Latin America Strategy Proposal May 2013

Executive Summary SPT’s Latin American channels have struggled to define their brands in the marketplace leading to an unclear advertiser-facing consumer profile. We have a defined roadmap to achieve greater brand distinction, consumer value and channel awareness among advertisers –The Latin America channels need to more clearly define their brands to focus on targeted audiences in order to give advertisers a reason to increase their investments in our media/channel brands –As the channels take ownership of their distinct brands, the channels needs to utilize research to clearly identify their respective consumer profiles and differentiate their audiences from each other and from the viewership on other competitive networks in the market –The channels then needs to utilize that research, which clearly enumerates the relevant and desirable key properties of the channel consumers, to provide a strategic selling proposition to advertisers Spin faces distinct challenges due to their re-focused effort on tailoring their channel to capture the growing “C” class market –Though this burgeoning “C” market provides growth opportunities, SPT lacks the scale and expertise compared with local market players such as Globosat and Televisa –SPT may consider selling a stake in Spin to a larger local Latin America player and re-brand the channel as a “C” class Spanish language dubbed channel (genre/brand TBD based on partner) with local programming, flavor and appeal Additionally, it is clear that there needs to be organizational changes made in order to provide a greater focus on each of the distinct channel properties 2

Strategic Roadmap 3 Step 1: SPT needs SET, AXN and Spin to focus on developing distinct channel brands, with each having a clear set of consumers, through marketing, programming and scheduling strategies thereby strengthening the audience’s relationship with the channel brand while growing the user base for each channel ChannelChannel Focus –SET to focus on a core female audience, similar to Bravo, who are upscale viewers i.e., metropolitan, professional and trendy  More high-gloss original unscripted content building on the success of MNTM  More human interest i.e., inspirational stories about talented and motivated individuals vs. traditional acquired scripted programming  Utilize Crackle women’s channel as a complement to SET –AXN to focus on a more urban and professional male skewing audience who enjoy competition, action and procedural programs along with major Hollywood films  Cool content for influential male TV watchers i.e., “the place for procedurals”  Turn Crackle into AXNs complementary service (Crackle movie blocks on AXN) with sharing of content/windows/marketing across platforms; making a cool cross-platform place for male skewing entertainment –Spin to focus on a core audience who lives in B/C counties, yet have metropolitan aspirations, more likely to have children and be heavy TV viewers  Local programming via co-productions, low cost unscripted programs and lower cost acquisitions (dubbed)

Strategic Roadmap (Cont’d) 4 Step 2: As the channel brands take focus, the channel needs to utilize research to put a face on the consumer and differentiate that audience from each other and from other network’ viewership i.e., the audiences for each channel are uniquely different and targetable Step 3: The channel then needs clearly enumerate the key properties of the SET/AXN/Spin consumer that are desirable to advertisers while raising top-of-mind awareness of the channels as a valuable ad medium –Create unique advertiser campaigns highlighting the channel’s unique on-air content and its unique relationship with its audience, when combined, greatly benefit advertisers –Illustrative example: Brands that appeared on the channels were elevated in the minds of the channel’s viewers; viewers were so engaged with the programming, they had higher brand opinion and purchase intent for the integrated brands ChannelDifferentiators (NOTE: Illustrative only) –Females with more purchasing power than the average consumer –Brand and trend conscious. Likely trendsetters in areas of fashion, beauty and style –Tech-savvy males who have the latest gadgets and who are career focused –Uses technology to enhance and extend their personal social experience –Geared equally toward males and females living in B/C counties –Heavy TV viewers who are more likely to have children

ManagementLatin America and Brazil GM overseeing all channel properties Channel Management (by Channel vs. territory) SET GM (Latin America and Brazil) AXN GM (Latin America and Brazil) Spin GM (Latin America and Brazil) Ad Sales SET Ad Sales Team (w/Channel leads by Country and Agency and Brand for the entire region) AXN Ad Sales Team (w/Channel leads by Country and Agency and Brand for the entire region) Spin Ad Sales Team (w/Channel leads by Country and Agency and Brand for the entire region) Marketing (1) Create differentiation among brands, (2) build consumer relevance and (3) build brand awareness among advertiser community Programming (1) Select programming initiatives by country, (2) fewer output deals and (3) acquire specific consumer focused programs for each distinct brand Shared ServicesCreative, On-Air Programming, IT, etc. Digital Complement to Crackle’s Women’s Channel Complement to Crackle Complement to Crackle (both men and women’s channel) Strategic Roadmap (Cont’d) In order to focus on creating 3 distinct channel brands, SPT also needs to (1) re-organize management and ad sales, (2) re-examine programming and marketing and (3) leverage share services and digital cross-platform opportunities 5