new network. new living room. mrp/crackle 07.08.13 us... · subscribers and viewers of pay tv...

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NEW NETWORK.NEW LIVING ROOM.

Crackle US - MRP FY15-FY17

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Vision and Strategy

OUR VISION

To be a leading on-demand programming network around the world

“CRACKLE…ALSO,” meaning Crackle is a welcomed choice even for subscribers and viewers of Pay TV (e.g., Comcast) and OTT services (e.g., Netflix)

OUR STRATEGY

Differentiate ourselves and build audience by

offering programmed experiences that are freely accessible on all connected devices

Connect brands with consumers through premium content experiences on connected devices

Online

Connected TV

Mobile

World Class Distribution

People are noticing….

“The 20 Best iOS and Android Apps Of 2012”

– TechCrunch

● “Amazon’s Best of 2012: Apps and Games” --

Amazon Editors

● “Xbox Top 5 App of the Year”

● “Best of TV on the Web in 2012” ● – USA Today

2012 Mobile Excellence Award Finalist

Top 5 Application on: PlayStation, Xbox, ROKU, BRAVIA, and

SAMSUNG

Top 10 iPad Apps of 2012

#3 Most Popular Entertainment

Application on Android

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• Sales Organization• Proving a real revenue model exists• Built systems to support sales and Yield Management

• Platform – Efficient relative to competitors – 20 apps/4 continents

• Original Content Studio – premium slate; accolades; cost capability

• Movies/TV - Creating AVOD licensing market

• Audience and Engagement – 50% increase in time; 30M apps;YT

• Distribution Partnerships – solid terms and relationships, globally

Solid Foundation and Asset Creation

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Advertisers Issues:Money moving to cTV slower than expectedBuying 3 quarters outOnline targeting is desired

Competition Issues: TVE and SVOD – taking consumer attention, and spending $billions on tech

Content – Prices bid up through exclusivityPortals – more premium video in AVOD space matched with scale

Critical Success Factors:Brand – build strong awarenessEngagement - combine product and programming in compelling mannerOriginal programming – stand-outTech platform – competitive, and able to maintain 20+ productsTargeting – systems and consumers to target campaigns

Market Conditions That We Face

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“It takes a Village…”

Platform Content

Marketing

The Consumer

Distribution

Ad Sales

US MRP Crackle Digital Media Sales

2015-2017 Go to Market Strategy

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Identify & maximize the value of our inventory & products

Leverage inventory

packages by core Lines of

Business

Identify the size, cycles

& anatomy of our

marketplace

Align & localize a

best in class sales team

with our marketplace

Leverage data to

penetrate all revenue

channels in the

ecosystem

2014 Sales Strategy & Principles

Leverage inventory packages by core

The “Build Year”

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Yr/Yr Quarterly Revenue Pacing

2014 Sales Pacing & Execution

Q1 Q2 Q3 Q40

2000000400000060000008000000

10000000120000001400000016000000

F2014F2013

- 11 -

2014 Current Pipeline

2014 Sales Pacing & Execution

Pipeline Revenue by Status - Full Value FY14 Q1 FY14 Q2 FY14 Q3 FY14 Q4

90% Hold $2,651,785 $1,635,215 $- 60% PIN $1,425,126 $2,207,754 $5,023,766

30% Proposed $10,300,807 $19,750,490 $7,025,271 0% Initial $3,779,343 $1,200,050 $493,151

Total $18,157,061 $24,793,508 $12,542,187

Pipeline Revenue by Status - Discounted Value FY14 Q1 FY14 Q2 FY14 Q3 FY14 Q4

90% Hold $2,386,607 $1,471,693 $- 60% PIN $855,075 $1,324,652 $3,014,259

30% Proposed $3,090,242 $5,925,147 $2,107,581 Total $6,331,924 $8,721,492 $5,121,841

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2014 Sales Highlights

2013 Annual Total

2014 Sold to Date

0 2000000 4000000 6000000 8000000

Closed Revenue

2013 Annual Total

2014 Sold to Date

0 20 40 60 80 100 120 140

Active Client Prospects

2013 Annual Total

2014 Sold to Date

0 50 100 150 200 250 300 350

Proposed Deals

2013 Annual Total

2014 Sold to Date

0 50000 100000 150000 200000 250000 300000

Average Deal Size

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Retain customers & reduce client

burn rate

Identify & break New Audience Segments

and pockets of video buying

Leverage Relationship

Equity to drive upfront

buying

Capitalize on Originals

success and incubate Crackle Studios

Enhance Ad Technology & targeting

to drive premium pricing &

GRP parity.

2015 Sales Strategy & Principles

Retain customers

Leverage Capitalize

Sustain & GrowDouble Down

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2014 Key Learnings from Ad Community

Headwinds Tailwinds

OCR & VCE

Brand awareness

CTV

Content

Scale

Targeting

Ad model

Originals

Talent

Mobile & Tablet

Distribution

cRoll

Performance

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2014-2017 Sales Cycle & Growth Projections

+42% +33% +1%2014 2015 2016 20170

20000000

40000000

60000000

80000000

100000000

120000000

140000000

Q1 Q2 Q3 Q4

5 8 13 12

Q1 Q2 Q3 Q4

10 10 15 15

Q1 Q2 Q3 Q4

15 15 20 20

Q1 Q2 Q3 Q4

25 25 35 35

$38M

$50M

$70M

$120M

Quarterly Goals

Marketing/ProgrammingCycles & Impact to Revenue

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2014-2017 Growth Projections & Incremental Gain

2014 2015 2016 2017

$38M

$50M

$70M

$120M

‘17 Incremental Growth to $120M

Premium Content Rotation $15MHolding Company Upfronts $15MData & B. Targeting $5MSony Pictures Studio $5M New Distribution Partners $5MLocal $5M

* All include rev gains in CTV


Tier 1 Publisher Upfronts $10MPremium Content Rotation $7MSony Pictures Studio $3M


AE Yield / Full Sales Cycle $10MTier 1 Publisher Upfronts $8M

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Market Size, Cycles & Anatomy

Total Size of Digital Ad Market2013 Total Digital Spend Excluding Search: $31.8B

Sources: Search, Display, Social Networks, Rich Media and Online Video 2014 from: “Advertising Forecasts 2012: US Market Trends and Data for All Major Media” (SNL Kagan, 2012); Mobile 2012 and 2013 from “US Online Advertising Spending to Surpass Print in 2012” (eMarketer, Jan 2012), Mobile 2014 from “Mobile Marketing Economic Impact Study” (Mobile Marketing Association, 2013); Online Video 2012 and 2013 from “iAB Internet Advertising Revenue Report : 2012 Full year Results” (April 2013)

Display

Mobile Video

Social Networks

Connected TV

12.8

3.4

0.242.5 2.6

1.60.19

14.5

4.1

0.52

3.1 31.6

0.52

16.1

4.9

0.92

3.9 3.31.7 0.93

Digital Media Spending by Year

201220132014

Tot

al D

olla

r A

d S

pend

(i

n $

Bill

ions

)

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Total Size of Digital Video Ad Market2013 Total Digital Video Spending: $4.1B

+42% +33% +1% NC

Sector 2011 2012 2013 2014

Online* 17.2 20.9 28.9 33.3

Online Video 1.8 2.5 3.1 3.9

Mobile* 0.8 1.4 2.4 3.6

Mobile Video 0.1 0.2 0.5 0.9

Connected TVs 0.1 0.2 0.5 0.9

Broadcast TV 24.8 27.4 x x

Cable TV 23.6 24.4 x xSyndication TV 4.7 5.1 x x

--$ Billions--

Sources: Total Ad Spend 2011, Total TV, Total Print, and Total Internet 2013, 2014 est: US Online Advertising Spending to Surpass Print in 2012 – eMarketer (Jan 2012); Radio 2013 and Mobile 2014: Mobile Marketing Economic Impact Study: Mobile Marketing Association (2013); Online Video 2014: Advertising Forecasts 2012: US Market Trends and Data for All Major Media (SNL Kagan, 2012)

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Break New Audience Segments

Male Audience$13.4B

Female Audience$18.4B

Hispanic Audience$2.5B

AA Audience$1.6B

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Total Size of Digital Ad Market2013 Total Digital Spending: $31.8B

2013 Digital Spending Male Audience: $13.4B

Source: Forecasts calculated from SNL Kalgan, 2011 and iamb October 2012; classified and lead generation not shown

Online Video Connected TV

1477.5

134.0457.06 60.48

1550

279.56178.24 133.92

20122013$M

illi

on

s

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2013 Digital Spending Female Audience: $18.4B



1025

109.67 48.6 20.16

1550

238.14158.06

52.08

20122013

$Mil

lio

ns

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2013 Digital Spending Hispanic Audience: $2.5B



317.5

38.99 21.13 16.13

396.8

86.46 67.2646.5

20122013

$Mil

lio

ns

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2013 Digital Spending AA Audience: $1.6B



237.5

24.37 12.68 9.68

285.2

51.77 40.3624.18

20122013

$Mil

lio

ns

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Spending Cycles

All Digital & Male Audience

Source, IAB totals by type, Kantar distribution by month, comScore Male Aud Composition; EXCLUDES SEARCH

FQ4 FQ3

4100041030

4106141091

4112241153

4118341214

4124441275

4130641334

0

200

400

600

800

1,000

1,200

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Total Digital Spending

Total Digital Spending Male Audience

$Mil

lio

ns

FQ2 FQ4

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Spending Cycles

All Digital & Female Audience

Source, IAB totals by type, Kantar distribution by month, comScore Male Aud Composition; EXCLUDES SEARCH

FQ4 FQ3

4100041030

4106141091

4112241153

4118341214

4124441275

4130641334

0

200

400

600

800

1,000

1,200

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Total Digital Spending

Total Digital Spending Female Audience

$Mil

lio

ns

FQ2 FQ3

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Male Audience Total Digital Video

Spending Cycles: By Category


Top 5 Categories in 20121. Media & Advertising2. CPG Food (Total)3. Department Stores4. Automotive, Auto Access & Equip5. CPG Health (Total)

April June August October DecemberFebruary0

5

10

15

20

25

Automotive, Auto Access & Equip

CPG Food

Communications

Department Stores

Games, Toys & Hobbycraft

Media & Advertising

Misc Services & Amusements

CPG Health

Retail

Ind

ustr

y R

ank

Sources: Kantar Stradegy Trend US Internet Display Spend: Male Product Categories, April 2011-March 2012; April 2012- March 2013

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Female Audience Total Digital Video

Spending Cycles: By Category


Top 5 Categories in 20121. Media & Advertising2. CPG Food (Total)3. CPG Health (Total)4. Retail5. Medicines & Proprietary Remedies

April June August October December February0

5

10

15

20

25

CPG Food

CPG Health

Discount Department & Variety Stores

Household Supplies

Media & Advertising

Medicines & Proprietary Remedies

Misc Services & Amusements

Retail

Indu

stry

Ran

k

Sources: Kantar Stradegy Trend US Internet Display Spend: Male Product Categories, April 2011-March 2012; April 2012- March 2013

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Regional Allocation of F15 GoalOrganizational Design

WEST$14M

CENTRAL$14M

EAST$22M

2015 Resource Requirements

4 Sellers1 SA

1 Sr. Lead( 0 )

4 Sellers1 SA

1 Sr. Lead( 0 )

6 Sellers2 SA’s

1 Sr. Lead( +2 )Yr/Yr Change

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Key Dependencies

Retain customers & reduce client

burn rate

Leverage Relationships Equity to drive upfront buying

Capitalize on Originals

success and incubate Crackle Studios

Enhance Ad Technology & targeting to

drive premium pricing

Identify & break New Audience

Segments and pockets of

video buying

Performance

Customer service

Delivery

Campaigns shifting

Client seasonality

Reach in segment

Targeting

Programming

Ecosystem marketing

Targeted originals

Full sales cycle

Early slate release

Holding Co. deals

One Sony deals

NewFront

Larger slate

Top talent

Big ideas

Long sales cycles

Production resources

OCR/VCE solve

Premium rotation

Behavioral targeting

First Party Data

CTV ad tech

F

MRP FY15+ SALES SOLUTIONS PLANNINGv3

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FY14 Ad Revenue Business Requirements

CONFIDENTIAL

Drivers

Direct Sales Team Support Marketplace Requirements

1. Sales Support – resources needed for $30M direct sales business

2. Yield Mgmt – manages monetization of portfolio

3. Ad Networks – manages $8M reseller business

4. Market Leadership – swimming upstream to be leader in industry

Budget Priority Areas

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FY14 Ad Revenue Business Requirements: Report Card

CONFIDENTIAL

120Proposals in June

20Campaigns executed in June

6 MthsNew Infrastructure

$2MLeft on table in FY13

+24%CPM - Desktop

+16%CPM - Mobile

20MMobile IMPs delivered to Rhythm

in June

Sales Support

Yield Mgmt

Ad Networks

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FY14 Market Leadership: Swimming Upstream Report Card

CONFIDENTIAL

2. Research

3. Ad Community Awareness 4. Sales Tools & Collateral Materials

DCNF Newfronts, Ad Age Digital and IAB Cross-screen

comScore Multi-Platform Audience Measurement

New Network. New Living Room. , Sizzle Videos & Media Kit

1. Media Innovation

cRoll Imagery Gallery & cRoll Cinema

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FY15 – FY17 Directional Strategy

CONFIDENTIAL

Create advertising beachhead for multi-platform video that capitalizes on audience scale with growth of CTV and mobile/tablet , first-in-market media innovation and first party data

Strategy

Tablet Mobile

CTV

Media InnovationAudience Scale

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FY15 – FY17 Directional Strategy: Short-term

CONFIDENTIAL

Priority Tactics

Sales Support

• Custom marketing solutions ie. integration in Originals• Scale with growth but find efficiencies

Yield Mgmt • Expand yield portfolio• Fold in Ad Ops as part of overall Yield Mgmt approach

Ad Networks

• Leverage CTV position and ad infrastructure to create new revenue opportunities

Market Leadership

• Improve ad experience• More cRoll• CTV education through trade mrkt

Compete and win through multi-platform innovation, custom marketing solutions and education on CTV

Strategy

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FY15 – FY17 Directional Strategy: Long-term

CONFIDENTIAL

Secure first party data from device partners, Sony and Crackle to take a market leadership position for ad targeting on CTV

Strategy

Acxiom

UMI PROJECT

US PROGRAMMING

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THE CHANGING COMPETITIVE LANDSCAPE

YESTERDAYTODAY

LINEAR TV WORLDMSO-driven experience

EXPLOSION OF APPS, BRANDS, & PLATFORMS

Convergence & chaos combined

TODAY TOMORROW

EVEN MORE CHAOS & PLATFORMS

Wearables, Cars, In-Flight, etc

What does this mean for Programming?

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PRICING AND AVAILABILITY

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MARKET PRICING & SPEND

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THE NEED TO ESTABLISH A BRAND

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PROGRAMMING STRATEGIES & TACTICS

How Crackle’s Programming will adapt, compete and thrive

Voice & Tone:- Reinforce brand via editorial/celebrity Watchlists- Produce on-brand Originals- Improve consumer messaging around content exclusives and windows- Increased retention

Licensing:- License exclusive content, multi year deals- Increase 3rd party licensing efforts (# of partners and volume)- Improve TV offering, including full seasons of driver titles

Expand Core Demographics:- Identify niche verticals and opportunities- Target new audience demographics: Hispanics, African Americans- Expand demographics for co-viewing

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Editorial VoiceStreaming Exclusives

& Themed Events

Premium Movie & TV Content in Key

Genres

Crackle Only

+ + +

Weekly Featured Watchlist

Guest Curators

Original Productions

Crackle Only

Crackle Only

Crackle Only

Denis Leary heads a heroic cast in a darkly funny and incendiary firehouse TV saga that has more grit than sandpaper.

On-Brand “Why It Crackles” Statement

VOICE & TONE

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WEEKLY WATCHLISTS

Curate content in fun, interesting and relevant weekly packages to reinforce voice, drive retention and elevate Originals

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Watchlists & Collections

Premium Movies & Full

TV Series

Exclusive Content & Originals

RETENTION: INCREASED ENGAGED VIEWING AND REPEAT VISITORS

RETENTION

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FY15 Titles

FY16 Titles

FY17 Titles

Library Titles

*Titles subject to change

Lock-in exclusive network windows & driver library titles for multi-year deals

SONY CONTENT BUYING STRATEGY-- Illustrative

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• Features $2.6MM• TV $1.8MM

FY15$4.4MM

• Features $3MM• TV $2.1MM

FY16$5.1MM

• Features $5.3MM• TV $5.1MM

FY17$10.4M

M

THIRD-PARTY CONTENT STRATEGY

FY15

Current MRP Target

$20MM

Increased investment in third-party titles with focus on multiyear deals, premium drivers and complete series for binge viewing

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TV STRATEGY

Premium series provide strong

brand recognition and cultural relevance

Driver Television

Genre-Supporting, Hour-Long Series

Influential and Visionary

Cult Series

Non-Fiction & Reality

Devotedly followed

franchises that align with

Crackle’s core genres

Influential series that pushed

boundaries and remain relevant

Interesting, smart fare from networks such

as Discovery and Smithsonian

Anime

Premium titles drive binge

viewing engagement via

a highly retainable and loyal audience

On-brand, complete TV series and Anime from multiple licensors to encourage binge viewing and bolster retention

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Continue to grow and expand relevant, influential and full-length narrative-based premium music content

Music-Themed Feature Films

Original SeriesPerformance / Concert Films

Music Documentaries

OPPORTUNITIES

Content Exclusivity High Dollar Sponsorships Strategic Partnerships

EXPANSION INTO NICHE VERTICALS: MUSIC (CONTINUED..)

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Narrative-Based Feature Films, Documentaries, TV shows, and Reality Sports Programming that drive sponsorship opportunities

Crackle Users

• 43% Say sports are a big part of their life

• 23% Regularly visit a sports website (ESPN, FoxSports, CBS Sports)

• 26% Watched 1+ hours of sports content on TV in the last week

• 7% Used ESPN to watch a sporting event on Xbox

• 3: Avg number of pay-per-view live sports events watched in the last 3 months

*SOURCE: Interpret NMM Q4 2012

EXPANSION INTO NICHE VERTICALS: SPORTS

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Crackle Users

• 12% of U.S. Crackle users identify as African American

• 82% Spend 1+ hours watching TV or movies online daily

• 5: Average hours watching movies online per week

• 12% Prefer to watch movies by streaming them online

• 49% Of AA Crackle app users used an app (past week) to stream movies/TV

• 64% Saw 1+ movies in theaters (3 months)

• 86% Owns a video game system

• 83% Spent 1+ hours playing video games

• SOURCE: Interpret New Media Measures: Q3 2012

Program movies, shows, stand-up comedy and music that target African American males, 18-34

EXPANDED DEMOGRAPHICS: AFRICAN AMERICAN

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Crackle Users

• 15% of U.S. Crackle users identify as Hispanic

• 61% Male

• 28 = Median age

• 26% HH income of $50K+

• 91% Own a game console

• 95% More likely to play a new video game

• 63% More likely to try a new technology

• when released

• 41% Agreed they would unplug the TV and turn exclusively to the Internet for video entertainment

• 240 min: Average time spent watching TV Shows Online

• SOURCE: Interpret New Media Measures: Q3 2012 Survey; comScore Plan Metrix Dec 2012; What Men Want 2012/2013 Crackle proprietary study

EXPANDED DEMOGRAPHIC: ENLGLISH SPEAKING HISPANICS

Program movies, shows and music that target tech-savvy second and third generation U.S. Hispanic males, 18-34

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Crackle Users

• 41% of U.S. Crackle users identify as female

• Women are (slightly) more likely to watch Crackle content with someone else

• Female users are 3% more likely to recommend Crackle than male users

• Onsite female Crackle users are much younger on average than males

SOURCE: ForeSee Crackle Browse (May ‘12-May’13)

Program movies, shows, stand-up comedy and music that appeal to both women and men, 18-34

EXPANDED DEMOGRAPHICS: CO-VIEWING

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FY14$5MM

FY15$8MM

FY16$10MM

FY17$14MM

0

5000000

10000000

15000000

33942005752200 6426000

86784001506000

26520003312000

5356800

Movies

SPT 3rd Party

Year-over-year increased investment in third-party licenses for Movies and Shows

**Illustrative content progression over MRP**

CONTENT BUDGET ALLOCATIONS

FY14$2MM

FY15$4MM

FY16$3.5MM

FY17$9MM

0

2000000

4000000

6000000

8000000

10000000

1399350 1769862 18232323787230705021.35

1847482.94 1945588.24

5189301.53

TV

SPT 3rd Party

FY14 FY15 FY16 FY170

5

10

15

20

25

MoviesTV

$7MM

$12MM$13.5MM

$23MM

Cumulative Content Spend

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CRACKLE STUDIO

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Crackle Studio – Original Content Programming

Build Upon Success

Multiple Full Length Formats

• ½ Hour Series

• Features

• Unscripted / Music programming

A Creative Home for Talent:

• Jerry Seinfeld

• David Spade

• Robert Downey Jr.

• Danny Glover

• David Arquette

• Gina Gershon

A Key Lever to Building The Business

• A partnership with Advertisers

• A strong consumer branding opportunity

• Awards (Streamy, Webby, Rockie….)

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Crackle Studio – Original Content Programming Strategy

Evolve Production Volume and

Quality

● LENGTH:

• Evolve to 10 x 1/2 hour scripted approach

• Test 10 x 1 hour format in FY16

● SEASONS:

• Produce multiple seasons of successful shows to build franchise

properties

• Greenlight/Produce 6 series over the year -- beat linear networks to

punch on burgeoning year-round original programming model

● BUDGETS:

• Increase per ep scripted budgets from $175k to $500+k by FY17

● NEW OPTIONS:

• Adopt orphaned linear series e.g., ‘Happy Endings’

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Crackle Studio – Original Content Programming

Features as “back-door

pilots”

Fully integrate “second

screen” into production

Crackle Branded/ Built-If-Sold Series

• Build 360 experience (second screen, gaming platforms, social

integrations, etc.) around original production franchises

• Second screen experience executed in parallel with production

• Explore a greater degree of social engagement

• Create more unscripted ‘built-if-sold’ revenue opportunities such

as “Play It Forward”

• Expand into built-if-sold 6x22 scripted comedy series and

features

● Produce original features to serve as pilots for future

franchises

● Launch AXN / Crackle international back-door pilot / feature

partnership for FY15

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CRACKLE NETWORK

DVD & EST

LINEAR TV

GLOBAL

Crackle and Beyond

CONTINUE TO LEVERAGE MULTIPLE WINDOWS OF DISTRIBUTION

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CRACKLE US MARKETING

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Marketing Approach

CONFIDENTIAL - NOT FOR RELEASE OUTSIDE OF SONY PICTURES

3/4 of the US will have heard of Crackle

• Brand top of mind for at least 25%

Double retention across all platforms

}

Dis

cover/

Watch

En

gag

e/D

ialog

ue

GoalsBrand Omnipresence: Our audience must see Crackle everywhere: online, offline, in the press, from their friends

Brand engagement: users must be reminded to return, and involved in 2 way communication with the brand

Critical Success Factors

Customer acquisition: Cast a wider net, increasing flow of new users

Retention: communicate with them in an ongoing, relevant dialog

Strategy

+4m +6m +12m

FY 15 FY 16 FY 17

New Users

- 63 -

Discover

Engage

Dialog

Share

Tactical Approach


}

Discover

Dialog

• 360° media• Multiple press

touchpoints• Partner and platform

marketing• Stunts and events• Brand and Originals focus

• Social recruitment• Registration• Open graph

• CRM• New social destinations• New user forums• 2 way communication

• Brand evangelists• Exclusive social

assets• Social visibility

- 64 -

Discover

Engage

Dialog

Share

Consumer Acquisition and Retention Evolution


}

FY 15 FY 16 FY 17

More monthly users sourced from return users, and customers acquiring customers

- 65 -

Media

CONFIDENTIAL

FY 15 FY 16 FY 17

• Shift spend from online traffic to brand building

• Majority of media spend to support brand

Less than 25% spent to drive

traffic

90%+ brand buildingTraffic

vs.Brand

Media Tactics

Partner-ships

• Major campaigns against key originals

• Outdoor, online, cable TV• Events and sponsorships• YouTube as media

• Year round media reach

• Evolve from ad hoc editorial promotions to long term platform marketing partnerships

• Co-op media from marketing partners

• Featured inplatform partner ad campaigns

• Joint events• Joint productions

Crackle will look and feel like a major network brand, driving continued discovery and achieving top of mind status

- 66 -

Stunts and PR

CONFIDENTIAL

FY 15 FY 16 FY 17

• Mainstream press, digital press, bloggers, niche/targeted press, business press.

• Direct contactTargets

Involve-ment

Awards and

Events

• Establish ongoing press relationships with management

• Deepen consumer press involvement in Originals with set visits, specially produced assets, “embedded journalists “

• Management called upon as industry experts

• Hold dedicated Originals panels and launch parties at major events (Comic-Con, TCA, etc.)

• Shift focus from web centric awards to “major leagues” (Emmy) with full on FYC campaigns

• Press friendly stunts leveraging Crackle advantages or Originals IP

Press presence will match media presence, with Crackle always in the conversation

• Annual events garner annual coverage

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Community Development & Management

CONFIDENTIAL

FY 15 FY 16 FY 17

• Aggregate disparate databases (NL, Mobile, CS, Notify); grow and integrate YT subs

• Collect and store relevant volunteered and behavioral data

• Initiate profile based communication

• Increasingly granular, targeted and relevant communication

CRM

Social

Outreach

• Establish baseline platforms to launch and facilitate a dialog:

• “Want To Follow” social destinations around Originals, genres, etc

• True CS function

• Incentivize “power followers” with sharable and exclusive assets, designating as brand evangelists

• Leverage social platforms to “break news” and assets, inviting feedback and enhancing WTF dom

• Originals dedicated brand evangelists, potentially serving as sponsor evangelists

Newly aware users will be engaged by relevant 2 way communication, ultimately sharing and recruiting new users

• Involve followers/users in content and product:

• Interactive Originals forums (speculation, conversation, reactions)

• Content decisions• User recognition on social

and off

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CRACKLE – CLIPS & TRAILERS

- 69 -

Business Recap

• The Crackle team continues to manage and grow Clips & Trailers content claiming business on YouTube

• Expected to generate ~$1M EBIT per year, growing 6% y-o-y through FY2019

• Business is fully dependent upon YouTube Platform

• One Full Time Coordinator (existing resource)

• Ad Ops Head Starting FY2014 (to enable manual operations on Provider channels)

Executive summary

Worldwide US

220M Views 46M Views

90M Uniques 18M Uniques

12M Hours Viewed 2.8M Hours Viewed

Worldwide US

Comscore not yet integrated WW*

23M Views

9.1M Uniques

1M Hours Viewed

Current ScaleMarch 2013 Comscore* and YouTube Reported Performance on

both Provider Channels and UGC

*comScore reporting is in still in early phase of integration, therefore remains a work-in-progress to capture total addressable reach and match to YouTube reporting

- 70 -

13 Million Worldwide Unique Viewers (Monthly)

70

Global Audience: Provider channels 2015 FORECASTED MONTHLY AVERAGE Unique Viewers IN PROVIDER CHANNELS

Provider Channel Uniques (mm) UGC Channel Uniques (mm)6.3

3.6

2.1

0.5 0.3 0.3

ROW US LATAM UK CA AU

Provider Channels are channels operated by SPE and monetized via the Crackle CMS tools. US Theatrical Marketing channels drive the bulk of Provider Channel usage. Less than 5% of usage originates via SPT Networks Channels.

Note: Assumes historical conversation rates between monthly views and monthly unique visitors to projected 2015 data

- 71 -71

Global Audience: UGC 2015 FORECASTED MONTHLY AVERAGE Unique Viewers IN PROVIDER and UGC CHANNELS

Provider Channel Uniques (mm) UGC Channel Uniques (mm)

100 Million Worldwide Unique Viewers (Monthly)

Note: Assumes historical conversation rates between monthly views and monthly unique visitors to projected 2015 data

6.3 3.6 2.1 0.5 0.3 0.3

44.7

14.614.6

3.4 2.71.3

51.0

18.216.8

4.0 3.01.5

ROW US LATAM UK CA AU

- 72 -

REVENUE and EBIT vs Last Years MRP

Current Plan includes: 1) Integrated ad serving on Provider Channels, and 2) Ad serving to UGC (TBD), we create significant EBIT improvement in FY16-FY19.

Gross Revenue and EBIT (millions)

Last Years MRP Current Plan

FY15 FY16 FY17 FY18 FY190

0.51

1.52

2.53

3.54

4.55

5.56

6.57

FY15 FY16 FY17 FY18 FY190

0.51

1.52

2.53

3.54

4.55

5.56

6.57

HEADCOUNT

Digital Networks Organization

FY14 FY15 FY16 FY17Crackle U.S. 30 29 32 56

Crackle CA 3 9 11 13

Crackle UK & AU 2 15 17 23

U.S. Sales 33 38 42 51

Digital Platform Group 38 44 53 61

Studio 3 6 8 11Global Digital Partnerships (a) 0 2 2 2Clips & Trailers (b) 2 6 6 6

Games 7 11 14 18

Digital Media 11 39 43 47

Total 129 199 228 288

YOY Increase 54% 15% 26%

(a) Includes a new head (on Home Office overhead) and 1 head from U.S.

(b) Clips & Trailer is part of Crackle US financial

Headcount: OTT Digital Platforms Group

ProductProject

ManagementTechnology

● Digital Media Platform Group

• App Producers• Backend Producer(s)• UI and Design mgmt• Video Producer

• Systems• Engineers• QA• Ad Technology

• Project Managers

Technology Product PMO Total

FY14 22 12 4 38

FY15 27 12 5 44

FY16 31 16 6 53

FY17 34 20 7 61

Headcount (EOY):

Digital Media Networks Headcount FY14 - 17

76

PMO• Common Platform

• Vendor Management

• Ad Operations

PRODUCT DEVELOPMENT•Consumer App Development

•Original Programming Content

•Global Acquisitions Content

•Second Screen & Social TV

•Emerging Platforms R&D

•Frontend Architecture

TECHNOLOGY• Platform Development

• Video Technology

• Backend Architecture

• Systems Integration

• API Configuration

• Platform Production

• Ad Technology• Analytics & Reporting

• QA

BUSINESS PLANNING•New Business Analysis

•Platform Partnerships

•Service Partners

•Business Affairs •Legal Affairs

HC (EOY)

EXECUTIVE PMO TECHNOLOGY PRODUCT BUSINESS TOTAL

FY14 2 1 3 4 1 11

FY15 2 4 17* 13 3 39

FY16 2 4 19* 15 3 43

FY17 2 5 19* 17 4 47

*3 Shared with DPG

FINANCIALS

SPT Digital Networks – Revenue & EBIT (BU and SPE)

Does not include Digital Media

FY15 FY16 FY17

(in millions) Rev BU EBIT

Rev to SPE

SPE EBIT Rev BU

EBITRev to SPE

SPE EBIT Rev BU

EBITRev to SPE

SPE EBIT

CRACKL

E

US $ 60.0

$ (9.5)

$ 7.6

$ (1.9)

$ 85.1

$ (0.0)

$ 8.3

$ 8.3

$ 137.6

$ 12.5

$ 12.5

$ 25.0

CA, UK, AU 7.8

(6.9)

3.8

(3.1)

13.3

(5.0)

3.9

(1.1)

20.9

(2.2)

3.9

1.7

LATAM 14.4

(7.4)

1.7

(5.7)

19.9

(4.0)

2.4

(1.6)

23.5

(4.2)

3.4

(0.8)

Kalista 5.9

(2.9)

1.1

(1.8)

10.1

(0.1)

1.6

1.5

13.0

0.9

2.3

3.2

Games 10.8

-

2.5

2.5

15.2

0.2

2.7

2.9

20.4

3.2

2.9

6.1

Total $ 98.9

$ (26.7)

$ 16.6

$ (10.1) $

143.6 $

(8.9) $

18.9 $

10.0 $ 215.4

$ 10.2

$ 25.0

$ 35.2

Note: Crackle US - Rev to SPE includes SPT programming and Clips rev share to MPG

Assume LATAM absorbs the DPG allocation as passed

CRACKLE U.S.

Q2 FCST (1) FY15 FY16 FY17

RevenueAdvertising 41.6$ 50.0$ 70.0$ 120.0$

Licensing & Clips (2) 2.7 2.0 2.9 3.2 Originals 3.4 8.1 12.2 14.4 Total Revenue 47.6$ 60.0$ 85.1$ 137.6$

COGSContent (14.8) (19.9) (24.8) (38.1) Dist. Partner Share (1.3) (1.5) (2.1) (3.7) Bandwidth (3.1) (4.9) (6.8) (11.7) Ad Serving (1.4) (2.8) (3.2) (3.6)

(20.6) (29.2) (36.9) (57.2) Operating

Operations(4) (2.6) (2.4) (3.2) (5.2) Marketing (6.4) (13.8) (17.5) (25.6) DPG Allocation (3.9) (7.2) (9.0) (11.0) G&A (15.6) (17.0) (18.5) (26.2)

(28.6) (40.3) (48.2) (67.9)

Total Expenses (49.1)$ (69.5)$ (85.1)$ (125.1)$

EBIT (1.5)$ (9.5)$ (0.0)$ 12.5$

HEADCOUNT 68 80 89 123 CASH (24.6)$ (30.0)$ (27.0)$ (18.0)$

Notes:

(1) Includes Comedian Having Coffee in Cars Season 2 with no EBIT

(2) No SVOD after FY14

(3) Content includes SPT content, 3rd party content and originals amortization and distribution costs

(4) Operations include web and video operations, web analytics, music fees, amortization of intangibles (last year in FY14)

Stay on

Q1F

FY14-17 Financials

FY15-17 Financial vs. Last MRP

Last MRP FY15 Variance Last MRP FY16 Variance FY17

RevenueAdvertising 67.2$ 50.0$ (17.2)$ 97.6$ 70.0$ (27.6)$ 120.0$

Licensing & Clips (2) 3.3 2.0 (1.1) 2.8 2.9 0.1 3.2 Originals 3.7 8.1 4.3 4.0 12.2 8.2 14.4 Total Revenue 74.2$ 60.0$ (13.9)$ 104.4$ 85.1$ (19.2)$ 137.6$

COGSContent (15.6) (19.9) (4.3) (21.8) (24.8) (3.0) (38.1) Dist. Partner Share (3.2) (1.5) 1.7 (4.6) (2.1) 2.5 (3.7) Bandwidth (10.0) (4.9) 5.1 (14.0) (6.8) 7.2 (11.7) Ad Serving (2.3) (2.8) (0.5) (3.1) (3.2) (0.1) (3.6)

(31.1) (29.2) 1.9 (43.5) (36.9) 6.5 (57.2) Operating

Operations(4) (3.5) (2.4) 1.1 (4.9) (3.2) 1.7 (5.2) Marketing (11.7) (13.8) (2.1) (19.2) (17.5) 1.8 (25.6) DPG Allocation (6.4) (7.2) (0.8) (6.8) (9.0) (2.2) (11.0) G&A (17.8) (17.0) 0.8 (21.0) (18.5) 2.5 (26.2)

(39.4) (40.3) (0.9) (51.9) (48.2) 3.7 (67.9)

Total Expenses (70.5)$ (69.5)$ 1.0$ (95.3)$ (85.1)$ 10.2$ (125.1)$

EBIT 3.6$ (9.5)$ (12.9)$ 9.0$ (0.0)$ (9.0)$ 12.5$

HEADCOUNT 92 80 (12) 105 89 (16) 123 CASH (7.6)$ (30.0)$ (22.5)$ (5.5)$ (27.0)$ (21.5)$ (18.0)$

Notes:

(1) Includes Comedian Having Coffee in Cars Season 2 with no EBIT

(2) No SVOD after FY14

(3) Content includes SPT content, 3rd party content and originals amortization and distribution costs

(4) Operations include web and video operations, web analytics, music fees, amortization of intangibles (last year in FY14)

Plan Over Plan EBIT Reconciliation

FY14 FY15 FY16 FY17

EBIT, Budget / 2012 MRP $ (0.0)

$ 3.6

$ 9.0

Advertising Revenue

0.6 (17.2)

(27.6)

Originals - TV/HE Distribution (net) -

4.3

8.2

Programming & Originals Production Ultimate

(1.6)

(4.3)

(3.0)

Partner's Rev Share 0.9

1.7

2.5

Hosting / Bandwidth -

5.1

7.2

Marketing -

(2.1)

1.8

Digital Platform savings

0.9

(0.8)

(2.2)

G&A

(2.3)

0.8

2.5

All Others, net

0.1

(0.7)

1.6

Total Variance $ (1.5)

$ (13.1)

$ (9.0)

$ 12.5

EBIT, Q2 Fcst / 2013 MRP $ (1.5)

$ (9.5)

$ (0.0)

$ 12.5

DIGITAL PLATFORMS GROUP - FINANCIALS

DPG Financial

($ in thousands)FY14

Q2 FcstFY15 MRP FY16 MRP FY17 MRP

OPERATING COSTS

Product Development

(1,200)

(2,500) (2,500) (2,500)

Engineering Development (500)

(1,000) (1,000) (1,000)

Creative Development -

(500)

(600)

(700)

General and Administrative

(6,160)

(8,000) (9,500) (11,000)

TOTAL OP. EXPENSES

(7,860)

(12,000) (13,600) (15,200)

ALLOCATION

CRACKLE US 60% 4,715 7,200 8,100 9,100

CRACKLE ELI 10% 785 1,200 1,400 1,500

CRACKLE LATAM 30% 2,360 3,600 4,100 4,600

7,860

12,000 13,600 15,200

EBIT -

-

-

-

Headcount 38

44

53

61

YOY HC Increase

6

9

8

DPG FY14 Q2 Reforecast

($ in thousands)FY14 Q2 Fcst

Budget Variance Q1 Fcst Variance

OPERATING COSTS

Product Development

(1,200)

(1,200)

-

(1,200)

- Engineering Development

(500)

-

(500)

-

(500)

Creative Development

-

-

- -

- General and Administrative

(6,160)

(7,100)

940

(7,100)

940

TOTAL OP. EXPENSES

(7,860)

(8,300)

440

(8,300)

440

ALLOCATION

CRACKLE US 60% 4,715

4,980

(265)

4,980

(265)

CRACKLE ELI 10%

785

830

(45)

830

(45)

CRACKLE LATAM 30% 2,360

2,490

(130)

2,490

(130)

7,860

8,300

(440)

8,300

(440)

EBIT

-

-

- -

-

Headcount

38

38

-

38

-

- Lower allocation due to savings from delayed hire of Group Lead

DPG MRP Financial

($ in thousands)FY15 MRP

Last MRP

Variance FY16 MRP Last MRP Variance FY17 MRP

OPERATING COSTS

Product Development

(2,500)

(1,300)

(1,200)

(2,500)

(1,400)

(1,100)

(2,500)

Engineering Development

(1,000)

(1,800) 800

(1,000)

(2,000)

1,000

(1,000)

Creative Development (500)

(500)

(600)

(600)

(700)

General and Administrative

(8,000)

(7,600)

(400)

(9,500)

(7,900)

(1,600)

(11,000)

TOTAL OP. EXPENSES

(12,000)

(10,700)

(1,300)

(13,600)

(11,300)

(2,300)

(15,200)

ALLOCATION

CRACKLE US 60% 7,200

6,420

780

8,100

6,780

1,320

9,100

CRACKLE ELI 10% 1,200

1,070

130

1,400

1,130

270

1,500

CRACKLE LATAM 30% 3,600

3,210

390

4,100

3,390

710

4,600

12,000 10,700

1,300

13,600

11,300

2,300

15,200

EBIT -

-

-

-

-

-

-

Headcount

44

39

5

53

39

14

61

YOY HC Increase

6

9

8

CANADA FINANCIALS

Canada MRP Financial

($ in thousands) FY17

Last MRP Variance Last MRP Variance

REVENUEAdvertising 3,174$ 3,215$ (41)$ 5,652$ 5,060$ 592$ 8,348$ - - - - TOTAL REVENUE 3,174 3,215 (41) 5,652 5,060 592 8,348

COST OF REVENUES - - - - Content Cost (1,552) (800) (752) (1,821) (1,000) (821) (1,990) Partner's Revenue Share (200) (218) 18 (350) (380) 30 (561) Hosting/Bandwidth (274) (539) 265 (434) (643) 209 (628) Ad Serving Fees (74) (69) (5) (219) (99) (121) (250)

TOTAL COST OF REVENUES (2,100) (1,627) (473) (2,824) (2,121) (703) (3,429)

Website/TechnologyDigital Platform (400) (357) (43) (533) (377) (156) (600) Traffic & Music Fees (79) (67) (12) (141) (105) (36) (209)

Sales and Marketing (1,496) (444) (1,052) (1,685) (460) (1,225) (1,697)

TOTAL OPERATING EXPENSE (1,975) (867) (1,108) (2,359) (941) (1,418) (2,506)

GROSS PROFIT (901) 721 (1,622) 469 1,997 (1,528) 2,413 - - - - General and Administrative (1,102) (444) (658) (1,692) (463) (1,229) (2,149) - - - - TOTAL COSTS (5,177) (2,937) (2,240) (6,875) (3,525) (3,350) (8,084) - - - - - - - -

EBIT (2,003)$ 278$ (2,281)$ (1,223)$ 1,534$ (2,757)$ 264$ - - - - Headcount 9 4 6 11 4 8 13

SPT EBIT (1,122)$ 1,078$ (2,200)$ (233)$ 2,534$ (2,767)$ 1,381$

FY15 FY16

UK & AU FINANCIALS

U.K. MRP Financial

($ in thousands) FY15 FY16 FY17


REVENUEAdvertising 3,579$ 1,530$ 2,049$ 5,934$ 2,520$ 3,414$ 9,538$ - - - - - - - TOTAL REVENUE 3,579 1,530 2,049 5,934 2,520 3,414 9,538

COST OF REVENUES - - - - - - - Content Cost (2,223) (700) (1,523) (2,965) (900) (2,065) (3,599) Partner's Revenue Share (329) (104) (225) (478) (189) (289) (667) Hosting/Bandwidth (201) (151) (50) (339) (181) (158) (513) Ad Serving Fees (124) (50) (74) (212) (89) (123) (341)

TOTAL COST OF REVENUES (2,877) (1,006) (1,871) (3,994) (1,359) (2,635) (5,120)

Website/TechnologyDigital Platform (400) (357) (43) (533) (377) (156) (600) Traffic & Music Fees (89) (32) (57) (148) (52) (96) (238)

Sales and Marketing (1,565) (296) (1,269) (1,737) (460) (1,277) (2,000)

TOTAL OPERATING EXPENSE (2,054) (684) (1,370) (2,418) (889) (1,529) (2,838) - - - - GROSS PROFIT (1,352) (160) (1,192) (478) 272 (750) 1,580 - - - - - - -

General and Administrative (1,234) (190) (1,044) (1,454) (198) (1,256) (3,049) - - - - - - - TOTAL COSTS (6,165) (1,880) (4,285) (7,866) (2,446) (5,420) (11,007) - - - - - - - - - - - - - -

EBIT (2,586)$ (350)$ (2,236)$ (1,932)$ 73$ (2,005)$ (1,469)$ - - - - - - - Headcount 10 2 9 12 2 11 18

SPT EBIT (781)$ 350$ (1,131)$ 35$ 973$ (938)$ 530$

($ in thousands) FY15 FY16 FY17


REVENUEAdvertising 1,178$ 255$ 923$ 1,808$ 921$ 887$ 2,993$ - - - - - - - TOTAL REVENUE 1,178 255 923 1,808 921 887 2,993

COST OF REVENUES - - - - - - - SPE Content Cost (1,055) (145) (910) (1,161) (400) (761) (1,317) Partner's Revenue Share (143) (17) (126) (168) (69) (99) (225) Hosting/Bandwidth (79) (52) (27) (117) (125) 8 (200) Ad Serving Fees (56) (6) (50) (84) (10) (74) (141)

TOTAL COST OF REVENUES (1,333) (221) (1,112) (1,530) (604) (926) (1,883)

Website/TechnologyDigital Platform (400) (357) (43) (533) (377) (156) (600) Traffic & Music Fees (29) (5) (24) 45 (19) 64 (75)

Sales and Marketing (707) - (707) (584) (230) (354) (677)

TOTAL OPERATING EXPENSE (1,136) (362) (774) (1,072) (626) (446) (1,352) - - - - GROSS PROFIT (1,291) (328) (963) (794) (308) (486) (242) - - - - - - -

General and Administrative (791) - (791) (793) - (793) (826) - - - - - - - TOTAL COSTS (3,260) (583) (2,677) (3,395) (1,230) (2,165) (4,061) - - - - - - - - - - - - - -

EBIT (2,082)$ (328)$ (1,754)$ (1,587)$ (308)$ (1,279)$ (1,068)$ - - - - - - -

Headcount 5 - 5 5 - 5 5

SPT EBIT (1,237)$ (182)$ (1,055)$ (851)$ 92$ (943)$ (220)$

AU MRP Financial

NETWORKS DIGITAL FINANCIALS

FY15 Digital Media Networks Investment

$0

$0.6

$2.3 $0.7

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

Expenses Overhead

Product

FY14 FY15

$1.3M

$0.2

$0

$0.2

$-

$0.1

$0.1

$0.2

$0.2

$0.3

$0.3

$0.4

$0.4

$0.5

$0.5

Expenses Overhead

Business Planning

FY14 FY15

$0.4M

$3.8

$1.5

$3.8

$3.0

$4.6

$1.0

$-

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

Expenses Overhead

Platform

FY14/Web Platform FY15/Augment Platform

FY15/Build Apps

$12.2M

$5.2M

5

16

7

28

2

1

3

5

3

8

Augment Platforms: HC Costs

Platform Growth 6 $1.2

Platform Features 4 $0.6System

Integration 6 $1.216 $3.0

Digital Media Networks Financial

FY'14 FY'17 Budget Q2 FCST Bgt vs Q2 2012 MRP 2013 MRP Difference 2012 MRP 2013 MRP Difference 2013 MRP

Expenses

Common Platform Operating Expenses 3,400$ 3,400$ (0)$ 3,800$ 3,800$ -$ 4,200$ 4,200$ -$ 9,300$

TV Everywhere Operating Expenses- App Initiative 1,800 (1,800) 2,500 (2,500) 2,600 Applications Development - - - - 4,600 (4,600) - 1,800 (1,800) 1,800 Content - - - - 800 (800) - 1,000 (1,000) 1,400 R&D - - - - 1,500 (1,500) - 1,500 (1,500) 1,500

System Integration 2,000 (2,000) 1,000 (1,000) 1,000

Overhead 2,200 2,200 0 2,240 6,900 (4,661) 2,309 8,400 (6,091) 9,700

Total Expenses 5,600$ 5,600$ 0$ 6,040$ 21,400$ (15,361)$ 6,509$ 20,400$ (13,891)$ 27,300$

Headcount 11 11 - 11 39 (28) 11 43 (32) 47

FY'15 FY'16

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