proprietary and confidential0. 1 agenda i.company overview ii.market environment and position...
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Proprietary and Confidential 1
Proprietary and Confidential 2
Agenda
I. Company Overview
II. Market Environment and Position
III. Product Portfolio
A. PureVideo Editorial Overview
B. GrindTV.com
C. HollywoodUpClose.com
D. StupidVideos.com
E. PureVideo.com
F. Sales & Technology
IV. Growth Strategy
V. Summary Financials and Wrap-Up
Proprietary and Confidential 3
Company Overview
• Digital media business dedicated to the creation, discovery and promotion of video content over IP delivery platforms
• Leverage compelling content (UGC, original, licensed), robust publishing and IT platforms and proprietary video search technology to operate a network of Branded Online Destinations (“BOD”s)
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Key Properties
• Delivering safe, advertising-friendly new media destinations to targeted audiences
• Blend of traditional media best practices with Web 2.0 advantages
Property General Concept
MTV for action sports enthusiasts
Yahoo! Music for celebrity and entertainment
The Walt Disney Company’s America’s Funniest Home Videos meets MTV’s Jackass
Unbiased political media resource online
Gemstar-TV Guide International’s TV Guide® for the Internet
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Business Model
• Each BOD provides the unified context for aggregated video content to simultaneously attract consumers, advertisers and content producers
– Reach highly targeted, engaged and valuable audience
• Monetize the “long tail” of content demand through search
• Self-perpetuating Web 2.0 business with robust community features and cross-promotion to drive organic growth
Content Creation Aggregation & Context Revenue Generation
User-Generated
Original Content
Licensed Content
Advertising (video, display, sponsorship, etc.)
Content Licensing (online media, mobile, television, DVD, etc.)
Search Revenue (pay-per-click)
Subscription (premium services)
sports
travel, etc.
comedy celebrity
Other Verticals
politics
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Our Competitive Differentiation
• PureVideo offers a sustainable, differentiated and defensible business that simultaneously attracts consumers, advertisers and content producers
Differentiation Others
Monetization of Channels Editorial integrity
Quality programming around a targeted lifestyle, interest or audience
Focus on stream volume irrespective of quality and / or revenue capability
Unstructured video repositories
Proprietary Search Utility Identify and develop new verticals faster and cheaper (business intelligence)
Drive organic traffic
New revenue stream
No clear business purpose or model
Inferior technology
High-Quality Content Advertising-friendly, “PG-13” content
Avoids indecent content that skews traffic near-term but hurts business long-term
Minimal editorial integrity
Traffic figures inflated by “questionable” content
Scalable Technology Proprietary, centralized CMS system
Scalable and flexible architecture
More engineers than PureVideo employed to run one website
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2005 2006 2007
Key Milestones and Accomplishments
Jan. ’06: Launch of StupidVideos 2.0
Feb. ’06: MSN ad partnership begins
Jul. ’06: Branded ad campaigns for Nissan and Sony PSP
Mar. ’06: Added user profiles and other community features
May. ’06: MSN ad partnership ends
Aug. ’06: Hired Carrie Kelly to lead direct sales effort
Sep. ’06: StupidVideos 3.0 released on new technology platform
Oct. ’06: GrindTV 2.0 released on new platform
Oct. ’06: Launch of PureVideo Search
Dec. ’06: GrindTV and PureVideo join StupidVideos in the comScore top 2000
Dec. ’06: $1.5mm bridge from Softbank
Feb. ’07: Launch of HollywoodUpClose; comScore number grows 45% from previous month to 4.7mm
Nov. ’05: Raised Series A from Sofbank
Nov. ’05: Launch of GrindTV
Apr. ’07: Launch of PoliticsUpClose
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Experienced Management Team
• Over 10 years of relevant Internet experience
• Formerly SVP of Product and Strategy at Citysearch (IAC)
• Leading Account Executive for Yahoo! Music
Erik HawkinsCEO
• Over 10 years of relevant Internet experience• Formerly Director of International Product Strategy for Yahoo! Music• Founder of MusicVideos.com (acquired by LAUNCH in 1999 and
ultimately by Yahoo! in 2001)
Greg MorrowPresident and COO
Russ SmithVP of Technology
Carrie KellyVP of Sales
Curtis BeckVP/GM GrindTV
• Formerly VP of Product for Business.com• Developed and patented pay-per-click local search system at
Citysearch/IAC
• Over 10 years of sales experience at top media companies• Formerly VP of Search Sales at Ask.com
• Formerly SVP of Business Development for Cinema Now• Over 7 years of experience in Business Development at Microsoft
Karina KoganVP Marketing
• Over 9 years of relevant Internet experience• Formerly Director of Marketing for evite.com, which grew traffic over
600% during her tenure.
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Agenda
I. Company Overview
II. Market Environment and Position
III. Product Portfolio
A. PureVideo Editorial Overview
B. GrindTV.com
C. HollywoodUpClose.com
D. StupidVideos.com
E. PureVideo.com
F. Sales & Technology
IV. Growth Strategy
V. Summary Financials and Wrap-Up
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Online Video Advertising Spending
• Reaches nearly $3 billion in 2010, but still only represents 3.3% of television spending
• Tremendous opportunity to better monetize the “long tail” of the content demand curve
$40 $55 $85 $135 $225$410
$775
$1,300
$2,000
$2,900
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010% of TV Spend 0.1% 0.1% 0.1% 0.2% 0.3% 0.6% 1.1% 1.6% 2.5% 3.3%
Source: eMarketer research, November 2006.
U.S. Online Video Advertising Spending ($ in millions)
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Drivers of Growth
• Internet is now the most popular entertainment source among teens and near the top overall
• Advertising spending “gap” expected to close
Media Usages: Ages 12–24 U.S. Ad Spending Per User/Audience Member
2006E U.S. Media Usage
Internet30%
TV24%
Radio21%
Telephone14%
Print Media11%
Avg MinutesMedia per Day
TV 240.9
PC Use (any) 135.8
Internet 93.4
Radio 80.0
Music (incl. MP3) 65.1
Phone (incl. Mobile) 42.2
All Print 32.8
All Video (VCR/DVD) 32.6
Newspapers 12.2
Game Console 11.6
Internet30%
TV24%
Radio21%
Telephone14%
Print Media11%
$2.28 $4.20 $14.80
$88.28 $99.13
$128.57
$253.37 $256.42
$300.01
2006 2007 2010
Online Video Total Internet TV
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Market Position
• In one year, we drove our comScore unique user count up 600% to 4.7mm
• We have proven the ability to scale this platform
comScore Unique Visitor Count Top 10 comScore Gainers (1)
0.0
1.0
2.0
3.0
4.0
5.0
Apr-06 May-06 Jul-06 Sep-06 Oct-06 Dec-06 Feb-07
Un
iqu
e V
isit
ors
(m
m)
(1) Source: comScore, February 2007, by percentage change in unique visitors.
PureVideo Network StupidVideos GrindTVPureVideo.com HollywoodUpClose
Jan-07 Feb-07 % Change
Total Internet Population 175,559 175,653 0%
FTD.COM 1,163 3,681 217%
1-800-Flowers 1,679 3,460 106%
NASCAR.COM 2,418 4,679 93%
Alloy 2,920 5,169 77%
123GREETINGS.COM 3,500 6,189 77%
TaxACT 4,057 6,348 56%
Hallmark 5,601 8,608 54%
WEBKINZ.COM 2,858 4,380 53%
PureVideo Network 3,252 4,725 45%
BUY.COM 2,730 3,965 45%
Property
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Agenda
I. Company Overview
II. Market Environment and Position
III. Product Portfolio
A. PureVideo Editorial Overview
B. GrindTV.com
C. HollywoodUpClose.com
D. StupidVideos.com
E. PureVideo.com
F. Sales & Technology
IV. Growth Strategy
V. Summary Financials and Wrap-Up
Proprietary and Confidential 14
PureVideo Editorial Integrity
• Harness creative energy of our audience to create valuable content assets that meet our strict programming standards
• All featured content must be contextually appropriate, PG-13 and not a gross violation of copyright
• Four-stage review process:– Deactivated: Violation of PureVideo strict
standards– Approved: Do not yet meet programming
standards; viewable from profile page but no advertising or search access
– Featured: Meet programming standards– Approved for Syndication: Can be licensed
to third parties
• As a result, very low DMCA takedown notice frequency (less than 1 per month, on average)
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GrindTV
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GrindTV – Overview
• Created for and by “adrenaline junkies”
– In the style of MTV for action sports
• Premiere destination to watch, share and review extreme and action sports videos
• Attracts 2mm monthly visitors and streams over 13mm videos
• Property is gaining strong traction with content partners, advertisers and endemic brands
• Audience is a younger, active, mobile and predominantly male
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GrindTV – Features
Grind House
• Original coverage of athletes and events
Category Channels
Image of navigation
• Easy navigation to user interest
Social Networking
• Xxxx• xxxx
Grind to Go
• Share content, personal profile page, etc.
• Original content available for mobile download
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• GrindTV has quickly become a recognizable action sports brand that is the online market leader among targeted competitors
comScore Unique Visitors Alexa Ranking
Source: comScore Networks U.S. data as of February 2007; Alexa Internet, Inc. Data for six months through March 15, 2007.
1,354
243 229162 121 89
GrindTV Snow.com FUEL TV PrimediaActionSports
FutureSnow-boarding
Skate-boarding
Un
iqu
e V
isit
ors
(00
0's)
Competitive Positioning – GrindTV
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• Dedicated to the world of entertainment, featuring movie trailers, celebrity video clips, red-carpet footage and interviews
• The long tail of the celebrity universe is organized by video and image search
• Launched in beta in February 2006, HUC.com attracted over 2mm visitors in March and over 10M video views
• Successful launch of a search-driven vertical with robust content and advertising partners validates vertical expansion model
HollywoodUpClose.com – Overview
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• More Content – Extensive movie trailer and music video collections have been licensed
• Solicit user-generated videos to find the next big star
• Consumer “mash-ups” of popular movie and television content
• Integration of member blogs and other social networking functionality
Upcoming features
HollywoodUpClose.com – Features
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StupidVideos.com
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StupidVideos.com – Overview
• Humorous, user-generated videos in the style of MTV’s Jackass and Disney’s America’s Funniest Home Videos
• The site has a passionate, retained audience of approximately 2mm monthly unique users who stream over 10 videos a session
• StupidVideos has a healthy content licensing business and is generating licensing revenue from top brands such as MSN, Yahoo, Comcast and Cingular
• Interest from television partners is strong and growing
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StupidVideos.com – Features
SV TV
• “Passive” experience to create user stickiness
• Familiar TV-like channel / episode format
Video Series
• Topical series to create consumer loyalty and activity
• Part of programming strategy and website organization
Easy Video Discovery
• Foster content discovery through simple browser tools
• Video filters such as time posted and category
• Upload/share content• Post reviews/comments and
create personal profiles (MySV)
Social Networking
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• “As impressive as it is that StupidVideos.com came in sixth in total sessions and seventh in unique visitors, some other metrics show an even more interesting, stickier picture of the site. StupidVideos is the runaway leader in page views per session with a massive 43, which is 74% more than Break.com in second place”
– Andy Kazeniac, Compete.com blog, 02/28/07
Page Views per Session Sessions per Unique Visitor
Source: Compete.com, February 2007.
Competitive Positioning – StupidVideos.com
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PureVideo.com – Overview
• Proprietary search utility through which consumers can discover video content on the Internet
• Combines keyword search with a categorized directory– Keyword search leverages
accuracy of a crawl-based search with timeliness of an RSS feed-based search
– Directory organizes video to create a “TV Guide for the Web”
• Proprietary video search indexing to improve upon content relevancy, user experience and monetization opportunities
• We have launched a paid inclusion pilot, and last month began to generate pay-per-click search revenue
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PureVideo Search Approach
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PureVideo – Features
New Features
• Complete transition to proprietary index• PureVideo page rank (“purity index”)• Automated customer signup and billing
Upcoming features
• My PureVideo • Search Tool Bar• Paid Inclusion Pilot
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• Search is Intelligence – We use video search data to focus our channel development and content acquisition efforts
• Search is Content – We use video search to organize the “long tail” and rapidly deploy deep, compelling, and highly-scalable branded online destinations
• Search is Traffic – Search creates organic traffic on PureVideo.com and on the destination sites
• Search is Revenue – An emerging pay-per-click model ensures baseline revenue from ordinary site activity
“Want to know what everyone else is watching on YouTube? Or AOL, or ESPN? Or perhaps you just want to find that hilarious online video ... Well, now you can, at PureVideo. A meta search engine specifically for videos, PureVideo organizes user-generated online video content by combining the accuracy of a crawl-based search with the timeliness of a feed-based search.
“We’ve combined ‘I know what I want to find’ with ‘Tell me what I should watch,’” says Greg Morrow, president and cofounder of PureVideo Networks.”
“Want to know what everyone else is watching on YouTube? Or AOL, or ESPN? Or perhaps you just want to find that hilarious online video ... Well, now you can, at PureVideo. A meta search engine specifically for videos, PureVideo organizes user-generated online video content by combining the accuracy of a crawl-based search with the timeliness of a feed-based search.
“We’ve combined ‘I know what I want to find’ with ‘Tell me what I should watch,’” says Greg Morrow, president and cofounder of PureVideo Networks.”
Video Search – Our Unifying Concept
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• Enterprise-level LAMP architecture
• Centralized, proprietary content management system (“CMS”)
– Easy publication, classification and syndication
– Non-technical editors can easily publish content in a timely fashion
• Original video digital asset and storage infrastructure
• Sophisticated workflow allowing for high-volume ingestion, storage and transcoding of video (transcode in 4 formats)
• Supports distribution over all IP platforms (broadband, VOD and mobile)
• Supports 4 properties in comScore Top 2000 with significant excess capacity
• Social networking functionality, playlist video algorithms and significant online programming intelligence
Scalable and Flexible Technology Platform
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Monetization Success
• PureVideo is already recognized by large branded advertisers as a trusted, safe and engaging web 2.0 video business that can deliver a high-quality and targeted audience
• Direct sales efforts began in Fall, 2006, and we are already generating strong results
Property Key Advertisers
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Strategic Partnerships
• Content, technology and distribution partners recognize the value of PureVideo’s brands, content and audience
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Agenda
I. Company Overview
II. Market Environment and Position
III. Product Portfolio
A. PureVideo Editorial Overview
B. GrindTV.com
C. HollywoodUpClose.com
D. StupidVideos.com
E. PureVideo.com
F. Sales & Technology
IV. Growth Strategy
V. Summary Financials and Wrap-Up
Proprietary and Confidential 33
Growth Strategy
1. Focus on depth and monetization of premium destinations
― Priority properties are GrindTV and HollywoodUpClose
2. Continued monetization of content library to grow content syndication revenue
3. Leverage PureVideo search model
― Drive paid referral revenue
― Drive organic traffic to BODs
― Drive business intelligence to identify new BOD opportunities
4. Expand into new verticals
― Utilize search to cost effectively deploy deep, compelling and highly scalable BODs
― Selectively acquire / license content to augment depth of BODs where ROI is justified and demand is clear
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• Consumer engagement to drive UGC creation
• Strong user opinions and reaction to encourage social networking and loyalty
• Identifiable audience demographic • Has successful analog in print or cable
but no dominant online player
Qualitative Attributes
• Attracts at least 250K free monthly uniques after 90 days
• Generates at least $0.02 per visit after 90 days
• Has strong PPC potential (e.g., travel)
Monetary Criteria
The Ideal Vertical…
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Our Newest Vertical
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Agenda
I. Company Overview
II. Market Environment and Position
III. Product Portfolio
A. PureVideo Editorial Overview
B. GrindTV.com
C. HollywoodUpClose.com
D. StupidVideos.com
E. PureVideo.com
F. Sales & Technology
IV. Growth Strategy
V. Summary Financials and Wrap-Up
Proprietary and Confidential 37
Summary Financial Information
($ in '000s) 2007E 2008E Run Rate
Q1 Q2 Q3 Q4 Q1 FY 2007E as of Q1 08 FY 2008E
Total Visits (000's) 34,479 19,252 23,411 32,470 37,421 109,612 149,685 176,293
Total Video Views (000's) - 185,216 281,759 441,103 515,536 908,077 2,062,145 2,413,465
Total Revenue $500 $358 $815 $1,658 $2,410 $3,331 $9,640 $12,593
Cost of Goods Sold (186) (67) (80) (103) (117) (436) (468) (550)
Traffic Acquisition Cost (313) (210) (340) (510) (660) (1,373) (2,640) (3,120)
Other Operating Expenses (1,249) (1,119) (1,154) (1,446) (1,664) (4,969) (6,656) (7,046)
Total Expenses (1,748) (1,396) (1,574) (2,060) (2,441) (6,778) (9,764) (10,716)
Total EBITDA ($1,248) ($1,038) ($759) ($402) ($31) ($3,447) ($124) $1,877
Capital Expenditures (131) (110) (75) (75) (100) (391) (400) (400)
Cash Flow (1,379) (1,148) (834) (477) (131) (3,838) NA 1,477
Cumulative Cash Flow (1) NA (274) (1,108) (1,585) (1,716) (1,585) NA (108)
(1) Cumulative cash flow shown from 6/1/07 to reflect approximate date of new funding
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Proposed Financing
• We are seeking to raise $4 million in new Series B financing to fund the projected growth
– Softbank, our lead investor, will roll its bridge financing into this round
– Total Series B financing expected to be $6.25 million
– We anticipate the financing round to close before the end of June
• We do not anticipate any additional financing will be needed
– The company is projected to generate positive cash flow in Q1 2008
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Wrap-Up
• Leading provider of online video content and search
• Differentiated model with powerful monetization platform
• Proprietary video search utility and scalable technology platform
• A growing library of valuable, advertiser-friendly content
• Traction with major branded advertisers
• Experienced and proven management team