our view of the changes occurring across the
THREE FOCUSED SEGMENTS
media landscape, enabled by technology
• New Media has become a core activity with three primary areas of focus
Build audiences for broadcast servicesIncrease engagement and ad effectiveness through social media and targeted advertisingProvide proprietary research on audiences and effective advertising
ENGAGEMENT
Support our distribution partners with new media products, enabling off-air consumption and “TV Everywhere”Distribute content directly through websites and applications on multiple platforms
DISTRIBUTION
License and build games applications and e-books that reflect our
multiple platformsLeverage our proprietary content library and unlock the value of the Nelvana assets
PRODUCTS
7
License and build games, applications and e books that reflect our brands and our intellectual propertyPRODUCTS
THE IMPACT OF OVER-THE-TOP
• Over-the-top (OTT) may be more additive than disruptive
THE IMPACT OF OVER-THE-TOP
• Pay television remains relevant to consumers and studios• Movie Central continues to grow; moderate subscriber losses are
economic rather than systemic• In the U.S., over-the-top services are finding their place in the overall
value chain
OTT i h h d th ti i i t• OTT services have reached the tipping pointBroadband penetration > 75%Internet video is now on televisionS ft d d i h d it ibl f thSoftware and new devices have made it accessible for the average consumerSimple pricing models vs. bundled cable bills
8
TELEVISION VALUE CHAINTELEVISION VALUE CHAIN
TV PREMIERE[Broadcast trigger]
PRE-PROMOTION
WEB/ONLINE
BDU: VOD, SVOD, BBOD, MOD
TRANSACTIONAL: DTO/DTR[Netflix, Consoles]
2-4 weeks prior
Next day/Month 1 Month 4Month 3 Month 5Month 2
PROMOTION [Netflix, Consoles]
Timeline:
TV: Other:
iTunes
Example: Nelvana Kids Content
9
OVER-THE-TOP HAS A PLACE IN THE VALUE CHAIN
• Content windowing, long used to control the progression of content
HAS A PLACE IN THE VALUE CHAIN
through viewing platforms and audiences, is changing but remains relevant across the value chain
• Other forms of “new” distribution such as premium TV, specialty TV, home video and download to own have found their niche in the contenthome video and download-to-own, have found their niche in the content value chain
• These distribution innovations have increased overall consumption of content and created value for content owners, broadcasters and ,distributors
• Studios and content owners clearly prefer this system to preserve value and maximize revenue
• Global over-the-top deals, while attractive in theory, will ultimately devalue content as a “one-size-fits-all” model doesn’t work with niche content
10
TV: Other:
RESPONDING TO OVER THE TOPRESPONDING TO OVER-THE-TOP
• Corus aggregates and curates content for consumers within well defined brands
• Contrast the brand implications – which one captures a niche demographic more effectively?
• Corus has some significant advantages in this competitive environment
• Unlike others, Corus owns content – more than 4,000 episodes in the Nelvana library aloneepisodes in the Nelvana library alone
• Unlike others, Corus already sells content into the over-the-top market as a hedge against rising content costscosts
• Unlike others, Corus can innovate with its fully owned global rights
11
CONCLUSIONS & SUMMARY
• The investment cycle for Corus Quay and new technology
CONCLUSIONS & SUMMARY
y y gyinfrastructure is complete
• We are leveraging this investment to open new markets, to reduce costs and to create enhanced value for our customerscosts and to create enhanced value for our customers
• Our New Media strategy balances the current ecosystem against future opportunities, building our brands while allowing us to innovate
• We understand the OTT market and are well positioned to respond and continue our growthand continue our growth
12
Technology remains a key driver of our business strategy
10 REASONS: CORUS RADIO
1. Virtually all of our Radio licences have been renewed for thel di
10 REASONS: CORUS RADIO
long or medium term
2. The Copyright Act amendments in Bill C-11 will reduce tariffli bilit f R di ti hil h i iliability for our Radio properties while enhancing piracyprotection for Nelvana products
3 CRTC approval of a change in our Winnipeg jazz radio format3. CRTC approval of a change in our Winnipeg jazz radio formatto a more popular music genre is expected
4 CRTC to examine the radio MLO (Multiple Licence Ownership)4. CRTC to examine the radio MLO (Multiple Licence Ownership)limits soon, establishing the potential for unlocking new valuein our AM licences
14
10 REASONS: CORUS TELEVISION10 REASONS: CORUS TELEVISION
5. Our Television licences have all been renewed for five years
6 TV group-based licensing decision will allow us to be strategic6. TV group based licensing decision will allow us to be strategicin our Canadian Content spending
7 Telelatino has favourable BDU linkage rules at a time when7. Telelatino has favourable BDU linkage rules, at a time whenthe Hispanic population is growing quickly
15
10 REASONS: POLICY CHANGES
8. Foreign ownership relaxation is on the Government’s agenda,
10 REASONS: POLICY CHANGES
which will serve to increase investor interest in Canadian mediacompanies
9. Based on two big wins by Corus, the Supreme Court ofCanada has expanded the flexibility of broadcasters in the areaof libel law, reducing the potential for liability and expanding ourability to report on matters of public interest
10. National and provincial government policy focus is shifting fromp g p y gincremental regulation to fostering quality and competitiveness.In this regard, a new Chair and four other new CRTCCommissioners will be appointed in 2012
16
CORUS RADIO PORTFOLIO
Growth through innovation and a focus on our audiences on a portfolio of stations
• Execution and Management of our portfolio of 37 stations• FM Music / AM News Talk• Opportunities for growth in fiscal 2012
• Digital Technology and New Media• Deepened consumer insight and listener trends• Streaming and the growth of mobile computing
18On Air, Online, On-Site
CORUS RADIO BRAND PORTFOLIO
19
CORUS RADIO
On Air
CORUS RADIO
On Air
OnlineOn-Site
Growth Through Innovation and a Focus on our Audiences20
CORUS RADIO
V i bl I ti L l M k t
• At any point in time, some stations may be in transition while others ti t f ll d li lid th d i
Variables Impacting Local Markets
continue to successfully deliver solid growth and margins• New market entrants• A re-format by a direct competitor• Macro changes in the music environment and listener tastesMacro changes in the music environment and listener tastes• The recent launch of PPM and the recalibration of market ratings
21
CYCLICAL NATURE OF GDP AND RADIO
10.0%
6.0%
8.0%
10.0%1998 2003
2010
0.0%
2.0%
4.0%0 0
% G
row
th
‐6.0%
‐4.0%
‐2.0%
GDP Radio
%
‐8.0%Source: World Bank, CRTC
22Radio Industry Revenue Mirrors GDP
PORTFOLIO MANAGEMENT
Hi h G th / M iN FM High Growth / Margin• Growing FM’s
High
New FMs
RevenueGrowth
• Small non metro markets
• FM market leaders
High Margin
L
• Stations in transitionTransition/Small Markets
• Secondary AM stations
• Small non-metro markets
• AM market leadersLow
23Audience Share
Low High
CASE STUDY ON EXECUTION TORONTO MARKET
24
MUSIC VARIABLE REVIEW 102 1 THE EDGE VS Q107102.1 THE EDGE VS. Q107
• Potential for Classic Rock, Modern Rock and Alternative Rock formats
• Musical “lanes” Q107 and 102.1 the Edge could dominate
• Distinctive positioning for the rock brands from each other
• Optimal music mix to ensure demographics are stacked effectivelyp g p y
Demographic Skew
Successfully Increase Market Share Adults 18 - 5425
CASE STUDY: 102.1 THE EDGE
OBJECTIVE
Grow 102 1 the Edge ratings
10
12
A18-54
Grow 102.1 the Edge ratings without impacting Q107
Successfully “stack” brands to maximize audience share
Audience Share Growth
6
8
10
A25-54
to maximize audience share
Strengthen the brand position of both FM’s via music offering
0
2
4
PPM
offering
0
26
Fall 2008 Fall 2009 Fall 2010
A WINNER INSIDE THE PORTFOLIO:102 1 THE EDGE102.1 THE EDGE
R th f 48%Revenue Growth Revenue growth of 48%Strong contribution to marginSustainable brand delivering predictable future cash flow
Revenue Growth
p ed ctab e utu e cas oSignificant Adult 18-54 audience growthDominant combined partner to Q107 d T t2009 2010 2011 2012e Q107 and Toronto revenue stream
Holding constant the results on the remaining stations in the portfolio, one station in a large market has the potential to deliver half of the expected growth in EBITDA
27Leverage of Larger Stations in the Top 5 Markets is Significant
CASE STUDY:VANCOUVER FM TURNAROUNDVANCOUVER FM TURNAROUND
Classic Rock 101 and 99.3 The FOX• Similar execution to Toronto FM’s• Research completed with direct intelligence on the brand
strengths of both stations• Currently in the marketing/promotion stage of developmentCurrently in the marketing/promotion stage of development
• Upside potential $6 million in revenue over the next 24 months • Projected strong contribution to margin as an FM station
28
CASE STUDY:VANCOUVER FM TURNAROUND
MARKETING STRATEGY
VANCOUVER FM TURNAROUND
• Use social media to keep stations top-of-mind by creating an evolving “story” in which audience can check back in as the day progresses
• Constantly communicate with audience both on and off the air• Broaden reach to Vancouver’s ethnically diverse population• Build a stronger Facebook community with “like” link capability
I Y T b h l h f ti ti i ti d• Increase YouTube channel reach for promotion participation and content sharing
• Promote the streaming radio player for access beyond conventional FM receivers
• Monitor blogsphere for insight into the stations’ discussion forums and comments on content
29Drive Deeper Listener Engagement Using Social Networking Tools
CASE STUDY:VANCOUVER FM TURNAROUNDVANCOUVER FM TURNAROUND
• As of July 2011, there were 881,200 Facebook users A18-54 who live within a 40 km radius of Vancouver
• 460,920 between the ages of 35-54A f 130 f i d• Average of 130 friends
• They create an average of 90 pieces of content each month• Connected to 80 community pages, groups, events, etc.
30Harness Listeners’ use of Social Media to Expand Reach
CASE STUDY:VANCOUVER FM TURNAROUNDVANCOUVER FM TURNAROUND
By tying the social network activities to the real time broadcast, our stations seek to reach out to listeners and drive tuning on an in-the-moment basis.
31Corus Drives Higher Listener Engagement Through the use of Social Media
EXTENDING REACH OF FMS IN THE PORTFOLIO
• Conventional marketing and advertising, while still important, needs to beConventional marketing and advertising, while still important, needs to be integrated with social media
• Extends reach• Provides a platform for higher listener engagement
• Content created on and off the air is becoming increasingly important for• Content created on and off the air is becoming increasingly important for differentiation and station development
• Extends the brand on the web• Provides on-demand content linked back to the station
32
CORUS RADIO BRAND PORTFOLIO
33
AM NEWS TALK SHARE INDEX
35.0%
25.0%
30.0%
35.0%
157 154256
15.0%
20.0%Audience Share
Revenue Share
130152
5.0%
10.0%
Revenue Share
0.0%
Toronto Vancouver Calgary Edmonton Winnipeg
34
Source: BBM Spring 2011 - PPM and Diary share of tuning Adults 18-54, Revenue TRAM / Corus estimates
AM NEWS TALK: STRONG LOCAL CONTENT
• Vancouver• Calgary• Edmonton• Winnipeg• Toronto• London• Hamilton
• Broader advertiser base• Higher composition of direct
retail vs. transactional agency• Robust feature availability
35News Talk Tends to be Less Sensitive to Cyclical Downturns
RADIO MARGIN IMPROVEMENT
Corus Radio Margins 2001 - 2011
30.0%
32.0%F’08
F’11
• F’07 CRTC Part 2 licence
24 0%
26.0%
28.0%• F 07 CRTC Part 2 licence
fee • F’08 Acquisition of 2
CanWest Stations
20.0%
22.0%
24.0%
F’07• F’09 Recession• F’11 Quebec Asset Sale
Recession
F01 F02 F03 F04 F05 F06 F07 F08 F09 F10 F11
36Margins Continue to Improve as Expenses are Managed Effectively
RADIO OPPORTUNITIES: FISCAL 2012
Wi i FM li l• Winnipeg FM license approval • Change from smooth jazz to a more mainstream format• Effective sales and management team
St i f i th l t• Strong margin performance in the cluster
• Copyright Bill C-11P t ti l f $1 5 illi t $1 8 illi i t i• Potential for $1.5 million to $1.8 million in cost savings
• Strong cluster ratings• Toronto, London, Kitchener• Calgary, Edmonton
37
DEVELOPMENT OF INNOVATIVEDEVELOPMENT OF INNOVATIVE DIGITAL OPPORTUNITIES FOR
RADIORADIO
38Exciting Platforms and Opportunities for a Local Medium
DEVELOPMENT OPPORTUNITIES: ENGAGEMENT ON THE WEB
39
DEVELOPMENT OPPORTUNITIES: NEW REVENUE SOURCES ON THE WEB
40
CORUS RADIO:STREAMING AUDIO GROWTH
Streaming Growth 2002 ‐ 2011
5000
6000Hours of streaming (000’s)
3000
4000
5000FM AM
FM 64%AM 36%
1000
2000
0
Sep 2002 Sep 2006 Sep 2010
41
Streamed Audio Signal is the Regular On-Air Feed Encoded for PPM Recognition
DEVELOPMENT OPPORTUNITIES:ROBUST AUDIO PLAYERS
42Continuous Expansion of Access to Stations is Driving Audience Growth
PPM RATED TUNING: MOBILE APPS
Just under 400,000 downloads since fi t i t d d J 2009first introduced January 2009 Contributing to 7 million hours of streamed tuning monthly to Corus stationsAudio stream is the regular air feed encoded for PPM recognition
43Mobile Apps will Continue to Expand Access to our Stations
DIGITAL DEVELOPMENT FOR RADIO
REVENUE GROWTH
An emerging new revenue stream for radio brands
REVENUE GROWTH
A significant platform to enable development of custom solutions, which deepens our advertiser relationship
44Radio’s Hyper-local Focus Ensures Strong Unique Positioning in a Digital World
DEEPER ENGAGEMENT VIA NEW MEDIA CONTENT
Brand extensions in the social media environmentStrengthens the station image and encourages tuning back to the station g geither on air or through the web stream
45Provides Deeper Engagement with Listeners Through Web Content
DEEPER ENGAGEMENT: SOCIAL NETWORKING PLATFORMS
Artist development platform
Supernova.comArtist development platformEngaging music community at largeCanadian talent developmentTies back to station brand
Developing the space
MyCommunity.comDeveloping the spaceMore robust social networking capabilityFacebook sign-in
46
Branded under the Corus station
46
RADIO’S STRENGTHS
Hyper LocalDifferentiated medium from traditional media choices
Hyper LocalContent A daily part of listener media consumption
Reflects local community values
Positive Attributes for Advertisers
Demographic and geographic targeted medium Short-term spot market sensitive regarding price and availabilityInexpensive, quick and timely to produce
Strong FinancialConsistent cash flowPredictable growthg
Fundamentals Predictable growth Exceptional leverage on incremental revenue
47Short Term Downturns are Cyclical
WHAT OUR CLIENTS SAY
48
FINALLY - OPPORTUNITIES … IF
49If the Leafs were to win the Stanley Cup
OPPORTUNITIES … IF
4 complete series of 7 gamesP i ll $1 illi iPotentially $1 million in revenue50% increase in ratings in the playoff window
50If the Leafs were to win the Stanley Cup
INVESTOR DAYNOVEMBER 30, 2011
Corus Television
Vision: To be globally recognized as Canada’s most influential entertainment company
CORUS KIDS:THE “THREE THIRDS”THE “THREE THIRDS”
• In 2009, we introduced the notion of the “three thirds” at Corus Kids
52
CORUS TV:THE OVERALL TV PORTFOLIOTHE OVERALL TV PORTFOLIO
• Corus Television is diversified, international and growing• Unique among Canadian media investment alternativesUnique among Canadian media investment alternatives
53
CORUS TV:A HISTORY OF STRONG PERFORMANCE
• Corus Television – a powerful portfolio of media assets with an impressive track record of delivering results
A HISTORY OF STRONG PERFORMANCE
g
54
CORUS TV BUILDS GREAT BRANDS
• Corus Television has consistently demonstrated an ability to grow our brand portfolio• Indigenous brands: YTV, W Network, Movie Central
CORUS TV BUILDS GREAT BRANDS
• Brand stewards: HBO, Nickelodeon, OWN, ABC Spark
Corus Has Launched More Brands than the Entire Canadian Media Industry Combined 55
THREE VERTICALS DRIVE PORTFOLIO GROWTHPORTFOLIO GROWTH
KIDS FAMILY WOMEN
56
CORUS WOMEN’S PORTFOLIO: GROWING OUR AUDIENCESGROWING OUR AUDIENCES
Source: Nielsen Media Research, BBM NMR, BBM Canada - Broadcast weeks 1-52(53), W25-54, Average Minute Audience - M-Su 6a-6a/2a-2a.*W Movies effective 3/1/10 57
CORUS WOMEN’S PORTFOLIO: 10 YEARS OF GROWTH10 YEARS OF GROWTH
10 Years of Audience Revenue and Earnings Growth 58
W NETWORK
• Our powerhouse brand in the Women’s vertical• Weekday prime +16% vs year ago¹Weekday prime 16% vs. year ago
• Strength in Movies• #1 on Saturday nights with audiences amongst movie competitive set²• Successful addition of Sunday night movie block – audience growth +106% vs.
year ago³
• W Movies a sold out complement to W Network• W Movies a sold-out complement to W Network• Q1 audience +20% vs. year ago4
Sources:1 Nielsen Media Research BBM NMR, Weeks 1-11, W 25-54 AMA, M-F 6p-12a2 Nielsen Media Research BBM NMR, Weeks 1-8, W 25-54 AMA, M-F 6p-12a3 Nielsen Media Research BBM NMR, Weeks 1-8, W25-54 AMA, Sa 6p-12a4 Nielsen Media Research BBM NMR, Weeks 1-11, W 25-54, 24-hour AMA
59W Network Will Provide Continued Profit Growth
W 2.0 STRATEGY: BUILDING AND REFRESHINGBUILDING AND REFRESHING• W 2.0 strategy will drive future growth: big characters, high stakes, compelling stories
60
COSMOTV: PROFITABILITY ACHIEVED IN JUST THREE YEARSJUST THREE YEARS
• CosmoTV generated $10M in revenue in Fiscal 2011
• Significant audience growth• Digital ranking jumped to #3 vs. #6 a year ago (W18-49)¹• Q1 2011 audience growth has increased +13% vs. year ago²
• Successfully monetized audience growth: Q1 2011 ad revenue +83% vs. year ago
Cl l d fi d b d t i h d l d b d di it l di t ib ti• Clearly defined brand, strong programming schedule and broad digital distribution sets stage for continued growth
Sources: ¹ Nielsen Media Research BBM NMR, Weeks 1-11, W 18-49 AMA, 2a-2a² Nielsen Media Research BBM NMR, Weeks 1-11, W 18-49 AMA, 2a-2a
61
CosmoTV: A Case Study in Launching Brands
COSMOTV: BEST AMONG OUR PEER GROUP
CosmoTV Peer Group Comparison: Segment Profit
BEST AMONG OUR PEER GROUP
1.3 1.1
3.0
1 0
2.0
3.0
0.2
1.1
(0.8)
(2.0)
(1.0)
‐
1.0
Year 1 Year 2 Year 3 Year 4 Year 5
gmen
t Pro
fit ($
M)
(3.8)
(3.1)
(4.5)
(5.2)
(2.8)
(5.0)
(4.0)
(3.0)Seg
( )
(6.0)Diva Comedy Gold DejaView Mystery Cosmo
Sources: CRTC, Company
62CosmoTV has Reached Profitability Faster than any Channel in its Peer Group
OWN: OPRAH’S NEW HOME
• OWN is the only place to watch Oprah• Oprah’s Lifeclass (improved ratings
vs. same timeslot last year +317%) ¹• Highly anticipated launch of Oprah’s
N t Ch t J 1 2012Next Chapter – January 1, 2012• The Oprah Winfrey Show library
• Advertisers also leveraging the strength of Oprah
• Q1 ad revenue +138% vs. year ago• Premium priced servicep• Charter sponsor strategy continues to
pay dividends through long term deals
Source:¹ Nielsen Media Research BBM NMR, Oct 10-Nov 11, 2011, W-25-54
AMA vs. M-F 8-9.pm VIVA Fall 2010 AMA
63
OWN: OPRAH’S NEW HOME
• Exciting new content debuting continually throughout the year• The Rosie Show• Our America with Lisa Ling Season 2• Oprah’s Next Chapter – Steven Tyler • Oprah’s Master Class Season 2• America’s Money Class – Suzie OrmanAmerica s Money Class Suzie Orman
• Canadian content commissions consistently deliver audiences• Devil You Know
Ps chic In estigators• Psychic Investigators• Launching Million Dollar Neighbourhood -
Jan. 22, 2012
64
OWN’S EXTENSIVE USE OF SOCIAL MEDIA: DELIVERING LOYAL AUDIENCESDELIVERING LOYAL AUDIENCES
• Oprah fosters a sense of community with her fans by leveraging social media to drive engagement and loyalty:
• Oprah is an active Twitter user – 8.2M followers• Oprah has a personal Facebook page – 6.4M fans
• Oprah fans are highly engaged on social media, specifically Facebook:Oprah fans are highly engaged on social media, specifically Facebook:• Fans respond to posts as if they are speaking directly to Oprah• Fan community is highly active during Oprah’s live chats and “live event” show premieres • Fans are easily converted to OWN newsletter subscribers
e g Shania T ain contest prod ced a 94% con ersion rate• e.g. Shania Twain contest produced a 94% conversion rate
“Congratulations Oprah! They really got it right. Thank you for all of the POSITIVE you bring us all. I LUV OWN.”
Facebook Postings:
“Thank you for your Lifeclass, it’s changing my life ☺.”
“Hey Oprah thank you so much! I had forgotten how I loved to help others and that I do make a difference! Sometimes we forget that we do matter! We have to love ourselves before we can help others.”
65OWN Delivers an Engaged Audience for our Advertisers
THREE VERTICALS DRIVE PORTFOLIO GROWTHPORTFOLIO GROWTH
KIDS FAMILY WOMEN
66
CORUS DRIVES SALES THROUGH CONSUMER INSIGHTSCONSUMER INSIGHTS
Core verticals all supported with branded consumer insight initiatives that drive meaningful connections for both advertisers and our networks g
Focused on kids/tweens:• Their lives
Th l f i i• The value of co-viewing• Their role within the household
Focused on moms:• Parenting priorities• Parenting priorities• Relationship with kids and spouse• Categories where they are or expect
to be active
Focused on women:• Lifestyle priorities• Consumer habits and patterns
67
Consumer habits and patterns
YTV CONTINUES TO BE A LEADING NETWORK FOR MOMSNETWORK FOR MOMS
Source: BBM Canada TV Meter - Mon-Sun 24 hour
68YTV has been a Top 3 Canadian Specialty Service for 9 Straight Quarters
CO-VIEWING:ANOTHER CORUS INNOVATIONANOTHER CORUS INNOVATION
• Corus research insights substantiated by PPM rollout• Parents and kids watch TV together and it’s increasingParents and kids watch TV together…and it s increasing
Co-Viewing will Continue to Drive Revenues69
KIDS VERTICAL:GROWING STRONGER EVERY DAYGROWING STRONGER EVERY DAY
• Corus Kids portfolio offers unassailable reach• YTV Nickelodeon Treehouse TELETOON TELETOON RetroYTV, Nickelodeon, Treehouse, TELETOON, TELETOON Retro• YTV.com #1 in Kids reach¹
• Nickelodeon growth anticipated to continue in the coming year • Advertising and subscription revenue
• YTV ratings up 10% since Fall Schedule Launch²• Integrated campaigns with key children’s advertisers
Sources:¹ YTV.com #1 Broadcaster Kids site, comScore, Jan 2011-Oct 2011
Corus Kids is the First Pick Amongst Advertisers 70
YTV.com #1 Broadcaster Kids site, comScore, Jan 2011 Oct 2011² BBM Canada, Oct-Nov 6, 2011 ratings compared to Sept 2011 ratings, K6-11 and K2-11
CANCON DRIVING RATINGS ON YTV
Number of Canadian and Nelvana Properties That Appear in YTV’s Top 20 Properties for Each Broadcast Year
CANCON DRIVING RATINGS ON YTV
Source: BBM Canada TV Meter
71Corus Kids Delivers Audiences and ROI with Nelvana Properties
THE CORUS ADVANTAGE IS GROWINGTHE CORUS ADVANTAGE IS GROWING
• Corus Advantage strategically benefits Corus Kids networks and Nelvana Enterprises internationally, providing:p y, p g• Financing advantage• Canadian broadcaster synergy advantage• Ratings advantage
72
DISCIPLINED MANAGEMENT OF THE CONTENT PIPELINECONTENT PIPELINE
73
NELVANA: THE CREATIVE PIPELINE WHAT’S NEXT?WHAT’S NEXT?
74
BEYBLADE SUCCESS STORYBEYBLADE SUCCESS STORY
• Now over 120 Million Beyblade tops sold worldwide• Will have launched in over 60 countries by 2012• Will have launched in over 60 countries by 2012• Over 200 licensing and retail partners on board • Online multiplatform game drives toy sales and TV ratings• Beyblade World Championship set for March 2012 in Toronto at Corus Quay• Beyblade World Championship set for March 2012 in Toronto at Corus Quay• Partnership with Hasbro and d-rights/TakaraTOMY to create an evergreen franchise
75
NELVANA IN FRANCE:A BIG OPPORTUNITYA BIG OPPORTUNITY
• Strategic brand relationships forged with key broadcasters• TF1 – Babar and the Adventures of Badou Franklin and FriendsTF1 Babar and the Adventures of Badou, Franklin and Friends• Gulli – Beyblade, Bakugan
Regional Hits can be Very Lucrative76
NELVANA:DIGITAL VIDEO “LIFT OFF”DIGITAL VIDEO “LIFT OFF”
• Video streaming is unlocking more value in the Nelvana library• Kids category performs very wellKids category performs very well• Everyone wants Kids programming• Video growth trajectory +50%
77
CORUS TV:LAUNCHING OUR APPLICATIONS BUSINESSLAUNCHING OUR APPLICATIONS BUSINESS
• Applications focused on great Nelvana and Kids Can Press brands: Max & Ruby Beyblade Franklin Scaredy Squirrel SidekickMax & Ruby, Beyblade, Franklin, Scaredy Squirrel, Sidekick
• Video Player Applications• Treehouse• Franklin’s 25th Anniversary
• Gaming Applications • Property driven – 17 apps launching by
end of 2012E B k• E-Books
• Leveraging Kids Can Press assets• 14 e-books on five platforms currently – 60 to launch in F’12
• Provides new revenue streams on all major devices such as iPhone/iPad, Kobo,Provides new revenue streams on all major devices such as iPhone/iPad, Kobo, RIM Playbook, Xbox Live, Kindle Fire
• All three of these initiatives can be financed through Canadian benefits and tax credits
Targeting $2M EBITDA from Corus Applications in the Next 12 Months78
INTERNATIONAL CHANNEL VENTURESINTERNATIONAL CHANNEL VENTURES
• KidsCo provides Corus a significant foothold in the international marketplace• 98 countries98 countries• 18 languages• 12.7 million subscribers• Leverages Nelvana library
• qubo provides Corus an impressive foothold in the U.S. marketplace • 42 million homes• English and Spanish• NBCU Saturday morning block reaches 215,000 Kids 2-11• Leverages Nelvana library
• Discussions are active on the next iteration of these promising channel ventures• Corus increases equity• Simplification of partnerships
79International Kids Channel Ventures Provide Significant Option Value
PREMIUM TV – THE BEST PROPOSITIONPREMIUM TV THE BEST PROPOSITION
• Exclusive content and subscriber insights• Supply and depth of exclusive Hollywood blockbustersSupply and depth of exclusive Hollywood blockbusters• Exclusive HBO and Showtime output deals
• New technologies roll out• TV Everywhere • On-Demand • HD deployment
• Aggressive Marketing CampaignsQ1 O D d F i Q2 HD C i A i iti• Q1 On-Demand Freeview, Q2 HD Campaign – Acquisition
• NEW – Value Proposition Campaign – Retention• A united Premium Television ecosystem
• BDUs and Premium TV operators focused on growthBDUs and Premium TV operators focused on growth• Over-The-Top impact negligible
• Series success: Game of Thrones Season 1 – best performing HBO series since The Sopranos. Season 2 premiering in 2012.
Pay TV Remains the Best Customer Proposition80
CORUS TV – AFFILIATE UPDATECORUS TV AFFILIATE UPDATE
• 2011 was a transformational year for affiliates• Vertical integrationVertical integration• Digital migration
• Digital migration implications• Corus’ strong brands resonate with our audiencesCo us st o g b a ds eso ate t ou aud e ces
• Vertical integration implications• Corus applies key account business development practices to grow our
businesses together• Heightened focus on costs by vertically integrated BDUs
• Revenue growth driven by premium television and strong commercial brands
81
TELELATINO:ANOTHER GROWTH OPPORTUNITYANOTHER GROWTH OPPORTUNITY
• Spanish language and Latino culture are influencing mainstream North American ltculture
• Nearly 1.8 million Canadians live in households where Spanish is spoken• Telelatino is widely distributed in 6 million homes• Telelatino has launched 100% Spanish 24-hour channels – a general interestTelelatino has launched 100% Spanish 24 hour channels a general interest
Spanish superstation called TLN en Español as well as a kids service called Teleniños
• Telelatino plans to test this opportunity and, if successful over time, reposition its flagship channel with an intoxicating new schedule of English language Latinoflagship channel with an intoxicating new schedule of English language Latino-inspired general entertainment programming to target this exciting growth opportunity
82
10 THINGS YOU GOTTA LOVE ABOUT CORUS TELEVISION
1. We are a growing portfolio of media assets diversified by geography and line of business and we have an unequalled track record of revenue and profit growth
TELEVISION
2. More new brands in the last five years than the rest of the industry combined
3. Women’s vertical is highly attractive to our audiences and our advertisers
4 Co-viewing leverages our consumer insights into incremental revenue4. Co viewing leverages our consumer insights into incremental revenue opportunities
5. Corus Kids is competitively advantaged, diversified, international and growing
83
10 THINGS YOU GOTTA LOVE ABOUT CORUS TELEVISION
6. Digital revenue and profit opportunities are emerging rapidly, with online video streaming and expected growth in our applications business
TELEVISION
7. International children’s channel ventures offer future option value
8. Pay TV is a superior consumer proposition, with exclusive content and a renewed commitment to growth on behalf of our affiliate partners
9. Hispanic population growth in Canada and the appeal of Latino culture represents a huge opportunity for Telelatino
10. Corus will launch ABC Spark in March 2012 – the perfect addition to our portfolio of services built on the highly successful ABC Family brand, the fastest growing network W18-49 in the U.S.
84
INTRODUCINGINTRODUCING
85
ABC SPARKABC SPARK• Launching in Spring 2012, ABC Spark is a multiplatform offering for the millennial generation
ABC S k b ild th f t t d U S bl d li ABC F il• ABC Spark builds on the success of top-rated U.S. cable darling - ABC Family• The only U.S. cable network with 8 consecutive years of growth (total viewers)¹• A top 10 cable network in all key demos and top 5 in key female demos²
• ABC Spark will be powered by: • Hit ABC Family original and exclusive programs such as The Secret Life of the American
Teenager, Switched at Birth and Jane by Design• Strong movie offering• Industry leading ABC Family stunt strategy: Campus Crush (back-to-school),
13 Days of Halloween and 25 Days of Christmas
• A highly differentiated brand ABC Spark is:A highly differentiated brand, ABC Spark is: • Quality and compelling entertainment for the millennial generation• Authentic storytelling told with optimism, heart and humour• Innovative technology that drives deeper viewer engagement
86Sources: ¹Nielsen Company, M-Sun 8-11pm, Live+SD (000s), growth each season from 2002-03 through 2010-11 among P2+²Nielsen Company, C3 (000s), M-Sun 8-11 pm, 2010-2011, Broadcast Season 9/27/10-9/25/11
ABC SPARKABC SPARK• The millennial generation is the largest demographic bubble in U.S. and Canadian history
• Nearly 10 million millennials in Canada – more than 30% of the population and growing M i th h b f lif t th t k th l bl• Moving through a number of life stages that make them valuable consumers
• Tech savvy “super-subscribers” are multiplatform consumers and curators of cool
• ABC Spark will capitalize on millennial appeal to drive traditional 18-49 audiences• Delivering the younger end of key female demos, ABC Spark is a strong addition to the
Corus portfolio• Lives within Corus Kids and Family vertical to leverage “environment” fit
• Corus will leverage our demonstrated best practices to drive ABC Spark awareness• Nested blocks on YTV, W Network and CMT to create anticipation for ABC Spark launch • Heavy cross-promotion on targeted Corus Entertainment networks
87
IFRS: WHAT WILL BE DIFFERENT IN Q1IFRS: WHAT WILL BE DIFFERENT IN Q1
The Way We Look• Reportable segments will be Radio, Television and Corporate, but with less
segmentation
• There will be a significant increase in financial note disclosure• Full set of IFRS accounting policies• Full set of IFRS accounting policies• Transition to IFRS section
• First time adoption – list of IFRS 1 exemptions used by Corus• Reconciliation of Canadian GAAP to IFRS• In Q1’12, selected year end Aug. 31, 2011 financial notes will be
restated for IFRS
• Balance Sheet presentation – Q1’12• Three year disclosure – Nov. 30, 2011, Aug. 31, 2011, Sept. 1, 2010
89
IFRS: WHAT ARE THE KEY CHANGESIFRS: WHAT ARE THE KEY CHANGES
• Business Combinations/Acquisitions• IFRS 1 election – we will not restate for acquisitions done prior to Sept 1 2010IFRS 1 election we will not restate for acquisitions done prior to Sept. 1, 2010• Net assets expressed at full fair value• Transaction and restructuring costs will be immediately expensed• CRTC benefits will be immediately expensed
• Broadcast Licenses• Previously recorded amortization (prior to fiscal 2002) reversed• Carrying value of Broadcast Licenses and Retained Earnings on Sept. 1, 2010
i dare increased• Methodology for annual impairment testing has changed
• Cumulative Translation Differences (CTA)IFRS 1 l ti ill t CTA b l t t S t 1 2010• IFRS 1 election – will reset CTA balance to zero at Sept. 1, 2010
• Program Rights • Amortization method altered for certain networks
• Stock Options• Stock Options• Acceleration of expense recognition – Retained Earnings adjustment at
Sept. 1, 2010 90
IFRS: WHAT IS THE FINANCIAL IMPACT
Corus has met with broadcaster peers on potential industry
IFRS: WHAT IS THE FINANCIAL IMPACT
Corus has met with broadcaster peers on potential industry issues and concluded that:
• No significant impact to EBITDA or Net Income is anticipated under Corus’ conversion to IFRS
91
FINANCIAL PRIORITIES RECAP:FISCAL 2011FISCAL 2011
Built for GrowthBuilt for Growth
• Maintain Strong Balance Sheet and Credit Ratingg g
• Return to Dividend Growth
D i T Li R G th• Drive Top-Line Revenue Growth
• Improve Operating Margins
Intense Focus on Total Shareholder Return92
FINANCIAL PRIORITIES:FISCAL 2011 ACCOMPLISHMENTSFISCAL 2011 ACCOMPLISHMENTS
Maintained Strong Balance Sheet, Credit Rating Increased
• Year end leverage at 1.9x• Unused lines of credit = access to $400M - $600M of capital• Fixed rate financing in place for 6 years at 7 25%Fixed rate financing in place for 6 years at 7.25%
• Credit Ratings: DBRS=BBB, S&P=BB+ (increased from BB in Jan’11)
Net Debt: Sept 1 1999 Aug 31 2011Net Debt: Sept. 1, 1999 – Aug 31, 2011
600
800
CD
N )
0
200
400
Mill
ion
($C
Fiscal Year93
FINANCIAL PRIORITIES:FISCAL 2011 ACCOMPLISHMENTSFISCAL 2011 ACCOMPLISHMENTS
Return to Dividend Growth
• Significant 45% dividend increase in F’11• Annual dividend increased in Q1 and Q3, ending the year at
$0.87/Class B Share vs. $0.60/Class B Share in the prior year
• CAGR since 2003 introduction of dividend = 70%
• Dividend paid monthly
• Di id d i ld f 4 3% t d F’11• Dividend yield of 4.3% at year end F’11
• Rated #5 on the S&P/TSX Dividend Aristocrats Index
• Ranked as one of Canada’s top dividend stocks by CPMS yMorningstar
• Dividend Reinvestment Plan with 2% discount offers opportunity for greater compound growth
• Implemented a Normal Course Issuer Bid for the potential repurchase of up to 3.9 million Class B Shares from June 16, 2011 to June 15, 2012 94
CORUS DIVIDEND HISTORYCORUS DIVIDEND HISTORY
Initial Semi‐Annual
Dividend of $0.0125
Increase to Quarterly Dividend
of $0.05 then $0.1075
C h i d i l di id d f $0 02 h h i
95NB: All Dividend rates adjusted for share split effective Feb 2008NB: All Dividend rates adjusted for share split effective Feb 2008
Corus has increased its annual dividend from $0.025 per share, when it was introduced in Dec. 2003 on a semi-annual basis, to $0.87 based on the monthly dividend of $0.0725 announced in July 2011 – a CAGR of 70%
FINANCIAL PRIORITIES:FISCAL 2011 ACCOMPLISHMENTSFISCAL 2011 ACCOMPLISHMENTS
Drive Top-Line Revenue Growth
• Delivered strong top-line revenue growth for the year• Consolidated revenues up 8%• Television consolidated revenues up 9%, with specialty advertising
revenues up 11%, subscriber revenues up 6% and international merchandising revenues up 66%
• Radio consolidated revenues up 2%• Radio consolidated revenues up 2%
Improve Operating Margins
• Overall Radio margins improved to 30%• Net income up 18% from prior year• Cost reduction program initiated in F’10 was successful delivering• Cost reduction program initiated in F 10 was successful, delivering
expected annual savings of $15M96
STOCK PERFORMANCE: 2006-2011STOCK PERFORMANCE: 2006 2011
Return on $100 invested at Aug. 31, 2006, assuming the reinvestment of dividends
150
Corus Entertainment vs. S&P/TSX Index Returns: Aug. 31, 2006 – Aug. 31, 2011
110
130
$
70
90
Corus (CJR.B)
S&P/TSX Composite Index
S&P/TSX Consumer Discretionary Index
97
STOCK PERFORMANCE VS. PEERSSTOCK PERFORMANCE VS. PEERS
Stock Performance vs. Peers as at August 31, 2011
CAGR - 5YR(incl. Dividends)
Corus 4 6% 1 1% 3 9%
Company CAGR - 1 YR CAGR - 5 YR
Corus 4.6% 1.1% 3.9%
Astral -5.1% -2.0% -0.6%T t 5 3% 12 6% 8 7%
Canadian Peers (CDN $)
Torstar 5.3% -12.6% -8.7%TVA -9.8% -6.7% -5.0%
U.S. Comparables (US $)EMMIS -50.7% -42.6% -42.6%Entercom 11.1% -24.8% -24.8%Time Warner 5.6% -8.7% -6.5%Disney 4.7% 2.8% 3.7%
98
CORUS HISTORICAL FINANCIAL PERFORMANCEPERFORMANCE
800
900
600
700
800
N)
300
400
500
illion ($CD
N
0
100
200M
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Revenue EBITDA*Fiscals 2010 and 2011 adjusted for continuing operations
99Since 1999, Corus has grown Revenue at a CAGR of 15% and EBITDA at a
CAGR of 16%
CORUS CONSISTENTLY MEETS OR EXCEEDS STATED PERFORMANCE OBJECTIVESSTATED PERFORMANCE OBJECTIVES
EBITDA : Actual vs. Guidance Range Free Cash Flow : Actual vs. Guidance Range
280
300
120
140
)
240
260
280
Million ($CD
N)
60
80
100
Million ($CD
N)
200
220
2007 2008 2009 2010 20110
20
40
2007 2008 2009 2010 2011
High End Low End Actual
2007 2008 2009 2010 2011
High End Low End Actual
*2009 EBITDA Guidance adjusted mid-year due to recession *2010 Free Cash Flow Guidance was lower due to Corus Quay constructionj y y
100
FISCAL 2011: AN EXCEPTIONAL YEARFISCAL 2011: AN EXCEPTIONAL YEAR
Fiscal 2011 Guidance: EBITDA $285M - $295MFree Cash Flow $100M+
• Achieved stated EBITDA guidance range of $285M - $295M
Free Cash Flow $100M+
• Delivered outstanding consolidated double digit growth of 12%• Television segment profit was up 14%• Radio achieved segment profit margin of 30%g p g
• Very strong adjusted Free Cash Flow of approximately $125M(1),exceeding guidance of $100M+exceeding guidance of $100M+
• Share Price: August 31, 2011 $20.36 (+5%)August 31, 2010 $19.47August 31, 2010 $19.47
(1) Adjusted for one-time gains from real estate and other investments 101
FISCAL 2012:PROJECTING STRONG FREE CASH FLOW
• Capital build-out of Corus Quay is now completeFi l 2012 f h fl i d d $12 M
PROJECTING STRONG FREE CASH FLOW
• Fiscal 2012 free cash flow is expected to exceed $125M• Opportunity for increased dividends/share buybacks
O ti d F C h Fl 2007 2011
$) 200 Free Cash Flow
Operating and Free Cash Flow: 2007 – 2011
llion
(CD
N
100
150Operating Cash Flow
llion
($CD
N)
Mil
0
50
2007 2008 2009 2010 2011
Mi
* Free cash flow normalized for business combinations, Fiscals 2010 – 2011 adjusted for continuing operations
Fiscal Year2007 2008 2009 2010 2011
102
TOP 10 THINGS YOU GOTTA LOVETOP 10 THINGS YOU GOTTA LOVE
1. Financial guidance is provided and we achieve our goals
2 D d i i d i f h fl2. Demonstrated commitment to growing and returning free cash flow to our shareholders, mainly in the form of increased dividends
3. Our significant capital investment is behind us• Lower future CAPEX with completion of Corus Quay
4. Corus has the financial capacity to pursue opportunistic acquisitions
5. We have the revenue diversity to weather economic uncertainty and to benefit from the anticipated economic recovery
6. Corus has successfully launched 5 new channels in 3 years through y y ginternally generated cash, with another exciting launch, ABC Spark, planned for 2012• New networks: OWN, CosmoTV, WMovies, Nickelodeon, Sundance
Ch l t ib ti i ifi tl t th d t th iChannel, contributing significantly to growth and strengthening our position in 3 key verticals – Kids, Women and Family
103
TOP 10 THINGS YOU GOTTA LOVE
7. International ventures will continue to add value and cash flow
TOP 10 THINGS YOU GOTTA LOVE
• Strong pipeline of Kids brands will provide ongoing opportunities for international merchandising growth
• New, revenue generating international content distribution t iti (Kid C b ) i i f lifi th i iopportunities (KidsCo, qubo) arising from prolific growth in emerging
platforms
8. Strong portfolio of digital rights, including Oprah, Nickelodeon, games, still to be exploited and new opportunities to leverage Nelvana’s deepstill to be exploited and new opportunities to leverage Nelvana’s deep library of 4,000+ episodes arising from broadband market
9. Investments such as Toonboom and Supernova allow “early window” opportunity to exploit/gain access to new technology knowledge and/oropportunity to exploit/gain access to new technology, knowledge and/or expand our audiences
10.Our Radio business is a great generator of cash flow in any economic environment and we are competitively positioned in our local marketsenvironment and we are competitively positioned in our local markets from a format, ratings and demographics perspective
104
FINANCIAL PRIORITIES:FISCAL 2012FISCAL 2012
Innovation in Action
• Maintain Strong Balance Sheet and Credit Rating
Innovation in Action
• Maintain Strong Balance Sheet and Credit Rating
• Dividend Growth to ContinueDividend Growth to Continue
• Drive Top-Line Revenue Growthp
• Grow Through Innovation
105
FINANCIAL GUIDANCE: FISCAL 2012FINANCIAL GUIDANCE: FISCAL 2012
Consolidated EBITDA $300million to $310 millionConsolidated EBITDA $300million to $310 million
Free Cash Flow $125 million +Free Cash Flow $125 million
InvestorInvestor Day 2011Day 2011Investor Investor Day 2011Day 2011
Q&AQ&A SessionSessionQ&A Q&A SessionSession
107