click to edit master title style - wikileaks ad sales... · executive summary and company...
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Click to edit Master title style
Investment Materials
November 2013
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Click to edit Master title styleExecutive Summary and Company Overview
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f@ctory Overview1
• Description: A next generation media and entertainment company, creating and distributing pop culture orientated video content targeted for the millennial demographic
• Revenue Model: YouTube advertising, content licensing, marketing placements, f@ctory live events, YouTube paid subscriptions, merchandising, and creative services
• Distribution: YouTube, f@ctory website, domestic/international licensing, and f@ctory sponsored live events
• Content Category: Short-form (2:00 to 5:00 minute) original video content orientated toward the culture/lifestyle genre, targeted for the millennial generation (approximately 15 to 30 years old)
• Joint Venture: Atom Factory and @radical.media
• Estimated Launch Date: January 1, 2014
(1) Source: Company website and Capital IQ.
Executive Summary
• Opportunity: Crackle ad sales has the opportunity to represent f@ctory for YouTube ad sales and video brand integrations
– The representation may be executed in conjunction with a potential investment in f@ctory
• Crackle Commissions: Based on a commission to Crackle at 20% of YouTube ad sales and video brand integrations, Crackle ad sales is projected to benefit from the following revenue:
– The total commissions to Crackle do not include potential additional overhead costs for ad sales
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Click to edit Master title style
• Description: Music artist, producers, and entertainment management company
• Operates AF Square, an angel fund with a portfolio including Spotify, Warby Parker, Songza, Uber, Dropbox, and Lyft
• Operates a record label, a joint venture between Capitol Records and Atom Factory to sign and develop new artists
• Founded: 2010
• Description: Develops, produces, and distributes programming and branded content for TV, digital, films, music, commercials, and entertainment
• Operates a Film & TV division, focusing on development, production, and distribution of programming and branded content for television, film, digital, and on-site platforms
• FreemantleMedia, a subsidiary of RTL Group, acquired a 60% stake in @radical.media in October 2010
• Estimated Revenue: $140MM
• Founded: 1993
Atom Factory and @radical.media Overview
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Company Business Overview Clients / Projects
Lady Gaga (TBD1)
John Legend
Bon Jovi Jay-Z
Source: Company website and Capital IQ.(1) It was recently rumored in the press that Lady Gaga and Atom Factory are no longer working together. Atom Factory has not confirmed these rumors.
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Click to edit Master title styleProgramming Shows
4 Source: Company management.
• A Punk’d meets Unplugged live music event
• Musicians pop up in unexpected places to play their hits, surprising audiences in an intimate, authentic open microphone session
• The youngest, most gifted musical prodigies in the world blow us away as they tell their stories and perform in f@ctory’s live streams
• From the youngest DJ, up-and-coming MC, or violinist, GIFTD profiles and gives a live stage to the next generation of global musical talent
• A frank and witty series on love, relationships and sex, hosted by one of the globe’s most original and insightful voices on relationships and sexuality, Dr. Ruth
• Engaging hot young people who are seeking to find the perfect balance between a happy relationship and the thrilling uncertainty of sexual attraction
• Two creative greats from two different fields are brought together to collaborate on a one-of-a-kind product, from art to fashion to gadgets, that our community can buy
• Watch the creative process unfold as egos and perspectives clash on the path to making something unexpected and beautiful available for purchase
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Click to edit Master title styleProgramming Shows (cont’d)
5 Source: Company management.
• Young CEOs are this generation’s rock stars. Addressing what drives, inspires and consumes these entrepreneurial stars
• Explore their companies and their philosophies, seeing how they’re using their hard-earned expertise to address the issues they’re passionate about, from clean water to urban renewal and global poverty
• Closer than the front row, more intimate than backstage, NOMAD is part travel guide and part video log - true connoisseurs explore the best in global culture with our community
• A groundbreaking travel series sharing private moments with touring music artists as they visit their favorite spots - or discover new ones - around the world
• Giving audiences their weekly dose of cutting edge pop culture content featuring breaking tech, new global fashion, rising musical icons, quirky and addictive video horoscopes, and food and wellness
• Correspondents contribute from around the globe, viewers participate and interact, celebrities and artists drop in with cross-collaboration within the YouTube community
• Enter the world of Grammy-nominated producers, Da Internz, as they create their next mammoth hit and make their way to the top of the charts
• These two rising stars will grant us access to their lives and lifestyles, from the studio to the boardroom, as f@ctory chronicles their rise within the music business
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Click to edit Master title stylePreliminary YR1 Programming Details
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• $3.6MM Year 1 Budget
• Rolling delivery December 2013 through November 2014 (Production Begins October 1, 2013)
• Show details:
Pop-Spot• 600 x 5:00 (episodes x minutes)
• 250 x 2:00 (episodes x minutes)
• 17 episodes per week
• Double Camera, Studio Based
• Live-to-tape; Lighting and Audio; Set Design and Construction
Da Internz• 80 x 4:00-5:00 (episodes x
minutes)
• 80 x 2:00 (episodes x minutes)
• 4 shoot windows, 20 episodes per window
• Location Based
• Single Camera Documentary/Verite
Nomad• 90 x 4:00 (episodes x minutes)
• 36 x 2:00 (episodes x minutes)
• 15 artists, 8-9 episodes per artist
• 1 Trip per Artist, Location Based
• Single Camera Doc/Verite
The Inter Course• 72 x 4:00 (episodes x minutes)
• 36 x 2:00 (episodes x minutes)
• 12 subjects, 9 episodes per subject
• Location Based
• Single Camera Documentary/Verite
Mogul• 72 x 4:00 (episodes x minutes)
• 36 x 2:00 (episodes x minutes)
• 12 subjects, 9 episodes per subject
• Location Based
• Single Camera Documentary/Verite
Giftd• 72 x 4:00 (episodes x minutes)
• 36 x 2:00 (episodes x minutes)
• 12 subjects, 9 episodes per subject
• Location Based
• Single Camera Doc/Verite
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YouTube Advertising Revenue
Discussion Revenue Build – SPT Case
(1) Assumes each new program produces 183 annual episodes based off YR1 episodes’ projections for 8 programs.(2) Assumes $9.00 minimum CPM required to YouTube to serve direct sales.(3) Does not include additional f@ctory Ad Sense revenue from f@ctory YouTube inventory not sold directly through Crackle ad sales team.
• Crackle projected to charge a 20% commission on YouTube ad sales
– $15.00 gross CPM
– $3.00 commission to Crackle
– $9.00 minimum CPM assumed to YouTube
– $3.00 net CPM to f@ctory
• Crackle projected to sell 8.4MM impressions in FYE15 (700K /month) growing to 44.9MM impressions in FYE19 (3.7MM /month)
– Assumes 8 new shows per year produced in FYE15 growing to 12 new shows per year in FYE19
– Assumes a 12 month ramp up for Crackle ad sales team to sell f@ctory inventory
• Total cumulative ad sales revenue to Crackle of $506K from FYE15 to FYE19 based on 20% commission
– Cumulative gross revenue to f@ctory of $506K over the same time period
• No additional Crackle ad sales overhead costs have been included
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Brand Integration Revenue
Discussion Revenue Build – SPT Case
(1) Assumes each new program produces 183 annual episodes based off YR1 episodes’ projections for 8 programs.
• Crackle sales team projected to sell brand integration in 2 shows in FYE15 growing to 8 shows in FYE19 (1 year contracts)
– 28.7MM implied views in FYE15 (2.4MM /month) growing to 177.0MM views in FYE19 (14.7MM /month) for sold shows
– Assumes a 12 month ramp up for Crackle ad sales team to sell f@ctory shows
• 20% commissions or $3.13 of CPM to Crackle sales team in FYE15 growing to $4.75 in FYE19
– Shows sold at $225K average revenue per brand integration in FYE15 growing to $525K in FYE19
– $15.66 implied gross CPM in FYE15 growing to $23.73 in FYE19
• Total cumulative ad sales revenue to Crackle of $3MM from FYE15 to FYE19 based on 20% commissions
– Cumulative net revenue to f@ctory of $11MM over the same time period
• No additional Crackle ad sales overhead costs have been included