1. November 2014  Sony reduces $1.2B Q2 loss with high PS4 sales  13.5M PS4s sold globally with 83.2% YoY growth  Loss is lead by its mobile div., reporting a $1.6B Q2 loss  Nintendo Q2 earnings are beyond expectations  ¥215MM earnings in Q2 compared to ¥3.7B loss in Q2 of FY’2013  Facebook beat Q3 estimates with $3.2B in revenue  66% of advertising revenue through Mobile  FB first released WhatsApp revenue – reported $15MM in first half revenue and 600MM users  FB was down 9.77% the day after due to slower user growth and weak WhatsApp revenue  Twitter quarterly growth is down from 6.3% to 4.8%  Resulted in a 9.8% stock price decline afterwards 1 Media: News Update Quarterly Reports 1989  Taylor Swift’s 1989 is, as of November 1 st, is on track to have highest first week album sales since 2002  No other album has been able to surpass the 1MM first week sales mark in 2014  Taylor Swift has removed all of her albums from Spotify  Expected to stay off Spotify until 1989 sales weaken Industry UpdateMovies  Google’s video site now supports clips running at up to 60 frames per second after a 4-month wait  60 FPS functionality currently limited to visitors using Chrome  Videos capable of running at 60fps have an indicator under the quality option in YouTube  Major improvement in gaming clips as previously users experienced distortion when not running at the rate of most modern video games  Boosts the appeal of YouTube for gamers after Google lost its bid to acquire live game streaming site Twitch.tv  YouTube still retains the right to control what videos will appear at 60fps; it will only be enabled for ‘motion intense’ videos YouTube Supports 60 FPS Video  Aiming for $100 million revenue in 2015  Tumblr was bought by Yahoo last year for $1.1 billion  Advertisers in the US are expected to increase their video ad budget by 42% this year  Tumblr targeting this ad money to reach targeted revenue  With Tumblr’s new video player released last week, videos will play automatically on a continuous loop and on mute until the user selected to unmute it  Viewers have the option of making the videos “pop out” to the side of the user’s dashboard so that is can be watched as the user continues to scroll through their newsfeed  Advertisers pay per view of their ads if it is watched for longer than 2 seconds (as per industry standards) Tumblr Displaying Auto-Play Video Ads

2. November 2014 2 The Effect of Netflix on Traditional Media Outlets Industry UpdateMovies The Numbers Behind Netflix The Declining Movie Industry  Currently Netflix is the world’s largest Internet television network with over 55 million active subscribers  The website has almost 78,000 different categories, from Comedy to Understated Detective TV Shows  Netflix users currently spend over 1 billion hours per month watching movies and television shows  61% of users use Netflic at least once a week  Q2 results:  Net revenue of $1.3 billion  Net profit of $71 million  Current rivals to look out for: Hulu, Amazon Instant Video (part of Amazon Prime) and iTunes Impact on the Movie Industry and Theatres  Average movie ticket prices in 2014: up to $8.18 from $7.90 in 2013  Number of movies released by the Big 6 has decreased by almost 50% since 2006  As Netflix subscribers increase, movie theatre revenue decreases  Regal Entertainment Group and Cinemark Holdings Inc:  Expected box office flexible theatrical windows such as Netflix and other earnings will continue to drop 1-2%/ year  Even with strong releases such as The Amazing Spider-Man 2, X-Men, and How to Train Your Dragon 2, Q2 of 2014 is expected to be down 5-6%  Warns that declines could continue if video consumption continues to shift towards movie-streaming services

3. November 2014  Between 2004-2013 animated films had the highest gross margin of all film genres, at 52%  Target markets for animation films and television have moved away from just the nine-and-under category  Now also targeting teens, adults, and the whole family  i.e.: The Simpsons, Shrek  The gap between animation and special effects is closing  Real life movies are mixed with CPI seamlessly as technology advances  More movies integrate animation with real life  i.e.: Diary of a Wimpy Kid, Scott Pilgram vs the World, Alvin and the Chipmunks, Enchanted, Garfield 3 The Growth of the Global Animation Industry Global Animation Industry worth $222 Billion Animation Increasing Faster Than Other Genres  In 2013, the Global Animation Industry was worth $222 Billion  An 81.7% increase from 2010 levels of $122.2 B  The animation industry is growing at a rate of 7% YoY  Technological advancement have contributed to animation being one of the fastest growing industries  Greater access to CPI technologies across the world has allowed companies to outsource the production of their animation and further expand  The animated gaming market growth is also large in part due to an increase in accessibility to broadband internet Changing Target Markets for Animation  North America, with industry leaders Disney, Pixar, and DreamWorks, holds 42% of global animation and gaming market share  However, Asia-Pacific and Japan are the fastest growing market  Disney’s Frozen is currently the highest-grossing animated feature film of all time  And the 5 th highest grossing film of all time  Over the past 10 years, the compounded annual growth rate of box office sales for all movie genres is 1.7%  The increase in box office sales of animation films is greater than this  Animation films CAGR has shown to be about 3.2% over the past decade Industry UpdateMovies