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Published byVerity Reed Modified over 9 years ago
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Precisely Traking Multi-Screen Media David Chemerow COO/CFO June 2012
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2 Safe Harbor Statement
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To expand our leadership role as the leading provider of consumer entertainment behavior information databases across all digital media distribution platforms including Box Office, Home Video, Television, Mobile & Broadband using Rentrak’s proprietary intelligence and technology. …We are the census-based currencies 3 Our Mission
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4 The Largest Multi-Screen Coverage
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REQUIRES: Advertising to become more targeted Better measurement as traditional samples become less relevant Convergence of mass marketing and direct marketing disciplines Merging of customer segmentation and consumer databases Databases are the solution All play to Rentrak’s strengths… We are the Census-Based Currency 5 Media Fragmentation 5
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The only company measuring box office gross revenues worldwide...census-based In 26 territories with offices in 10 countries Focused now on growth opportunities: Add new global territories, including China Measure admissions in the US Develop consumer sentiment product for real- time consumer feedback How many attend...How much they spend.. What they think 6 6 Box Office
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Rentrak is the only company measuring VOD Measuring 102 million+ TVs daily...Census-Based Growth from expansion of client base and volume-based pricing New initiatives: Advertiser/Ad Agency Transparency Providing advanced advertising and measurement of On Demand content Everywhere International 7 7 On Demand Everywhere
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Rentrak is only company to integrate satellite, Telco TV and cable viewing information projected to the viewing population: 20 million TVs All 210 TV local markets & nationally Census-based currency receiving 90% of the return path TVs Focus on syndicated, recurring research 8 8 TV Essentials
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9 13,000 974 Advanced Demographics, Consumers Rating & Census-based Research Age/Sex Ratings & Sample-based Research
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Stability: All Households Note: Based on Rentrak sample of 7.7MM HH vs. Nielsen 20K HH 10 RATINGS BOUNCE 10
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Power of Census-Like Measurement Source: CNBC presentation at the Collaborative Alliance, October 5, 2011 11
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12 INDUSTRY SPECIFIC ADVERTISING TARGETS: Automotive Movie Political CPG Retail Financial Insurance Telecom Travel Restaurant 12 TV Currency Landscape
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Quantity of Data: Requires the ability to process and aggregate an enormous amount of data with sound business rules Need the Research Knowledge of how to Project to the TV Universe Technological Ability: Ability to capture, clean, process, deliver data and analyze multiple analytics with sound business rules Privacy: Experience with the highest level of respect for the privacy of the American consumer Data Standardization: Data from operators is complex and has thousands of standards today 13 Competitive Barriers
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All 2,000 stations in country benefit from improved stability and targeting capabilities Stations within 150 diary markets (#60–210) receive daily ratings, rather than current 4 days/yr by sample currency 14 Local Stations
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Local Market Clients 180 stations; 40 station groups; 85 markets 412 more stations owned by these groups have not yet signed with Rentrak 1 Station 6 Stations 2 Stations 4 Stations Ft. Myers Broadcasting 1 Station 13 Stations 4 Stations 2 Stations Holston Valley Broadcasting 7 Stations 2 Stations 3 Stations Jackson Broadcasting 1 Station Koplar Communications 1 Station 2 Stations 3 Stations 5 Stations 13 Stations 3 Stations 2 Stations 5 Stations Morris Network Neuhoff Family 1 Station 6 Stations 3 Stations Peak Media of PA 2 Stations 6 Stations Prime Cities Broadcasting 2 Stations 24 Stations 12 Stations 1 Station 29 Stations Sun Broadcasting 1 Station 2 Stations 3 Stations 1 Station WPSD, LLC 2 Stations
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16 Stations Signed and Stations Available in Current Groups
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180 local station clients (up from 0 at 12/31/09) Progress accelerating: Signed over 100 stations in last 9 months 17 Substantial Progress Signing Local Stations
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Current groups own 30% of the 2,000 available stations – own 412 stations not yet signed by us Signed 4.5 new groups per quarter over last year Sold more stations into 50% of all groups sold over 1 year ago 84% of stations we’ve sold are in top 50 groups 18 Progress Signing Local Station Groups
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19 National Media Agency Clients 8 of the Top 15 National Ad Agencies
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National Television Clients 20 45 networks; 27 network groups
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45 current network clients 25% in top 100 networks Of 500 TV networks, 400 are too small for Nielsen ratings (Highly Targeted Networks) 21 Networks
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22 Rentrak Potential Revenue From TV Stations/Networks 22 Potential Local Stations2,000 TV Networks500 Total2,500 Assume Sell 80% in 5 years2,000 Average, Annual Contract Value$ 150,000 Annual Revenue$ 300M MAKE MORE CONSERVATIVE ASSUMPTION: Reduce Revenue by 50%$ 150M Gross Margin$ 75M Less: Selling, Servicing Costs (10% of Revenue)$ 15M Pre-Tax$ 60M After Tax$ 40M Free Cash Flow/Share~ $ 4.00
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23 PPT was the start of Rentrak – providing revenue sharing services to video retailers and studio clients since 1988 Strong cash flow generator: Over $5M annually – funding growth of the AMI Division Moving towards more information products: Direct Revenue Share – 10+% of Home Entertainment revenues High margin, growth product Home Entertainment Division 23
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24 Financial Profile $28 million in cash & short term investments No debt Our Home Entertainment products typically supply $5 million annually in free cash flow Fully funded business plan with only maintenance capital expenditures required 24
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25 F’12
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26 12% with some year-to-year variability 20% Double for the next 3 years –8 to –12% with expected volatility for quality of titles; -15% in F’13 75% 27% 50% with variation for fixed cost deals Updated Financial Metrics
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27 Extrapolate advice over 5 years; show what Rentrak can look like NOT our forecast … but reasonable projection Extrapolation of Metrics
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28 $ 21 11 9 $ 41 50 $ 91 $ 24 13 18 55 42 $ 97 34% 7% $ 26 16 37 79 38 $ 117 43% 20% $ 30 19 74 122 34 $ 157 55% 34% $ 33 23 129 185 31 $ 216 51% 38% $ 37 28 225 290 28 $ 318 57% 47% 12% 20% 100% / 75% -15%/-10% 43% 22% Expect TV to double for next 3+ years; then perhaps 75% Expect Home Entertainment to decline 15% in F’13, then -10% * These sample extrapolations are not projections, are based on assumptions and are subject to various risks, uncertainties and changes in circumstances. Rentrak’s actual results may vary materially from these extrapolations, particularly in later periods. Modeled Revenues* 19% -6%
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CEO and COO/CFO Took major reduction in cash comp to a small base to receive option/RSU packages...Livek currently owns about 123,000 shares, he spent $750,000 of his own capital purchasing 48,000 shares...Chemerow currently owns about 55,000 shares, he spent $215,000 of his own capital purchasing 13,000 shares Next 4 senior officers took 10-50% salary reductions for equity or enhanced bonus plans 29 Compensation Philosophy: Align Interests with Shareholders 29
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Rentrak has a strong core business with high barriers to entry Advertisers want to plan and buy TV better using their Advanced Demographics TV Stations and TV Networks want a census-based currency in a world where we use a basket of currencies ONLY Rentrak has the years of experience and systems to capitalize on this large market 30 Summary 30
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