ITN Networks Board Meeting June 04, 2008. “The 5 th Network” Television & Multi-Video Platforms At a Time When the Aggregation Model is Becoming Most.

ITN Networks

Board MeetingJune 04, 2008

“The 5th Network”Television & Multi-Video Platforms

At a Time When the Aggregation Model is Becoming Most Important, ThroughOur Management & Investments, ITN is in a Stronger Position for the Future.

2008-2009: Strategic Opportunity to Re-Brand ITN:

• 3rd Party Electronic Commercial Verification• Commercial Ratings vs. Program Ratings

Accountability

Significant Advances

Technology Development• Move Legacy Systems to SQL Systems

Efficiency & Execution Time• Profitability• Operational Efficiency

Sales Development• News & Entertainment• Behavioral & Lifestyle Targeting• Online Expansion

Inventory Expansion• Cable & Satellite: National, Regional, Local

Since September 2006

50% SQL Based as of June 200880% SQL Based by December 2008

10%+ of ITN’s Inventory in Non-Broadcast15 Providers of Cable & Satellite InventorySustained Growth across News & EntertainmentContinue Expanding on Custom Consumer TargetsActively Building ITN’s Online Strategy InternallyInvestments in EV = Quicker Reaction TimeLocally: Significantly Improved Station Profit MarginsNationally: “C3” Ratings within 3 weeks from Airdate

Original Television Content• Primetime in Broadcast and/or Cable• Secondary: Other Dayparts

2008-2009Strategic Move to Add

National “C3” Commercial RatingsExact Break / 100% Verified Clearances

Highest Level of Accountability in Television

“The 5th Network”

News DivisionEarly Morning NewsEvening NewsNoon NewsPrime-Late News

Entertainment DivisionDaytimeTop-Talk ShowsEarly FringeWeekend

Prime AccessPrime ExtensionLate NightThe Simpsons

Consumer DivisionMoms TeensAfrican-AmericansFT Working WomenBeauty & Fashion

Online Division Presentation MaryAnn Halford Sr. VP of Broadband

Television & Multi-Video Platforms

The final missing ingredient to re-brand as a true full-service networkEspecially Primetime: Will drive significantly more activity across every ITN division

Original Television Content:

Increasing Per Demand

The 5th Network: Market Dynamics

Ratings Erosion on 4 Major Broadcast Networks

Network Primetime

Network Morning News Network Evening News

Network Daytime Network LateNight

*Excludes Sports

-17%W18-49

-15%W25-54

-16%A18-49

-15%A25-54

-13%W18-49

- 9%W25-54

-11%A18-49

- 8%A25-54

-21%W18-49

-19%W25-54

-21%A18-49

-18%A25-54

- 7%W18-49

- 7%W25-54

- 8%A18-49

- 7%A25-54

-12%W18-49

-10%W25-54

-11%A18-49

- 8%A25-54

ABC, CBS, NBC FOX: 4Q’07 - April ’08 vs. 4Q’06 – April ’07



Network Primetime

Network Morning News Network Evening News

Network Daytime Network LateNight

Networks’ Share of Broadcast Television Viewing

Network Programs:

Non-Network Programs:

90%10%

Network Newscasts:

Local Newscasts:

48%52%

Network Newscasts:

Local Newscasts:

24%76%

Network Programs:


33%67%

Network Programs:


39%61%

Non-Network Programs & Local Newscasts: 70%-100% of the Commercial Inventory Is Local – Not in the National Marketplace

Represents a Large Majorityof Total Network Ad Revenue60%+ across ABC/CBS/NBC/FOX



ITN Networks Provide Stronger Alternatives to Broadcast Network Television

Outside of Prime, Plus Non-Network Dayparts

A25-54

Early Morning News Networks

NBC Morning News Average(Today Show 1,2,3, Sat. Today, Sun. Today, Early Today)

1.3

ABCABC Morning News Average(GMA, GMA Sat., GMA Sun., America this Morning)

0.9CBS Morning News Average(Early Show 1&2,CBS Morn. News, Sat/Sun. Early Show)

1.3

1.5

Network Morning News W25-541.6

1.0

1.8

1.7

A25-54

Evening News Networks

NBC Evening News Average(NBC Nightly News Mon.-Sun.)

1.9

ABCABC Evening News Average(ABC Nightly News Mon.-Sun.)

1.5CBS Evening News Average(CBS Evening News Mon.-Sun.)

1.9

2.1

Network Evening News W25-54

2.0

1.7

2.1

2.3

News Division: National Ratings Comparison

Noon News Network 11am-2pm

Plus Non-Network News Dayparts

Late News Network 10pm-11:30pm



Early Fringe/Prime Access 4pm-8pm

Plus Non-Network Entertainment Dayparts

Entertainment Division: National Ratings Comparison

W18-49

Daytime Networks

NBC Daytime Average(Days of Our Lives)

1.3

ABCABC Daytime Average(All My Children, Gen. Hospital, One Life to Live, The View)

1.2CBS Daytime Average(As World Turns, Bold-Beaut., Guid-Light, Price, Young-Rest)

1.3

1.5

Network Daytime W25-541.5

1.5

1.6

1.6

A18-49

Late Night Networks

NBC Late Night Average(Tonight Show, C. O’Brien, C. Daly, SNL)

1.0

ABCABC Late Night Average(ABC Nightline, J. Kimmel)

0.8CBS Late Night Average(D. Letterman, C. Ferguson)

0.7

1.4

Network Late Night W18-49

1.1

0.9

0.9

1.5

1.0FOX Late Night Average(Mad TV, S. Feresten)

0.9





ITN Lacks A True Primetime Alternative Entertainment Division: National Ratings Comparison

Current Efforts Surround Primetime:Prime “Replacement” Network 6p-8p & 10p-12am

Prime “Access” Network 6p-8p

Top Syndicated Programs / 90%+ Off-Network Sitcoms / Key Daypart ControlResearch: Less Channel Switching / Less DVR Recorded-Ad Skipping

Prime “Extension ” Network 10p-12am



…Yet Marketplace Interest Remains Strongly Focused on Original Primetime Content


Failures of “CW” and “My Network” in Primetime

“CW” = “The best of WB & UPN” “MyNet” = “A new broadcast television network”

Formed2 Years Ago

WB Avg. Ratings:UPN Avg. Ratings:

W18-341.81.7

521

A18-341.41.4

411

W18-491.71.5

471

A18-491.31.3

381

W25-541.61.4

439

A25-541.31.2

367Estimated Ad Inventory Total Weekly GRPs:

4Q’05 – April ’06

CW Avg. Ratings:MYN Avg. Ratings:

1.10.4

249

0.90.4

215

1.00.4

238

0.90.4

213

0.90.5

226

0.90.5

212Estimated Ad Inventory Total Weekly GRPs:

4Q’07 – April ’08

-52% -48% -49% -44% -48% -42%

Today, ITN Delivers More GRPs to Current Advertisers than are Available on CW & MYN Combined




Next Season 4Q’08-3Q’09:


CW will no longer be programming Sunday nightsMedia Rights Capital (founded in 2004) purchased the rights to Sunday nights

across CW affiliates to distribute their producers’ content (Reality Shows, Sitcoms)

Beyond Next Season:New Speculation that CW & MYN may cease to exist beyond 2009

May Create Numerous Similar Opportunities to Gain Access to Broadcast Primetime

•Annual Deal is Estimated at $10-$15 million• WPP Group owns 6.8% stake in Media Rights Capital

(WPP Group Agencies: Mediacom, Mediaedge, Mindshare, etc)

Significant ITN Advantages:• ITN is already active across all other supporting News & Entertainment dayparts

• Only ITN, at the outset, can immediately offer Prime with larger, multi-daypart upfront packages• Multi-daypart packages significantly minimizes risks of Primetime efforts – Enables Sustained Effort



Syndication: Significant Declines – Fewer New Programs

123 Returning Programs in ’07-’08:

Top 10 M-F Programs of the Season:(~1/3rd of All M-F Syndicated GRPs)

W18-34 A18-34 W18-49 A18-49 W25-54 A25-54-10%

-17%

- 4%

-15%

-12%

-14%

- 7%

-15%

-14%

-12%

- 9%

-13%

Syndication: 4Q’07- April’08 vs. 4Q’06 - April’07

Next season (4Q’08-3Q’09), for the first time, there are ZERO New Off-NetworkSitcoms entering the Broadcast Syndication Market (Key to Top 10 Ratings Strength)

2008-’09-----

2009-’10My Name is EarlThe OfficeAmerican Dad

2007-’08Two & Half Men

Family GuyGeorge Lopez

Half & Half





Cable: Too Over-Saturated to Absorb All Broadcast Declines

Greater Ratios of Broadcast Strength vs. Cable Exists Across All Other Dayparts

4-5x More Commercials 7-8x More Commercials

23-26x More Commercials

To Replace 1 Average PrimeAiring on a Broadcast Network

3.182.663.753.16ABC/CBS/NBC/FOX

2.832.403.332.84ABC/CBS/NBC/FOX/CW

W18-49 W25-54 A18-49 A25-54

Broadcast Network Primetime: Avg. Ratings 4Q07-1Q’08

0.60

Cable Network Primetime

0.130.110.130.11All Others

0.390.390.400.40Ranked 11-20

0.590.650.67Top 10 Cable NetsW18-49 W25-54 A18-49 A25-54




Total:WalgreenPetSmartNintendoKelloggApplebeesHanesbrandsDiscover CardBest BuyAllstate

All Programs

SyndicationOther DaypartsPrimetime

ABC/CBS/NBC/FOX/CW

Number of National Commercial Units Airing by Advertiser6 Months Oct. '07 – Mar.'08Starcom Activity: Top Clients

Cable Networks

2,61125013437

1,2691403481580

338

1,86790

1672593175003747

230220

4,21923085

4582,27243721679

127315

25,2491,6261,0172,6698,5281,5422,252743

2,9553,917

161,49310,3975,643

20,01261,4357,291

12,7303,378

13,15527,452

Other DaypartsPrimetime


Cable: Too Over-Saturated to Absorb All Broadcast DeclinesExample:





Cable: Too Over-Saturated to Absorb All Broadcast Declines

Agencies: Must Expand Reach with Greatest Ease-of-Use• Fragmented Media = More Work to Achieve Same Results• Increasingly Being Squeezed on Client Fees• Clients Are Demanding Greater Accountability & Consumer Targeting• New Growth Requires Expanding Services Across New Media• Reducing Costs by Reorganizing to Consolidate Labor


Original Premise:At a Time When the Aggregation Model is Becoming Most Important, ThroughOur Management & Investments, ITN is in a Stronger Position for the Future…

Broadcast Ratings & Reach Highest Level of Accountability Greater Consumer Targeting

Client & Brand Flexibility Strong Track Record of Delivery Network-Time Turnaround

Ease-0f-Use Aggregation Across Multiple Video Touch-Points

“The 5th Network”Television & Multi-Video Platforms

2008-2009: Strategic Move to Add the Component of Original Television Content

News Division Entertainment Division

Consumer Division Online Division

• Sony• Comcast• Time Warner• Cox Communications• Media Rights Capital• Dunne Capital• Major Independent Studios

Potential Strategic Acquirers

CW & MYN Affiliates, Cable Networks, Digital “Virtual” Channels

Content Development Content Distribution

Public Relations Machine

ITN Networks Board Meeting June 04, 2008. “The 5 th Network” Television & Multi-Video Platforms At a Time When the Aggregation Model is Becoming Most.

Documents

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