PICTURES TELEVISION - WikiLeaks 2013...Inflation (% CPI) 4.97 5.10 4.50 Exchange Rate 2.02 2.04 2.06 Devaluation (%) (15.84) (0.99) (0.99) GDP Per Head (US$) 11,925 13,443 14,897 Population

C H A N N E L S

PICTURESSONY

TELEVISION

FY14 BUDGET PRESENTATIONDecember 14, 2012

B R A Z I L & L A T I N A M E R I C A

AGENDA1. OVERVIEW

2. FINANCIALS

3. ACQUISITIONS / PROGRAMMING

4. MARKETING

5. DIGITAL

6. SONY SPIN

OVERVIEW

3

ACCOMPLISHMENTS IN FY13

• Ratings Growth!

– In key Ad Sales time period (Mon-Sun, 18:00 – 24:00)

– 18% growth on AXN (Mexico, A18-49)

– 4% growth on SET (Mexico, W18-49)

– 16% growth on SET (Brazil, W 18-49)

– 6% growth on AXN (Brazil, W 25+)

– In Prime Time (Mon-Fri, 21:00 – 23:00)

– 18% growth on SET (Mexico, W18-49)

– 25% growth on AXN (Mexico, M18-49)

• SET/AXN Ranking Top 10 Channels on DirecTV

• #1 Reality Show in its time period in 11 different targets

– #2 program in GE after The Simpsons

• New ad sales approach impacting over 3,000 advertisers across the region

4

ACCOMPLISHMENTS IN FY13

• Affiliate relationship closer to HBO and MSO’s

– Sky & Net Brazil, DirecTV, Dish Mexico

• Customized grids by key markets

• FB reached 1,000,000 fans

• SD Feed HD Feed Unification for Brazil

• Launch of “The Countdown” on Sony Spin

• Strategic alliance with Reforma, Elle & Sears, MSN (Latam ) & Youtube, Google, Sony Music (Brazil)

• 1st time ever SET is awarded “A Favor de lo Mejor” for Once Upon a Time in Mexico

• 4 Gold Promax Awards for MNTM S3, CSI, Criminal Minds

5

WORK IN PROGRESS FY13

• Rating / Ranking in Ad Sales Time Period Mon-sun,18:00 – 24:00

• Spin Distribution

• Segmentation of Spin Mexico Feed

• Executive Director of On-air Search

6

BUSINESS OBJECTIVES FY14

7

BUSINESS OBJECTIVES FY14 – BRAZIL / LATAM• Revenue Growth

• Focus on EBIT

– Mitigate increasing costs of content

– Reducing operational costs

– Program / revenue analysis monitoring

– Alternate ways of marketing our channels and content

• Continue Ratings / Rankings Progress

– Prime access 6pm – 8pm, Mon-Sun

– Argentina/Brazil/Colombia/Mexico/Venezuela

• Reposition of Sony Spin into C Class channel

– Focus on growing distribution

8

BUSINESS OBJECTIVES FY14 – BRAZIL / LATAM• Ad Supported OP’s

• Successfully launch “Agora Vai” (Brazil)

• Maximize the use of Government Incentives

• Explore partnerships with key players in major markets

– RedeTV Model (Brazil)

– Venevision (Venezuela)

– Cadena 3 (Mexico)

– Grupo Expansion (Mexico)

– Liga Mexicana de Futbol (Mexico)

• Continue improvement of communication/work-flow process/integration of all offices

– Focus on Venezuela / Shared Services

9

• Brand Study to define positioning, target audience and core attributes for Sony / AXN brand based on key criteria:

– Relevant to consumer & trade

– Works with current and future programming

– Clearly differentiated from the competition

– Clearly works for both Brazil & Latin America

– Lends itself to outstanding channel creative execution

– Slogans

BUSINESS OBJECTIVES FY14 – BRAZIL / LATAM

10

FINANCIALS

11

Latin America Economic Outlook (2012-2014)

Source: World Bank & IMF

Last Update: October 2012

Mexico 2012 2013 2014GDP Growth (%) 3.78 3.45 3.49 Inflation (% CPI) 3.99 3.27 3.01 Exchange Rate 13.05 12.95 13.02 Devaluation (%) (4.98) 0.77 (0.54)GDP Per Head (US$) 10,173 10,950 11,785 Population (millions) 114.87 116.02 117.18

Venezuela 2012 2013 2014GDP Growth (%) 5.75 3.26 3.38 Inflation (% CPI) 22.00 29.20 28.20 Exchange Rate 4.30 6.30 6.30 Devaluation (%) - (46.51) - GDP Per Head (US$) 14,835 19,079 23,570 Population (millions) 30.36 30.97 31.59

Colombia 2012 2013 2014GDP Growth (%) 4.25 4.41 4.45 Inflation (% CPI) 2.70 3.05 3.01 Exchange Rate 1,802.80 1,907.40 2,005.40 Devaluation (%) 2.49 (5.48) (4.89)GDP Per Head (US$) 7,658 7,802 7,992 Population (millions) 46.60 47.15 47.71

Brazil 2012 2013 2014GDP Growth (%) 1.47 3.95 4.20 Inflation (% CPI) 4.97 5.10 4.50 Exchange Rate 2.02 2.04 2.06 Devaluation (%) (15.84) (0.99) (0.99)GDP Per Head (US$) 11,925 13,443 14,897 Population (millions) 196.53 198.04 199.49

Argentina 2012 2013 2014GDP Growth (%) 2.59 3.06 3.83 Inflation (% CPI) 9.85 9.85 9.85 Exchange Rate 4.80 5.20 5.80 Devaluation (%) (10.42) (7.69) (10.34)GDP Per Head (US$) 12,340 13,159 14,683 Population (millions) 41.03 41.49 41.96

12

MARKET SNAPSHOT

• Argentina – ongoing economic situation and currency restrictions.

• Brazil – Real$ devaluation and slower market growth have challenged government efforts to stimulate economy

• Mexico – election of Enrique Peña Nieto and link to Televisa will continue regulatory challenges for PayTV.

• Venezuela – Chavez re-election and recent announcement of cancer return. Devaluation of Bolivar expected in 2013. “Stable Uncertainty” continues.

13

FX(LC / USD)

Variance

Budget FY14 MRP 2012 Budget FY13 vs.. MRP 2012

vs.. Budget FY13

4.74 4.51 4.28 (5.10%) (10.75%)

2.03 2.07 1.79 1.93% (13.41%)

1,787 1,787 1,950 0.00% 8.31%

12.89 13.86 13.64 7.00% 5.50%

5.30 5.30 5.30 0.00% 0.00%

FX Comparative

14

40

54

64

05

56

40

56

84

057

84

05

90

40

60

24

06

16

40

62

64

063

84

06

48

40

66

24

06

74

40

68

64

069

64

07

08

40

72

14

07

31

40

74

34

075

34

07

65

40

77

74

07

87

40

80

04

081

24

08

22

40

83

54

08

47

40

85

84

087

14

08

83

40

89

34

09

05

40

91

74

092

74

09

39

40

94

94

09

63

40

97

54

098

74

09

97

41

01

04

10

22

41

03

34

104

34

10

51

41

05

94

10

67

41

07

54

10

83

41

09

34

11

03

41

11

54

11

27

41

13

74

11

49

41

16

24

117

24

11

84

41

19

74

12

07

41

22

04

123

34

12

43

1.50

1.60

1.70

1.80

1.90

2.00

2.10

2.20

1.53

1.90

2.11

BRAZILIAN REAL EVOLUTIONFY 12 & FY13

5 months below the final average of 1.67 BRA/USD

Max FY12=

Min FY12=

Min FY13= 1.84

Max FY13=

December 12th rate of 2.0785

15

03

/01

/20

10

24

/01

/20

10

14

/02

/20

10

07

/03

/20

10

28

/03

/20

10

18

/04

/20

10

09

/05

/20

10

30

/05

/20

10

20

/06

/20

10

11

/07

/20

10

01

/08

/20

10

22

/08

/20

10

12

/09

/20

10

03

/10

/20

10

24

/10

/20

10

14

/11

/20

10

05

/12

/20

10

26

/12

/20

10

16

/01

/20

11

06

/02

/20

11

27

/02

/20

11

20

/03

/20

11

10

/04

/20

11

01

/05

/20

11

22

/05

/20

11

12

/06

/20

11

03

/07

/20

11

24

/07

/20

11

14

/08

/20

11

04

/09

/20

11

25

/09

/20

11

16

/10

/20

11

06

/11

/20

11

27

/11

/20

11

18

/12

/20

11

08

/01

/20

12

29

/01

/20

12

19

/02

/20

12

11

/03

/20

12

01

/04

/20

12

22

/04

/20

12

13

/05

/20

12

03

/06

/20

12

24

/06

/20

12

15

/07

/20

12

05

/08

/20

12

26

/08

/20

12

16

/09

/20

12

07

/10

/20

12

28

/10

/20

12

18

/11

/20

12

11.50

12.00

12.50

13.00

13.50

14.00

14.5014.24

14.39

12.70

13.04

MEXICAN PESO EVOLUTIONFY12 & FY13

6 months below the final average of 12.66

MXN/USD

Min FY12= 11.50

Max FY12=Max FY13=

Min FY13=

December 12th rate of 12.7506

16

Source: Econanalítica

The Venezuela secondary market was “stable” until August 2012 leading up to the presidential elections.

VENEZUELAN BOLIVAR SECONDARY MARKET

17

In last 4 months, the secondary rate has increased at an explosive rate of 72%. After the elections results the rate moved from an average of 12 Bs/US$ to 16 Bs/US$

4115

241

154

4115

641

158

4116

041

162

4116

441

166

4116

841

170

4117

241

174

4117

641

178

4118

041

182

4118

441

186

4118

841

190

4119

241

194

4119

641

198

4120

041

202

4120

441

206

4120

841

210

4121

241

214

4121

641

218

4122

041

222

4122

441

226

4122

841

230

4123

241

234

4123

641

238

4124

041

242

4124

441

246

4124

8

9

10

11

12

13

14

15

16

17

18

VE

B/U

S$

72%

VENEZUELAN BOLIVAR SECONDARY MARKET

18

-

50,000

100,000

150,000

200,000

250,000

183,618 216,547 226,758

FY13 Q3REF FY14 BUDGET FY14 MRP

129,957 151,947 158,833

53,662

64,600 67,925

Brazil

Latam

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

57,042 62,124 63,158


46,463 49,369 50,693

10,579 12,759 12,465

Brazil

Latam

Financial Performance

Revenue EBIT

Margin

+18% -5% +9% -2%

36% 32% 32% Latam20% 20% 18% Brazil31% 29% 28% Combined

19

Revenue increase to bottom line impacted by programming commitments and other expenses

FY14 Budget vs.. FY13 EOY

20

EBIT FY13 Ref. 57,042 Ad Sales 16,330 Affiliate Sales 16,599 Selling Expenses (3,920) Programming (10,769) Overhead (2,819) Original Prod. (1,949) Dubbing (1,800) Prog Br Acq. (1,721) Decos (1,247) Marketing (1,066) Digital (1,300) New Feeds (880) Others (376) EBIT FY14 Budget 62,124

FY14 Budget vs.. FY14 MRP

21

EBIT FY14 MRP. $63,158FX 2,889 Ad Sales (18,317) Affiliate Sales 3,842 Selling Expenses 7,645 Programming 2,957 Original Prod. (862) Prog Br Acq. (257) Dubbing (1,400) Marketing 866 Overhead 417 Others 1,186 EBIT FY14 Budget 62,124

0

25000

50000

75000

100000

125000

150000

175000

200000

225000

250000

53042.4 58780.52 59165.58

43408.35

54268.99 48199.93

87167.63

103497.71 119392.43

Ad Sales

DTH

Cable

-15%FX+2.4M Ops -16M

+25%

Revenue Growth

22

+19%

+11%

+13% FX+1M

Ops +5M

-1% FX+1M Ops -1M

-5% FX+4M

Ops -14M

+18% Ops +33M

Top Eight Affiliates 70% of total revenue

23NOTE: HBO Projections from Jan-Dec 2013 (not adjusted with SPT FX Budget rates)

Total % SET AXN SPINNET Servicios 8,311 13% 4,080 15% 289 6% 12,680 13% 4,171 3,731 901

Telmex 9,813 15% 3,011 11% 345 7% 13,169 13% 5,637 3,530 1,236

SKY Brazil 8,344 13% 3,509 13% 679 14% 12,532 13% 5,201 3,809 3,809

Liberty Media 6,653 10% 2,915 10% 944 20% 10,512 11% 6,108 6,108 5,502

Telefonica 2,293 3% 1,138 4% 112 2% 3,543 4% 1,385 1,158 163

Televisa 5,670 9% 1,680 6% 143 3% 7,493 8% 6,652 2,400 1,244

Clarin 2,655 4% 1,415 5% 249 5% 4,319 4% 3,324 3,324 3,324

Dish 3,485 5% 548 2% 204 4% 4,237 4% 2,779 684 684

Top Affiliates 47,224 72% 18,296 66% 2,965 63% 68,486 70% 35,257 24,744 16,863

Others 18,704 28% 9,550 34% 1,762 37% 30,017 30% 12,360 11,300 3,785

Total HBO 65,928 27,846 4,727 98,503 47,617 36,044 20,648

Growth vs. 2012 HBO Ref. 10% 8% 5% 9% 14% 11% 11%

SET AXN SPINRevenue YE Paid Subscribers

Consolidation in market amongst affiliate systems.Top four affiliate systems are 50% of revenue

Affiliate Revenue by Market

24

DTH Cable Total % DTH Cable Total % DTH Cable Total % DTH Cable Total %Brazil 17,381 9,228 26,609 40% 6,000 4,500 10,500 38% 1,037 378 1,415 30% 24,418 14,106 38,524 39%Mexico 6,536 7,299 13,835 21% 1,289 3,213 4,502 16% 306 436 742 16% 8,131 10,948 19,079 19%Argentina 1,550 4,221 5,771 9% 625 2,248 2,873 10% 208 548 756 16% 2,383 7,017 9,400 10%Colombia 1,482 3,529 5,011 8% 680 1,904 2,584 9% 159 112 271 6% 2,321 5,545 7,866 8%Chile 1,866 1,641 3,507 5% 962 905 1,867 7% 57 269 326 7% 2,885 2,815 5,700 6%Venezuela 1,713 1,176 2,889 4% 660 647 1,307 5% 234 111 345 7% 2,607 1,934 4,541 5%Peru 826 1,434 2,260 3% 243 777 1,020 4% 51 188 239 5% 1,120 2,399 3,519 4%Central America 394 1,590 1,984 3% 211 861 1,072 4% 16 105 121 3% 621 2,556 3,177 3%Others 894 3,168 4,062 6% 413 1,708 2,121 8% 75 437 512 11% 1,382 5,313 6,695 7%

Total HBO 32,642 33,286 65,928 11,083 16,763 27,846 2,143 2,584 4,727 45,868 52,633 98,501

SET AXN SPIN Total

NOTE: HBO Projections from Jan-Dec 2013 (not adjusted with SPT FX Budget rates)

63%43%

25% 30%51% 57%

32% 20% 21%

37%57%

75% 70%49% 43%

68%80% 79%

Brazil Mexico Argentina Colombia Chile Venezuela Peru Central America Others

Cable

DTH

0

10000

20000

30000

40000

50000

60000

70000

10901.93

2156.31

25242.03

15802.98 15941

13995.8

29230.64 30124

13718.8615741

FY14 Acq.(2,116 Hrs - $60M)

FY13 Acq.(2,675 Hrs - $61M)

FY12 Acq.(2,909 Hrs - $56M)

PY Amortization

FY14 Programming Amortization

25

+24% -5%

77% amort. from prior

year acquisitions

+12M

FY14 acquisitions are 98% committed based upon current renewals and committed deals

Cash Flow

26

Timing of ad sales collections into FY14

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

35,447 46,119 49,807


32,827

43,421 47,041

2,620

2,698 2,766

Brazil

Latam

+30%

-7%

Exchange Control Risks

27

Venezuela Sitme will apply only to Ad Sales

revenues Possible devaluation and/or new

regulations Worst case scenario: cash basis

accounting (loss $6.6M) Current excess of cash in Venezuela VEF24M. Annual inflation 25%.

Argentina Possible devaluation and/or new

regulations Worst case scenario: cash basis

accounting (loss $6.5M) Affiliate budget assumes collections in US$

at 34% discount. If not possible would create an immediate excess of cash . Annual inflation 25%

FX 5.3 FX 15 ImpactAffiliate 7,934 2,803 (5,131) Ad Sales 11,453 4,047 (7,406) Selling Exp. (3,860) (1,364) 2,496 Marketing (1,380) (488) 892 Overhead (7,575) (2,677) 4,899

EBIT 6,572 2,322 (4,250)

Current excess of cash 4,500 1,590 (2,910)

Maximum Sitme annual transfer 8,400

P&L FY14 Budget (in US$)

FX 4.7 FX 6.5 ImpactAffiliate 7,934 5,737 (2,197) Ad Sales 6,007 4,344 (1,663) Selling Exp. (1,328) (960) 368 Marketing (1,932) (1,397) 535 Overhead (4,088) (2,956) 1,132

EBIT 6,593 4,767 (1,826)

P&L FY14 Budget (in US$)

ACQUISITIONS/PROGRAMMING

28

ACHIEVEMENTS FY13ACQUISITIONS – BRAZIL / LATAM

• Key terms on SPT volume deal Y2 re-negotiated resulting in $1.6 million in savings

– No obligation to select a 3rd title from the studio and no PUT series

– $1 mm library commitment opened to include library films and MOWs

• Lionsgate becomes new content provider

• Identified local Brazilian content to comply with law

29

MITIGATING INCREASING COST LINE AGGRESSIVE APPROACH ON ELIMINATING HOURS = $13 million in acquisition savings In FY14!!!

• Eliminated renewals of current series ($4.8 million in savings)

– American Idol S13 and on

– Sesiones con A. Franco

– WarpTV

– Gamebox

– Spin Fest

– Sesiones Off Season

– Road Trip Nation

– Being Human

– Punk’ed

– Movie Budget Line

• Non-renewal of library content ($4.4 million in savings) – 5th relicense of the CSI Franchise – Castle – That 70’s Show – Top Chef – Top Model – Grey’s Anatomy

• Not replacing cancelled hours ($2.4 million in savings) –CSI Miami –Private Practice –30 Rock

30

KEY NOTES CURRENT DEALSNOTE SPT Volume Deal Disney Output Deal

• Expiration Date • Year 3 begins May 2013 • Final selection at

Screenings

• Year 3 begins October 2013

• Final selection at Screenings

• Ideal time for Renewal •After selection of Year 3 • Before May Screenings

• Terms for Improvement (both)

• License fees• Expand digital rights (TV Everywhere)• SPT: re-evaluate library commitment & 2nd relicense

obligation• Disney: consider straight output throughout the year

31

SCORECARD NEW SERIES FY13FULL SEASON ORDERED

CANCELLED / NOT RETURNING

TO BE CONFIRMED IF FULL SEASON

OTHERS

• Nashville - 22• The Neighbors - 22• Bunheads – 18 • Switched at Birth –

20 • Scandal - 22• Malibu Country - 18

• Last Resort • Private Practice• 30 Rock

• Red Widow• Zero Hour• Mistresses

• Grey’s Anatomy - 24• Castle – 23 • Baby Daddy -

renewed • Undercover -

renewed • Client List - renewed

FY14 budget assumes “90210” is being cancelled

32

ACQUISITIONS STRATEGIESFY14 – BRAZIL / LATAM • Reduce inventory hours / mitigate increasing cost

• Improve terms of current volume/output deals

• Focus on securing attractive titles instead of volume

• Identify foreign content that can work in our region – Finding quality content at lower avg. cost per hour

– EX: The Killing, Undercover

• Push further on including Catch-up, VOD, SVOD, TV Everywhere rights on all deals

33

TOTAL PROGRAMMING HOURS

SET AXN SONY SPIN0

200

400

600

800

1000

1200

1400

818

1205

639

842901

359

FY13 FY14

34

AVERAGE COST P/HOUR

FY13 FY140

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

SETAXNSONY SPIN

+32%

+4%

+21%

35

CHALLENGES

• More players after the same content from US major studios

• Several output deals in place today with major studios (mostly films) limiting access to current/attractive titles

• Leverage for negotiation is limited against larger channels groups (portfolios)

• Long-running series being cancelled (CSI Miami, Private Practice). Replacement hours will have higher fees

36

OPPORTUNITIES• Solid partnership with Disney

– Disney interested in the renewal of current output deal

• Strong relationships with quality content providers

– Fremantle, Lionsgate and Miramax

• SPT possibility to explore replacement of library commitment for Teleset production

• Important growth in the development of quality content outside major studios

– eOne, AMC, Starz, BBC, DRG, Endemol

• Distributors are more willing to explore partnerships in original productions

37

PROGRAMMING

38

Season 3, Episodes 1-12

Source: IBOPE Media

• Highest rated show in W25-34H with 1.37 rating

• Finale delivers

– 2.0 rating in W25-49M

– .90 in W18-49HM (61% increase vs. S2)

• #1 Reality show in its time period in 11 different targets

• Repeats ranked #2 among the competition

Women 18-49 High+Medium

PROGRAMMING ACCOMPLISHMENTS FY13 - SET

39

• Premiere Week Success !

– SET ranks #2 among all Pay TV (Pan/Mex)

• New Successful Access Strategy!

– increased ratings by 25% in Pan, 62% in Mexico, and 75% in Argentina

– Movies keep delivering on SET BRA, Top 10 in 19 Targets

• ANCINE block on Saturdays increased results of weekends

– 7pm +300% & 9pm +63% A18-49

• Dubbing of OUAT on Sundays increased results on time slot/day (Brazil)

– +78% in AB 18-49

PROGRAMMING ACCOMPLISHMENTS FY13 – SET / LATAM & BRAZIL

i*Source: IBOPE Media (Oct 22-28, 2012; Mon-Fri 21:00-23:00

40

MORE SET PROGRAMS NOW RANKING AS MOST WATCHED

YTD Program Ranker, Mon-Sun 18:00-24:00

Source: IBOPE Media (Jan 1-Nov 25, 2012)

4 of the Top 10 shows

belong to Sony!

CHANNELS CONSIDERED: SONY, WARNER, FOX, UNIVERSAL, FX, FOX LIFE, ID, SPACE, AND A&E

CHANNELS CONSIDERED: SONY, AXN, WARNER, FOX, UNIVERSAL, FX AND A&E

A18-49 ABW18-49 AB

1 month data2 months data

2 weeks data

2 weeks data

1 month data

41

AXN CONTINUES TO SHINE WITH ITS CONTENT IN THE TOP 10 MOST WATCHED

YTD PROGRAM RANKER, MON-SUN 18:00-24:00


CHANNELS CONSIDERED: AXN, WARNER, FOX, UNIVERSAL, FX, FOX LIFE, ID, SPACE, AND A&E

CHANNELS CONSIDERED: SONY, AXN, WARNER, FOX, UNIVERSAL, FX, AND A&E


A 25+ ABA18-49 AB

1 month data

2 months data

2 weeks data

2 weeks data

3 of the Top 10 shows

belong to AXN!

42

MexicoPAY ENTERTAINMENT CHANNELS (INCLUDING LOCAL), MON-SUN 18:00-24:00


(Out of 64 Channels)

YTD CHANNEL RANKERS

18% higher vs.. same time last year




43

YTD CHANNEL RANKERSPan

PAY ENTERTAINMENT CHANNELS, MON-SUN 18:00-24:00

Source: IBOPE Media (Jan 1-Nov 18 2012)

Same rating vs.. same time last year



Same rating vs.. same time last year

44

YTD DTV CHANNEL RANKERS

PAN

PAY ENTERTAINMENT CHANNELS, MON-SUN 19:00-25:00

Source: DTV Ratings (Jan 1-Oct 31 2012)

*On Sep 2012, Venezuela’s (DirecTV’s ) feed’s schedule was moved 30 minutes

45

BRA

Source: DTV Ratings (Jan 1-Oct 31 2012)

YTD DTV CHANNEL RANKERSPAY ENTERTAINMENT CHANNELS, MON-SUN 18:00-24:00

46

PAY ENTERTAINMENT CHANNELS (INCLUDING LOCAL), MON-SUN 18:00-24:00

Source: IBOPE Media (Jan-Nov, 2012)

YTD CHANNEL RANKERSBRA

6% higher vs.. same time last

year


year

47


Source: IBOPE Media (Jan-Nov, 2012)



year


year

48


Source: IBOPE Media (Jan Nov, 2012)


-11% vs.. same time last year

-5% vs.. same time last year

49

PROGRAMMING STRATEGY FY14 – LATAM / BRAZIL (SET / AXN)

• Optimize premieres throughout the year

– Returning series (October – SET) (November – AXN)

– New series during the year ( February thru September)

• Increase male viewership

– Action movies

– Explore alternative content (ex: Ultimate Fighting / Mini-Series)

– Develop male-focused on air campaigns

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• Focus On Weekends

– Weekend Blocks

– Exclusive Sunday Movies

– Brazilian Content Blocks (Verde+amarelo/Territorio National)

• Short Format Content

– Ex: APH To Bring More Ad Sales Revenue

– Maintain Freshness On Air Due To Frequency Of Promo Rotation

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• Dubbing

– LATAM:

– Prime Time Repeats (June – September)

– Morning Block – Library

– Family Weekend Block

– Movies in Argentina

– BRAZIL:

– Weekend Repeats

– All movies

– Access blocks/strips (6-9pm)

– Library shows

PROGRAMMING STRATEGY - DUBBING FY14 – LATAM / BRAZIL (SET / AXN)

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• Original Productions for key markets - Ad supported

– Mexico’s Next Top Model Season 4

– Mexico’s Next Top Model REVISITED

– Agora Vai

– Breakout 2

– Santo Forte

• New business models - boost our current OP pipeline

– SPT – Teleset and/or Floresta Productions as part of our volume deal

– MTV3 U.S. Hispanic Market Co-productions

– Broadcast partnerships in key market (Ex: cadena 3 in Mexico)

– Grupo Expansion (Mexico)

– La Liga Mexicana (Mexico)

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MARKETING

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MARKETING ACCOMPLISHMENTSFY13 – LATAM / BRAZIL

• OUAT becomes a hit!

– $4m in press coverage

– +100% growth in digital traffic

• MNTM S3

– First ever retail partnership: SEARS

– POP presence with SEDAL products

– Top TT in MX and WW. 30% growth in facebook & 50% in twitter

• Impacted over 3,000 Advertisers across the region

– Road shows and Upfronts

• Turn around with HBO affiliate marketing

– Sky & Net Brazil

– DirecTV and Dish Latam

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MARKETING STRATEGY - FY14

DOING MORE WITH THE SAME!

• Covering more measured cities – 90+ IBOPE Cities

• Greater focus on Digital / Social Media

– Leveraging Crackle

• Grass Roots / Guerilla marketing

• Focus on proven returning series

• Focus on promoting movie titles to bring new viewers to our channels

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USING CLIENT $ TO EXTEND MARKETINGMARKETING STRATEGY – FY14

• Identify select programs to sell through to clients

• Ensure desired ratings-geared off channel elements are included in the package

• If client signs off, move marketing reserved funds for that project to other program

• Examples: OUAT talent tour with BIMBO, CSI campaign with Cadillac

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MARKETING BY REGIONMEXICO & Brazil ARE BIGGEST RATINGS & REVENUE MARKETS, AS SUCH RECEIVE MOST INVESTMENT

BRAZIL MEXICO ANDEAN SCONE PAN0

500000100000015000002000000250000030000003500000400000045000005000000

Total Marketing $10,328,581

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57%

14%

29%Total Consumer Marketing

Total Affiliate Marketing

Total Ad Sales Marketing

MARKETING BY AREAMARKETING DOLLARS ARE GEARED PRIMARILY TO DRIVING RATINGS

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DIGITAL, VOD & AUTHENTICATED CATCH UP

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DIGITAL MEDIAFY13 ACHIEVEMENTS• MNTM’s website increased 400% its traffic

• BRA Facebook pages reached 1,000,000 fans

• The Confession generated 500,000 video views

• SPIN’s Cold Play contest drove Facebook’s page from 30K to 67K followers

• New AXN.com template deployed

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DIGITAL MEDIA GOALS

• Programming guides, Tent-pole show informational minisites, and basic Social Media broadcasting

• Ad Sales’ special client integrations

• Marketing campaigns and digital media goals

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VOD & CATCH-UP RIGHTS

15%

20%

35%

● Cougar ● America's Got Talent ● Body of Proof● Nashville● Switched at Birth ● Revenge ● Scandal● The Client ● Private ● Baby Daddy ● Drop Dead ● Grey's Anatomy● Malibu Country ● The Family ● X-Factor ● Once Upon a ● The ● Undercover ● Breaking Bad Season ● Zero Hour ● Criminal Minds ● Last Resort ● Perception ● Damages ● Red Widow ● Hannibal Season ● Castle Season● Merlin ● Sesiones con Alejandro Franco● Call Me Fitz ● Gamebox ● Live From Abbey Road ● Roadtrip Nation ● WarpTV ● Lost Girl ● Archer● Teen Wolf ● Blue Mountain State

Initial 10% of Prime Time, 20% of Non-Prime Time (est.)

FY13 FY14 FY15

Available VOD-Catch UpNon-Linear Content

Inventory& Expected Evolution

Episodes Hours

SET 369 323.5

AXN 153 153

SPIN 260 215.5

TOTAL 782 692

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VOD

• Estimated roll-out starting around April 2013– Some initial cost to be incurred in FY13 (up to $150K)

• Target BRA (NET), MEX (Cablevision & Megacable), CHI (VTR & Telmex), PER, COL and Central America

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CATCH-UP

• Est. launch date Apr 2013 with Basic Channels

• Program respecting the 90-day holdback ask by Affiliates

• Web-only initially

• Ad Sales monetizable

FY13 FY14 FY15 FY16

200% 300% 500%

Catch-Up Service Growth

Unique Users (monthly average) 26,100 104,400 626,400 Video Views (monthly average) 52,200 208,800 1,252,800

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SONY SPIN

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• Launch of “Breakout” on digital platform– 2,250+ Entries in two weeks

• Launch of “Vagazoids”

• Launch of “The Countdown”

• Better positioning on DirecTV

PROGRAMMING ACCOMPLISHMENTS FY13 – SPIN / LATAM & BRAZIL

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BARKER CHANNEL STRATEGY FY14 – LATAM / BRAZIL

• New positioning for Sony Spin to target lower tier distribution focusing in Brazil & Mexico

– Subscriber growth coming from the C Class in the region

– Need to diversify our offering to cable systems

– Barker channel offering that will heavily promote SET / AXN to support upgrades

• High quality, aspirational content

– Target : 18-34 C

– Dubbed 100% / Focus on Local Content

– Series - Films - Music - Magazine – Soaps

• Increase advertising potential / complementary offering to SET/AXN

– Volume offering

– Inventory Overflow

– Broaden Advertising base

• New graphics package in line with new positioning

• Transition to begin: April 2013

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69

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HOW WILL WE MEASURE SUCCESS? FY14 – LATAM / BRAZIL

• Growth in distribution – Targeting 26 million HH

– LATAM (+ 2.6 million HH)

– Dish Mexico Targeting growth of 1.7 million HH

– Mega Cable Targeting growth of 900,000 HH

– BRAZIL (+2.2 Million HH)

– Net Targeting growth of 2.0 million HH

– Oi TV Targeting growth of 200,000 HH

• Delivering on ad sales budget of $5 million 71

GRACIAS!

OBRIGADO!

THANK YOU!

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Documents

PICTURES TELEVISION - WikiLeaks 2013...Inflation (% CPI) 4.97 5.10 4.50 Exchange Rate 2.02 2.04 2.06 Devaluation (%) (15.84) (0.99) (0.99) GDP Per Head (US$) 11,925 13,443 14,897 Population