Mid Range Plan Presentation Fiscal Year 2009-2011 October 2007 [DRAFT 09.19.07]

Mid Range Plan Presentation Fiscal Year 2009-2011

October 2007

[DRAFT 09.19.07]

2

Agenda

• Executive Summary

• Core Assets

• Programming

• Digital Networks

• Distribution

• Ad Sales

• Financial Appendix

DIGITAL NETWORKS

4

Digital 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]

DISTRIBUTION

6

Market Update and Strategy Overview

• The marketplace has evolved past traditional delivery platforms, creating new opportunities for SPT

– Non-traditional competitors (Comcast, Google, Verizon) are buying content and rights for emerging platforms (VOD/Internet/Mobile)

– To remain competitive, established platforms are expanding their rights offerings

• As more companies buy more content and rights; SPT is well positioned to sell to all of them

– Offering “all rights under one roof”, including broadcast, cable, IPTV, satellite, Internet and mobile

– Unlocking rights that are unavailable in many studios

– Intelligently tailoring each rights and product offering to a customer’s business activities and objectives

– Driving the market towards a proactively consumer-focused media experience

– Leading advertisers to richer opportunities to connect with the public

• As a result, we are distributing shows from more sources now than ever before:

– Off broadcast (Rules of Engagement, Power of 10)

– Off cable (Rescue Me, Damages)

– 1st run (Judge David Young)

– Internet developed shows (The 9)

– 3rd party acquisitions (G.B.B., Just for Laughs)

– New library strategies (Minisode network, digital cable and satellite sales)

7

Distribution Sales – Total Revenues

$50 $50 $50 $50

$850 $850 $850 $850

$210$800$800 $800

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

FY08 FY09 FY10 FY11

($ in MM) TV Customers Online / Mobile Customers

Budget/ Prior MRP

$846 $663

Variance $21 $32

$631

$123

SPT will generate over [$X] million in total current and library sales for SPE

[Placeholder Numbers Only]

8

Free / Basic TV

Market Dynamic MRP Initiatives

• Cable networks’ growing appetite for original programming is coming at the expense of acquisition budgets

• For movies and TV shows, SPT is employing new strategic initiatives and licensing new rights

– New internal ratings systems– Shorter and dual windowing– Inclusion of barter– Repurposing– Multiplatform simulcasting and

multiplexing– Network VOD/SVOD– Network-branded MSO VOD– EST

• Increase revenue by 2 to 3% by increasing sales of non-linear digital rights across platforms

• Increase library film sales by 5% by utilizing newly-developed ratings and competitive database

• Increase library film sales by 2-3% by converting “event” movie buyers into ongoing buyers (e.g., Hallmark, G4, and E!)

• Increase library sales by 1-2% by converting non-buyers (e.g., TV Land, Nick @ Nite, and SoapNet) into at least occasional buyers

9

Free / Basic TV – Revenues

$377

$190

$286

$210

$370

$171$152

$0

$50

$100

$150

$200

$250

$300

$350

$400

FY07 FY08 FY09 FY10

Q2/MRP Budget/Prior MRP


10

Syndication


• Consolidation of buyers has created the need to partner and co-develop first-run programming, increasing the likelihood of shows being picked-up

• Off net programming continues to be a highly desired product that commands premiums

• For library sales, new clients are emerging through Spanish language channels and digital second channel owners

• Local stations and cable networks are seeking rights to stream episodes on their web sites

• Aggressive sales efforts of library & new shows– King of Queens 2nd cycle– 4th cycle renewal of Seinfeld– Upgrades and renewals for Judge Maria

Lopez and Judge David Young– New first run syndication shows (The 9;

Power of 10)– Steve Harvey as an ad-supported strip in

2008• Stream products on local TV station/cable

network sites• Secure additional 3rd party products• Add new clients from digital second channel

owners (GTN) and ION Television and Spanish Language channels (Telemundo, etc.)

• Exploit the relationship with WGN+ for new library sales

• Pursue co-development deals with NBC, Tribune and other station groups

11

Syndication – Revenues

$164

$113 $113$122

$149

$103 $106

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

FY07 FY08 FY09 FY10



12

Pay Per View / VOD

Cable Market MRP Initiatives

Satellite Market MRP Initiatives

• Cable cos. continue to focus on the triple play; committed to being the single provider of TV, voice and data into the home

–Eager to improve the traditional PPV/VOD offerings

–Seeking earlier windows and HD rights–Focus on content to increase sales of

broadband services

• Primary product is traditional PPV/VOD rights–Locked a 3 year extension output deal for

PPV/VOD rights (expires Dec 31, 2010)–Leveraging interest in PPV / VOD for better

placement, higher prices, better splits• Expanding licensing discussions to on-line

rental VOD and EST based on MSO focus on broadband services

• Satellite cos. are trying to catch-up with cable on VOD and broadband

–Creating new products for their home customers to compete with the triple play

–DIRECTV and EchoStar are building out push VOD and closed IP delivered products to the home

• Leveraging satellite's need to provide VOD, SPT is in negotiations for PPV/VOD output deals with both DIRECTV and EchoStar

–Securing commitment from DIRECTV for SPT FOD product

–Securing commitment from EchoStar to carry The Minisode Network and direct-to-video product

13

Pay Per View / VOD – Revenues

$110 $107

$91

$78

$110

$91

$75

$0

$20

$40

$60

$80

$100

$120

FY07 FY08 FY09 FY10



14

Pay TV – Strategy


• Starz remaining a critical partner in Pay TV

• Pay partners, including Starz, are seeking cross-platform rights

• Multiple customers have demonstrated interest in a mix of library and newer/short-form content

• Exercise the Starz option. Once exercised, the deal will expire December 31, 2013

• Secure an additional long-term Pay TV extension with Starz

• Address key “asks” including:

–Caps on Sony's theatrically released product

–Expansion of on-demand rights

–Reductions in overall license fees

–Earlier windows to Pay TV

• Leverage Starz’ desire for digital content for VONGO and cross-platform plays

• SPT has closed a rental on-line VOD deal. SPT is negotiating EST, The Minisode Network and SPT on-line channels

• Close library deals with Showtime and HBO

15

Pay TV – Revenues

$216

$285$264

$318

$217

$298 $298

$0

$50

$100

$150

$200

$250

$300

$350

FY07 FY08 FY09 FY10



16

Title PPV Pay TV Free TV Title PPV Pay TV Free TV Title PPV Pay TV Free TV

SPIDER-MAN 3 $8,500 $22,500 $50,000 VACANCY $2,500 $9,510 $6,500 PERFECT STRANGER $3,000 $0 $0SUPERBAD $3,000 $10,350 $6,500 RESIDENT EVIL 3 $2,160 $9,510 $4,000 ARE WE DONE YET? $4,880 $0 $0VANTAGE POINT $2,950 $13,450 $11,380 BONE DEEP $2,380 $7,830 $4,880 BROTHERS SOLOMON $1,130 $0 $030 DAYS OF NIGHT $2,160 $9,290 $4,000 UNTRACEABLE $2,500 $9,510 $6,500 NEXT $3,025 $0 $0THE OTHER BOLEYN GIRL $2,500 $9,510 $6,500 THIS CHRISTMAS $1,890 $8,850 $3,060 ACROSS THE UNIVERSE $3,000 $0 $0WALK HARD $3,750 $11,130 $8,130 UNDERWORLD 3 $2,250 $10,460 $7,310 WATERHORSE $3,750 $0 $0

STEP FATHER $2,350 $7,830 $4,880

TOTAL $22,860 $76,230 $86,510 TOTAL $16,030 $63,500 $37,130 TOTAL $18,785 $0 $0

Title PPV Pay TV Free TV Title PPV Pay TV Free TV Title PPV Pay TV Free TV

SURF'S UP $5,000 $18,890 $19,500 TBD#1-2008 $10 $90 $300 A HOPE $700 $2,830 $780TBD#2-2008 $800 $2,560 $300 LUST, CAUTION $300 $1,300 $500

TOTAL $5,000 $18,890 $19,500 TBD#3-2008 $10 $290 $170TBD#4-2008 $5 $190 $80 TOTAL $1,000 $4,130 $1,280

TBD#5-2008 $10 $380 $150TBD#6-2008 $20 $440 $220TBD#7-2008 $800 $2,560 $300TBD#8-2008 $10 $580 $150TBD#9-2008 $10 $90 $190 Title PPV Pay TV Free TV

TBD#10-2008 $10 $290 $170 TBDTBD#11-2008 $5 $190 $80TBD#12-2008 $10 $380 $180TBD#14-2008 $455 $2,340 $250TBD#15-2008 $10 $380 $450TBD#16-2008 $10 $380 $150TBD#17-2008 $10 $180 $190TBD#18-2008 $10 $750 $290TBD#19-2008 $5 $190 $80

TOTAL $2,200 $12,260 $3,700

SPT will generate over $389 million in sales from the FY08 slate

[Update / Reformat]

Distribution Sales – FY08 Slate

17

Library Sales – Market Trends

The consistent licensing of our library product is evolving with new business models and applications

• Dual windowing (Just Shoot Me – cable and broadcast)

• 3rd party distribution (RTN – premium guarantees)

• Re-packaging library products for cross-platform distribution (Minisodes)

• “Long Tail” new media sales (Netflix online, Funnybone, AXN)

18

$73 $77$66

$77

$20

$17

$8

$90

$77

$102

$5

$5

$60

$5

$6

Forecast $150 +

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY07 FY08 FY09 FY10

($ in MM) Free/Basic Pay TV PPV/VOD

Library Sales Targets by Market

• 3 year annual average of $106MM in FY07-FY09, and $90MM in FY08-FY10

• 4 year annual average of $105MM

In-House $103MM

Budget $65MM

[Numbers to be Updated by Friday]

19

Library Revenue by Division

$76

$33

$52

$27

$44

$46

$48

$28

$34

$26

$26

$18

$11

$36$33

$75

$42 $40

$32 $30

$16

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY07 FY08 FY09 FY10

$133

$111

$81

$124

$77

$101

$146

Q2/BDGT. MRP/PRIOR MRP/PRIOR MRP

TV SPHEMPG

In-House

$103MM

In-House $62MM

In-House $77MM

In-House $31MM

NOTE: Assumes a consistent volume and quality of SPHE acquired product.

($ in MM)

[Numbers to be Updated by Friday]

20

Digital Video Market Growth

1,170

1,691

2,191

2,629

447

651

846

1,3502,100

3,100

4,300

775

774

2007 2008 2009 2010 2011

Ads TV Downloads* MovieDownloads*

U.S. Consumer /Advertiser Spending ($M)

$1,663$1,663

$2,765$2,765

$7,775$7,775

$4,238$4,238

$5,942$5,942

Source: eMarketer; *includes DST and rental

• Spending on paid and ad-supported content is forecasted to grow at double-digit rates well into the next decade

• Studios are continuing to make an increasing amount of premium content available for digital distribution

– Primetime TV, movies, and original content

• Historically game-based, mobile is also proving viable for video distribution

– Adoption of 3G handsets continues to grow and is improving viewing experience

– Carriers are seeking video content to attract and retain customers

[Confirm #’s include mobile videoClarify this in footnote]

21

Digital Distribution


• Content owners are leveraging wide distribution networks, rather than exclusivity, to drive demand

– NBCU and Fox to launch JV “Hulu” in Q4 as well as distributing through Yahoo! and MSN

• TV and movie content is fully cross platform utilizing a variety of business models

– Ad supported streams on ABC.com and DST on iTunes

– DST and VOD on XBox360– Ad supported and subscription TV and

movies on Verizon Wireless and Sprint

• 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

22

Digital – Revenues

$10 $10 $10 $10$10 $10 $10

$0

$2

$4

$6

$8

$10

$12

FY07 FY08 FY09 FY10



23

Mobile Games and Personalization


• Mobile comments to come…

• 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

[Mobile comments to come]

24

Mobile Games & Personalization

Q2/MRP Budget/Prior MRP Q2/MRP Budget/Prior MRP

EBIT Revenue

$10$10$10 $10 $10$10$10

$0

$2

$4

$6

$8

$10

$12

FY07 FY08 FY09 FY10

($ in MM)

$10$10$10 $10 $10$10$10

$0

$2

$4

$6

$8

$10

$12

FY07 FY08 FY09 FY10

($ in MM)


Documents

Mid Range Plan Presentation Fiscal Year 2009-2011 October 2007 [DRAFT 09.19.07]