U.S. Production: Challenges and Opportunities Continued investment in A-list writers, directors and...

U.S. Production: Challenges and Opportunities

• Continued investment in A-list writers, directors and producers for future drama/comedy/unscripted development

• Develop series with broad international appeal with globally marketable talent to sell in the US and abroad

• International co-production partnerships

• Continue to be on the forefront of the burgeoning subscription VOD market (Netflix, DirecTV) to sell and develop series

• Production cost control and reduction efforts continue on all programs

• Expand our prime time broadcast and cable reality slate

Opportunities

• Continued network reliance on self produced shows

• Declines in Broadcast and Cable ratings

Challenges

Ad Sales: Challenges and Opportunities

• Diffuse volatility in TV ad revenue market by growing a strong digital base

• Continue to drive additional revenue for first run through advertiser integrations

• Expand current base of advertisers for :30s and :10 to off-nets

• Develop emerging Cable Networks business

• Find new 3rd party representation opportunities

• Continue to support cable/network properties through Branded Entertainment

Opportunities

• Year-over-year growth in TV ad revenue is limited by available shows

• Opportunities for 3rd party ad sales representation in TV are declining

Challenges

International Production: Challenges and Opportunities

• Continue to exploit Who Wants to Be a Millionaire and develop a stable base of other successful formats

• Make more focused and sustained investment in development executives, producers, production companies, and new content especially in the UK

• Foster a more creative culture to develop intellectual property by: − Realigning the organization, including a

new President and a creative head

− Combining the print sales and format sales teams to better serve our buyers

− Creating a strategically centralized development fund

− Implementing a competitive incentive plan

• Simplify administrative and operational processes

Opportunities

• Competitive marketplace

Challenges

US Distribution: Challenges and Opportunities

• Opportunity to renegotiate Starz output deal

• Sell library film and TV series into non-exclusive subscription deals

• Split library windows, license multiple rights, structure non-exclusive deals

• Aggressively sell slate carve-out windows utilizing more aggressive inventory tracking and planning

• Develop consistent flow of first-run product with top talent

Opportunities

• Starz spin-off and uncertain future of their original strategy

• Less reliance on library product

Challenges

International Distribution: Challenges and Opportunities

• Broaden scope of broadcaster relationships to explore English language, European content, co-production opportunities

• Take full advantage of opportunities with emerging SVOD players

• Close long-term deals in key markets over the plan

• Focus on select emerging markets to expand SPT’s presence and better capitalize on opportunities (Netherlands, Scandinavia, Poland, Hungary, South Africa)

Opportunities

• Shift in MPG film slate• Lack of a breakout/hit Drama• Ensure we keep rights to key revenue-

driving feature film franchises

Challenges

Networks: Challenges and Opportunities

• Buy out Indian partners and realize an Indian regional opportunity

• Focus next 18 months on maximizing efficiencies in existing operations

• Continue to selectively launch channels in new and existing territories

• Increase investment in Crackle U.S. advertising and technical infrastructure

• Continue to secure programming supply through studio output deals and investment in original programming (The Firm). Increase 3rd party acquisitions for US businesses

• Maximize value in Crackle US and expand internationally (Latam, Brazil, Canada)

• Expand SPTL Asia facility to service EMEA channels

Opportunities

• Global pressure on ad sales and subscriber fees

• Volatility of foreign currencies has had a particularly harsh impact on Networks earnings

• Rising content costs, increased broadcasting costs from HD roll outs and the investment in ad sales and affiliate infrastructure keeps margins in check

• Lack of a sports channel in India

Challenges