Venture and Growth Development

Lisa Mauro, Justine Cheng, Adrian Duke & Kemp Edmonds

•Corporate Objectives

•Overall Strategy

•Future Implementation Tactics

•Financials

•Build on reputation as the best mini major

•Increase library by an average of 80 titles/yr

•Increase methods for distribution

•Produce low cost, high return films

TV 15% 14%

46%

8%12%4%1%

Motion Pictures 85%

Television Production

Motion Pictures

Theatrical

Video

Television

International

Mandate Pictures

Other

•Increase profitability of operations

•Reduce risk in volatile production industry

•Increase library and distribution methods

Tactic 1 – Reduce Production Cost

Tactic 2 –Increasing Online Distribution

Tactic 3 – Alternative Revenue Streams

•Reduce the number of in-house productions

•Increase number of acquisitions

2009 •Reduce to 6 theatrical in-house production •Increase to 10 film acquisitions

2010•Maintain 6 theatrical in-house production•Increase to 12 film acquisitions

2011•Maintain 6 theatrical in-house production•Increase to 14 film acquisitions

(in millions) Releases

200820

200916

201018

201120

3 year total

Produced $330 $180 $180 $180 $540

Acquired $162 $180 $216 $252 $648

TotalExpense

$492 $360 $396 $432 $1,188

(in millions)Releases

200820

200916

201018

201120

3 year total

Produced $355.92 $193.59 $193.59 $193.59 $580.77

Acquired $232.31 $258.12 $309.76 $361.37 $929.25

TotalRevenue

$587.22 $451.71 $503.35 $554.96 $1,510.02

•Currently only 2.5% of the 8000 film titles are available online

• Online movie downloading has increased from $114 to $245million

• Forecast to reach a high of $846 million by 2011

•39% increase in online rental subscriptions

•255% increase in digital video downloads

•Low cost and risk

•Sharing revenues with online distributers

2009 •Increase library titles from 200 to 400 •Increase market share from 4% to 5%

2010•Increase library titles from 400 to 600 •Increase market share by 1%

2011•Increase library titles from 600 to 800 •Increase market share to 7%

(in millions) 2008 2009 2010 2011 3 year total

Market Size 245 440 655 846 -

Market Share 4% 5% 6% 7% -

Revenue $8.8 $22 $39.3 $59.22 $120.52

Expenses $1.32 $3.30 $5.90 $8.88 $18.08

Gross Profit $7.48 $18.70 $33.41 $50.34 $102.44

2009 •Invest $250,000 in R&D in Smartphone distribution analysis

2010•Invest $250,000 in R&D in Smartphone distribution testing

2011

•Invest $500,000 in R&D for Smartphone distribution implementation

• Achieve 2% of market share of the mobile video content market

•Smartphone use is forecast to grow 56% per year for the next 3 years

•Movement into mobile video services; 198% growth from 06 - 07

•23% of US consumers watch video on their mobile phones

•10.3 million watched video on their phone in the 3rd quarter 08

•mainly for entertainment

(in millions) 2008 2009 2010 2011 3 year total

Revenue $0 $0 $0 $1.64 $1.64

Expenses $0 $.25 $.25 $.5 $1.00

Gross Profit

$0 ($.25) ($.25) $1.14 $.64

(in millions) Not Implemented Implemented

2009 $64.33 $110.41

2010 $141.06 $140.76

2011 $169.78 $173.94

Total $375.17 $425.11