cscmediagroup.com Historic growth of CSC Media 2006 2007 2008 - - PowerPoint PPT Presentation

cscmediagroup.com

Historic growth of CSC Media

• Ten digital channels

acquired

• Four new

channels launched

• Eight channels

launched

• n Freesat

+1

• Two new

channels launched

• Channel

refreshes started

• Websites rolled out
• Three channels

refreshed

• Five further

channels launched

• n Freesat
• One new

channel launched

• One channel

refreshed

• CSC moved to

digital file delivery

• BuzMuzik

launches

• Flava and Bliss

refreshed

• PopPower.com

launched

• True Drama, Kix Power

& True Christmas launch

• Channel Starz acquired
• PopGirl and Chartshow

Dance refreshed

• True Entertainment

launches on Freeview

• Playout move to WRN
• Ad-sales move to Sky

Media

• Two channels

refreshed

• New advertising

agreements with Sky Media & Dolphin (Sony)

+1

2006 2009 2007 2008 2010 2011 2012 2013

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0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Number of UK Digital TV Households Dsat Dcab DTT (Freeview)

Total number of UK multichannel households

UK Television Market – Overview Digital satellite and free digital satellite continue to grow

Key Points + In October 2012 all UK TV households became digital

• multichannel. Platforms

comprise Dsat, Dcab and DTT (Freeview) + CSC’s core distribution platform for its free-to-air channels in the UK is Dsat (Sky and Freesat) with some channels also available on Dcab (Virgin Media) + Dsat (pay and free) penetration in UK homes has grown by 52% since 2005 + Free satellite (Free Sat from Sky and Freesat) is expected to grow at a 14% CAGR from 2010 to 2016 + The Freesat platform is the fastest growing TV platform in the UK in terms of quarterly net additions + By 2014 Freesat will account for

• ver 3m homes in the UK. This

is a 43% improvement on Q1 2012 which stands at 1.4m + CSC has recently joined the Freeview platform which has 11m unique TV homes. 20m UK homes have a Freeview/Dsat combination.

0.0 1.0 2.0 3.0 4.0 2010A 2011A 2012F 2013F 2014F 2015F 2016F

Number of UK Free Satellite Households

Free Satellite Freesat Free Sat from Sky

3

UK Advertising Market – Overview TV continues to be the most important advertising medium

Key Points + UK TV advertising revenue is expected to grow from 2012 to 2016 as TV remains the single most important advertising medium for brands + Digital devices are increasingly complementing the television experience as many people use a second display device (i.e. smartphone, laptop or tablet) while watching TV + In the UK, 80% of tablet owners and 78% of smartphone owners said they used their device while watching TV at least once a day + CSC’s digital strategy harnesses these digital devices to drive television impacts and market share growth

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

UK Media Advertising Expenditure by Type

2009 2010 2011 2012

2012 UK Media Advertising Expenditure by Type

TV Internet Display Internet Search Direct Mail National Newspapers Regional Newspapers Outdoor Consumer Magazines Radio Directories B2B Magazines Cinema 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8

Total UK TV Advertising Revenue

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CSC’s Strategic Focus

Grow Market Share + Increase market share in all genres providing opportunities for advertisers and sponsors Grow Impacts + Grow commercial impacts to leverage ad sales negotiations and ensure continued price improvement Increase Distribution + Increase UK distribution on Freeview and other, complementary digital platforms + Build international distribution infrastructure and maximise opportunities

• verseas in both Pay TV and Free To Air (FTA)

High Quality Content + Invest in quality content and increase in-house production underpinning viewing and impact growth More Channels + Harness CSC’s efficient operations to launch new channels and leverage existing content libraries Efficient Cost Base + Maintain CSC’s low-cost model, increasing impressive margins and cash conversion Technology Differentiation + Drive CSC’s integrated broadcast platform to increase interactivity and maintain technological competitive edge. + Live linking of CSC’s channels to Social Media and its proprietary websites to maximise differentiation and increase ‘stickiness’.

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CSC’s Current Channel Distribution

Kids Music Movies / Entertainment

International Digital Media Channels

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International Distribution and Pipeline for Expansion Kick-starting CSC’s international roll-out plan Channel feed Territories Customers Feed launch date

Africa Africa Africa

South Africa & Sub-Saharan Africa Jan 2012 Oct 2011 TBC: Discussions

• n-going

TBC: Discussions

• n-going

South Africa & Sub-Saharan Africa Sub-Saharan Africa Republic of Ireland Republic of Ireland South Africa & Sub-Saharan Africa

7

June 2013

Belgium

Belgium, Netherlands & Luxembourg TBC: Discussions

• n-going

TBC: Discussions

• n-going

CSC Total Impacts and Revenue – Our Key KPIs Excellent balance and growth through genre diversification and channel launches

Source: BARB/TechEdge; Kids: 4-15s, Music: 16-34s, Movies: 16+s. All Dsat (Tiny Pop also in Dcab) (4-15 Kids, All Adult Movies commercial Advertising Impacts, 16 -34 Music)

0.8 0.9 1.5 3.7 2.1 4.8 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2006A 2013A (bn)

Commercial Impacts

Music Kids Movies/Entertainment Total: 4.4bn Total: 9.4 bn 55% 20% 25%

2006 Advertising Revenue by Genre - £11.9m

Music Kids Movies/ Entertainment

21% 47% 32%

2013 Advertising Revenue by Genre - £27.4m

Music Kids Movies/ Entertainment

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Complementary Digital Media – Overview Harnessing technology and digital media to drive TV impacts TV Impacts

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Music: 5 FTEs Kids: 4 FTEs Movies: 3 FTEs Online: 5 FTEs Scheduling: 5 FTEs Production: 25 FTEs Management, Finance & Administration: 6 FTEs Commercial: 2 FTEs Research: 2 FTEs International : 1 FTEs

People and Culture Giving exceptional young people responsibility early in their careers

+ Young, positive and entrepreneurial culture + Average age 27, average salary £28k pa + 25% of employees have worked for CSC for 5 years

Most CSC young managers have worked their way up within CSC

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CSC Portfolio

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CSC Kids – Demographic Profile

Boys 7-12 Kids 4-9

0% 50% 100% Tiny Pop Pop Pop Girl Kix

Gender Profile

Girls Boys 0% 50% 100% Tiny Pop Pop Pop Girl Kix

Age Profile

4-6 yr 7-9 yr 10-12 yr 13-15 yr

Kids 3 – 7

+1

Girls 7-12

+1

Boys 7-12

POP-UP CHANNEL

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Well known branded programmes for children and parents to enjoy watching together, including brand new Care Bears, Franklin, Harry and his Bucket Full of Dinosaurs and much more!

For 3-7 year olds

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On POP everything is fast paced and fun. Slapstick comedy, exploration, invention, art, make and do all add to the line up for 2013 . Plus favourites Oggy and the Cockroaches and Sally Bollywood

For 4-9 year olds

15

Returning series of the classics Sabrina and Zoey 101, back due to popular demand. Plus plenty of new live action comedy series and movies

For 7-12 girls

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Focussing on comedy and action, Kix has new series of Power Rangers, re-mastered classic anime series Dragon Ball Z Kai and new comedies including Total Drama Island forming the backbone of the schedule

For 7-12 Boys

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For Power Rangers Fans

2013 POP-UP CHANNEL Operation Overdrive Wild Force (40 eps) Mystic Force (32 eps) Dino Thunder (38 eps) Jungle Fury (32 eps) SPD (38 eps)

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CSC Kids websites

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500,000 1,000,000 1,500,000 2,000,000 2,500,000

Tiny Pop Popfun Popgirl Kix

Average Monthly Page Impressions Q4 2014

20,000 40,000 60,000 80,000 100,000

Tiny Pop Popfun Popgirl Kix

Average Monthly Unique Users Q4 2014

Aqua Moon – CSC Skill-based, Social and Subscription Gaming

+ Aqua Moon JV (60% CSC ownership) + Operates a dedicated online skill-based gaming

site for kids: www.poppower.com

+ Team of experienced illustrators, flash

developers and web developers

+ Producing freemium mobile and tablet based

app games marketed via the Pop Channels and virally

+ Integrated into the Pop channels with high

scores on TV to hold viewers across breaks and build social networking

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CSC Music

2 1

Over 20 years of Pop music heritage in the UK! Chart Show give viewers a channel packed full of the latest releases packaged with exclusive content + The channel’s dominance in the UK means labels need to secure airplay on Chart Show to guarantee chart listing. CSC leverages this to secure first releases, exclusive content and interview time + CSC interviews 12-15 artists per month – A-list acts to UK newcomers. This content premieres on Chart Show and is then shared across CSC Music + Chart Show takes the lead on social media initiatives

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Non-stop pop hits + The Vault draws upon CSC’s video vault of 30,000 music videos to deliver non-stop pop hits + The channel has found success in focussing on hits from the last five years along with themed Top 20-50 countdowns, artist vs. artist specials + The Vault has very clear positioning – with a mix of uplifting pop hits with carefully selected old favourites there to surprise

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The destination for urban music fans + Flava is the only music channel that is entirely dedicated to Hip Hop, R&B and Garage + The channel features videos from A-list stars such as Jay-Z , Rihanna and Beyoncé with are scheduled in charts or artist specials + Flava also has exclusive content to support its credible brand values with interviews with A list artists and programming packaged into Top review shows

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Contemporary temporary easy listening

+ Featured artists include; Adele, Take That, Westlife, Bruno Mars, Whitney Houston, Micheal Buble, Mariah Carey, Elton John and Sting + Regular artist interviews and music quizzes including: Movie Soundtrack Facts, Number 1’s Trivia and Where Are They Now? + Bliss positions itself as an easy listening channel for a slightly younger and more contemporary audience

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The definitive channel for rock fans!

+ Scuzz is 100% dedicated to the world of hard rock and metal and leaves no room for confusion + Bands like Foo Fighters, Bring Me The Horizon, Paramore, Metallica and You Me At Six deliver a carefully selected mix of music to cater for the broad church that is rock + Scuzz is a highly credible brand – maintained via its playlisting, its media partnerships with leading rock events and its exclusive and own produced content

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The biggest mixes from mainstream Dance

+ Chart Show Dance is targeted at the mainstream music market with dance mixes of mainstream artists such as David Guetta, Black Eyed Peas, Calvin Harris and Lady Gaga + Additionally CSC commissions exclusive dance mix one hour programmes that retain viewers and provide standout for the channel + Chart Show Dance also packaging up content into seasonal stunts using own produced idents and interviews

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FB users can send in: + Messages + Photos + Track requests BuzMuzik’s team of moderators check and publish all content and also drive interaction with topics and competitions Viewers can interact using the Buz app

World’s first socially networked music channel

+ BuzMuzik picks the best and latest videos and then lets viewers pick which videos get played and lets them message each other live on-screen or see each other via photos + Viewers can engage via mobile or PC via Facebook or SMS or the Bz app. + There is a small charge per interaction to

• ffset moderation costs but with the video

window “squeezed” throughout advertising revenue will dominate

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The home of 100% true stories

+ True Movies 1 offers a wide range of emotional and moving true stories, based on real people and actual events, 24 hours a day, 365 days a year + Films cover a variety of genres from missing children and family relationships to murder, miscarriages of justice and human rights + Our viewers are predominantly females aged 35+ + 13 Premieres a month keeps the channel fresh and engaging

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True-to-life stories and author-based drama mini-series

• True Movies 2 takes the emotional core of True Movies 1 and

combines it with strong narratives and mini-series

• The channel creates a unique and attractive mix, with series

based on bestselling novels by authors such as Jackie Collins and Danielle Steel

• Our programmes and mini-series feature well known stars such

as Helena Bonham Carter, Halle Berry, Patrick Stewart and Courtney Cox

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The best of British drama, timeless American classics and gripping documentaries

• TE has a winning combination of gritty dramas, mini-series,

powerful true story movies, bestsellers and revealing Royal Documentaries

• Classic American series such as The Waltons and Little House on

the Prairie

• The best of British drama including The Vice, Cold Feet, The

Knock, Life Begins and At Home with the Braithwaites

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True Drama is the home of thought provoking Drama

• True Drama features a mix of powerful and emotional dramatic

programming

• From hard hitting British Drama and gripping movies to moving

mini-series & significant historical events

• True Drama shows award winning content from award winning

actors

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CSC Operations

CSC Operations – Content Acquisition Effective content acquisition strategy keeps costs down and drives impact growth Content Create Distribute Sale & Consume

+ Maintain Competitive Pricing

+ Average price per movie <$5,000 + Average price per kids episode <$1,000

+ Continued Content Investment + Licensors

+ Movies/entertainment – 20 distributors + Kids – 40 distributors

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Content Create Distribute Sale & Consume

+ Full service – creative conception to

programme production

+ 10 Final Cut Server edit suites + Fully equipped green screen studio + Dedicated 2D & 3D animation team + Fully digital file delivery + Integrated playout solution

CSC Production - Fully Equipped, In-House Production Facility CSC’s content is increasingly produced in-house

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Technical distribution

Schedules Schedules Dual SDI lines Eutelsat 28A Planning/Scheduling Content Transmission Control Grass Valley Backup Servers Grass Valley Main Servers Warp Media Storage Compression and MUX Uplink Virgin Media Head end Content FTP Server Astra 4A Eutelsat Paris Stellar DBS Cologne Intelsat 20 EutelSat 10A

Content Create Distribute Sale & Consume

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Content Create Distribute Sale & Consume

* Sky Media adjusts price for inflation/deflation

Advertising Sales

+ CSC sells its advertising impacts through Sky Media

Consume

+ CSC has carriage agreements with all UK pay

digital platforms and both Freesat and Freeview in FTA

+ CSC

licenses its channels to international broadcasters at a fixed annual rate and also on a CPS basis

UK International

Sold by Consumed across Consumed across Sold by

CSC From Production to Delivery – Sales & Consume Best of breed sales agents maximise value across UK and international platforms

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CSC Financials

Income Statement Strong growth and industry leading EBITDA margins

5.9 8.5 9.8 11.1 14.1 15.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 2011 2012 2013 2014 2015 2016

Revenue and EBITDA

2013 proforma for effect of new Sky ad sales contract

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2013 2014 2015 2016 Revenue (£m) Dec YE Ad Sales 27.4 33.0 36.7 37.4 International 1.0 2.5 3.3 4.3 Other Revenue 0.9 1.1 1.1 1.2 Total Revenue 29.3 36.6 41.2 42.9 Cost of Sales Fixed Costs (9.5) (13.0) (13.2) (13.3) Variable Costs (8.2) (10.7) (12.2) (12.7) Total Cost of Sales (17.7) (23.7) (25.4) (26.1) Gross Profit 11.6 12.9 15.9 16.8 Overhead (1.8) (1.8) (1.8) (1.8) EBITDA 9.8 11.1 14.1 15.0 Margin, % 33% 30% 34% 35%

Income Statement Strong growth and industry leading EBITDA margins

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Beyond The Business Plan

Future Development Plans Continued diversification and growth initiatives beyond the business plan

International Office

+ Currently exploring feasibility/opportunity of opening a local office in

South Africa for own and 3rd party channel/format distribution and independent ad-sales. POP Movies Channel

+ CSC currently market-testing movies across CSC Kids channels

Marketing

+ CSC has limited marketing experience having achieved current levels of

success with zero marketing spend. CSC considering its first national advertising campaign around its Freeview channel Social Networking and Gaming

+ CSC has a robust strategy and roll-out pipeline. However, it is early days

here and it only takes one ‘break out’ success to change the business model Acquisitions

+ CSC considering FTA channel purchases in the UK alongside looking for

complementary content libraries to acquire

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Executive Summary Exceptional operational and financial performance with a strong foundation for further growth

• 1. Strong Business Model

+ Leading FTA broadcaster with 16 profitable brands

• 2. Attractive Market

+ TV continues to be the single most important medium for advertisers (2013: £3.5bn)

• 3. Leading Distribution

Platforms + Channels available across all major UK Pay TV platforms reaching 15m+ UK homes (True Entertainment 25m+ homes). Exciting international opportunities in both Pay TV and FTA

• 4. Material Impact

Growth + Commercial impacts across the group grew 115% between 2006 – 2013

• 5. Complementary Digital

Properties + Building online and social media into the DNA of the business

• 6. Efficient Cost Structure

+ Leveraging economies of scale and scope to provide a cost-efficient infrastructure

• 7. Outstanding

Profitability + Low fixed cost base creates high operational efficiency with industry leading EBITDA margins

• 8. Clear Expansion /

Growth Opportunities + Grow UK impacts, increase UK distribution, expand international licensing and exploit other revenue streams

• 9. Experienced Dynamic

Team + Entrepreneurial, young, loyal, dynamic and cost efficient culture - 2013 EBITDA per employee £171k

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cscmediagroup.com

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