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Successfully Transforming DIY Media for the Digital Age

Content + Community + eCommerce

Introduction to Interweave

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• Exceptional franchises and brand names in growing, recession-resistant markets

• Must-have content for passionate enthusiasts with life-long interests

• Evergreen content that is repurposed across products and distribution channels

• Multi-platform portfolio that generates revenue primarily from consumers – not from advertising

• Superior editorial, marketing, financial and administrative talent

• Transformed business model focused on digital products and distribution channels

• Market leader in anticipating and responding to changing market dynamics

• Integrated digital content, database-driven marketing and eCommerce distribution

• Digital content development prowess has increased customer base for new and existing products without cannibalizing sales

• History of transformation through integration of strategic acquisitions

• Significant organic and acquisition growth prospects to execute Interweave’s plan

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Introduction to InterweaveExecutive Summary

Introduction to InterweaveInterweave’s Markets & BrandsThe Leading Online & Offline Resource for Crafters & Artists

• Knitting, Crochet, Spinning and Weaving

• Art Quilting, Mixed Media and Sewing

• Jewelry Making and Beading

• Painting and Drawing

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Introduction to InterweaveDo-It-Yourself (DIY) Content

• Premium-Priced and Must-Have Content

Like blueprints to a builder

• Life-long Interests

Enduring customer base

• Consumer (Not Advertising) Driven Revenue

Recession resistant

• Insatiable Customer Appetites

Ready markets for new content products

• Community Focused

Offline community focused for centuries

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Introduction to InterweaveFree Affinity and Paid Premium Content

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Free Affinity ContentBlogs Email Newsletters ForumsFreemiums Online Communities Pattern DownloadsVideo Tutorials Television WebsitesSocial Media Affinity Apps

Paid Premium ContentBooks Bookazines eBooks

Utility Apps Magazines Events

Magazine Apps Videos Workshops

ePatterns CD Compilations Pattern Downloads

Digital Magazines

Introduction to InterweaveRepurpose Evergreen Content for Use Across

Multiple Channels

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Content

Television Print & Digital

Magazines

Magazine Apps

Books

eBooks

Instructional Videos

Events

Workshops

Utility Apps

Freemiums

Downloads

Social Media

Email Newsletters

Online Communitie

s

Affinity Apps

Free Affinity

Paid Premium

Introduction to InterweaveBusiness Transformation: Acquired vs. Started

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Content

Television Digital Magazines &

Apps

Print Magazines

Books

Events

Workshops

eBooksInstructional

Videos

Apps

Freemiums

Downloads

Social Media

Email Newsletters

Online Communitie

s

Introduction to InterweaveInterweave History 2005-Today

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• Launched apps for books and magazines

• Launched affinity and utility apps

• Launched eBooks and eMags

• Acquired Quilting Arts TV

• Built video studio

• Built eCommerce store• Launched lines of

instructional videos• Acquired American Artist

Group

• Launched online communities and daily email blogs/newsletters

• Built ePattern download business from disaggregated content

• Launched new PBS television programming

• Acquired Quilting Arts, Cloth Paper Scissors and NeedleArts Studio

• Aspire acquires Interweave

• Acquired Gems Division

2005 2006 2007 2008 2009 2010 2011

Interweave Market Dynamics

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Interweave Market DynamicsInterweave Creatives: the Heart of the Craft Market

*Enthusiasts whose favorite activities are Interweave segments: knitting, crochet, quilting, sewing, jewelry/beading, painting, drawing, mixed media, or fiber arts.

Data sources: Number of Interweave creatives and spending are Hart estimates based upon Interweave internal data. Enthusiasts at large data is from Hart

analysis. Crafter data is from the Craft and Hobby Association (CHA) Attitude & Usage Study.

Data is approximately for the year ending June 30, 2011.

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Interweave Market DynamicsInterweave Creatives Active Across Multiple Platforms

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Content Consumed

Interweave Customer Types

Interweave Magazines

Interweave Websites

Interweave E-

NewslettersInterweave

Online StoreInterweave

Subscribe

Knitters 84% 83% 73% 51% 49%

Crocheters 66% 78% 67% 34% 40%

Quilters 79% 79% 72% 57% 59%

Sewers 72% 75% 70% 43% 40%

Jewelry Makers 81% 80% 70% 54% 58%

Beaders 84% 82% 72% 55% 63%

Artists 76% 76% 66% 49% 50%

• Interweave is a leader in understanding the digital content needs of creative people,

providing both traditional and digital resources to creatives

• Interweave magazines and websites are highly rated by customers and enthusiasts

Note: Interweave customers’ responses to the question: “Which of the following Interweave media have you read or used in the past two years?”

• 80% of digital subscribers do not match an existing Interweave magazine active

subscriber record

• 40% of digital subscribers do not match any active subscriber or eCommerce buyer

record in the Interweave database

• 22% of subscribers are completely “new-to-file” – they do not match any record in the

Interweave database (subscribers, eCommerce buyers or any affinity newsletter list)

Digital Magazine Subscribers are Expanding the Audience for

Interweave’s Magazines

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Interweave Market Dynamics

Content + Communities + eCommerce

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Content + Community + eCommerceMulti-Pronged Approach to Fueling Creatives' Interests

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Content(Inspiration

& Instruction)

Communities(Engagement)

eCommerce(Monetization)

• eCommerce and traditional wholesale channels

• Digital content products and physical content products

• Free content and paid content

• Original content and repurposed content

• Professional content and user content

• Commissioned content and curated content

• Online and offline communities

Content + Community + eCommercePlatform AgnosticInterweave provides both digital and traditional media to serve enthusiast needs

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Content + Community + eCommerceCommunities Offline Communities in Existence for Generations

• Quilting Bees have been around since the Revolutionary War

• Knit nights have been around for decades

• Artists and crafters are predisposed to engage in online communities

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Content + Community + eCommerceCommunities More than 1.4 million artists and crafters engaged with each other and with Interweave

through Online Communities

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Content + Community + eCommerceCommunities Who are they?

• Mainly women age 35+

• Pro-am markets (art and jewelry making)

also attract men

• Women focused on creative self-expression

• Crafters and artists with life-long interests

• Seeking inspiration, original designs,

technical instruction, peer-to-peer

engagement, and content products

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Content + Community + eCommerceeCommerceInterweave’s Fastest-Growing Channel

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Content + Community + eCommerceeCommerceInterweavestore.com

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• 10 niche stores-within-a-store

• Product offering includes both digital and physical content

• Customers can access the InterweaveStore directly or via the “Shop” tab on each

of Interweave’s online community pages

Interweave by the NumbersFree Affinity Content Websites - 2011

23Websites

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Interweave by the NumbersFree Affinity Content Email Newsletters - 2011

10Online Communities

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Interweave by the NumbersFree Affinity Content Television Programs - 2011

3 TV Programs reaching

71% of PBS Markets

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Interweave by the NumbersFree Affinity Content Free ePattern/Project Downloads - 2011

1,600 Free Patterns

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Interweave by the NumbersFree Affinity & Paid Premium Content iPad & iPhone Apps in market - 2011

5 Utility Apps

13 Magazine Apps

3 Affinity Apps

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Affinity Apps – free apps that are developed to build relationships and drive registered users;Utility Apps – paid apps (low priced) that provide users with tools to solve specific problems and objectives; andMagazine & Book Apps – apps that contain digital replicas of magazine and books and original rich content products (eMags) – some sold through Zinio and others sold through iNewsstand and iTunes stores.

Interweave by the NumbersPaid Premium Content eCommerce Interweave Store - 2011

11 eCommerce Stores

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Interweave by the NumbersPaid Premium Content Magazines, Bookazines & eMags - 2011

48 Magazines and Bookazines

11 eMags

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Interweave by the NumbersPaid Premium Content Books & eBooks in market - 2011

35-45New Books & eBooks Annually

100+ eBooks

375+ Books

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Interweave by the NumbersPaid Premium Content Events & Workshops - 2011 11 Consumer Events

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Interweave by the NumbersPaid Premium Content Instructional Video & Digital Compilations - 2011

159Instructional Videos

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Executive TeamTalented & Successful Operators

• V.P. Consumer Marketing Rodale

• Publisher F+W Media

• President & Publisher Leman Publications

• Director of Events F+W Media

• Director of Book Production F+W Media

• Owner/Publisher Quilting Arts, Cloth Paper Scissors

• Attorney

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Bob KaslikSenior V.P.

John BoltonSenior V.P.

Sara DumfordV.P. Events

David DunnV.P. eCommerceJamie BognerV.P. Content

Julie MacdonaldV.P. Media Sales

• V.P. eCommerce Webroot Software

• Director of Product Marketing Rally Software

• Art Director Nielsen

• Editor-in-Chief MCO Magazine

• Editor-in-Chief/Publisher Art Business News

• Sales Director Louise Blouin Media

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Executive TeamExperienced Support Teams

• Senior Editor Duke Communications International

• Managing Editor Penton Technology & Lifestyle Media

• Senior Director of HR Westwood College

• Director of HR IAS

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Trish FaubionV.P. Production

Aaron WilmotV.P. People OperationsDawn StewartV.P. Financial Planning & Analysis and Operations

• Manager of Financial Planning and Analysis Coca-Cola

North America

• Senior Financial Analyst Hyundai Motor America

• Owner/Publisher Natural Home, Herbs for Health,

Herb Companion

• Publisher Ready Made

• Director of eMedia Technology

Penton Technology

Linda LigonFounder

T.J. HartyV.P. Technology

• V.P./Group Publisher Cowles Enthusiast Media

• C.E.O./Owner Southwest Art Magazine

• Controller Meredith Corporation Publishing Group

• Business Director Meredith Corporation

Clay HallC.E.O.

Troy WellsC.F.O.

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Executive TeamCapable Corporate Executives