MOTION PICTURES PRODUCTION ANALYTICSMONEYBALL

January 7, 2014

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ProductionCost

Control

INDUSTRY

TREND

PRODUCTIONSPEND

The goal of the Moneyball initiative is to provide an analytics platform to Motion Pictures Creative, Business Affairs, Production and Finance executives for insight into Production cost drivers and create a model to improve decisions in the planning process and manage against that framework throughout the production lifecycle for a higher return on each annual slate of films.

BUSINESS PROBLEM

1.

Current industry trend of flat Box Office and a decreasing return on Home Entertainment reducing overall studio revenue

Parallel trend of increasing Talent, Production, & Post-production costs increases overall production cost investment, reducing overall margin

2.

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Design

Develop

Test

Implement

Analyze

PROPOSED SOLUTION

Work collaboratively with stakeholders to automate current analysis models (e.g. 99 titles) and design new models with emphasis on trend analysis across the production process of a film or year-over-year slate.

Determine the best technology platform for development and delivery of the analyses from currently available SPE tools (Tableau, BO, BIRT), and build out the models.

In the UAT environment, work collaboratively with stakeholders to test the analytic hypotheses through what-if scenarios and adapt the model.

Once a model is validated, it is promoted into the production environment with appropriate security depending on the data sources.

Collaborate with stakeholders to determine and measure the success of the models across the following benefits:• Automation of manual analyses

increasing productivity at the executive level, accuracy of data, and up-to-date data refresh making analyses dynamic and reflecting current trends

• Provide new insights or prove production variance hypotheses with data analysis

• Apply new insights and corresponding production cost management policies to a test project and measure results

Security & Compliance: All dashboard analytics & reporting will adhere to the same security model as the underlying databases/applications require, with full review

from SPE Legal and PMO.

Financial Summary

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Inception Phase Project Costs Five-Year Summary and Payback Software: $8,000 Three-Year Total Cost: $1,376,750Hardware: $0 Five-Year Total Benefit: $7,020,000Internal Labor: $73,125 Five-Year Net Benefit: $5,643,250External Labor $343,500 Internal Rate of Return: 654%Misc./Other: $0 Net Present Value at 10%: $6,323,569TOTAL $424,625 Payback in Months: 2.30 Years

Blended Onshore/Offshore Labor Rate: $68*includes ADM & Exec Mgmt oversight

Funding by Fiscal YearFY1 $133,167

FY2 $291,458

TOTAL $424,625

Depreciation: FY15 18K, FY16-19 72K

Ongoing Costs: N/A

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Deliverable Type Work Tasks Cost Benefit

MP Production data cleanup

Data - Current Slate Year review- Parsing out of text data to fields- Hot Costs GL code association- Tax Incentive GL code association- Date sync-up from manual records (R.

Hendler review)- Location cleanup

40,000

Assuring data migration and historical clean-up and parsing of data is complete and data is verified for accurate trend analysis

C2 Project Integration

Data - Industry & AP Genre- SPE Managing Business Unit- Distribution Studio(s)

7,000 Cleanup and correct association for accurate tracking by Studio & Business Unit

C2 Talent Data - Clean-up of ~5,000 talent records- Removal of duplicates- Integration of Union Occupation

Codes- Addition of Participation Code

generation & migration of existing from DARTS

- Upload of Crew Lists

40,000

Baseline database for ATL and BTL talent analysis.

99 Titles Analysis

- Create data views to support each of the 9 tabs of 99 Titles

- Create the framework and filters for each of the 9 tabs of 99 Titles

- Test data extraction & promote to the Prod environment

- Train users on the usage, filters etc.

92,850

Update of 99 titles from 2009 through FY2014. Providing currently unavailable portfolio analysis over this critical 5-year period with the ability for trend analysis at user-defined intervals.

Phase 1 Deliverables: Deliverables & Benefits

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Deliverable Type Work Tasks Cost Benefit

Production Cost Statement

Analysis

- Data Views- Design, Testing and Delivery through

Tableau

42,250

Project Post Mortem analysis

Production Spend Report (Qtr/Annual)

Analysis

- Data Views- Integration with local excel files for non-

MP Production Data- Design, Testing and Delivery through

Tableau

50,500

Ability to run Qtr & Annual with auto update of financial information from MP Production Data. Currently all manual process by Scott Abrams. Phase 2 - SAP

ATL Comparison Model

Analysis

- Data Views- Design, Testing and Delivery through

Tableau

60,000

For Andy Davis. Ability to select ATL personnel and get a comp model on financial profile of past films against similar films for input into deal terms

Project Perpetual Analysis

Analysis

- Data Views- Design, Testing and Delivery through

Tableau

33,750

In-flight and Post Mortem analysis of Variance growth

Year-Over-Year Slate

Analysis

- Data Views- Design, Testing and Delivery through

Tableau

24,775

On the fly analysis of production areas to compare against Year over Year slate at user-defined time intervals.

Phase 1 Deliverables: Deliverables & Benefits

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Deliverable Type Work Tasks Cost Benefit

Budget Comparison

Analysis

- Data Views- Design, Testing and Delivery

through Tableau

22,929 Currently limited in format and up to 3 films. Convert to tableau to run comparisons across user-defined inputs

EFC by Title(s) Analysis

- Data Views- Design, Testing and Delivery

through Tableau

22,929 Run comparisons across user defined selection of films. Currently pulled together manually.

Phase 1 Deliverables: Deliverables & Benefits

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Competitive Analysis• The business challenge is common across the studio, SPE has taken a lead in

creating the infrastructure that supports the ability for motion pictures portfolio financial management in the form of the creation of the Concept-to-Camera (C2)application suite and corresponding integrated database. This is evidenced by the presentation and interest in the suite at the Hollywood IT forum and presentation of the suite and its capabilities to other studio with the potential interest of licensing its capability.

• The combination of layering an analytics tool over the C2 database in combination with other databases e.g. SAP, MP Marketing, Box Office, Home Entertainment to provide a full analytical view follows the emerging, cross-industry focus on “Big Data” and extracting more value out of enterprise data stores that formerly were disparate to provide a more advanced Decision Support System (DSS)

• The only company utilizing a similar approach is Relativity Media which uses algorithms based on hedge-fund modeling for selecting films it produces.

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TimelineDec Jan Feb Mar Apr May June July Aug

MP Data Clean up, Normalization, Views and Joins

Year-Over-Year Slate

Budget Comparison& EF by Title

ProjectPerpetualAnalysis

Production Cost Statement

Talent Comparison Model

Production Spend Report

99 Titles

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Appendix

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Security, Risk and Compliance Considerations

• Security, particularly data security, is in compliance with the organizational rules governing data.

• Analyses are reviewed with legal and security to workbooks is set at the user level and matches the users data security for the underlying applications which provide the data

• The tableau application is IDM enabled.