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Click to edit Master title style CSC Media Group
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Click to edit Master title style CSC Media Group comprise a bouquet of thematic channels in the UK CSC Media Group is controlled by the venture capital group VSS (60%) with the remainder held by management and the original founders VSS is conducting a competitive sale process for 100% of the business SPT is one of the selected parties to move forward in the due diligence process SPE believes that we are part of a very small number of bidders NBC Universal, Turner, Cello/Liberty and Scripps are out of the process CSC Media Group 2
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Click to edit Master title style TRUE CHANNELS Complimentary audience demographic and brand Delivers shelf space to increase efficiencies and sweat program assets across portfolio Sony become #2 movie provider on Sky (after Sky premium movies) Low cost content model improves opportunity to launch on Freeview Leverage SPT infrastructure to develop low cost global movie channel proposition MUSIC CHANNELS Limited strategic fit with Sony portfolio, concern over long term business sustainability Box TV (Channel 4/Bauer JV) is one of the major music channel players in UK CSC music channels would position Box TV as #1 linear music channel provider KIDS CHANNELS Potential complimentary genre for SPT but limited in-house expertise Kids Channels forecast to achieve 25% market share in 2012 Digital properties and merchandising forecast to drive growth Switchover operates FTA kids business in Italy using similar low cost model as CSC Evaluate option for SPT to take a minority stake (with path to control) Consortium bid approach 3 Awaiting feedback from VSS to confirm if they are happy to proceed with either stand alone or consortium bid approach Box TV SwitchOver/ Rubis CSC SONY SPT is proposing to acquire True channels either alone or as part of consortium bid
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Click to edit Master title style Channel 6
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Click to edit Master title style Analogue switchoff has released a one-off supply of DTT capacity in the UK In Sep 2012 Ofcom plan to utilise this capacity by licensing a number of ‘local’ TV channel franchises across the UK Franchises will be granted PSB status in exchange for producing socially valuable local programming (approx 2 hrs/day) PSB status guarantees the channels prominent EPG positions (Slot 108 on Freeview, Slot 117 on Sky) ONE TIME OPPORTUNITY London is the largest license reaching over 12MM people Submissions are due to Ofcom by August 13 th UK local TV 5
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Click to edit Master title style Proposed Joint Venture between Archant Ltd (London local news/magazine/ website publisher), management and a strategic investor Archant is subscribing for 10%-25% of the equity mainly through non-cash consideration Management includes Richard Horwood (formerly Trinity Mirror) and Clive Jones (formerly head of ITV Networks, GMTV and ITV news) Strategic investor would have majority stake and control – management stake to be discussed Unique opportunity to secure premium EPG position on key platforms Signed NDA and started initial discussions with management Anticipated total DWM of approx $25MM-$30MM Option to fund SPT share with mix of cash and content Evaluate alongside CSC Media Group opportunity Channel 6 6
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Click to edit Master title style Animax UK
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Click to edit Master title style Premium VOD service targeting UK Anime audience (0.5MM Facebook fans) New business model for SPT – deliver key learnings for development of digital strategy Test concept in single market to evaluate further territory and brand launches Linear Animax branded “Anime season” on Sony’s UK channels Planned Launch: October 2012 Digital on demand streaming service SVOD £5.99 / month Planned Launch: October 2012 Key Consumer Offers Unlimited access to content Subscription service is ad free for consumers Simulcast latest shows from Japan Movies Added value content from Animax Japan Animax UK
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Click to edit Master title style Partner responsibilities SonyViz Media Program acquisition and delivery of material Subbing/dubbing (where required) Transcoding and Metadata Service development and operations Billing/Payments (via Invideous) Ad sales (via Dolphin/Videology) Marketing
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Click to edit Master title style Finalise long form agreements Invideous Viz Media Playstation Build service Timelines Nov/Dec 2013 Jul/Aug 2012 Sep 2012 Oct 2012 Launch iOS and Android apps Xmas marketing push (Facebook, DVD sleeves and Anime magazines) VOD launch (website and PS3) Linear launch Launch marketing activity (London Comicon, Anime Film Festival, Playstation) Beta launch (website) Finalise launch marketing plan Q4 FY13 Launch on TV Player (new OTT platform)
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Click to edit Master title style FINANCIALS
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Click to edit Master title style Norway
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Click to edit Master title style Norway Market Overview GDP per capita 2011 (USD ‘000s) Unemployment rate 2011 UK388.0 % Germany446.0 % France449.7 % Norway973.3 % Source: IMF Outlook April 2012 Stable economy driven by rich natural resources and conservative economic policies TV Population of 4MM adults (12+) One of the highest GDP per Capita in Europe
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Click to edit Master title style Ad market Norway Ad Market 2011 (USD$MM) Highly developed TV market PSB broadcaster NRK is not allowed to carry commercial advertising (similar to BBC) TV advertising forecast to grow approx 5% YOY Regulation permits advertising minutage up to 15% of total schedule (20% in any 1 hour) Average viewing has remained constant at approx 180 mins/day Source: Nielsen May 2012
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Click to edit Master title style Commercial TV Market share Source: TNS Gallup June 2012
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Click to edit Master title style TV Maritim TV Maritim will be a new FTA general entertainment channel Potential distribution to over 90% of TV Households Channel brand designed to resonate with Norwegian population 76% live in coastal communities 20% have a maritime related income 36% of families own a boat Broad programming mix including dramas, documentaries, factual entertainment and features Investment in local production Experienced management team Launched and successfully built TV Norge in to leading FTA channel Strong relationship with Norwegian Operators and Advertisers Opportunity to take a majority stake in the business
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Click to edit Master title style Distribution Negotiations with all operators underway Canal Digital carriage is critical to channel success (47% of total HH’s) Initial feedback is positive Includes CD providing marketing support across TV, print and Radio Total cost for securing 77% distribution in Norway per year estimated at $1.4MM (forecast to reduce over time as channel becomes established) Plan to finalise negotiations with Operators in August Opportunity to secure top 20 position on EPGs and distribution in basic packages Subscription revenues for all established TV channels are still common However new channels must pay for distribution until they become “must have” (approx 3%-5% viewing share) % Distribution
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Click to edit Master title style Programming and audience
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Click to edit Master title style Draft management forecasts EBIT positive FY16 Total $15MM DWM FY13 $6.5MM Headcount 28
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Click to edit Master title style Key CHANNEL TARGETS and opportunities Key Targets/Risks Canal Digital carriage (secure carriage with main operators in advance) Commercial audience share of 4%-5% by FY16 (straight GRP market – ratings directly convert to revenues) Opportunities Develop Norwegian thematic channel bouquet leveraging TV Maritim infrastructure Launch TV Maritim concept in to Sweden and Denmark Similar language, culture and affinity with the sea Pan-regional operators facilitate distribution discussions
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Click to edit Master title style NEXT steps & proposed timeline August 2012Finalise business plan September 2012 Present to Sony management for review Start long form documentation October 2012Sony Management approval and deal close October – December 2012 Pre-launch activity January 2013Channel launch
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Click to edit Master title style TURKEY
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Click to edit Master title style Turkey economic outlook Source: Zenith Optimedia forecasts May 20122012Source: IMF Outlook April 2012
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Click to edit Master title style Overview of ad market dynamics TV Trading environment TV ratings in Turkey were suspended in Dec 2011 after fraud investigations TNS were appointed to replace AGB and were due to start in May 2012 However due to issues with the independent auditor (TIAK) the new panel has not yet been implemented This has resulted in advertisers holding back TV spend until 2H 2012 TV ad market will continue to remain uncertain until ratings panel resolved Solution for Sony Dogus continue to represent ad sales for e2 post acquisition Secured ad revenue MG for 2012 and 2013 to mitigate short term risk
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Click to edit Master title style E2 operations Strategy in short term to leverage Dogus infrastructure post acquisition Channel operations post close 4 SPT heads based in Dogus offices (Territory Director, finance and marketing) Dogus will continue to provide services to e2 under SLAs Program acquisition co-operation agreement Ad sales representation (with MG) Channel operations (versioning, scheduling, playout, on-air, traffic, office space) Channel promotion and marketing commitment The services are provided in-kind for the first 6 months Thereafter they are provided for a fixed monthly fee for a period up to 31 Mar 2014 SPT has an option to terminate some or all of the services at any time
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Click to edit Master title style E2 programming Existing program rights transferred from Dogus Future co-op agreement with Dogus Sony and Dogus approach distributors together to acquire product Benefit from Dogus scale and leverage in the market Discussions to date include HBO, Endemol, LionsGate and SPT
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Click to edit Master title style E2 key deal terms Agreed headline deal terms with Dogus: $7.5M purchase price paid $5M at close and $2.5M in FY14 6 months in-kind operational services support (technical operations and facilities) (value ~$380K) In-kind marketing support through 2013 (value ~$280K) MG of 100% of gross revenue from close to Dec 2012 MG of 95% ($5.5MM) of forecast gross revenue for CY2013 (13% YOY growth)
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Click to edit Master title style NEXT steps & proposed timeline JulyIncorporated EUK local subsidiary Commenced Due Diligence on the Company by SPT 30 th JulyCompletion of due diligence 6 th AugustCompletion of draft Transaction documents 20 th AugustApproval of relevant SPT/Dogus Boards 21 st AugustExecution of SPA Notification to RTUK of proposed change in control of the Company Registration of relevant competition filings/notices SeptemberCompetition approval Execution of Key Agreements
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Click to edit Master title style Financials FY13
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Click to edit Master title style Financials FY13-FY16
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Click to edit Master title style V-NETWORKS AFRICA
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Click to edit Master title style V-Networks is a new African broadcaster set up by Phil Schmidt (ex SPT) V-Nets is in negotiations with Multichoice to launch a new thematic channel targeting the African pay TV audience V-Nets has approached SPT about investing in the channel (up to $5MM) Investment would be subject to finalising carriage agreement with Multichoice V-Networks Africa’s Novela Channel The entry-tier channel for women in Africa. Telenovelas, soaps, reality and dramas. In English and Portuguese.
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Click to edit Master title style V-Networks
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Click to edit Master title style Vida programming mix Launch with 700 hours of content (550 hours for Portugese feed) Annual refresh Acquired content 75% Original Productions 100%
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Click to edit Master title style Financial Summary 35
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Click to edit Master title style Strategic fit and Deal structure 36 Female skewing Vida would be a complimentary fit for SPT Africa Networks alongside family SET and male skewing Max Delivers scale and shelf space Cross-demographic commercial impacts supports ad sales Increases operational efficiencies Improves scale for Multichoice renegotiations Deal structure options under discussion Equity investment in new V-Nets Company with SPT NetOps SLA V-Nets assigns Multichoice contract to SPT Future role for Phil Schmidt Next steps: Confirm carriage terms with Multichoice and launch timing (Nov 2012) Finalise deal structure terms with V-Nets
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Click to edit Master title style MIDDLE EAST AND NORTH AFRICA
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Click to edit Master title style Middle East Opportunity Arab region has one of the youngest populations in EMEA (60% pop. < 25 years old) Arab Spring has inspired youth to actively engage in media with increased freedom Incumbent channels mainly focused on general entertainment and news Opportunity to create a youth channel that is relevant to their environment Multiplatform Audience interaction Free to air
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Click to edit Master title style GNAM – a Diverse media group WEISS Global New Age Media Broadcasting Mobile Movies & TV Films Production TIGER PRODUCTION Licensing Ad Sales/Marketing Publishing Online
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Click to edit Master title style Broadcast Overview SpaceToon – successful kids channels targeting 3-10yrs Airtime sales Brand driver for Franchises Space Power originally launched as extension to SpaceToon Targeting 12yrs-18yrs Manga, Sci Fi, Xtreme Sports, thriller/drama 2 nd run (1 st dub) Prison Break, Matrix Channel currently underperforming In-house dub/sub and playout facilities Kids Media (50:50 JV GNAM and management) Ex MBC sales team Reps GNAM channels, CNBC and Fatafeat (cooking) Ad sales, marketing and research
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Click to edit Master title style GNAM partnership opportunity Opportunity to partner with GNAM across the MENA region Proposed deal structure: Sony acquire 51% equity of Space Power (“SP”) Channel for $6MM- $8MM (subject to negotiation and DD) Develop FTA youth channel leveraging existing SP channel infrastructure and distribution across MENA Each partner funds pro-rata share of future cash requirements Branding options include Sony Spin Other opportunities to be discussed separately Additional channel launches
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Click to edit Master title style Process and timelines July-August 2012Develop detailed business plan with GNAM [Commence commercial due diligence in parallel] Early Sep 2012Present plan to management for review September 2012Due Diligence OctoberFinalise deal structure and terms Draft Transaction documents NovemberExecution of SPA Q4 FY13Channel Launch
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Click to edit Master title style Other potential opportunities Rotana Group NewsCorp currently own 19% of Rotana as well as 3 channel JVs Indications are that channel JV relationship is not working Rotana own largest Arabic music label and ~40% of all Arabic movies Rotana are interested in working with SPT on channels across the region Movie channel and Youth channel Structure could be equity JV or service agreements Schedule follow up meeting with Rotana to discuss further Qatar TV Government looking to develop Qatar as a media hub Qatar owns and operates Al Jazeerah news, sports and kids channels Looking for partner(s) to launch a pan-regional FTA GE channel Mix of acquired and original production (circa $30MM budget) SPT Production coordinating with Qatar to set up initial meet
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