1. MACROVISION BY JEREMY SMITH SAJAL ROHATGI SWECHHA JAIN November 15, 2007

2. Agenda  Company Overview  Industry Overview  Business Risk  Recent News  RCMP  Competitors  Valuation  Conclusion

3. Overview  Offer content protection, digital rights management, and software licensing solutions  Founded in 1983 and is now headquartered in Santa Clara, CA.  Publicly traded company on the NASDAQ under the ticker symbol MVSN  Currently trading at $26.72 Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

4. Macrovision Lines of Business Revenue Sources Entertainment 51% LicensesPer Unit Royalties Copyright protection for: DVD, VHS, CD- ROM, DVR video PPV transaction based royalties for protected programs Perpetual/One- Time TV systems using video content security for PPV or VOD Services P2P anti-privacy and digital distribution Software 49% Licenses Rights and FLEXnet products Licensed to software vendors and IT enterprise departments Services Consulting and Training Software Vendors and End Customers Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

5. Customers of Macrovision 1. Motion picture studios and record labels 2. Software publishers 3. Hardware manufacturers 4. Consumer electronic firms 5. Personal computer manufacturers 6. Digital set-top box manufacturers 7. Digital PPV and VOD network operators 8. Publication companies 9. Enterprise information technology organizations Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

6. 3 Major Customer Groups  1. Entertainment and Content Producers and Distributors  2. Software Publishers  3. Enterprise End-Users Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

7. Entertainment Content Producers and Distributors  Video Technology  Packaged Media Solutions Analog Copy Protection “ACP” allows customers to use stored content and deter them from making illegal copies Used by almost every DVD player, VCR, DVD recorder, DVD drive and PC to make sure that ACP DVDs and VHS are properly recognized Inclusion of RipGuard DVD technology  PPV and VOD solutions View programming through Cable, Satellite, or Internet Macrovision content security widely used in digital set-top boxes to prevent VHS and DVD copies ACP technology solutions in 249 million digital boxes and DVRs world wide Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

8. Entertainment Content Producers and Distributors Continued  Peer-To-Peer File Sharing Solutions Hawkeye protects against illegal acquisition of secured content via P2P servers  PC Games Technology  Digital distribution of gaming network  Protection of CD/DVD-ROM and digital game content from unauthorized copying SafeDisc used to authenticate media ActiveMark secures content for online distribution Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

9. Software Publishers  FLEXnet publisher  Electronically manage software licenses and guard against unauthorized use  Allows customers a broad choice of pricing and licensing models (subscription- and usage-based) Monitor compliance with license agreement  Software Services  Use of Right products to add value  RightAccess enhances administrative control  RightCommerce handles billing strategies Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

10. Enterprise End Users  Software enables organizations to effectively manage licensed software usage among end-users  FLEXnet Manager  Gathers and analyzes software usage data  Allocate software-related costs to different departments or projects Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

11. Industry Overview  Increasing need for companies to protect digital content  Growth of high-bandwidth internet, file sharing servers, and shift to digital media has copyright owners vulnerable to unauthorized use  Easily accessible in-expensive copying devices are allowing for billions of dollars in loss related to piracy of products  At the same time consumers are demanding simple and flexible software solutions Macrovision (2006). Annual Report 2006. Retrieved November 10, 2007, from SEC EDGAR database http://sec.gov/edgar

12. Business Risk Risk Analysis Customer Risk Shrinking margins reduces the per unit revenue charged by MVSN Employee Risk Hacking software's Legislative Risk Huge Litigation expenses Most of the patents expire in 2020 Competitive Risk IBM, MSFT, Apple developed intellectual property rights for DRM Customers develop Own license and software copy protection Industry Risk Migration from DVD to next medium Better technology for anti piracy Copying through Handy cam and video camera Growth Risk Acquisitions fail to provide synergies

13. Recent News 12 th Nov Microsoft to use Admin studio for software deployment 6 th Nov Q3 earnings: Revenue forecast for 07 – 280 – 285 million Acquired All Media guide – leading provider of databases for music, video games and movies Extends and enhances MVSN distribution of digital content : $ 80 million from 2008 2 nd Nov Motorola and MVSN end anti piracy law suit Motorola renewed agreement to use ACP in set top boxes

14. Stock Chart : April 00 – Nov 07 Source: Yahoo Finance: http://finance.yahoo.com/charts#chart8:symbol=mvsn;range=20000313,20071109;charttype=line;crosshair=on;logscale=on;source=undefined  Highest price since 2000 : $108.25 on 30 th Aug 2000  Lowest price since 2000 : $ 9.81 on 29 th July on 2002

15. Stock Vs S&P 500 Source: Yahoo Finance: http://finance.yahoo.com/charts#chart10:symbol=mvsn;range=1y;compare=^gspc;charttype=line;crosshair=on;logscale=on;source=undefined  S&P in 1 year : Gained 11%  MVSN: Lost 8%

16. Key Statistics  Closing as on 14 th Nov 2007: $26.72  52 Week High Low: $21.81 - $ 30.95  Market Cap: 1462.71Million  P/E Ratio: 37.78  P/Sales: 5.91  P/Book: 3.03  EPS :.72 Source: Wall Street Journal: http://online.wsj.com/quotes/ratios.html?mod=2_0460&symbol=mvsn&news-symbol=MVSN

17. RCMP Position  Total value of portfolio as of 14 th Nov 2007 is $381692.70  3.5% MVSN constitutes of  200 shares bought in April’00 @ 75 per share  300 Shares bought in April’07 @ 25.04 per share

18. RCMP Position  Net Gain: $ 100657  Total Loss : $11091.23  Loosing $9656 on our original 200 shares

19. Peers IndustryProductMain Competitors Video Technology Analog Content Protection Rip Guard Hawkeye Microsoft, Apple, Real networks, IBM, Sony Music Technology Analog Content Protection Total Play CD Hawkeye Digital Rights Management Sunncom, Sony, Microsoft, Settec PC GamesAnalog Content Protection Hawkeye Trymedia Activemark Sony, Real networks, Smart solutions Software PublishersFlexnet Publisher Flexnet Connect Install Shield SafeNet, Microsoft, IBM, Sun Enterprise End-UsersFlexnet Publisher Flexnet Connect Flexnet Admin studio Install Shield Altiris, Computer Associates, IBM Information PublisherseMetaIBM, Oracle Source : One source

20. VALUATION  DCF VALUATION  Assumptions  WACC  Share Price Range

21. ASSUMPTIONS  Revenue –Volatile Past and same is expected in future.  SG&A – to increase year on year in real term.  R&D – to increase on year on year.  General and Administrative Expenses – to increase year on year basis.  Capex- As reported in 10-k report.  Tax Rate – Nominal Tax Rate of 35%

22. WACC  Beta –  Yahoo Finance – 1.34 (3 yr monthly returns)  Regression with S&P500 – 1.15 (3yr weekly returns)  Bloomberg -1  Beta = 1.24

23. WACC  CAPM  Risk Free Rate – 4.26%  Market Premium – 5.75%  Beta – 1.24  Cost of Equity -11.38%E/V – 86%  Cost of Debt – 2.41%D/V – 14%  Tax Rate 35%  WACC – 10%

24. Sensitivity Analysis Sustainable Growth 2.00%2.50%3.00%3.50%4.00%4.50%5.00% 9.00%23.7525.5627.6830.1833.1836.8441.42 10.00%19.9921.3222.8324.5826.6229.0331.92 WACC11.00%17.0918.0919.2220.5021.9623.6525.61 12.00%14.7815.5616.4317.3918.4819.7221.12 13.00%12.9013.5214.2014.9515.7916.7217.77 14.00%11.3511.8512.3912.9913.6514.3715.18

25. DCF Share Value AssumptionsDCF Share Price We assume volatility in Revenue (Base Case)25-27 Following Management Guidance for year on year revenue growth of 25% - 30%30-32 The Company need to grow at 35% year on year to achieve the break even price45.02

26. Conclusion  Sell 200 Shares Vs.Purchase April 3, 2000 @ Market Price (retain 300 purchased April 2007)  Added benefit of Tax Shielding.

27. QUESTIONS?