Siemer & Associates Digital Video Report 2013

Embedded Specialized Accomplished

Fall 2013

Digital Video Report

2 Summer 2013Digital Video Report

Table of ContentsSection I

Section II

Section III

Section IV

Appendix

Industry Trends and Dynamics

Multi-Channel Networks

Social Video

OTT Video Platforms

Transaction Case Studies

Public and Transaction Comparables

INDUSTRY TRENDS AND DYNAMICS


Online & Mobile Video OverviewVideo content spans all connected devices – smartphones, tablets, connected TVs and OTT platforms, and even including wearable technologies – delivering a perpetually always-on digital video audience

Digital video – with its comparatively small production budgets and unlimited distribution – has democratized content creation and turned audiences global, allowing upstarts to scale rapidly and compete with traditional incumbents for audience engagement and advertising spend

Multi-channel networks in particular have sought to capitalize on the proliferation of content creators, leveraging YouTube as a distribution platform and attempting to differentiate via defined verticals and ancillary services (advertising, analytics tools, etc.)

With users increasingly accessing their chosen content across multiple platforms, digital video adtechcompanies have been responding accordingly by expanding their product and service suite to support cross-platform functionality and programmatic media buying / selling


Online & Mobile Video OverviewThe way customers access video content continues to change as the functionality in both mobile applications and gaming consoles are further developed ― Non-Desktop video views, a combination of both mobile applications and game consoles, accounted for 19.0%

of all views in Q1 2013 in the US, up from only 3.0% in Q1 2012― As a result, desktop video minutes per viewer is down 5% in YoY growth as consumers increasingly use non-

desktop devices to stream contentThe industry is characterized by various subsectors and unique monetization strategies― YouTube and other destination sites (e.g., DailyMotion) aside, multi-channel networks (MCNs), social video

and over-the-top (OTT) video platforms have all emerged as prominent players― Prominent MCNs Fullscreen and Maker Studios recently received $30.0 million and $26.0 million in investment

led by the Chernin Group and Canal+ / SingTel Innov8, respectively

Source: Wells Fargo Securities, LLC, ComScore, FreeWheel

Total US Video Views by Platform

*Non-desktop videos includes game consoles in the calculation

97%

3%Q1 2012

Desktop videos Non-desktop videos*

81%

19%

Q1 2013

Desktop videos Non-desktop videos*


Domestic PenetrationThe US stabilizes as a mature market with steady growth and penetration projections

Source: Wall Street Research, eMarketer

View

ers (

in m

m)

% o

f Int

erne

t Use

rs

130.8

145.6158.1

169.3178.7

187.6195.5

60.5%65.0%

68.2% 70.8% 72.9% 74.7% 76.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0

20

40

60

80

100

120

140

160

180

200

2009A 2010A 2011A 2012A 2013P 2014P 2015POnline video viewers % of Internet users

Internet Users Who Download or Stream Video Online at least Once per Month


$650 $1,051 $1,251

$1,508 $1,665 $1,874 $2,054

$331

$583

$903

$1,274

$1,611

$148

$208

$270

$316

$349

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2011 2012 2013 2014 2015 2016 2017

Subscription-based* Ad-supported Pay-per-view download

Current Market TrendsOnline video audiences are expected to double by 2016, reaching 1.5 billion globally, as the penetration and affordability of computers and mobile devices continues to expandAs the market matures, US mobile video revenues are projected to nearly triple to $4.0 billion in 2013, up from $1.3 billion in 2012


US Mobile Video Revenues (By Type, in $000s)

*Subscription-based revenues include mobile-only subscription revenues and a portion of revenues from cross-device subscription bundles

$735

$1,316

$1,730

$2,298

$2,838

$3,463

$4,015

A A E E E E E


Online & Mobile Video OverviewThe online video industry posted strong growth through the first part of the year as indicated by May’s YoY 22.0% increase from 46.7 billion total IP-video streams to 57.0 billion― Total viewers grew to 178.0 million, a 2.0% YoY growth, suggesting an increase in per capital consumption as

the primary driver for industry growthConsumers are willing to accept higher advertisement loads per content segment in return for more viewing convenience― Long-form ad loads grew 28.0% from Q1 2012 to Q1 2013, an increase from 7.4 ad units per content segment

to 9.5 units

Source: Wells Fargo Securities, LLC, ComScore

Ad Completion Rate by Site Type Video Ads Per Video Viewed (Long-Form Content)

68.0%76.0%

91.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Ad Networks /Exchanges

Internet Brands Major Media Brands

7.4

9.2 8.910.2

9.5

0

2

4

6

8

10

12

Q1 2012 Q2 2013 Q3 2012 Q4 2012 Q1 2013


Current Market TrendsThe average US viewer watches almost 100,000 minutes of television each year. Viewing habits are changing as 229 million viewers are expected to be connected to over-the-top services on devices by 2016― 35% of these viewers will watch TV on these devices

Almost 25% of television viewing time is dedicated to ads and content providers are taking advantage of viewers’ acceptance of ads tied to TV as they look to increase their digital ad spending

Source: IAB, Multiscreen Marketer; TDG, TV Everywhere Update; mDialog; eMarketer

2016 Projected Share of TV Viewing by Device (US) US Digital Video Ad Spending, 2011-2017

$2

$3

$4

$6 $7

$8

$9

40.8%

56.5%

41.4%38.9%

21.4%

15.1%12.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

$-

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

2011 2012 2013 2014 2015 2016 2017

$ bn

Digital video ad spending % Change

Television, 65%

Smartphone, 5%

Computer, 14%

Tablet, 16%

E E E E EAA


Current Market TrendsThis ultimately creates a potential linear video ad market of 4 trillion ads by 2016― 50,000 ads x 229 million viewers x 35% of total devices

Consumption of digital video ads is increasing – 23% of the 39 billion content videos viewed in December included video ads, up from 14% the prior yearIncreasing sophistication of brand engagement via new methods such as interactive content or long-form advertorials versus traditional TV advertisements are capitalizing on the advantage that online video provides― Chipotle’s new branded video generated almost 4 million views on YouTube in its first five days

Source: TDG, TV Everywhere Update; mDialog; Tubefilter; Wall Street Journal

2.52

5.9

4.6

0.4

1.3 1.1

2.83.3

1.2

4.6

3.4

1.52

0.7 0.6

3

1.7

4.7

3.7

11.4

0.7 0.5

0

1

2

3

4

5

6

7

TV Web TV Web TV Web TV Web

Aided Brand Awareness Online Ad Awareness Brand Favorability Purchase Intent / Consideration

18-34 35-49 50+

Impact of Made-for-Web vs. Repurposed TV Advertisement by Age Group


Current Market TrendsLarger supply inventory coupled with the increased use of programmatic buying of ads is reducing the average price per CPM in the near term as the advantage shifts to the buyers― Publishers who provide access to distinct and high value market will remain more resistant to this

commoditized pricing

Source: Credit Suisse, Google – Doubleclick, Wall Street Journal, Forrester, Tubefilter

$16 $17 $18 $19 $20 $21 $22 $23

$45

$41

$37

$33 $31 $31 $31 $31

$27 $26 $25 $25 $24 $25 $25 $26

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2010 2011 2012 2013 2014 2015 2016 2017

Indirect Midtier Premium Average CPM

$190

$402

$686

$1,141

$-

$200

$400

$600

$800

$1,000

$1,200

2011 2012 2013 2014

US Online Video Ad CPM, by Inventory Tier, 2010-2017 Total Spending on RTB Video (in $mm)


Current Market TrendsVideo ad networks are exploring ways to capitalize on growth of video ads and their higher level of engagement― YuMe launched its new Household Targeting system to deliver in-stream, interactive ads across all connected

screens in a household― Tremor Video announced they would move from serving in-banner video advertising and focus on in-stream

video ad contentTechnologies such as mDialog’s Smart Stream platform, which allows for uniquely addressable advertising within linear, live and VOD, are being launched to maximize the potential of video ads

Source: eMarketre.com, Milward Brown, Dynamic Logic & Yume, Adobe

88%

76%

59%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mid-Roll Pre-Roll Post-Roll

3

1.3

1.3

0.8

0.5

2.3

1.4

1

0.7

0.4

0 1 2 3 4

Online ad awareness

Aided brand awareness

Message association

Purchase intent

Brand favorability

% Increase over Control Group (TV ads)Noninteractive Interactive

Interactive Online Video Advertising’s Effect on Brand Metrics in the US, Q2, 2012 Completion Rate by Spot Position


Online & Mobile Video TrendsDespite early concerns that consumers would resist utilizing mobile devices for long-form video, both mobile and tablet video users spent more than half of their total online viewing time watching videos longer than 10 minutes― Previously, analytics focused on the number of views a piece of video content had accumulated, yet recent

studies indicate that the number of minutes watched per view is a more relevant metric― The growing popularity of long-form viewing on online and mobile devices allows for more opportunities to

include mid-roll ads within this contentAs mobile screens proliferate globally, we expect that consumer video consumption will continue to evolve as a more mobile, multi-platform experience


Proportions of Videos Watched by Length

3.0% 4.0% 5.0% 7.0%14.0%

21.0% 22.0% 25.0%

7.0%15.0% 15.0%

22.0%

5.0% 6.0% 6.0% 8.0%

71.0%

53.0% 52.0%

38.0%

0.0%

20.0%

40.0%

60.0%

80.0%

Connected TVs / Gaming Consoles Mobile Tablet Desktop

< 1 min 1-3 min 3-6 min 6-10 min > 10 min

MULTI-CHANNEL NETWORKS


Multi-Channel Network OverviewMCNs provide the production, marketing and technology infrastructure to original content channels for a percentage of the revenues generated ― By joining MCNs, video content creators can expand their audience through cross-promotion executed across

the massive group of channels aggregated by each firm― MCN’s scale allows for revenue and cost synergies, as well as removing a lot of the challenges small content

creators faceMCN’s distinct business model is attracting interest from both large corporations and notable VC firms

Milestone Fundings for MCNs

YouTube renewed its contract with VEVO and has taken a 7% stake in the company for a $40-50 million investment

Maker Studios turned down a nine-figure acquisition offer to close a $36.0 million investment led by Time Warner Investments in 2012 and raised an additional $26.0 million in August 2013

Fullscreen raised $30.0 million in Series A funding led by the Chernin Group in June 2013

In July 2013, Base79 secured a multi-million dollar funding, actual amount undisclosed, led by Evolution Media Growth Partners

Tastemade raised $10.0 million in Series B funding led by Raine Venture Partners in August 2013 Machinima closed $35.0 million in venture round

funding led by Google in May 2012 and is rumored to be seeking another $80.0 million from large studios (e.g., WB and Paramount)

Source: Variety, TechCrunch, Wall Street Research, CrunchBase

StyleHaul raised an additional $6 million in Series B funding from RTL Group, bringing the total Series B funding to $12.5 milliontheAudience raised $20.0 million in 2012 from

investors including Founders Fund, Guggenheim, Participant Media and Intertainment Media


Top YouTube Partner Channels as of June 2013VEVO leads in total unique visitors and number of views

Source: comScore.com

*Views are defined as any streamed segment of audiovisual content, including both progressive downloads and live streams. For long-form content, each segment of content is counted as a distinct video stream. Video views are inclusive of both user-initiated and auto-played videos that are viewed for longer then 3 seconds.

47.5

34.3

28.8 28.426.5

22.620.4

16.8

533.9

309.2

476.8

160.2137.2

85.3

389.5

127.0

0.0

100.0

200.0

300.0

400.0

500.0

600.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Vide

os (i

n Th

ousa

nds)

Uniq

ue V

isito

rs (i

n m

m)

Total Unique Visitors Views*

MCNs Total Unique Visitors and Number of Views


Industry Challenges for Multi-Channel NetworksBecause music makes up the largest share of the MCN market, developers must consider legal obstacles to maintain unique visitors and earnings― Fullscreen was sued in August 2013 by the National Music Publishers’ Association (NMPA) for copyright

infringement of videos― Maker Studios also settled a lawsuit with the NMPA and will pay music publishers for past and future

infringementsUtilizing MCNs requires a trade-off on behalf of the content publisher― Ad revenue is often deferred to network providers in exchange for greater exposure and marketing

Access to high-end equipment and resources allowing for better quality video productionSignificantly increased marketing support and endorsementOpportunity for cross-promotion between channels within the network

Forgo advertising revenue generated from channel contentForfeit merchandise revenue due to profit split with MCNPotential loss of freedom in producing original content

Primary Benefits / Concerns for Content Creators Joining an MCN

Source: TechCrunch, Wall Street Research


Industry Challenges for Multi-Channel NetworksNetworks poaching other networks’ clients is proving to be dangerous to the industry ― Some MCNs are beginning to prioritize poaching big-name channels and popular YouTube personalities over

developing the quality of their current talentPoaching talent and co-opting material from other networks has the potential to drive up the percent of revenue share that MCNs split with talent, which limits long term financial benefits of acquiring new talent― MCNs currently have a net revenue margin of around 16.5% (after profit splits with both YouTube and Talent)

and further compression could prove challenging to achieving both profitability and future growth prospects

Source: Wall Street Research, TubeFilter, Upfront Ventures

30%

70%

MCN Talent

55%45%

MCN YouTube

Percentage Revenue Splits Net Revenue Margin

16.5%

38.5%

45.0%

MCN Talent YouTube


Industry Challenges for Multi-Channel NetworksMCNs may become less advantageous as different applications emerge offering similar analytics― Google Chrome’s free extension, VidIQ, offers video analytics to help content producers maximize audiences

― For each video, VidIQ tracks and displays watch time, social media shares and VidIQ score, which determines how likely a video is to show up in YouTube’s related, recommended and search categories

― This may prove threatening to Fullscreen, which has a differentiated product among MCNs, offering key data analytics, tools and support

― Optimizing videos through third-party applications may deliver increases in a video’s exposure comparable with what MCNs provide

While incumbent MCNs have their own challenges, new or aspiring MCNs face enormous hurdles and barriers to enter the market, including the scale already achieved by incumbents, as well as large funding disadvantages― The first MCNs were able to capitalize on YouTube’s Partner Grants program which allocated an initial $5.0

million to help spur the creation of original content― Many feel the “land grab” is largely complete – so new networks have to attract talent away from the large

players – which will prove costly

Source: Wall Street Research, TubeFilter


Multi-Channel Networks Reduce Dependency on YouTubeBoth Youtube creators and MCNs feel that YouTube’s ad revenue splits are overbearing, curtailing the industry’s growth potential and causing MCNs to seek strategic alternatives― Fullscreen and VEVO remain the only MCNs rumored to be profitable

Although YouTube is currently the foundation for all MCNs, leading networks are seeking ways of diversifying their content onto other platforms― Maker Studios recently acquired Blip Networks and will integrate it into their multi-media platform as an

independent destination site (Fullscreen is also exploring this possibility) ― Machinima announced in July 2013 that it wants to raise $80.0 million to launch its own online video platform

subscription service with premium original content

Founded in 2009, VEVO operates as an online music video platform In March 2013, VEVO announced the release of a 24-hour programmed channel, called VEVO TV, consisting of music-themed original shows supplementing blocks of videos grouped by genre

Although Maker Studios represents a wide range of channels, they established themselves as a top network in the gaming vertical in August 2013 with a re-launch of their gaming channel, PolarisMaker Studios, unhappy with YouTube’s revenue share agreement, acquired Blip Networks which will serve as an independent destination site

Fullscreen differentiates itself from other MCNs by providing its creators with technical toolsAfter Fullscreen secured $30.0 million in a round of Series A funding led by the Chernin Group, co-founder George Strompolosconfirmed that while Fullscreen is currently known as a network of YouTube creators, they are on the path of evolving into a studio

Source: Variety, Pandodaily, The Wrap

Leading MCNs Delve into Original Content Production

This gaming and comic-oriented MCN originated as a YouTube channel producing original contentHaving already partnered with Lionsgateto produce an original web series in 2012, Machinima recently teamed up with Ridley Scott to produce 12 original Sci-Fi short filmsIf able to secure funding, the company is earmarked to launch Machinima Plus, a premium subscription product similar to Hulu Plus

SOCIAL VIDEO


Emergence of the Social Video PlatformViddy, Socialcam, Chill, and Loopcam, launched in 2011, were the first mobile applications to introduce the concept of viewing and sharing video content in a social media setting― Between December 2011 and March 2012, mobile video app usage jumped 52.0% from 152.0 minutes per

month to 231.0 minutes per month― During the same period, video usage from Google’s sites, primarily consisting of YouTube, fell 10.0%

Twitter, a platform based on shortened and straightforward content, launched Vine in January 2013― Vine places control in users’ hands to customize and share brief videos with followers― In August 2013 Vine hit 40 million users, up 207% from its reported 13 million users just two months prior― Vine has succeeded where previous mobile video sharing apps have faltered by capitalizing on Twitter’s

customer base and market shareAs the battle ensues for which platform will become the “Instagram of videos,” Instagram announced in late June 2013 that it would allow for users to film and post videos― Instagram reported it has reached 150 million monthly users in September 2013

2011 2012 2013April 2011 - Viddy launches as a social video platform and becomes #1 in iOS App Store

July 2011 - Loopcam launches as a platform that allows users to create and loop gif-animations

April 2012 - Viddy secures $30.0 million in Series B funding after reporting 5.5 million new users in 11 days

June 2013 – Instagramannounces it will launch a 15-second video feature

July 2012 – Autodesk acquires Socialcam, a mobile video application, just 18 months after its launch for $60.0 million

January 2013 – Twitter introduces Vine, which allows users to film 6 seconds of video through punctuated recording

Source: TechCrunch, CrunchBase, Wall Street Research, LA Times


Online Social Media as a Marketing ToolIn the US alone, video advertisements receive 13.2 billion views monthlySocial video advertising relies heavily on shared content through social channelsCompanies aim to leverage “earned media,” or publicity gained through social media― Popular viral videos may deliver businesses publicity for no extra cost

Online video advertising has overtaken traditional TV commercials in terms of customer recall and likability

Source: Business Insider

• Better tailor campaigns to customer base

Analytics

• Marketing relevancy• Efficient ad placement

Targeting Consumers

• Expand reach to similar consumers

Social Media Sharing

• Potential virality may expand audience

Brand Recognition

64.0%

50.0%

40.0%

28.0%

49.0%

32.0%

24.0%17.0%

46.0%

27.0%20.0%

15.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

General Recall Brand Recall Message Recall LikabilityVideo ads in TV shows online Video ads in short-form video online TV commercials

Effectiveness Metrics: TV vs. Online Video Ads


YouTube Demands High Premium for Content DistributionWith over 1.0 billion monthly users and 1.0 million content creators, YouTube reigns as the world’s largest online video destination― YouTube is expected to generate $5.0 billion in revenue in 2013, comprising nearly 11.0% of Google’s total

revenueContent creators have the option to join the YouTube Partner Program, which allows them to monetize their videos through automatically-targeted ad formats With increasing digital video ad spend, YouTube’s revenue sharing model has been challenged as it gives content suppliers only 55% of ad revenue generated against their content, while keeping 45%― YouTube asserts that bandwidth, video hosting, video players, user analytics, ad serving, geo-blocking, content

filtering and other large infrastructure costs justify its collecting 45.0% A challenge for YouTube is that premium content providers such as traditional media companies and pure play digital studios could shift toward alternative distributors in an effort to retain more profit

Leading Online Video Monetization Platforms (May 2013)

Source: Variety, Wall Street Research, Wells Fargo Securities, LLC, comScore.com

Company Name Total Videos (bn) YoYVideos with In-stream ad

units (bn) YoY11 Microsoft Sites 0.81 0% 0.27 -16%12 CBS Interactive 0.79 33% 0.49 27%13 Facebook 0.73 N/A 0.00093 N/A14 VEVO 0.66 -7% 0.072 24%15 Videology 0.63 58% 0.63 58%16 Viacom Digital 0.63 -8% 0.21 -16%17 NETFLIX.COM 0.62 47% 0.00004 -67%18 Yahoo! Sites 0.59 -39% 0.25 106%19 ESPN 0.52 -31% 0.34 -31%20 SpotXchange Video Ad Marketplace 0.48 22% 0.48 -22%

Company Name Total Videos (bn) YoYVideos with In-stream ad

units (bn) YoY1 Google Sites 16.51 -13% 2.55 84%2 Bright Roll platform 2.62 132% 2.62 132%3 Hulu 2.40 -6% 1.67 0%4 LIVERAIL.COM 2.13 N/A 2.13 N/A5 ADAP.TV 2.10 117% 2.10 117%6 AOL, Inc. 1.47 155% 0.63 66%7 Specific Media 1.41 88% 1.41 88%8 TubeMogul Video Ad Platform 1.23 37% 1.23 37%9 NDN 1.08 89% 0.58 102%

10 Tremor Video 0.88 22% 0.88 22%


Social Video Advertising Opportunities

The 6-second Vine or 15-second Instagram video IS the adVine can easily add geo-location data to post, a comparative advantage over other video platforms (most notably YouTube)― This allows local restaurants and vendors to better target their specific, location based, customers

Short form video content also naturally lends itself to teaser segments― Longer form video content could be released in 6 or 15-second segments where the next video is only un-

lockable after certain follower and retweet thresholds are met― Ideally suited to ramp up fan engagement for marquee (i.e., sports, movie/TV premieres) events

Finally, short, how-to videos can be created to either showcase the product itself, or show off creative uses for a product― Additionally, customers could be asked to submit Vine or Instagram videos of themselves using the product

Source: AdAge

Most online video can be monetized via pre-roll insertion, banner overlays or interactive in-stream ads, among others, but how can a platform consisting solely of 6 or 15-second videos be monetized?


Social Video Viral AdvertisingSharing of branded content grew in Q2 2013 by 7.0% across all verticals to 33.3 million video shares― However, sharing in Q2 was highly concentrated with the top 10 videos accounting for 45.0% of total sharing

FMCG / CPG brands put in an excellent social video performance, growing shares by 10.3% from the previous quarter, which had been boosted by a strong Super Bowl performanceEntertainment (including movie, videogame and TV trailers, but excluding music videos) remained the strongest social vertical, with a 33.1% share of total video shares― Entertainment sharing remains highly hit-driven, with Man of Steel and Call of Duty driving much of the activity

Source: Wall Street Research

Social Video Sharing by Vertical: Q2 2013 Market Share Performance by Vertical: Q1 2013 vs. Q2 2013

33.1%

28.7%

17.8%

8.7%

3.1%8.6%

Entertainment FMCG Tech Retail Autos Other0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Entertainment FMCG Tech Retail Autos

Quar

terly

Sha

res

Q1 2013 Q2 2013

+12.0%

+10.3%

+1.6%

+218.6%-67.3%


Social Video Advertising OverviewPopular social media platforms such as Twitter and Facebook now have over 200.0 million and 1.1 billion monthly users, respectively― As of July 2013, 76.0% of Twitter and Facebook users log in at least once each day

Simultaneously the growth of online video “snacking,” or viewing short, easily accessed clips has served to increase social video sharingTo capitalize on the organic growth in users sharing their favorite videos, an ecosystem of video seeding companies distribute branded videos for their agency or direct clients has developed― Optimum content placement, or “seeding,” is achieved by providing means for the advertiser to segment and

target their intended audience by geo-location, interest vertical, etc., across as large a publisher base as possible, with additional sequential ads, vendor or in-network re-targeting capabilities provided

These companies such as Giant Media, Unruly Media and Feed Company, among others, seek to maximize outreach and optimize content placement― Outreach is designed to target both social media communities, influential online personalities and followers of

niche interest blogs and forums across the web and get people talking about and sharing a campaign

Source: Wall Street Research,


Social Video Advertising OverviewTo ensure that consumers are truly engaging with the brand, and to effectively measure a campaign’s ROI, social video campaigns are generally priced on a CPV modelHowever, video views are just one important consideration when trying to effectively measure brand engagement, with other metrics arguably providing deeper insight:

― Time spent viewing the ad, even if not to completion

― Interactivity, such as starting the ad, or intentionally mousing over it

― Dwell rate, or the proportion of impressions that were intentionally engaged with by touch, interaction or click

― Sharing or commenting on ads – the foundation of the social, word-of-mouth or viral aspects of brand engagement

― Visiting a brand’s website as a result, even if not directly, of viewing the video ad

― Simply paying attention to ads and being aware of the brand – which are, in many ways, the core engagement metrics

Source: eMarketer


Social Video Advertising Opportunities

While video views are primarily an indication of media spend (“paid media”), video shares on platforms such as Facebook, Twitter and across the blogosphere, demonstrate that the consumer has engaged much more deeply with the content― These shares are an indication that the product or promotional video has gained genuine social traction and

organic consumer demand (“earned media”)― As word-of-mouth is the primary factor behind 20%-50% of purchasing decisions, peer-to-peer

recommendations are one of the most powerful marketing tactics available to move buyers down the purchase funnel

Source: Unruly Media, McKinsey

Making branded videos shareable can dramatically increase a brand’s reach, generate recommendations among peer groups, increase brand uplift, and trigger purchases / conversions

Survey: User Behavior Within Three Days of Video Viewing

26.0%21.0% 20.0%

11.0% 8.0% 7.0% 5.0% 4.0% 2.0%

12.0%

9.0%6.0%

9.0%

3.0% 1.0% 2.0% 2.0% 2.0%0.0%

10.0%

20.0%

30.0%

40.0%

Talked to someoneabout it

Went brand's site Searched forbrand online

Searched forsimilar products

Commented onvideo

Shared link ofvideo

Visited/followedbrand on social

media

Sent video directlyto someone

Purchasedproduct

Immediate Delayed


Social Video Seeding OpportunitiesAdded competition in social video has fueled the need for the leading companies to go beyond seeding to stand out from the crowd and stay ahead through various initiatives including:

1. Emotional measurement— Take a more scientific approach to work out what makes someone decide to share a piece of content— Calculate the amount of “earned media” a video is likely to attract across the social web and how much

paid investment (“paid media”), will need to be deployed— Partner with companies who measure how users are likely to respond to advertising

2. Exchange-based seeding— Create an ad format that can be served into standard MPU (300x250) and into Facebook by buying on

the exchanges— Focus more on presenting the media as content, rather than as an ad

3. Self-service platform— Develop a platform through which smaller advertisers can set up their own campaigns in a simple way

and can choose from a variety of geo and audience targeting options

Source: Videoadnews.com

OTT VIDEO PLATFORMS


OTT Overview and Trends

The global OTT video market is estimated to be worth over $20.0 billion as of February 2013, with opportunities for extensive growth in upcoming years― Much of this growth potential lies abroad, as approximately 510.0 million (excluding current developed markets,

India and China) international homes are expected to have broadband by 2021Subscription video-on-demand (SVOD) represents a key market opportunity in the sector while the highly fragmented global marketplace allows for potential consolidation― SVOD platforms are expected to spend between $9.2 billion and $13.8 billion on content rights by 2021, with

content producers expected to earn up to $10.0 billion annually from OTT digital rights salesApart from SVOD, OTT providers focus on three other principal monetization strategies: bonus add-ons, advertisements and VODConcerns arise with certain research suggesting that the growth in SVOD rights sales may eat into revenues of the much more pervasive advertising strategy― SVOD inherently promotes the avoidance of ads and a shift away from traditional television ratings metrics

Major players, such as Netflix, will gain the most from global SVOD growth if they can leverage their market position to wisely expand their content offerings and geographic distribution


Bonus Add-on Advertisements VOD SVOD


Original Content

Netflix leads in original content programming with critically acclaimed offerings such as Arrested Development, House of Cards and most recently, Orange is the New BlackIn late July 2013, Netflix announced it will expand its lineup into additional content verticals including feature films, documentaries, stand-up comedy specials, news programs and talk showsNetflix executives attributed their YoY subscriber growth for Q2 2013 to their original programs

Although it remains in last place in terms of original content production, Amazon created buzz in the industry earlier this year when it put out 14 pilots at once and invited user feedback, disrupting traditional pilot season in favor of crowdsourcingAfter airing its original pilots in April 2013 and allowing for viewers to vote on their favorites, Amazon announced in May that it will produce five original series

Hulu began launching original series as early as 2011, with its most recent offerings featuring stars such as Seth Meyers and Eva LongoriaIn April 2013, with content costs rising, Hulu lost the exclusive rights to old SNL clips to Yahoo; this may lead to a need for increased focus on original programmingHulu retracted its for-sale status for a second time in July 2013, with owners Disney, NBCUniversal and 21st Century Fox instead investing $750.0 million into the company to compete more directly with Netflix and Amazon Prime

Source: TechCrunch, Vulture.com, Wall Street Research

The industry leaders in online television expand to include original programming


Internet-to-TV DevicesThe compatibility of Internet-to-TV devices with an increasing number of content delivery channels signifies the high growth potential for the OTT market in coming years― The cost to convert a single film for ten Internet delivery channels is in the range of $6,000-$8,000― Content providers have proven willing to assume the expenditure due to the growing popularity of the OTT

Internet video platform― Greater compatibility opens the market for more competing OTT content delivery channels

― Rumors suggest HBO is considering unbundling HBO Go and offering it as a broadband package

Subscription Options

Rental & Purchase Options

Growing Compatibility of Internet-to-TV Devices


OTT Content Channels Chromecast Apple TV Roku Xbox Samsung Smart TV

$35 $100 $50-$100 $200-$500 $800-$3,699

Netflix Yes Yes Yes Yes Yes

Hulu Plus Via Laptop Yes Yes Yes Yes

HBO Go Via Laptop Yes Yes Yes Yes

Amazon Prime Via Laptop Via AirPlay Yes Yes Yes

Google Play Yes Via AirPlay No No Yes

Apple iTunes No Yes No No Yes

Amazon Via Laptop Via AirPlay Yes No Yes

Vudu Via Laptop Via AirPlay Yes Yes Yes

Xbox Video No No No Yes No


Internet-to-TV Device Market

Internet-to-TV Connection Type (US, Japan, China, France, Germany, Italy and UK)

Game console, 19.3%

Media center box, 17.1%

DVD / blu-ray player, 16.3%

Cable / satellite, 10.7%

Notebook PC, 10.3%

Smart TV, 10.2%

Desktop PC, 9.0%

Connected TV, 6.3% Others, 1.0%

Although game consoles are currently the preferred method for Internet-to-TV connection, emerging devices such as smart TVs are on the rise― Smart TV adoption has steadily increased in China due to aggressive promotions by manufacturers ― Historical usage of smart TVs had been limited by high prices and the widespread availability of other devices― However, in a survey conducted by Digitalsmiths, the increasing convenience, and relative cheapness, of OTT

platforms is driving more consumers to 3rd party rental and subscription services that are delivered over-the-top

Source: Wall Street Research, Fierce Telecom, Digitalsmiths

Survey: Why Use OTT Services?

53.1%

48.3%

30.8%

27.2%

23.1%

18.3%

14.4%

14.7%

0.0% 20.0% 40.0% 60.0%

Convenience

Cheaper

Ability to watch certain content

Better selection

Easier to find content

Ability to watch on iPad/tablet

Ability to watch on smartphone

Other


Trends for Global Smart TV AdoptionSmart TV adoption is slated to grow exponentially due to:― Consumers experiencing device fatigue as they look to eliminate devices which perform overlapping tasks

― The smart TV covers the work of the landline, TV, DVD player, entertainment system, and game station all in one― The continued move from the old broadcast model to on-demand and OTT video

― Smart TVs offer a more curated viewing experience for the consumer at a lower cost structure than broadcasting― The ability to use social networking services in conjunction with television services

― The next evolution of TV enables viewers to access and share media content via Facebook and Twitter― Establishes the possibility of setting up “virtual living rooms” where friends can watch videos at the same time through

social networks, enabling a shared viewing experienceCountries will see a rise in smart TV adoption as consumers become more comfortable using the connectivity features, and as navigation and search capabilities become more intuitive and user friendly

Leading Countries for Smart TV Penetration

Source: MediaTel

42.0% 40.0% 40.0%34.0%

28.0% 26.0% 26.0% 25.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

France Turkey Poland Germany Italy Spain Netherlands US

% o

f Hou

seho

lds


OTT Industry Challenges


OTT content is the largest driver of network capacity upgrades― In a survey conducted by Rapid TV News, 82.0% of operators

upgraded network infrastructure due to increased usage― 75.0% of operators attribute these changes to popularity of

streaming videoOTT growth may be hindered by Internet providers― Video streaming quality on OTT platforms are trending upward,

requiring more bandwidth ― Broadband service providers are opting for bandwidth caps to limit

traffic caused by video streaming

Consumer Frustrations with Internet OTT Video

Increasing OTT

Bandwidth

HEVC Video Codec

Increased Mobile

Capabilities

Multicast

Peer Assisted Delivery

Greater Storage Density

Scalable Video

Coding (SVC)

Caching Networks

Tiered Pricing Plans

53.0% 51.0%45.0%

19.0% 19.0% 17.0%12.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Advertising during theprogram

Time required to buffer /download the video

Video quality (i.e., poordefinition)

Cost of the videocontent

Broadband / High-speedcost of downloading the

video

Range of programsavailable

Navigation experience(i.e., search / epg)


Traditional Networks vs. OTTDespite the growing popularity of OTT, traditional television networks are having some success in competing with this new sector of OTT providers― Comcast has implemented competitive on-demand services in response, and some traditional networks have

quickly developed multi-platform accessibility on desktops, tablets and smartphones― Other traditional TV operators are looking to partner with OTT providers to provide more flexible, on-demand

servicesIn terms of VOD rentals, managed networks still top the market compared to newer OTT players― VOD rentals, however, do not appear to be nullifying the losses in physical DVD sales


Share of Paid VOD Movie Rentals

23.0%

14.0%

9.0%8.0% 7.0% 7.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Comcast DirecTV Time Warner Cable Apple iTunes Verizon DISH

% S

hare

APPENDIX

TRANSACTION CASE STUDIES


Case Study: Video Advertising (8/7/2013)

ACQUIRES

Acquirer: AOLBus. Description: Offers a suite of online content, products and services to consumers, advertisers, publishers and subscribers worldwide

Target: Adap.tvBus. Description: Builds technology to connect video advertising buyers to sellers on a single platform

Implied EV: $405.0mmDeal Commentary― Demonstrates AOL’s increasing focus on two of the fastest-growing sectors of online advertising:

video and programmatic ad buying― Combination of AOL On video network and Adap.tv will give AOL an end-to-end solution and video

stack for publishers and advertisers, including premium original production, content aggregation and syndication, robust video CMS technology and a leading video advertising platform

Source: Capital IQ, Wall Street Research


Case Study: Video Advertising (8/5/2013)

ACQUIRES

Acquirer: BlinkxBus. Description: Provides video search and advertising services on the Internet worldwide

Target: Grab MediaBus. Description: A video distribution company that connects video content from a collection of professional sources and brand-name advertisers to ideal viewers

Implied EV: Not DisclosedDeal Commentary― The deal should help Blinkx to accelerate its syndication drive, including the introduction of Blinkx

VideoAdvantage, designed to expand distribution of premium video content across the web― Enables Blinkx to add incremental audience and augment its relationships with advertisers,

publishers and content providers

Source: Capital IQ, Wall Street Research


Case Study: Multi-Channel Networks (8/21/2013)

Target: Blip NetworksBus. Description: Blip Networks is a digital media company that develops, produces, and distributes Web content

Implied EV: N/ADeal Commentary― Blip Networks will serve as a content distribution resource for Maker Studios― The acquisition will reduce Maker Studios reliance on YouTube for content distribution

Source: LA Times

Acquirer: Maker StudiosBus. Description: Leading MCN generating over 2.0 billion monthly video views that specializes in production and promotion services for its channels

ACQUIRES



Target: Maker StudiosBus. Description: Leading MCN generating over 2.0 billion monthly video views that specializes in production and promotion services for its channels

Investors: Canal+, Astro, SingTel Innov8, Lakestar, and Northgate Capital

Investment Size: $26.0mmInvestment Commentary:― The $26.0 million comes in addition to the $36.0 million Maker Studios raised in December 2012― The December 2012 capital raise was lead by Time Warner Cable and a 25.0% stake was acquired― Maker Studios acquired Blip Networks to help facilitate original programming and to make content

more ad-friendlySource: Wall Street Research, TechCrunch

FUNDED BY



Acquirer: DreamWorks Animation (“DWA”)Bus. Description: Leading animation production company for film and television

Target: Awesomeness TVBus. Description: MCN of 55,000 YouTube channels comprised of sketch comedy, scripted and reality/ talk shows for teens

Implied EV: $150.5mmDeal Commentary― AwesomenessTV makes DWA a player in the online content creation space ― AwesomenessTV will serve as a promotional platform for DWA’s animated properties― As part of the deal, AwesomenessTV CEO Brian Robbins will help develop a branded digital

channel aimed at family audiences for DWA


ACQUIRES



Acquirer: Discovery CommunicationsBus. Description: Largest nonfiction media company reaching more than 1.5 billion cumulative subscribers

Target: Revision3Bus. Description: MCN with more than 23.0 million monthly unique viewers across 27 digital channels

Implied EV: $35.0mmDeal Commentary― Strengthens Discovery’s online presence― Revision3’s cost-effective online video content allows Discovery to remain the nonfiction media

industry leader on multiple platforms― Revision3 had raised $10.0 million in two rounds from Greylock Partners with additional funding

from Marc Andreessen and Mark CubanSource: Wall Street Research

ACQUIRES



Target: FullscreenBus. Description: Leading MCN of over 10,000 YouTube channels generating over 2.5 billion monthly video views

Investors: The Chernin Group, Comcast Ventures, WPP Digital

Investment Size: $30.0mmInvestment Commentary:― Fullscreen is looking to focus on video production and investing in the creation of owned and

operated content― Fullscreen further plans to expand the number of platforms it can reach as well as its international

presence into overseas markets

Source: Wall Street Research, TechCrunch

FUNDED BY


Case Study: OTT Video Platforms (7/3/2013)

ACQUIRES

Acquirer: Samsung ElectronicsBus. Description: Develops, manufactures and sells consumer electronics

Target: BoxeeBus. Description: Offers set top box devices for live TV broadcasts, DVR and more

Implied EV: $30.0mmDeal Commentary― Samsung is now a more direct competitor in the OTT video streaming space with Apple, Roku and

Intel― Samsung shut down Boxee’s signature cloud DVR service, upsetting Boxee’s existing customers ― Although Boxee has had its focus on TV hardware, speculation suggests Samsung will utilize

Boxee’s software technology to boost their smart TV’s capabilities Source: BroadCastEngineering, VentureBeat, Israel21c

PUBLIC AND TRANSACTION COMPARABLES


Select Digital Media Public Comparables

Source: CapitalIQ and Siemer Proprietary Research

(figures in millions of $USD, except per share) Share Price as of: Market Enterprise EV / LTM EV / CY 2013E LTM AnnualCompany Name 10/18/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue GrowthOnline MediaAkamai Technologies, Inc. $51.89 $9,244.7 $8,714.0 5.9x 16.0x 4.9x 11.3x 17.0%Amazon.com Inc. 310.89 142,040.2 137,619.2 2.1x NA 1.5x 20.3x 23.0%AOL Inc. 33.95 2,611.8 2,244.8 1.0x 4.5x 0.9x 4.5x 1.9%Apple Inc. 492.81 447,718.2 422,001.2 2.5x 7.6x 2.3x 7.0x 13.8%Baidu, Inc. 154.90 54,180.1 50,763.0 11.9x 23.9x 7.6x 18.1x 42.2%Blinkx plc 2.42 892.0 833.2 4.0x 29.5x 3.2x 17.4x 73.0%Brightcove, Inc. 12.69 359.4 328.9 3.4x NA 2.6x NA 27.7%Diamond Foods, Inc. 21.80 487.0 1,072.0 1.2x 17.2x 1.2x 9.1x -12.0%Digital Generation, Inc. 12.88 359.5 698.3 1.8x 6.8x 1.7x 5.5x 1.0%Facebook, Inc. 49.11 119,598.6 111,513.6 18.2x 40.4x 11.3x 20.6x 41.4%Google Inc. 871.99 290,391.0 244,159.0 4.4x 14.4x 3.6x 9.6x 30.5%IAC/InterActiveCorp 55.63 4,615.9 4,624.8 1.5x 9.7x 1.3x 6.1x 24.1%Microsoft Corporation 34.13 285,352.2 225,428.2 2.9x 7.5x 2.6x 6.8x 5.6%Netflix, Inc. 300.85 17,726.7 17,146.6 4.3x NA 3.4x 33.8x 14.1%Pandora Media, Inc. 24.90 4,710.0 4,651.1 8.8x NA 5.2x NA 56.0%Phoenix New Media Limited 11.87 914.4 727.1 3.6x 29.7x 2.6x 13.5x 14.9%RealNetworks Inc. 8.55 305.0 68.3 0.3x NA NA NA -21.6%SINA Corporation 86.58 5,779.5 5,023.6 8.7x NM 6.2x 31.9x 14.7%SIRIUS XM Radio Inc. 3.88 24,091.9 26,690.0 7.4x 21.7x 6.4x 18.4x 12.8%Tremor Video, Inc. 10.64 527.2 664.6 5.4x NM 3.8x 126.8x 0.0%Yahoo! Inc. 34.15 34,844.0 32,314.0 6.7x 15.8x 7.0x 19.3x -3.1%Yandex N.V. 38.33 12,511.3 12,295.0 12.1x 27.4x 8.0x 17.8x 37.1%Youku Tudou Inc. 29.55 4,900.9 4,359.0 11.1x NA 5.9x NA 95.8%YuMe, Inc. 9.92 317.1 370.4 2.8x 47.0x 1.8x 35.0x 0.0%

Mean $54,762.9 5.5x 19.9x 4.1x 21.6x 21.3%Median $4,837.4 4.2x 16.6x 3.4x 17.6x 14.8%


Select Traditional Media Public Comparables


(figures in millions of $USD, except per share) Share Price as of: Market Enterprise EV / LTM EV / CY 2013E LTM AnnualCompany Name 10/18/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue GrowthTraditional Content and CableAMC Networks Inc. $65.95 $4,766.5 $6,502.7 4.5x 13.0x 3.9x 10.3x 14.4%Axel Springer AG 59.12 5,840.8 6,920.4 1.5x 8.8x NA NA 1.1%CBS Corporation 56.25 35,740.6 41,881.6 2.8x 11.6x 2.7x 10.4x 7.6%Crown Media Holdings Inc. 3.23 1,161.8 1,586.9 4.5x 5.9x NA NA 3.0%Discovery Communications, Inc. 80.54 28,208.6 34,231.6 7.0x 16.9x 5.5x 12.4x 11.4%The Walt Disney Company 66.21 118,280.3 131,722.3 3.0x 10.8x 2.7x 9.6x 5.6%Liberty Media Corporation 149.23 17,032.9 30,395.9 8.2x 30.5x 6.2x 20.8x 119.6%Lions Gate Entertainment Corp. 34.77 4,742.2 6,038.9 2.2x 18.4x 2.0x 14.1x 56.1%Scripps Networks Interactive, Inc. 77.72 11,337.5 12,784.6 5.3x 11.1x 4.7x 10.5x 10.8%Starz 29.05 3,394.2 4,368.7 2.5x 9.9x 2.6x 10.1x 6.8%Time Warner Inc. 67.92 62,486.8 79,870.8 2.7x 10.4x 2.6x 9.8x 1.4%Twenty-First Century Fox, Inc. 33.23 75,993.5 89,438.5 3.2x 13.2x 2.9x 12.0x 10.5%Viacom, Inc. 82.00 39,126.6 47,066.6 3.5x 11.6x 3.2x 10.0x -7.4%


MVPDs / AggregatorsAT&T, Inc. $34.20 $181,636.2 $253,355.2 2.0x 8.7x 1.9x 5.9x 0.1%Cablevision Systems Corporation 16.27 4,350.6 14,099.0 2.1x 8.2x 2.2x 8.2x 4.3%Charter Communications, Inc. 136.23 14,133.0 26,930.0 3.5x 10.1x 3.0x 8.3x 4.5%Comcast Corporation 46.06 120,213.3 162,956.3 2.5x 7.5x 2.4x 7.2x 7.7%Deutsche Telekom AG 15.45 68,433.8 136,294.4 1.7x 6.6x NA NA -0.2%DIRECTV 60.65 33,296.5 50,144.5 1.6x 6.6x 1.5x 6.0x 7.6%Dish Network Corp. 47.88 21,865.1 26,532.6 1.9x 9.1x 1.8x 8.7x -0.8%NTT DOCOMO, Inc. 15.98 66,275.6 64,945.3 1.4x 4.2x 1.4x 4.0x 5.8%Singapore Telecommunications Limited 2.98 47,478.5 52,567.1 3.6x 9.8x NA NA -4.3%Time Warner Cable Inc. 115.79 33,090.7 56,604.7 2.6x 7.0x 2.5x 6.8x 7.0%Verizon Communications Inc. 47.09 134,759.0 235,200.0 2.0x 7.2x 1.9x 5.4x 4.5%



Select Precedent Online Video Transactions


(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA

10/8/2013 Break Media Alloy Digital, LLC NA NA NA9/1/2013 ViKi Rakuten, Inc. $200.0 NA NA8/21/2013 Blip Networks, Inc. Maker Studios, Inc. NA NA NA8/21/2013 Orb Networks, Inc. Qualcomm NA NA NA8/12/2013 Stringwire NBC News Digital LLC NA NA NA8/7/2013 Adap.tv AOL 405.0 3.5x NA8/5/2013 Grab Media Blinkx NA NA NA7/9/2013 Greenhouse Studio, Inc. Burdette Ketchum NA NA NA7/1/2013 Red Bee Media Limited Ericsson NA NA NA6/28/2013 Virtual Nerd, LLC Pearson NA NA NA5/30/2013 DeFranco Creative Revision3 Corporation NA NA NA5/29/2013 Zubox Limited Digimania, Ltd. NA NA NA5/6/2013 PPStream, Inc. iQIYI.com, Inc. 370.0 NA NA5/1/2013 AwesomenessTV, Inc. DreamWorks Animation SKG 150.5 NA NA4/26/2013 E-surfing Media Co., Ltd. China Telecommunications Corporation 244.9 NA NA4/8/2013 Microsoft, Mediaroom IPTV Business Ericsson NA NA NA2/11/2013 Preview Networks Aps Rightster Ltd. NA NA NA1/7/2013 Pipewave, Inc. ZEFR, Inc. NA NA NA

12/12/2012 KickApps Corporation Perfect Sense Digital, LLC NA NA NA11/14/2012 Russer Communications Corcoran Consulting & Coaching Inc. NA NA NA11/13/2012 Verivue, Inc. Akamai Technologies, Inc. 32.1 NA NA11/2/2012 iQIYI.com, Inc. Baidu, Inc. NA NA NA9/19/2012 Zui.com, Inc. Saban Brands LLC NA NA NA8/10/2012 15miles Inc. GearyLSF Group NA NA NA7/18/2012 Castfire, Inc. AlphaBird, Inc. NA NA NA7/17/2012 Socialcam Inc. Autodesk, Inc. 60.0 NA NA


Select Precedent Online Video Transactions



6/18/2012 Clevver Media LLC Alloy Digital, LLC NA NA NA6/17/2012 Metacafe, Inc. Collective Digital Studio, LLC NA NA NA6/13/2012 Wuaki.TV, S.L. Rakuten, Inc. $18.7 NA NA5/21/2012 On Demand Group, Ltd. Vubiquity, Inc. 27.0 NA NA5/15/2012 Cull TV, Inc. EatLime, Inc. NA NA NA5/14/2012 Splat Interactive, Inc. UIEvolution, Inc. NA NA NA3/12/2012 Tudou Holdings Limited Youku Tudou Inc $721.8 7.3x NA2/8/2012 DirectBrand Image Now Design and Film Consultants NA NA NA1/23/2012 Live Matrix, Inc. OVGuide.com, Inc. NA NA NA1/17/2012 WebVisible, Inc. The Berry Company, LLC NA NA NA1/10/2012 SBDS Active, SAS Lagardere Active SAS NA NA NA1/6/2012 ChannelFlip Media Limited Shine Limited NA NA NA

12/14/2011 Quadia Web TV B.V. Van den Ende; Deitmers Venture Capital NA NA NA11/29/2011 Genesis Media LLC TVGenesis LLC NA NA NA10/31/2011 Auditude, Inc. Adobe Systems Inc. NA NA NA9/26/2011 QianJun, Inc. Renren Inc. 80.0 NA NA9/21/2011 Remixation, Inc., Vodpod.com Lockerz, LLC NA NA NA8/24/2011 FilmRookie Eurotech, Ltd. NA NA NA3/29/2011 The Web TV Enterprise Ltd. Collective Media, Inc. NA NA NA3/25/2011 Global Inspiration s.r.o. Seznam.cz, a.s. NA NA NA3/24/2011 Camtenna Oy Qbrick AB NA NA NA2/22/2011 Fliqz, Inc. VBrick Systems, Inc. NA NA NA2/9/2011 Shine Limited Twenty-First Century Fox, Inc. 615.0 3.9x NA1/31/2011 KickApps Corporation KIT digital, Inc. 43.2 NA NA1/11/2011 BitGravity, Inc. Tata Communications 10.7 NA NA

Mean $213.8 5.6x NAMedian $80.0 5.6x NA


Select Precedent Online Video Financings


AmountDate Company Description Investors Round Raised ($mm)

9/13/2013 Maker Studios, Inc. Operates a digital video studio that engages in digital content production and distribution

Canal+; SingTel Innov8; Astrolabe Ventures; Lakestar; Northgate Capital

C $26.0

8/16/2013 Open Road Integrated Media, Inc.

Operates as a digital publisher and multimedia content company that publishes ebooks and produces video content

Azure Capital Partners; Golden Seeds LLC; Kohlberg Ventures; NewSpring Capital

NA 11.0

8/15/2013 Tastemade Food-focused online video network Raine Ventures; Redpoint Ventures B 10.0

8/12/2013 Extreme Reach, Inc. Provides video management, delivery, and measurement solutions on a cloud-based platform that enables advertisers to manage, deliver, and measure video

Digital Generation, Inc. NA 40.0

7/30/2013 Qwilt Inc. Develops video technology solutions that help carriers to identify, monitor, store, and deliver Internet video to their subscribers

Accel Management Co, Inc; Bessemer Venture Partners; Redpoint Ventures

C 16.0

7/12/2013 Hulu, LLC Provides an online video service that offers a selection of hit shows, clips, movies, and more

NBCUniversal Media, LLC; The Walt Disney Company; Twenty-First Century Fox

NA 750.0

5/23/2013 Collective Media, Inc. Provides audience targeting and optimization solutions for publishers and advertisers in the U.S.

Accel Management Co, Inc.; Samsung Venture Investment Corporation; Cox Media Group, Inc.

C 20.0

5/15/2013 Videology, Inc. Provides online video advertising solutions to connect brands with consumers

New Enterprise Associates; Comcast Ventures; Valhalla Partners; Catalyst Investors; Pinnacle Ventures

D 68.3

5/14/2013 StyleHaul Fashion-focused online video network RTL Group B 6.0 4/8/2013 Moment Systems Provides digital advertising solutions for advertisers and

agenciesRedpoint Ventures; CBC Capital; WPP Digital; KPCB China

C 10.0





4/4/2013 Fullscreen Operates as a digital media company that builds next-generation channels and networks on the YouTube platform

Comcast Ventures; The Chernin Group, LLC; WPP plc

A $30.0

3/28/2013 Pixability, Inc. Provides cloud-based online video marketing software and consulting solutions geared toward small and medium-sized businesses

Quad / Graphics, Inc. NA 6.6

3/26/2013 LearnZillion, Inc. Provides online video lessons for teachers, children and parents

Calvert Investment Management, Inc.; DCM; NewSchools Venture Fund, Investment Arm; O'Reilly AlphaTech Ventures, LLC; Calvert Social Investment Fund - Calvert Balanced Portfolio; DC Community Ventures LLC

A 7.0

3/6/2013 Innovid, Inc. Operates as an interactive video advertisement development company

Sequoia Capital; TNAVenture Holding GmbH; Genesis Partners Ltd.; Vintage Investment Partners

C 11.0

3/5/2013 Epoxy.tv Provides professional tools for video channel management

Upfront Ventures; Greycroft Partners; Bertelsmann Digital Media Investments; Advancit Capital

NA 2.0

2/28/2013 VEVO LLC Owns and operates an online syndication network and platform for entertainment content

YouTube, LLC NA 50.0

1/31/2013 FreeWheel Media, Inc. Provides online video advertising solutions for global media companies

DIRECTV NA NA

1/29/2013 Magnify Networks, Inc. Provides cloud-based video curation solutions to online publishing, non / profits, communities, brands and advertising networks

WS Investments NA 7.0

1/25/2013 StyleHaul Inc. Owns and operates an online video community through which it provides makeup and style tutorial videos

Bertelsmann Digital Media Investments; Siemer Ventures; RezVen Partners LLC

B 12.5





12/3/2012 Vdopia Inc. Provides online video advertising network and technology services to brands and advertisers

NA B $7.4

11/20/2012 Kaltura Inc. Designs and develops online video solutions Intel Capital; Mitsui & Co. Global Investment, Inc.; Avalon Ventures; ORIX Venture Finance, LLC; Nexus Venture Partners; .406 Ventures, LLC

D 25.0

11/14/2012 Maker Studios, Inc. Owns and operates a digital video studio that engages in digital content production and distribution

Greycroft Partners LLC; Upfront Ventures; Time Warner Investments; Daher Capital

NA 36.0

11/7/2012 ClipClock Develops and operates an online video editing and sharing platform

Runa Capital A 2.5

10/19/2012 LongTail Ad Solutions, Inc.

Provides online video solutions Greycroft Partners LLC; The Cue Ball Group, LLC

B 5.0

10/15/2012 Tvinci Ltd. Operates an over-the-top television platform for pay TV Trellas Enterprises Limited; Kaedan NA 4.5 6/27/2012 Namesake, Inc. Owns and operates an online community for video sharing Atlas Venture L.P.; Kleiner, Perkins,

Caufield & Byers; William Morris Endeavor Entertainment, LLC;

A 8.0

6/14/2012 Ooyala, Inc. Offers online video management, publishing, analytics and monetization solutions

Sierra Ventures; Rembrandt Venture Partners; EDB Investments Pte. Ltd.; The CID Group; Telstra Applications and Ventures Group

E 35.0

6/7/2012 Visible Measures Corporation

Operates as an independent third-party media measurement firm for online video advertisers and publishers

Mohr Davidow Ventures; Advance Publications, Inc.; General Catalyst Partners; Northgate Capital Group, L.L.C.; DAG Ventures, LLC

NA 21.5

5/7/2012 Machinima, Inc. Operates a video entertainment network for video gamers Google Inc.; MK Capital; Redpoint Ventures

D 36.0




*Mean and Median calculation excludes Hulu, LLC


3/21/2012 NicePeopleAtWork SL Develops and provides high definition Internet video distribution software solutions to Web, mobile devices, set top boxes and connected televisions

Axón Capital e Inversiones, SGECR, S.A.

NA $1.3

3/2/2012 DramaFever Corp. Operates DramaFever.com, an online video platform for entertainment on the Web

AMC Networks Inc.; MK Capital; Bertelsmann Digital Media Investments; NALA Investments, LLC

B 6.0

2/21/2012 Maker Studios, Inc. Owns and operates a digital video studio that engages in digital content production and distribution

Greycroft Partners LLC; Upfront Ventures; YouTube, LLC

NA NA

2/8/2012 Unicorn Media, Inc. Provides Internet video solutions that enable companies to maximize IP video profitability

Nexeven AB A NA

2/1/2012 Videoplaza AB Develops advertising solutions for publishers of online video

Innovacom Gestion; QUALCOMM Ventures; Northzone Ventures; Creandum AB

B 12.0

2/1/2012 Conviva, Inc. Provides a media platform to companies for managing the distribution of live media and programming online

Time Warner Investments NA 15.0

1/26/2012 StyleHaul Inc. Owns and operates an online video community through which it provides makeup and style tutorial videos

RezVen Partners LLC A 4.4

Mean $39.5 Median $11.0


Select Precedent Mobile Video Transactions



9/4/2013 Saffron Digital Ltd Cinram Group, Inc. $47.0 NA NA5/19/2013 Mogreet, Inc. payvia, Inc. 32.0 NA NA4/17/2013 Digital Broadcasting Group, Inc. Alloy Digital, LLC NA NA NA3/14/2013 Clk2c.com ValueFirst Messaging NA NA NA10/9/2012 Vine Twitter, Inc. NA NA NA9/25/2012 All Night Media MOKO.mobi NA NA NA7/17/2012 Socialcam Inc. Autodesk, Inc. 60.0 NA NA6/7/2012 Bytemobile, Inc. Citrix Systems International GmbH 435.0 NA NA6/6/2012 ESPN STAR Sports STAR Group 670.0 NA NA8/1/2012 PixSense Inc. FunSpot Corp. NA NA NA5/1/2012 Ortiva Wireless, Inc. Allot Communications Ltd. NA NA NA4/9/2012 Instagram, Inc. Facebook, Inc. 1,000.0 NA NA12/9/2011 Mobiclip Nintendo Co. NA NA NA

10/17/2011 Livecam Mobile AppTech Corp. NA NA NA10/10/2011 Qumu, Inc. Rimage Corporation 52.8 3.9x NM4/13/2011 Commobility Inc. Intertainment Media Inc. 4.5 NA NA6/15/2011 YuMe Europe Limited YuMe, Inc. NA NA NA2/4/2011 Transpera, Inc. Tremor Video, Inc. NA NA NA2/4/2011 Inlet Technologies LLC Cisco Systems, Inc. 95.0 NA NA1/31/2011 decentral tv Corp. KIT digital, Inc. 6.7 1.8x NA1/18/2011 Yospace Technologies Ltd., EyeVibe MOKO.mobi Limited NA NA NA1/6/2011 Qik, Inc. Skype Technologies, S.A. 150.0 NA NA

Mean $232.1 2.9x NAMedian $60.0 2.9x NA


Select Mobile Video Precedent Financings



4/23/2013 Apalya Technologies Pvt. Ltd.

Operates as a content aggregation, provisioning and distribution platform in the mobile video delivery space in India

Cisco Systems, Inc.; QUALCOMM Ventures; IDG Ventures India; Kalaari Capital

C $10.0

3/27/2013 Vantrix Inc Provides mobile video mediation and delivery solutions for streaming, browsing and messaging worldwide

NXT Capital Venture Finance NA 4.5

1/17/2013 Keek Inc. Operates a social networking platform enabling users to create and watch videos using Webcam, iPhone, Android or BlackBerry devices, as well as tablets and laptops

Pinetree Capital Ltd.; AGF Investments Inc; Plazacorp Ventures; Cranson Capital Solutions Inc

C 18.0

12/31/2012 Streamweaver, Inc. Provides a multi-angle mobile video app that connects a client with client’s friends

Tennessee Community Venture Fund LLC; Mountain Group Capital LLC; The INCITE Co-Investment Fund

A 1.8

12/14/2012 Spot411 Technologies, Inc.

Operates as a social technology company that delivers and licenses interactive social television programs for the second screen

NA NA 2.0

12/6/2012 Vantrix Inc Provides mobile video mediation and delivery solutions for streaming, browsing and messaging worldwide

Summerhill Venture Partners; Innovacom Gestion; JK&B Capital; BDC Venture Capital; Tudor Growth Equity; Entrepia Ventures

D 13.5

10/11/2012 Skyfire Labs, Inc. Develops and creates a compression-as-a-service based mobile video optimization browser / platform for wireless carriers and device makers

Matrix Partners; Trinity Ventures; Lightspeed Venture Partners; Panorama Capital; Verizon Ventures

D 10.0

12/31/2012 Streamweaver, Inc. Provides a multi-angle mobile video app that connects a Tennessee Community Venture Fund A 1.8 9/18/2012 Keek Inc. Operates a social networking platform enabling users to Whitecap Venture Partners; Pinetree B 7.0 8/22/2012 XinLab, Inc. Provides mobile video services that work on video-

enabled mobile phones with an Internet access. Its services index various videos from the Web; and enables users to watch videos on PCs

New Enterprise Associates; SingTel Ventures (Pte) Ltd.; JAFCO Ventures

D 15.0


Select Mobile Video Precedent Financings



4/26/2012 Viddy Offers a social mobile application that helps in capturing, producing and sharing bite-size videos with the world

New Enterprise Associates, Khosla Ventures, Goldman Sachs Group, Merchant Banking Division

B $30.1

2/3/2012 Viddy Offers a social mobile application that helps in capturing, producing and sharing bite-size videos with the world

Bessemer Venture Partners, QUALCOMM Ventures, Greycroft Partners LLC

A 6.4

1/31/2012 Socialcam Inc. Develops a video sharing application for capturing, editing and sharing videos from smartphones

Y Combinator NA 1.5

1/25/2012 Skyfire Labs, Inc. Develops and creates a compression-as-a-service based mobile video optimization browser / platform for wireless carriers and device makers

Matrix Partners; Trinity Ventures; Lightspeed Venture Partners; Verizon Ventures

C 8.0

11/29/2011 Reality Mobile LLC Develops enterprise-class real-time mobile video visual data collaboration solutions

NA NA 5.8

10/5/2011 Keek Inc. Operates a social networking platform enabling users to create and watch videos using Webcam, iPhone, Android or BlackBerry devices, as well as tablets and laptops

AlphaNorth Asset Management; Plazacorp Ventures

NA 5.5

8/22/2011 Mogreet, Inc. Operates Mogreet Messaging System (MoMS), a mobile video messaging platform that delivers and monetizes rich media to mobile devices

Draper Fisher Jurvetson; Ascend Venture Group, LLC; DFJ Frontier; Black Diamond Ventures, LLC; Bryant Park Ventures, LLC

NA 4.1

7/21/2011 Vringo, Inc. Provides software products for mobile video entertainment Benchmark Capital; Alpha Capital AG; NA 2.5 4/27/2011 Viddy Offers a social mobile application that helps in capturing,

producing and sharing bite-size videos with the worldBessemer Venture Partners, QUALCOMM Ventures

NA $1.6

3/31/2011 XinLab, Inc. Provides mobile video services that work on video-enabled mobile phones with an Internet access

New Enterprise Associates; JAFCO Ventures

C 8.0

Mean $7.9Median $6.1


Contact Information

Technology

Siemer & Associates Digital Video Report 2013