1. FY10 MRP
VOD Pre-Meeting
– Confidential –

2. TRANSITION TO DIGITAL DISTRIBUTION
The impact of electronic distribution on our business will start to become evident this MRP cycle.
There is significant concern about consumers transitioning their behavior towards rental and away from purchase.
Increasing rental at the expense of purchase would drive down margins.
Lehman Brothers has downgraded most of the major media company stocks due to fear that consumers will rent at the expense of purchases of media.
Internally, Corporate Development has been highlighting this risk.

3. CONSOLIDATED MRP VIEW
SPT needs to develop, articulate and support it’s view of the changing marketplace.
MRP forecasts for EST, VOD, and physical disk sales will likely be scrutinized to determine whether there is cannibalization

4. VALUE PER-VIEW
Value per transaction is higher on a purchase basis and also tends to be higher for physical media sales
We need to determine if / how we can support sell-thru over rental in the digital space.

5. To develop a reasonable MRP, we need to consider:
MRP Development
To develop a reasonable MRP, we need to consider:
How do we value VOD, SVOD - do we maximize value by packaging or separating rights?
What is SPT’s view on the changes in the market? (e.g., growth assumptions for the different market segments)
Do we need to rethink our windows?
Based on rights that have already been licensed, we should determine the impact in the MRP time-frame vs. the 2012 and beyond