This document summarizes key trends in the digital video industry. It finds that online and mobile video viewership is growing rapidly, especially via non-desktop devices. Various sectors have also emerged, including multi-channel networks (MCNs), social video platforms, and over-the-top (OTT) video services. While ad prices per view (CPM) may decrease short-term due to greater inventory, targeted and interactive ads are engaging viewers more effectively. Overall, digital video is becoming more integrated with television and traditional content as viewers access content across multiple platforms.

1. Embedded
Specialized
Accomplished
Digital Video Report
Fall 2013

2. Table of Contents
Section I
Industry Trends and Dynamics
Section II
Multi-Channel Networks
Section III
Social Video
Section IV
OTT Video Platforms
Appendix
Transaction Case Studies
Public and Transaction Comparables
2
Summer 2013
Digital Video Report

3. INDUSTRY TRENDS AND DYNAMICS

4. Online & Mobile Video Overview
Video content spans all connected devices – smartphones, tablets, connected TVs and OTT platforms,
and even including wearable technologies – delivering a perpetually always-on digital video audience
Digital video – with its comparatively small production budgets and unlimited distribution – has
democratized content creation and turned audiences global, allowing upstarts to scale rapidly and
compete with traditional incumbents for audience engagement and advertising spend
Multi-channel networks in particular have sought to capitalize on the proliferation of content creators,
leveraging YouTube as a distribution platform and attempting to differentiate via defined verticals and
ancillary services (advertising, analytics tools, etc.)
With users increasingly accessing their chosen content across multiple platforms, digital video adtech
companies have been responding accordingly by expanding their product and service suite to support
cross-platform functionality and programmatic media buying / selling
4
Summer 2013
Digital Video Report

5. Online & Mobile Video Overview
The way customers access video content continues to change as the functionality in both mobile
applications and gaming consoles are further developed
― Non-Desktop video views, a combination of both mobile applications and game consoles, accounted for 19.0%
of all views in Q1 2013 in the US, up from only 3.0% in Q1 2012
― As a result, desktop video minutes per viewer is down 5% in YoY growth as consumers increasingly use nondesktop devices to stream content
The industry is characterized by various subsectors and unique monetization strategies
― YouTube and other destination sites (e.g., DailyMotion) aside, multi-channel networks (MCNs), social video
and over-the-top (OTT) video platforms have all emerged as prominent players
― Prominent MCNs Fullscreen and Maker Studios recently received $30.0 million and $26.0 million in investment
led by the Chernin Group and Canal+ / SingTel Innov8, respectively
Total US Video Views by Platform
Q1 2012
Q1 2013
3%
19%
81%
97%
Desktop videos
Desktop videos
Non-desktop videos*
Non-desktop videos*
*Non-desktop videos includes game consoles in the calculation
Source: Wells Fargo Securities, LLC, ComScore, FreeWheel
5
Summer 2013
Digital Video Report

6. Domestic Penetration
The US stabilizes as a mature market with steady growth and penetration projections
Internet Users Who Download or Stream Video Online at least Once per Month
200
187.6
178.7
Viewers (in mm)
120
90.0%
169.3
158.1
160
80.0%
145.6
130.8
65.0%
68.2%
100.0%
70.8%
72.9%
74.7%
76.0%
70.0%
60.0%
60.5%
100
50.0%
80
40.0%
60
30.0%
40
20.0%
20
10.0%
0
% of Internet Users
180
140
195.5
0.0%
2009A
2010A
2011A
2012A
Online video viewers
2013P
2014P
% of Internet users
2015P
Source: Wall Street Research, eMarketer
6
Summer 2013
Digital Video Report

7. Current Market Trends
Online video audiences are expected to double by 2016, reaching 1.5 billion globally, as the
penetration and affordability of computers and mobile devices continues to expand
As the market matures, US mobile video revenues are projected to nearly triple to $4.0 billion in 2013,
up from $1.3 billion in 2012
US Mobile Video Revenues (By Type, in $000s)
$4,500
$4,015
$4,000
$3,463
$3,500
$2,838
$3,000
$2,298
$2,500
$1,316
$1,500
$1,000
$500
$208
$1,730
$2,000
$650
$316
$1,611
$1,274
$903
$583
$148
$331
$735
$1,051
$270
$349
$1,508
2014 E
$1,251
$1,665
2015 E
$1,874
$2,054
$0
2011 A
2012 A
2013 E
Subscription-based*
Ad-supported
2016 E
2017 E
Pay-per-view download
*Subscription-based revenues include mobile-only subscription revenues and a portion of revenues from cross-device subscription bundles
Source: Wall Street Research, eMarketer
7
Summer 2013
Digital Video Report

8. Online & Mobile Video Overview
The online video industry posted strong growth through the first part of the year as indicated by May’s
YoY 22.0% increase from 46.7 billion total IP-video streams to 57.0 billion
― Total viewers grew to 178.0 million, a 2.0% YoY growth, suggesting an increase in per capital consumption as
the primary driver for industry growth
Consumers are willing to accept higher advertisement loads per content segment in return for more
viewing convenience
― Long-form ad loads grew 28.0% from Q1 2012 to Q1 2013, an increase from 7.4 ad units per content segment
to 9.5 units
Ad Completion Rate by Site Type
100.0%
80.0%
Video Ads Per Video Viewed (Long-Form Content)
12
91.0%
10.2
76.0%
10
68.0%
8
60.0%
9.2
Q2 2013
Q3 2012
9.5
8.9
7.4
6
40.0%
4
20.0%
2
0.0%
Ad Networks /
Exchanges
Internet Brands
Major Media Brands
0
Q1 2012
Q4 2012
Q1 2013
Source: Wells Fargo Securities, LLC, ComScore
8
Summer 2013
Digital Video Report

9. Current Market Trends
The average US viewer watches almost 100,000 minutes of television each year. Viewing habits are
changing as 229 million viewers are expected to be connected to over-the-top services on devices by
2016
― 35% of these viewers will watch TV on these devices
Almost 25% of television viewing time is dedicated to ads and content providers are taking advantage
of viewers’ acceptance of ads tied to TV as they look to increase their digital ad spending
US Digital Video Ad Spending, 2011-2017
2016 Projected Share of TV Viewing by Device (US)
$10
$9
$9
56.5%
$8
$8
Tablet, 16%
$ bn
Computer, 14%
Television, 65%
50.0%
$7
$7
$6
60.0%
$6
41.4%
40.8%
$5
40.0%
38.9%
30.0%
$4
$4
$3
$2
Smartphone, 5%
$3
20.0%
21.4%
$2
15.1%
$1
12.8%
$-
10.0%
0.0%
2011 A
2012 A
2013 E
2014 E
Digital video ad spending
2015 E
2016 E
2017 E
% Change
Source: IAB, Multiscreen Marketer; TDG, TV Everywhere Update; mDialog; eMarketer
9
Summer 2013
Digital Video Report

10. Current Market Trends
This ultimately creates a potential linear video ad market of 4 trillion ads by 2016
― 50,000 ads x 229 million viewers x 35% of total devices
Consumption of digital video ads is increasing – 23% of the 39 billion content videos viewed in
December included video ads, up from 14% the prior year
Increasing sophistication of brand engagement via new methods such as interactive content or longform advertorials versus traditional TV advertisements are capitalizing on the advantage that online
video provides
― Chipotle’s new branded video generated almost 4 million views on YouTube in its first five days
Impact of Made-for-Web vs. Repurposed TV Advertisement by Age Group
7
5.9
6
4.6 4.7
5
4
3
3.3
2.5
3.4
3
3.7
2.8
2
2
4.6
1.2
1.7
1.5
1
2
1
1.4
1.3
0.4
1.1
0.7 0.7
0.6 0.5
TV
Web
0
TV
Web
Aided Brand Awareness
TV
Web
TV
Online Ad Awareness
Web
Brand Favorability
18-34
35-49
Purchase Intent / Consideration
50+
Source: TDG, TV Everywhere Update; mDialog; Tubefilter; Wall Street Journal
10
Summer 2013
Digital Video Report

11. Current Market Trends
Larger supply inventory coupled with the increased use of programmatic buying of ads is reducing the
average price per CPM in the near term as the advantage shifts to the buyers
― Publishers who provide access to distinct and high value market will remain more resistant to this
commoditized pricing
US Online Video Ad CPM, by Inventory Tier, 2010-2017
Total Spending on RTB Video (in $mm)
$50
$1,200
$1,141
$45
$45
$41
$40
$33
$35
$30
$1,000
$37
$27
$26
$25
$25
$25
$31
$24
$31
$31
$31
$25
$25
$26
$800
$686
$600
$20
$15
$16
$17
$18
$19
$20
$21
$23
$22
$402
$400
$10
$5
$200
$190
$2010
2011
Indirect
2012
Midtier
2013
2014
Premium
2015
2016
2017
$-
Average CPM
2011
2012
2013
2014
Source: Credit Suisse, Google – Doubleclick, Wall Street Journal, Forrester, Tubefilter
11
Summer 2013
Digital Video Report

12. Current Market Trends
Video ad networks are exploring ways to capitalize on growth of video ads and their higher level of
engagement
― YuMe launched its new Household Targeting system to deliver in-stream, interactive ads across all connected
screens in a household
― Tremor Video announced they would move from serving in-banner video advertising and focus on in-stream
video ad content
Technologies such as mDialog’s Smart Stream platform, which allows for uniquely addressable
advertising within linear, live and VOD, are being launched to maximize the potential of video ads
Interactive Online Video Advertising’s Effect on Brand
Metrics in the US, Q2, 2012
Completion Rate by Spot Position
100%
0.4
0.5
Brand favorability
90%
70%
1
Message association
1.3
50%
40%
2.3
Online ad awareness
0
59%
60%
1.4
1.3
Aided brand awareness
76%
80%
0.7
0.8
Purchase intent
88%
30%
3
1
2
3
% Increase over Control Group (TV ads)
Noninteractive
Interactive
20%
10%
4
0%
Mid-Roll
Pre-Roll
Post-Roll
Source: eMarketre.com, Milward Brown, Dynamic Logic & Yume, Adobe
12
Summer 2013
Digital Video Report

13. Online & Mobile Video Trends
Despite early concerns that consumers would resist utilizing mobile devices for long-form video, both
mobile and tablet video users spent more than half of their total online viewing time watching videos
longer than 10 minutes
― Previously, analytics focused on the number of views a piece of video content had accumulated, yet recent
studies indicate that the number of minutes watched per view is a more relevant metric
― The growing popularity of long-form viewing on online and mobile devices allows for more opportunities to
include mid-roll ads within this content
As mobile screens proliferate globally, we expect that consumer video consumption will continue to
evolve as a more mobile, multi-platform experience
Proportions of Videos Watched by Length
80.0%
71.0%
60.0%
53.0%
52.0%
38.0%
40.0%
21.0%
20.0%
14.0%
3.0%
7.0% 5.0%
25.0%
22.0%
15.0%
6.0%
4.0%
22.0%
15.0%
6.0%
5.0%
8.0%
7.0%
0.0%
Connected TVs / Gaming Consoles
Mobile
< 1 min
1-3 min
Tablet
3-6 min
6-10 min
Desktop
> 10 min
Source: Wall Street Research, eMarketer
13
Summer 2013
Digital Video Report

14. MULTI-CHANNEL NETWORKS

15. Multi-Channel Network Overview
MCNs provide the production, marketing and technology infrastructure to original content channels for
a percentage of the revenues generated
― By joining MCNs, video content creators can expand their audience through cross-promotion executed across
the massive group of channels aggregated by each firm
― MCN’s scale allows for revenue and cost synergies, as well as removing a lot of the challenges small content
creators face
MCN’s distinct business model is attracting interest from both large corporations and notable VC firms
Milestone Fundings for MCNs
Fullscreen raised $30.0 million in Series A funding
led by the Chernin Group in June 2013
In July 2013, Base79 secured a multi-million dollar
funding, actual amount undisclosed, led by
Evolution Media Growth Partners
YouTube renewed its contract with VEVO and has
taken a 7% stake in the company for a $40-50
million investment
Maker Studios turned down a nine-figure
acquisition offer to close a $36.0 million investment
led by Time Warner Investments in 2012 and
raised an additional $26.0 million in August 2013
Tastemade raised $10.0 million in Series B funding
led by Raine Venture Partners in August 2013
Machinima closed $35.0 million in venture round
funding led by Google in May 2012 and is rumored
to be seeking another $80.0 million from large
studios (e.g., WB and Paramount)
StyleHaul raised an additional $6 million in Series B
funding from RTL Group, bringing the total Series B
funding to $12.5 million
theAudience raised $20.0 million in 2012 from
investors including Founders Fund, Guggenheim,
Participant Media and Intertainment Media
Source: Variety, TechCrunch, Wall Street Research, CrunchBase
15
Summer 2013
Digital Video Report

16. Top YouTube Partner Channels as of June 2013
VEVO leads in total unique visitors and number of views
MCNs Total Unique Visitors and Number of Views
50.0
47.5
600.0
533.9
500.0
45.0
35.0
34.3
400.0
28.8
30.0
25.0
476.8
28.4
389.5
26.5
22.6
309.2
20.0
300.0
20.4
16.8
200.0
15.0
10.0
160.2
137.2
127.0
5.0
Videos (in Thousands)
Unique Visitors (in mm)
40.0
100.0
85.3
0.0
0.0
Total Unique Visitors
Views*
*Views are defined as any streamed segment of audiovisual content, including both progressive downloads and live streams. For long-form content, each segment of content is counted as a
distinct video stream. Video views are inclusive of both user-initiated and auto-played videos that are viewed for longer then 3 seconds.
Source: comScore.com
16
Summer 2013
Digital Video Report

17. Industry Challenges for Multi-Channel Networks
Because music makes up the largest share of the MCN market, developers must consider legal
obstacles to maintain unique visitors and earnings
― Fullscreen was sued in August 2013 by the National Music Publishers’ Association (NMPA) for copyright
infringement of videos
― Maker Studios also settled a lawsuit with the NMPA and will pay music publishers for past and future
infringements
Utilizing MCNs requires a trade-off on behalf of the content publisher
― Ad revenue is often deferred to network providers in exchange for greater exposure and marketing
Primary Benefits / Concerns for Content Creators Joining an MCN
Access to high-end equipment and resources allowing for better quality video production
Significantly increased marketing support and endorsement
Opportunity for cross-promotion between channels within the network
Forgo advertising revenue generated from channel content
Forfeit merchandise revenue due to profit split with MCN
Potential loss of freedom in producing original content
Source: TechCrunch, Wall Street Research
17
Summer 2013
Digital Video Report

18. Industry Challenges for Multi-Channel Networks
Networks poaching other networks’ clients is proving to be dangerous to the industry
― Some MCNs are beginning to prioritize poaching big-name channels and popular YouTube personalities over
developing the quality of their current talent
Poaching talent and co-opting material from other networks has the potential to drive up the percent of
revenue share that MCNs split with talent, which limits long term financial benefits of acquiring new
talent
― MCNs currently have a net revenue margin of around 16.5% (after profit splits with both YouTube and Talent)
and further compression could prove challenging to achieving both profitability and future growth prospects
Percentage Revenue Splits
Net Revenue Margin
16.5%
45%
45.0%
30%
55%
38.5%
70%
MCN
YouTube
MCN
Talent
MCN
Talent
YouTube
Source: Wall Street Research, TubeFilter, Upfront Ventures
18
Summer 2013
Digital Video Report

19. Industry Challenges for Multi-Channel Networks
MCNs may become less advantageous as different applications emerge offering similar analytics
― Google Chrome’s free extension, VidIQ, offers video analytics to help content producers maximize audiences
― For each video, VidIQ tracks and displays watch time, social media shares and VidIQ score, which determines how
likely a video is to show up in YouTube’s related, recommended and search categories
― This may prove threatening to Fullscreen, which has a differentiated product among MCNs, offering key data analytics,
tools and support
― Optimizing videos through third-party applications may deliver increases in a video’s exposure comparable with
what MCNs provide
While incumbent MCNs have their own challenges, new or aspiring MCNs face enormous hurdles and
barriers to enter the market, including the scale already achieved by incumbents, as well as large
funding disadvantages
― The first MCNs were able to capitalize on YouTube’s Partner Grants program which allocated an initial $5.0
million to help spur the creation of original content
― Many feel the “land grab” is largely complete – so new networks have to attract talent away from the large
players – which will prove costly
Source: Wall Street Research, TubeFilter
19
Summer 2013
Digital Video Report

20. Multi-Channel Networks Reduce Dependency on YouTube
Both Youtube creators and MCNs feel that YouTube’s ad revenue splits are overbearing, curtailing the
industry’s growth potential and causing MCNs to seek strategic alternatives
― Fullscreen and VEVO remain the only MCNs rumored to be profitable
Although YouTube is currently the foundation for all MCNs, leading networks are seeking ways of
diversifying their content onto other platforms
― Maker Studios recently acquired Blip Networks and will integrate it into their multi-media platform as an
independent destination site (Fullscreen is also exploring this possibility)
― Machinima announced in July 2013 that it wants to raise $80.0 million to launch its own online video platform
subscription service with Leading MCNs Delve into Original Content Production
premium original content
This gaming and comic-oriented MCN
originated as a YouTube channel
producing original content
Having already partnered with Lionsgate
to produce an original web series in
2012, Machinima recently teamed up
with Ridley Scott to produce 12 original
Sci-Fi short films
If able to secure funding, the company is
earmarked to launch Machinima Plus, a
premium subscription product similar to
Hulu Plus
Founded in 2009, VEVO
operates as an online
music video platform
In March 2013, VEVO
announced the release of a
24-hour programmed
channel, called VEVO TV,
consisting of music-themed
original shows
supplementing blocks of
videos grouped by genre
Although Maker Studios represents
a wide range of channels, they
established themselves as a top
network in the gaming vertical in
August 2013 with a re-launch of
their gaming channel, Polaris
Maker Studios, unhappy with
YouTube’s revenue share
agreement, acquired Blip Networks
which will serve as an independent
destination site
Fullscreen differentiates itself from
other MCNs by providing its
creators with technical tools
After Fullscreen secured $30.0
million in a round of Series A
funding led by the Chernin Group,
co-founder George Strompolos
confirmed that while Fullscreen is
currently known as a network of
YouTube creators, they are on the
path of evolving into a studio
Source: Variety, Pandodaily, The Wrap
20
Summer 2013
Digital Video Report

21. SOCIAL VIDEO

22. Emergence of the Social Video Platform
Viddy, Socialcam, Chill, and Loopcam, launched in 2011, were the first mobile applications to introduce
the concept of viewing and sharing video content in a social media setting
― Between December 2011 and March 2012, mobile video app usage jumped 52.0% from 152.0 minutes per
month to 231.0 minutes per month
― During the same period, video usage from Google’s sites, primarily consisting of YouTube, fell 10.0%
Twitter, a platform based on shortened and straightforward content, launched Vine in January 2013
― Vine places control in users’ hands to customize and share brief videos with followers
― In August 2013 Vine hit 40 million users, up 207% from its reported 13 million users just two months prior
― Vine has succeeded where previous mobile video sharing apps have faltered by capitalizing on Twitter’s
customer base and market share
As the battle ensues for which platform will become the “Instagram of videos,” Instagram announced in
late June 2013 that it would allow for users to film and post videos
― Instagram reported it has reached 150 million monthly users in September 2013
July 2011 - Loopcam launches as a
platform that allows users to create
and loop gif-animations
2011
April 2011 - Viddy launches as a
social video platform and
becomes #1 in iOS App Store
2012
Source: TechCrunch, CrunchBase, Wall Street Research, LA Times
July 2012 – Autodesk acquires Socialcam,
a mobile video application, just 18 months
after its launch for $60.0 million
April 2012 - Viddy secures $30.0
million in Series B funding after
reporting 5.5 million new users in 11
days
22
2013
June 2013 – Instagram
announces it will launch a
15-second video feature
January 2013 – Twitter introduces
Vine, which allows users to film 6
seconds of video through
punctuated recording
Summer 2013
Digital Video Report

23. Online Social Media as a Marketing Tool
In the US alone, video advertisements receive 13.2 billion views
monthly
Social video advertising relies heavily on shared content through social
channels
Companies aim to leverage “earned media,” or publicity gained through
social media
― Popular viral videos may deliver businesses publicity for no extra cost
• Better tailor campaigns to
customer base
Targeting Consumers
• Marketing relevancy
• Efficient ad placement
Social Media Sharing
• Expand reach to similar
consumers
Online video advertising has overtaken traditional TV commercials in
terms of customer recall and likability
Brand Recognition
Effectiveness Metrics: TV vs. Online Video Ads
70.0%
Analytics
• Potential virality may
expand audience
64.0%
60.0%
50.0%
49.0%
46.0%
50.0%
40.0%
40.0%
32.0%
27.0%
30.0%
24.0%
20.0%
28.0%
20.0%
17.0%
15.0%
10.0%
0.0%
General Recall
Video ads in TV shows online
Source: Business Insider
Brand Recall
Message Recall
Video ads in short-form video online
23
Likability
TV commercials
Summer 2013
Digital Video Report

24. YouTube Demands High Premium for Content Distribution
With over 1.0 billion monthly users and 1.0 million content creators, YouTube reigns as the world’s
largest online video destination
― YouTube is expected to generate $5.0 billion in revenue in 2013, comprising nearly 11.0% of Google’s total
revenue
Content creators have the option to join the YouTube Partner Program, which allows them to monetize
their videos through automatically-targeted ad formats
With increasing digital video ad spend, YouTube’s revenue sharing model has been challenged as it
gives content suppliers only 55% of ad revenue generated against their content, while keeping 45%
― YouTube asserts that bandwidth, video hosting, video players, user analytics, ad serving, geo-blocking, content
filtering and other large infrastructure costs justify its collecting 45.0%
A challenge for YouTube is that premium content providers such as traditional media companies and
pure play digital studios could shift toward alternative distributors in an effort to retain more profit
Leading Online Video Monetization Platforms (May 2013)
Company Name
1
2
3
4
5
6
7
8
9
10
Google Sites
Bright Roll platform
Hulu
LIVERAIL.COM
ADAP.TV
AOL, Inc.
Specific Media
TubeMogul Video Ad Platform
NDN
Tremor Video
Total Videos (bn)
16.51
2.62
2.40
2.13
2.10
1.47
1.41
1.23
1.08
0.88
YoY
-13%
132%
-6%
N/A
117%
155%
88%
37%
89%
22%
Videos with In-stream ad
units (bn)
2.55
2.62
1.67
2.13
2.10
0.63
1.41
1.23
0.58
0.88
Company Name
YoY
84%
132%
0%
N/A
117%
66%
88%
37%
102%
22%
11
12
13
14
15
16
17
18
19
20
Microsoft Sites
CBS Interactive
Facebook
VEVO
Videology
Viacom Digital
NETFLIX.COM
Yahoo! Sites
ESPN
SpotXchange Video Ad Marketplace
Total Videos (bn)
0.81
0.79
0.73
0.66
0.63
0.63
0.62
0.59
0.52
0.48
YoY
0%
33%
N/A
-7%
58%
-8%
47%
-39%
-31%
22%
Videos with In-stream ad
units (bn)
0.27
0.49
0.00093
0.072
0.63
0.21
0.00004
0.25
0.34
0.48
YoY
-16%
27%
N/A
24%
58%
-16%
-67%
106%
-31%
-22%
Source: Variety, Wall Street Research, Wells Fargo Securities, LLC, comScore.com
24
Summer 2013
Digital Video Report

25. Social Video Advertising Opportunities
Most online video can be monetized via pre-roll insertion, banner overlays or interactive in-stream ads, among
others, but how can a platform consisting solely of 6 or 15-second videos be monetized?
The 6-second Vine or 15-second Instagram video IS the ad
Vine can easily add geo-location data to post, a comparative advantage over other video platforms
(most notably YouTube)
― This allows local restaurants and vendors to better target their specific, location based, customers
Short form video content also naturally lends itself to teaser segments
― Longer form video content could be released in 6 or 15-second segments where the next video is only unlockable after certain follower and retweet thresholds are met
― Ideally suited to ramp up fan engagement for marquee (i.e., sports, movie/TV premieres) events
Finally, short, how-to videos can be created to either showcase the product itself, or show off creative
uses for a product
― Additionally, customers could be asked to submit Vine or Instagram videos of themselves using the product
Source: AdAge
25
Summer 2013
Digital Video Report

26. Social Video Viral Advertising
Sharing of branded content grew in Q2 2013 by 7.0% across all verticals to 33.3 million video shares
― However, sharing in Q2 was highly concentrated with the top 10 videos accounting for 45.0% of total sharing
FMCG / CPG brands put in an excellent social video performance, growing shares by 10.3% from the
previous quarter, which had been boosted by a strong Super Bowl performance
Entertainment (including movie, videogame and TV trailers, but excluding music videos) remained the
strongest social vertical, with a 33.1% share of total video shares
― Entertainment sharing remains highly hit-driven, with Man of Steel and Call of Duty driving much of the activity
Social Video Sharing by Vertical: Q2 2013
Market Share Performance by Vertical: Q1 2013 vs. Q2 2013
12,000,000
+12.0%
+10.3%
3.1%
8.6%
8.7%
Quarterly Shares
10,000,000
33.1%
17.8%
28.7%
8,000,000
+1.6%
6,000,000
+218.6%
4,000,000
-67.3%
2,000,000
0
Entertainment
FMCG
Tech
Retail
Autos
Entertainment
Other
FMCG
Q1 2013
Tech
Q2 2013
Retail
Autos
Source: Wall Street Research
26
Summer 2013
Digital Video Report

27. Social Video Advertising Overview
Popular social media platforms such as Twitter and Facebook now have over 200.0 million and 1.1
billion monthly users, respectively
― As of July 2013, 76.0% of Twitter and Facebook users log in at least once each day
Simultaneously the growth of online video “snacking,” or viewing short, easily accessed clips has
served to increase social video sharing
To capitalize on the organic growth in users sharing their favorite videos, an ecosystem of video
seeding companies distribute branded videos for their agency or direct clients has developed
― Optimum content placement, or “seeding,” is achieved by providing means for the advertiser to segment and
target their intended audience by geo-location, interest vertical, etc., across as large a publisher base as
possible, with additional sequential ads, vendor or in-network re-targeting capabilities provided
These companies such as Giant Media, Unruly Media and Feed Company, among others, seek to
maximize outreach and optimize content placement
― Outreach is designed to target both social media communities, influential online personalities and followers of
niche interest blogs and forums across the web and get people talking about and sharing a campaign
Source: Wall Street Research,
27
Summer 2013
Digital Video Report

28. Social Video Advertising Overview
To ensure that consumers are truly engaging with the brand, and to effectively measure a campaign’s
ROI, social video campaigns are generally priced on a CPV model
However, video views are just one important consideration when trying to effectively measure brand
engagement, with other metrics arguably providing deeper insight:
― Time spent viewing the ad, even if not to completion
― Interactivity, such as starting the ad, or intentionally mousing over it
― Dwell rate, or the proportion of impressions that were intentionally engaged with by touch, interaction or click
― Sharing or commenting on ads – the foundation of the social, word-of-mouth or viral aspects of brand
engagement
― Visiting a brand’s website as a result, even if not directly, of viewing the video ad
― Simply paying attention to ads and being aware of the brand – which are, in many ways, the core
engagement metrics
Source: eMarketer
28
Summer 2013
Digital Video Report

29. Social Video Advertising Opportunities
Making branded videos shareable can dramatically increase a brand’s reach, generate recommendations among
peer groups, increase brand uplift, and trigger purchases / conversions
While video views are primarily an indication of media spend (“paid media”), video shares on platforms
such as Facebook, Twitter and across the blogosphere, demonstrate that the consumer has engaged
much more deeply with the content
― These shares are an indication that the product or promotional video has gained genuine social traction and
organic consumer demand (“earned media”)
― As word-of-mouth is the primary factor behind 20%-50% of purchasing decisions, peer-to-peer
recommendations are one of the most powerful marketing tactics available to move buyers down the purchase
funnel
Survey: User Behavior Within Three Days of Video Viewing
40.0%
30.0%
12.0%
9.0%
20.0%
10.0%
26.0%
6.0%
9.0%
21.0%
20.0%
3.0%
8.0%
1.0%
7.0%
Commented on
video
Shared link of
video
11.0%
0.0%
Talked to someone Went brand's site
about it
Source: Unruly Media, McKinsey
Searched for
brand online
Searched for
similar products
Immediate
29
2.0%
5.0%
2.0%
4.0%
Visited/followed Sent video directly
brand on social
to someone
media
2.0%
2.0%
Purchased
product
Delayed
Summer 2013
Digital Video Report

30. Social Video Seeding Opportunities
Added competition in social video has fueled the need for the leading companies to go beyond seeding
to stand out from the crowd and stay ahead through various initiatives including:
1.
Emotional measurement
— Take a more scientific approach to work out what makes someone decide to share a piece of content
— Calculate the amount of “earned media” a video is likely to attract across the social web and how much
paid investment (“paid media”), will need to be deployed
— Partner with companies who measure how users are likely to respond to advertising
2.
Exchange-based seeding
— Create an ad format that can be served into standard MPU (300x250) and into Facebook by buying on
the exchanges
— Focus more on presenting the media as content, rather than as an ad
3.
Self-service platform
— Develop a platform through which smaller advertisers can set up their own campaigns in a simple way
and can choose from a variety of geo and audience targeting options
Source: Videoadnews.com
30
Summer 2013
Digital Video Report

31. OTT VIDEO PLATFORMS

32. OTT Overview and Trends
Bonus Add-on
Advertisements
VOD
SVOD
The global OTT video market is estimated to be worth over $20.0 billion as of February 2013, with
opportunities for extensive growth in upcoming years
― Much of this growth potential lies abroad, as approximately 510.0 million (excluding current developed markets,
India and China) international homes are expected to have broadband by 2021
Subscription video-on-demand (SVOD) represents a key market opportunity in the sector while the highly
fragmented global marketplace allows for potential consolidation
― SVOD platforms are expected to spend between $9.2 billion and $13.8 billion on content rights by 2021, with
content producers expected to earn up to $10.0 billion annually from OTT digital rights sales
Apart from SVOD, OTT providers focus on three other principal monetization strategies: bonus add-ons,
advertisements and VOD
Concerns arise with certain research suggesting that the growth in SVOD rights sales may eat into
revenues of the much more pervasive advertising strategy
― SVOD inherently promotes the avoidance of ads and a shift away from traditional television ratings metrics
Major players, such as Netflix, will gain the most from global SVOD growth if they can leverage their
market position to wisely expand their content offerings and geographic distribution
Source: Wall Street Research
32
Summer 2013
Digital Video Report

33. Original Content
The industry leaders in online television expand to include original programming
Netflix leads in original content
programming with critically
acclaimed offerings such as
Arrested Development, House of
Cards and most recently, Orange
is the New Black
In late July 2013, Netflix
announced it will expand its
lineup into additional content
verticals including feature films,
documentaries, stand-up comedy
specials, news programs and talk
shows
Netflix executives attributed their
YoY subscriber growth for Q2
2013 to their original programs
Hulu began launching original
series as early as 2011, with its
most recent offerings featuring
stars such as Seth Meyers and Eva
Longoria
In April 2013, with content costs
rising, Hulu lost the exclusive rights
to old SNL clips to Yahoo; this may
lead to a need for increased focus
on original programming
Hulu retracted its for-sale status for
a second time in July 2013, with
owners Disney, NBCUniversal and
21st Century Fox instead investing
$750.0 million into the company to
compete more directly with Netflix
and Amazon Prime
Although it remains in last
place in terms of original
content production, Amazon
created buzz in the industry
earlier this year when it put
out 14 pilots at once and
invited user feedback,
disrupting traditional pilot
season in favor of
crowdsourcing
After airing its original pilots
in April 2013 and allowing
for viewers to vote on their
favorites, Amazon
announced in May that it will
produce five original series
Source: TechCrunch, Vulture.com, Wall Street Research
33
Summer 2013
Digital Video Report

34. Internet-to-TV Devices
The compatibility of Internet-to-TV devices with an increasing number of content delivery channels
signifies the high growth potential for the OTT market in coming years
― The cost to convert a single film for ten Internet delivery channels is in the range of $6,000-$8,000
― Content providers have proven willing to assume the expenditure due to the growing popularity of the OTT
Internet video platform
― Greater compatibility opens the market for more competing OTT content delivery channels
― Rumors suggest HBO is considering unbundling HBO Go and offering it as a broadband package
Growing Compatibility of Internet-to-TV Devices
OTT Content Channels
Chromecast
Apple TV
Roku
Xbox
Samsung Smart TV
$35
$100
$50-$100
$200-$500
$800-$3,699
Yes
Yes
Yes
Yes
Yes
Hulu Plus
Via Laptop
Yes
Yes
Yes
Yes
HBO Go
Via Laptop
Yes
Yes
Yes
Yes
Amazon Prime
Via Laptop
Via AirPlay
Yes
Yes
Yes
Google Play
Yes
Via AirPlay
No
No
Yes
Apple iTunes
No
Yes
No
No
Yes
Amazon
Via Laptop
Via AirPlay
Yes
No
Yes
Vudu
Via Laptop
Via AirPlay
Yes
Yes
Yes
No
No
No
Yes
No
Netflix
Subscription
Options
Rental &
Purchase
Options
Xbox Video
Source: Wall Street Research
34
Summer 2013
Digital Video Report

35. Internet-to-TV Device Market
Although game consoles are currently the preferred method for Internet-to-TV connection, emerging
devices such as smart TVs are on the rise
― Smart TV adoption has steadily increased in China due to aggressive promotions by manufacturers
― Historical usage of smart TVs had been limited by high prices and the widespread availability of other devices
― However, in a survey conducted by Digitalsmiths, the increasing convenience, and relative cheapness, of OTT
platforms is driving more consumers to 3rd party rental and subscription services that are delivered over-the-top
Internet-to-TV Connection Type
(US, Japan, China, France, Germany, Italy and UK)
Connected TV,
6.3%
Desktop PC, 9.0%
Survey: Why Use OTT Services?
0.0%
Others, 1.0%
Convenience
Game console,
19.3%
Cable / satellite,
10.7%
30.8%
Better selection
Easier to find content
DVD / blu-ray
player, 16.3%
Ability to watch on iPad/tablet
60.0%
48.3%
Ability to watch certain content
Media center box,
17.1%
40.0%
53.1%
Cheaper
Smart TV, 10.2%
Notebook PC,
10.3%
20.0%
27.2%
23.1%
18.3%
Ability to watch on smartphone
14.4%
Other
14.7%
Source: Wall Street Research, Fierce Telecom, Digitalsmiths
35
Summer 2013
Digital Video Report

36. Trends for Global Smart TV Adoption
Smart TV adoption is slated to grow exponentially due to:
― Consumers experiencing device fatigue as they look to eliminate devices which perform overlapping tasks
― The smart TV covers the work of the landline, TV, DVD player, entertainment system, and game station all in one
― The continued move from the old broadcast model to on-demand and OTT video
― Smart TVs offer a more curated viewing experience for the consumer at a lower cost structure than broadcasting
― The ability to use social networking services in conjunction with television services
― The next evolution of TV enables viewers to access and share media content via Facebook and Twitter
― Establishes the possibility of setting up “virtual living rooms” where friends can watch videos at the same time through
social networks, enabling a shared viewing experience
Countries will see a rise in smart TV adoption as consumers become more comfortable using the connectivity
features, and as navigation and search capabilities become more intuitive and user friendly
Leading Countries for Smart TV Penetration
50.0%
42.0%
% of Households
40.0%
40.0%
40.0%
34.0%
28.0%
30.0%
26.0%
26.0%
25.0%
Spain
Netherlands
US
20.0%
10.0%
0.0%
France
Turkey
Poland
Germany
Italy
Source: MediaTel
36
Summer 2013
Digital Video Report

37. OTT Industry Challenges
OTT content is the largest driver of network capacity upgrades
― In a survey conducted by Rapid TV News, 82.0% of operators
upgraded network infrastructure due to increased usage
― 75.0% of operators attribute these changes to popularity of
streaming video
OTT growth may be hindered by Internet providers
― Video streaming quality on OTT platforms are trending upward,
requiring more bandwidth
― Broadband service providers are opting for bandwidth caps to limit
traffic caused by video streaming
Tiered
Pricing
Plans
Caching
Networks
Scalable
Video
Coding
(SVC)
Consumer Frustrations with Internet OTT Video
60.0%
53.0%
50.0%
HEVC
Video
Codec
Increased
Mobile
Capabilities
Increasing
OTT
Bandwidth
Greater
Storage
Density
Multicast
Peer
Assisted
Delivery
51.0%
45.0%
40.0%
30.0%
19.0%
20.0%
19.0%
17.0%
12.0%
10.0%
0.0%
Advertising during the Time required to buffer / Video quality (i.e., poor
program
download the video
definition)
Cost of the video
content
Source: Wall Street Research
37
Broadband / High-speed
cost of downloading the
video
Range of programs
available
Navigation experience
(i.e., search / epg)
Summer 2013
Digital Video Report

38. Traditional Networks vs. OTT
Despite the growing popularity of OTT, traditional television networks are having some success in
competing with this new sector of OTT providers
― Comcast has implemented competitive on-demand services in response, and some traditional networks have
quickly developed multi-platform accessibility on desktops, tablets and smartphones
― Other traditional TV operators are looking to partner with OTT providers to provide more flexible, on-demand
services
In terms of VOD rentals, managed networks still top the market compared to newer OTT players
― VOD rentals, however, do not appear to be nullifying the losses in physical DVD sales
Share of Paid VOD Movie Rentals
25.0%
23.0%
% Share
20.0%
14.0%
15.0%
9.0%
10.0%
8.0%
7.0%
7.0%
Verizon
DISH
5.0%
0.0%
Comcast
DirecTV
Time Warner Cable
Apple iTunes
Source: Wall Street Research
38
Summer 2013
Digital Video Report

39. APPENDIX

40. TRANSACTION CASE STUDIES

41. Case Study: Video Advertising (8/7/2013)
ACQUIRES
Acquirer: AOL
Target: Adap.tv
Bus. Description: Offers a suite of online
content, products and services to consumers,
advertisers, publishers and subscribers
worldwide
Bus. Description: Builds technology to
connect video advertising buyers to sellers
on a single platform
Implied EV: $405.0mm
Deal Commentary
― Demonstrates AOL’s increasing focus on two of the fastest-growing sectors of online advertising:
video and programmatic ad buying
― Combination of AOL On video network and Adap.tv will give AOL an end-to-end solution and video
stack for publishers and advertisers, including premium original production, content aggregation
and syndication, robust video CMS technology and a leading video advertising platform
Source: Capital IQ, Wall Street Research
41
Summer 2013
Digital Video Report

42. Case Study: Video Advertising (8/5/2013)
ACQUIRES
Acquirer: Blinkx
Target: Grab Media
Bus. Description: Provides video search and
advertising services on the Internet worldwide
Bus. Description: A video distribution
company that connects video content from
a collection of professional sources and
brand-name advertisers to ideal viewers
Implied EV: Not Disclosed
Deal Commentary
― The deal should help Blinkx to accelerate its syndication drive, including the introduction of Blinkx
VideoAdvantage, designed to expand distribution of premium video content across the web
― Enables Blinkx to add incremental audience and augment its relationships with advertisers,
publishers and content providers
Source: Capital IQ, Wall Street Research
42
Summer 2013
Digital Video Report

43. Case Study: Multi-Channel Networks (8/21/2013)
ACQUIRES
Acquirer: Maker Studios
Target: Blip Networks
Bus. Description: Leading MCN generating
over 2.0 billion monthly video views that
specializes in production and promotion
services for its channels
Bus. Description: Blip Networks is a
digital media company that develops,
produces, and distributes Web content
Implied EV: N/A
Deal Commentary
― Blip Networks will serve as a content distribution resource for Maker Studios
― The acquisition will reduce Maker Studios reliance on YouTube for content distribution
Source: LA Times
43
Summer 2013
Digital Video Report

44. Case Study: Multi-Channel Networks (9/12/13)
FUNDED BY
Target: Maker Studios
Investors: Canal+, Astro, SingTel Innov8,
Lakestar, and Northgate Capital
Bus. Description: Leading MCN generating
over 2.0 billion monthly video views that
specializes in production and promotion
services for its channels
Investment Size: $26.0mm
Investment Commentary:
― The $26.0 million comes in addition to the $36.0 million Maker Studios raised in December 2012
― The December 2012 capital raise was lead by Time Warner Cable and a 25.0% stake was acquired
― Maker Studios acquired Blip Networks to help facilitate original programming and to make content
more ad-friendly
Source: Wall Street Research, TechCrunch
44
Summer 2013
Digital Video Report

45. Case Study: Multi-Channel Networks (5/1/2013)
ACQUIRES
Acquirer: DreamWorks Animation (“DWA”)
Target: Awesomeness TV
Bus. Description: Leading animation
production company for film and television
Bus. Description: MCN of 55,000
YouTube channels comprised of sketch
comedy, scripted and reality/ talk shows for
teens
Implied EV: $150.5mm
Deal Commentary
― AwesomenessTV makes DWA a player in the online content creation space
― AwesomenessTV will serve as a promotional platform for DWA’s animated properties
― As part of the deal, AwesomenessTV CEO Brian Robbins will help develop a branded digital
channel aimed at family audiences for DWA
Source: Wall Street Research
45
Summer 2013
Digital Video Report

46. Case Study: Multi-Channel Networks (5/3/2012)
ACQUIRES
Acquirer: Discovery Communications
Target: Revision3
Bus. Description: Largest nonfiction media
company reaching more than 1.5 billion
cumulative subscribers
Bus. Description: MCN with more than
23.0 million monthly unique viewers across
27 digital channels
Implied EV: $35.0mm
Deal Commentary
― Strengthens Discovery’s online presence
― Revision3’s cost-effective online video content allows Discovery to remain the nonfiction media
industry leader on multiple platforms
― Revision3 had raised $10.0 million in two rounds from Greylock Partners with additional funding
from Marc Andreessen and Mark Cuban
Source: Wall Street Research
46
Summer 2013
Digital Video Report

47. Case Study: Multi-Channel Networks (6/17/13)
FUNDED BY
Target: Fullscreen
Investors: The Chernin Group, Comcast
Ventures, WPP Digital
Bus. Description: Leading MCN of over
10,000 YouTube channels generating over 2.5
billion monthly video views
Investment Size: $30.0mm
Investment Commentary:
― Fullscreen is looking to focus on video production and investing in the creation of owned and
operated content
― Fullscreen further plans to expand the number of platforms it can reach as well as its international
presence into overseas markets
Source: Wall Street Research, TechCrunch
47
Summer 2013
Digital Video Report

48. Case Study: OTT Video Platforms (7/3/2013)
ACQUIRES
Acquirer: Samsung Electronics
Target: Boxee
Bus. Description: Develops, manufactures
and sells consumer electronics
Bus. Description: Offers set top box
devices for live TV broadcasts, DVR and
more
Implied EV: $30.0mm
Deal Commentary
― Samsung is now a more direct competitor in the OTT video streaming space with Apple, Roku and
Intel
― Samsung shut down Boxee’s signature cloud DVR service, upsetting Boxee’s existing customers
― Although Boxee has had its focus on TV hardware, speculation suggests Samsung will utilize
Boxee’s software technology to boost their smart TV’s capabilities
Source: BroadCastEngineering, VentureBeat, Israel21c
48
Summer 2013
Digital Video Report

49. PUBLIC AND TRANSACTION COMPARABLES

50. Select Digital Media Public Comparables
(figures in millions of $USD, except per share)
Company Name
Online Media
Akamai Technologies, Inc.
Amazon.com Inc.
AOL Inc.
Apple Inc.
Baidu, Inc.
Blinkx plc
Brightcove, Inc.
Diamond Foods, Inc.
Digital Generation, Inc.
Facebook, Inc.
Google Inc.
IAC/InterActiveCorp
Microsoft Corporation
Netflix, Inc.
Pandora Media, Inc.
Phoenix New Media Limited
RealNetworks Inc.
SINA Corporation
SIRIUS XM Radio Inc.
Tremor Video, Inc.
Yahoo! Inc.
Yandex N.V.
Youku Tudou Inc.
YuMe, Inc.
Share Price as of:
10/18/2013
$51.89
310.89
33.95
492.81
154.90
2.42
12.69
21.80
12.88
49.11
871.99
55.63
34.13
300.85
24.90
11.87
8.55
86.58
3.88
10.64
34.15
38.33
29.55
9.92
Mean
Median
Market
Cap (mm)
$9,244.7
142,040.2
2,611.8
447,718.2
54,180.1
892.0
359.4
487.0
359.5
119,598.6
290,391.0
4,615.9
285,352.2
17,726.7
4,710.0
914.4
305.0
5,779.5
24,091.9
527.2
34,844.0
12,511.3
4,900.9
317.1
Enterprise
Value (EV)
EV / LTM
Revenue
EBITDA
EV / CY 2013E
Revenue
EBITDA
LTM Annual
Revenue Growth
$8,714.0
137,619.2
2,244.8
422,001.2
50,763.0
833.2
328.9
1,072.0
698.3
111,513.6
244,159.0
4,624.8
225,428.2
17,146.6
4,651.1
727.1
68.3
5,023.6
26,690.0
664.6
32,314.0
12,295.0
4,359.0
370.4
5.9x
2.1x
1.0x
2.5x
11.9x
4.0x
3.4x
1.2x
1.8x
18.2x
4.4x
1.5x
2.9x
4.3x
8.8x
3.6x
0.3x
8.7x
7.4x
5.4x
6.7x
12.1x
11.1x
2.8x
16.0x
NA
4.5x
7.6x
23.9x
29.5x
NA
17.2x
6.8x
40.4x
14.4x
9.7x
7.5x
NA
NA
29.7x
NA
NM
21.7x
NM
15.8x
27.4x
NA
47.0x
4.9x
1.5x
0.9x
2.3x
7.6x
3.2x
2.6x
1.2x
1.7x
11.3x
3.6x
1.3x
2.6x
3.4x
5.2x
2.6x
NA
6.2x
6.4x
3.8x
7.0x
8.0x
5.9x
1.8x
11.3x
20.3x
4.5x
7.0x
18.1x
17.4x
NA
9.1x
5.5x
20.6x
9.6x
6.1x
6.8x
33.8x
NA
13.5x
NA
31.9x
18.4x
126.8x
19.3x
17.8x
NA
35.0x
17.0%
23.0%
1.9%
13.8%
42.2%
73.0%
27.7%
-12.0%
1.0%
41.4%
30.5%
24.1%
5.6%
14.1%
56.0%
14.9%
-21.6%
14.7%
12.8%
0.0%
-3.1%
37.1%
95.8%
0.0%
$54,762.9
$4,837.4
5.5x
4.2x
19.9x
16.6x
4.1x
3.4x
21.6x
17.6x
21.3%
14.8%
Source: CapitalIQ and Siemer Proprietary Research
50
Summer 2013
Digital Video Report

51. Select Traditional Media Public Comparables
(figures in millions of $USD, except per share)
Company Name
Traditional Content and Cable
AMC Networks Inc.
Axel Springer AG
CBS Corporation
Crown Media Holdings Inc.
Discovery Communications, Inc.
The Walt Disney Company
Liberty Media Corporation
Lions Gate Entertainment Corp.
Scripps Networks Interactive, Inc.
Starz
Time Warner Inc.
Twenty-First Century Fox, Inc.
Viacom, Inc.
Share Price as of:
10/18/2013
$65.95
59.12
56.25
3.23
80.54
66.21
149.23
34.77
77.72
29.05
67.92
33.23
82.00
Market
Cap (mm)
$4,766.5
5,840.8
35,740.6
1,161.8
28,208.6
118,280.3
17,032.9
4,742.2
11,337.5
3,394.2
62,486.8
75,993.5
39,126.6
$34.20
16.27
136.23
46.06
15.45
60.65
47.88
15.98
2.98
115.79
47.09
Mean
Median
Source: CapitalIQ and Siemer Proprietary Research
EV / LTM
Revenue
EBITDA
EV / CY 2013E
Revenue
EBITDA
LTM Annual
Revenue Growth
$181,636.2
4,350.6
14,133.0
120,213.3
68,433.8
33,296.5
21,865.1
66,275.6
47,478.5
33,090.7
134,759.0
$6,502.7
6,920.4
41,881.6
1,586.9
34,231.6
131,722.3
30,395.9
6,038.9
12,784.6
4,368.7
79,870.8
89,438.5
47,066.6
4.5x
1.5x
2.8x
4.5x
7.0x
3.0x
8.2x
2.2x
5.3x
2.5x
2.7x
3.2x
3.5x
13.0x
8.8x
11.6x
5.9x
16.9x
10.8x
30.5x
18.4x
11.1x
9.9x
10.4x
13.2x
11.6x
3.9x
NA
2.7x
NA
5.5x
2.7x
6.2x
2.0x
4.7x
2.6x
2.6x
2.9x
3.2x
10.3x
NA
10.4x
NA
12.4x
9.6x
20.8x
14.1x
10.5x
10.1x
9.8x
12.0x
10.0x
14.4%
1.1%
7.6%
3.0%
11.4%
5.6%
119.6%
56.1%
10.8%
6.8%
1.4%
10.5%
-7.4%
$37,908.4
$30,395.9
Mean
Median
MVPDs / Aggregators
AT&T, Inc.
Cablevision Systems Corporation
Charter Communications, Inc.
Comcast Corporation
Deutsche Telekom AG
DIRECTV
Dish Network Corp.
NTT DOCOMO, Inc.
Singapore Telecommunications Limited
Time Warner Cable Inc.
Verizon Communications Inc.
Enterprise
Value (EV)
3.9x
3.2x
13.2x
11.6x
3.5x
2.9x
11.8x
10.4x
18.5%
7.6%
$253,355.2
14,099.0
26,930.0
162,956.3
136,294.4
50,144.5
26,532.6
64,945.3
52,567.1
56,604.7
235,200.0
2.0x
2.1x
3.5x
2.5x
1.7x
1.6x
1.9x
1.4x
3.6x
2.6x
2.0x
8.7x
8.2x
10.1x
7.5x
6.6x
6.6x
9.1x
4.2x
9.8x
7.0x
7.2x
1.9x
2.2x
3.0x
2.4x
NA
1.5x
1.8x
1.4x
NA
2.5x
1.9x
5.9x
8.2x
8.3x
7.2x
NA
6.0x
8.7x
4.0x
NA
6.8x
5.4x
0.1%
4.3%
4.5%
7.7%
-0.2%
7.6%
-0.8%
5.8%
-4.3%
7.0%
4.5%
$98,148.1
$56,604.7
2.3x
2.0x
7.7x
7.5x
2.1x
1.9x
6.7x
6.8x
3.3%
4.5%
51
Summer 2013
Digital Video Report

52. Select Precedent Online Video Transactions
EV / LTM
(figures in millions of $USD)
Date Announced
10/8/2013
9/1/2013
8/21/2013
8/21/2013
8/12/2013
8/7/2013
8/5/2013
7/9/2013
7/1/2013
6/28/2013
5/30/2013
5/29/2013
5/6/2013
5/1/2013
4/26/2013
4/8/2013
2/11/2013
1/7/2013
12/12/2012
11/14/2012
11/13/2012
11/2/2012
9/19/2012
8/10/2012
7/18/2012
7/17/2012
Target
Break Media
ViKi
Blip Networks, Inc.
Orb Networks, Inc.
Stringwire
Adap.tv
Grab Media
Greenhouse Studio, Inc.
Red Bee Media Limited
Virtual Nerd, LLC
DeFranco Creative
Zubox Limited
PPStream, Inc.
AwesomenessTV, Inc.
E-surfing Media Co., Ltd.
Microsoft, Mediaroom IPTV Business
Preview Networks Aps
Pipewave, Inc.
KickApps Corporation
Russer Communications
Verivue, Inc.
iQIYI.com, Inc.
Zui.com, Inc.
15miles Inc.
Castfire, Inc.
Socialcam Inc.
Acquirer
Alloy Digital, LLC
Rakuten, Inc.
Maker Studios, Inc.
Qualcomm
NBC News Digital LLC
AOL
Blinkx
Burdette Ketchum
Ericsson
Pearson
Revision3 Corporation
Digimania, Ltd.
iQIYI.com, Inc.
DreamWorks Animation SKG
China Telecommunications Corporation
Ericsson
Rightster Ltd.
ZEFR, Inc.
Perfect Sense Digital, LLC
Corcoran Consulting & Coaching Inc.
Akamai Technologies, Inc.
Baidu, Inc.
Saban Brands LLC
GearyLSF Group
AlphaBird, Inc.
Autodesk, Inc.
Implied EV
NA
$200.0
NA
NA
NA
405.0
NA
NA
NA
NA
NA
NA
370.0
150.5
244.9
NA
NA
NA
NA
NA
32.1
NA
NA
NA
NA
60.0
Revenue
NA
NA
NA
NA
NA
3.5x
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EBITDA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Source: CapitalIQ and Siemer Proprietary Research
52
Summer 2013
Digital Video Report

53. Select Precedent Online Video Transactions
EV / LTM
(figures in millions of $USD)
Date Announced
6/18/2012
6/17/2012
6/13/2012
5/21/2012
5/15/2012
5/14/2012
3/12/2012
2/8/2012
1/23/2012
1/17/2012
1/10/2012
1/6/2012
12/14/2011
11/29/2011
10/31/2011
9/26/2011
9/21/2011
8/24/2011
3/29/2011
3/25/2011
3/24/2011
2/22/2011
2/9/2011
1/31/2011
1/11/2011
Target
Clevver Media LLC
Metacafe, Inc.
Wuaki.TV, S.L.
On Demand Group, Ltd.
Cull TV, Inc.
Splat Interactive, Inc.
Tudou Holdings Limited
DirectBrand
Live Matrix, Inc.
WebVisible, Inc.
SBDS Active, SAS
ChannelFlip Media Limited
Quadia Web TV B.V.
Genesis Media LLC
Auditude, Inc.
QianJun, Inc.
Remixation, Inc., Vodpod.com
FilmRookie
The Web TV Enterprise Ltd.
Global Inspiration s.r.o.
Camtenna Oy
Fliqz, Inc.
Shine Limited
KickApps Corporation
BitGravity, Inc.
Source: CapitalIQ and Siemer Proprietary Research
Acquirer
Implied EV
Revenue
EBITDA
Alloy Digital, LLC
Collective Digital Studio, LLC
Rakuten, Inc.
Vubiquity, Inc.
EatLime, Inc.
UIEvolution, Inc.
Youku Tudou Inc
Image Now Design and Film Consultants
OVGuide.com, Inc.
The Berry Company, LLC
Lagardere Active SAS
Shine Limited
Van den Ende; Deitmers Venture Capital
TVGenesis LLC
Adobe Systems Inc.
Renren Inc.
Lockerz, LLC
Eurotech, Ltd.
Collective Media, Inc.
Seznam.cz, a.s.
Qbrick AB
VBrick Systems, Inc.
Twenty-First Century Fox, Inc.
KIT digital, Inc.
Tata Communications
NA
NA
$18.7
27.0
NA
NA
$721.8
NA
NA
NA
NA
NA
NA
NA
NA
80.0
NA
NA
NA
NA
NA
NA
615.0
43.2
10.7
NA
NA
NA
NA
NA
NA
7.3x
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.9x
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Mean
Median
$213.8
$80.0
5.6x
5.6x
NA
NA
53
Summer 2013
Digital Video Report

54. Select Precedent Online Video Financings
Amount
Raised ($mm)
$26.0
Date
Company
9/13/2013 Maker Studios, Inc.
Description
Operates a digital video studio that engages in digital
content production and distribution
Investors
Canal+; SingTel Innov8; Astrolabe
Ventures; Lakestar; Northgate Capital
Round
C
8/16/2013 Open Road Integrated
Media, Inc.
Operates as a digital publisher and multimedia content
company that publishes ebooks and produces video
content
Food-focused online video network
Azure Capital Partners; Golden Seeds
LLC; Kohlberg Ventures; NewSpring
Capital
Raine Ventures; Redpoint Ventures
NA
11.0
B
10.0
Provides video management, delivery, and measurement
solutions on a cloud-based platform that enables
advertisers to manage, deliver, and measure video
Develops video technology solutions that help carriers to
identify, monitor, store, and deliver Internet video to their
subscribers
Provides an online video service that offers a selection of
hit shows, clips, movies, and more
Digital Generation, Inc.
NA
40.0
Accel Management Co, Inc; Bessemer
Venture Partners; Redpoint Ventures
C
16.0
NBCUniversal Media, LLC; The Walt
Disney Company; Twenty-First Century
Fox
Provides audience targeting and optimization solutions for Accel Management Co, Inc.; Samsung
publishers and advertisers in the U.S.
Venture Investment Corporation; Cox
Media Group, Inc.
Provides online video advertising solutions to connect
New Enterprise Associates; Comcast
brands with consumers
Ventures; Valhalla Partners; Catalyst
Investors; Pinnacle Ventures
Fashion-focused online video network
RTL Group
Provides digital advertising solutions for advertisers and
Redpoint Ventures; CBC Capital; WPP
agencies
Digital; KPCB China
NA
750.0
C
20.0
D
68.3
B
C
6.0
10.0
8/15/2013 Tastemade
8/12/2013 Extreme Reach, Inc.
7/30/2013 Qwilt Inc.
7/12/2013 Hulu, LLC
5/23/2013 Collective Media, Inc.
5/15/2013 Videology, Inc.
5/14/2013 StyleHaul
4/8/2013 Moment Systems
Source: CapitalIQ and Siemer Proprietary Research
54
Summer 2013
Digital Video Report

55. Select Precedent Online Video Financings
Date
4/4/2013
Company
Fullscreen
3/28/2013 Pixability, Inc.
3/26/2013 LearnZillion, Inc.
Description
Operates as a digital media company that builds nextgeneration channels and networks on the YouTube
platform
Provides cloud-based online video marketing software
and consulting solutions geared toward small and mediumsized businesses
Provides online video lessons for teachers, children and
parents
3/6/2013
Innovid, Inc.
Operates as an interactive video advertisement
development company
3/5/2013
Epoxy.tv
Provides professional tools for video channel
management
2/28/2013 VEVO LLC
Owns and operates an online syndication network and
platform for entertainment content
1/31/2013 FreeWheel Media, Inc. Provides online video advertising solutions for global
media companies
1/29/2013 Magnify Networks, Inc. Provides cloud-based video curation solutions to online
publishing, non / profits, communities, brands and
advertising networks
1/25/2013 StyleHaul Inc.
Owns and operates an online video community through
which it provides makeup and style tutorial videos
Investors
Comcast Ventures; The Chernin Group,
LLC; WPP plc
Quad / Graphics, Inc.
Round
A
Amount
Raised ($mm)
$30.0
NA
6.6
A
7.0
C
11.0
Calvert Investment Management, Inc.;
DCM; NewSchools Venture Fund,
Investment Arm; O'Reilly AlphaTech
Ventures, LLC; Calvert Social Investment
Fund - Calvert Balanced Portfolio; DC
Community Ventures LLC
Sequoia Capital; TNAVenture Holding
GmbH; Genesis Partners Ltd.; Vintage
Investment Partners
Upfront Ventures; Greycroft Partners;
Bertelsmann Digital Media Investments;
Advancit Capital
YouTube, LLC
NA
2.0
NA
50.0
DIRECTV
NA
NA
WS Investments
NA
7.0
B
12.5
Bertelsmann Digital Media Investments;
Siemer Ventures; RezVen Partners LLC
Source: CapitalIQ and Siemer Proprietary Research
55
Summer 2013
Digital Video Report

56. Select Precedent Online Video Financings
Date
Company
12/3/2012 Vdopia Inc.
11/20/2012 Kaltura Inc.
11/14/2012 Maker Studios, Inc.
11/7/2012 ClipClock
10/19/2012 LongTail Ad
Solutions, Inc.
10/15/2012 Tvinci Ltd.
6/27/2012 Namesake, Inc.
6/14/2012 Ooyala, Inc.
6/7/2012
Visible Measures
Corporation
5/7/2012
Machinima, Inc.
Investors
Description
Provides online video advertising network and technology NA
services to brands and advertisers
Designs and develops online video solutions
Intel Capital; Mitsui & Co. Global
Investment, Inc.; Avalon Ventures; ORIX
Venture Finance, LLC; Nexus Venture
Partners; .406 Ventures, LLC
Owns and operates a digital video studio that engages in Greycroft Partners LLC; Upfront Ventures;
digital content production and distribution
Time Warner Investments; Daher Capital
Develops and operates an online video editing and
Runa Capital
sharing platform
Provides online video solutions
Greycroft Partners LLC; The Cue Ball
Group, LLC
Operates an over-the-top television platform for pay TV
Trellas Enterprises Limited; Kaedan
Owns and operates an online community for video sharing Atlas Venture L.P.; Kleiner, Perkins,
Caufield & Byers; William Morris
Endeavor Entertainment, LLC;
Offers online video management, publishing, analytics and Sierra Ventures; Rembrandt Venture
monetization solutions
Partners; EDB Investments Pte. Ltd.; The
CID Group; Telstra Applications and
Ventures Group
Operates as an independent third-party media
Mohr Davidow Ventures; Advance
measurement firm for online video advertisers and
Publications, Inc.; General Catalyst
publishers
Partners; Northgate Capital Group,
L.L.C.; DAG Ventures, LLC
Operates a video entertainment network for video gamers Google Inc.; MK Capital; Redpoint
Ventures
Round
B
Amount
Raised ($mm)
$7.4
D
25.0
NA
36.0
A
2.5
B
5.0
NA
A
4.5
8.0
E
35.0
NA
21.5
D
36.0
Source: CapitalIQ and Siemer Proprietary Research
56
Summer 2013
Digital Video Report

57. Select Precedent Online Video Financings
Date
Company
3/21/2012 NicePeopleAtWork SL
3/2/2012
DramaFever Corp.
2/21/2012 Maker Studios, Inc.
2/8/2012
Unicorn Media, Inc.
2/1/2012
Videoplaza AB
2/1/2012
Conviva, Inc.
1/26/2012 StyleHaul Inc.
Description
Develops and provides high definition Internet video
distribution software solutions to Web, mobile devices, set
top boxes and connected televisions
Operates DramaFever.com, an online video platform for
entertainment on the Web
Investors
Axón Capital e Inversiones, SGECR,
S.A.
AMC Networks Inc.; MK Capital;
Bertelsmann Digital Media Investments;
NALA Investments, LLC
Owns and operates a digital video studio that engages in Greycroft Partners LLC; Upfront Ventures;
digital content production and distribution
YouTube, LLC
Provides Internet video solutions that enable companies to Nexeven AB
maximize IP video profitability
Develops advertising solutions for publishers of online
Innovacom Gestion; QUALCOMM
video
Ventures; Northzone Ventures;
Creandum AB
Provides a media platform to companies for managing the Time Warner Investments
distribution of live media and programming online
Owns and operates an online video community through
RezVen Partners LLC
which it provides makeup and style tutorial videos
Mean
Median
Round
NA
Amount
Raised ($mm)
$1.3
B
6.0
NA
NA
A
NA
B
12.0
NA
15.0
A
4.4
$39.5
$11.0
*Mean and Median calculation excludes Hulu, LLC
Source: CapitalIQ and Siemer Proprietary Research
57
Summer 2013
Digital Video Report

58. Select Precedent Mobile Video Transactions
EV / LTM
(figures in millions of $USD)
Date Announced
9/4/2013
5/19/2013
4/17/2013
3/14/2013
10/9/2012
9/25/2012
7/17/2012
6/7/2012
6/6/2012
8/1/2012
5/1/2012
4/9/2012
12/9/2011
10/17/2011
10/10/2011
4/13/2011
6/15/2011
2/4/2011
2/4/2011
1/31/2011
1/18/2011
1/6/2011
Target
Saffron Digital Ltd
Mogreet, Inc.
Digital Broadcasting Group, Inc.
Clk2c.com
Vine
All Night Media
Socialcam Inc.
Bytemobile, Inc.
ESPN STAR Sports
PixSense Inc.
Ortiva Wireless, Inc.
Instagram, Inc.
Mobiclip
Livecam Mobile
Qumu, Inc.
Commobility Inc.
YuMe Europe Limited
Transpera, Inc.
Inlet Technologies LLC
decentral tv Corp.
Yospace Technologies Ltd., EyeVibe
Qik, Inc.
Acquirer
Mean
Median
Revenue
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.9x
NA
NA
NA
NA
1.8x
NA
NA
EBITDA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NM
NA
NA
NA
NA
NA
NA
NA
$232.1
$60.0
Cinram Group, Inc.
payvia, Inc.
Alloy Digital, LLC
ValueFirst Messaging
Twitter, Inc.
MOKO.mobi
Autodesk, Inc.
Citrix Systems International GmbH
STAR Group
FunSpot Corp.
Allot Communications Ltd.
Facebook, Inc.
Nintendo Co.
AppTech Corp.
Rimage Corporation
Intertainment Media Inc.
YuMe, Inc.
Tremor Video, Inc.
Cisco Systems, Inc.
KIT digital, Inc.
MOKO.mobi Limited
Skype Technologies, S.A.
Implied EV
$47.0
32.0
NA
NA
NA
NA
60.0
435.0
670.0
NA
NA
1,000.0
NA
NA
52.8
4.5
NA
NA
95.0
6.7
NA
150.0
2.9x
2.9x
NA
NA
Source: CapitalIQ and Siemer Proprietary Research
58
Summer 2013
Digital Video Report

59. Select Mobile Video Precedent Financings
Company
Date
4/23/2013 Apalya Technologies
Pvt. Ltd.
3/27/2013 Vantrix Inc
1/17/2013 Keek Inc.
12/31/2012 Streamweaver, Inc.
12/31/2012 Streamweaver, Inc.
9/18/2012 Keek Inc.
8/22/2012 XinLab, Inc.
NA
4.5
Pinetree Capital Ltd.; AGF Investments
Inc; Plazacorp Ventures; Cranson Capital
Solutions Inc
C
18.0
Tennessee Community Venture Fund
LLC; Mountain Group Capital LLC; The
INCITE Co-Investment Fund
NA
A
1.8
Description
Operates as a content aggregation, provisioning and
distribution platform in the mobile video delivery space in
India
Provides mobile video mediation and delivery solutions
for streaming, browsing and messaging worldwide
Operates a social networking platform enabling users to
create and watch videos using Webcam, iPhone, Android
or BlackBerry devices, as well as tablets and laptops
Investors
Cisco Systems, Inc.; QUALCOMM
Ventures; IDG Ventures India; Kalaari
Capital
NXT Capital Venture Finance
Provides a multi-angle mobile video app that connects a
client with client’s friends
12/14/2012 Spot411 Technologies, Operates as a social technology company that delivers
Inc.
and licenses interactive social television programs for the
second screen
12/6/2012 Vantrix Inc
Provides mobile video mediation and delivery solutions
for streaming, browsing and messaging worldwide
10/11/2012 Skyfire Labs, Inc.
Round
C
Amount
Raised ($mm)
$10.0
Develops and creates a compression-as-a-service based
mobile video optimization browser / platform for wireless
carriers and device makers
Provides a multi-angle mobile video app that connects a
Operates a social networking platform enabling users to
Provides mobile video services that work on videoenabled mobile phones with an Internet access. Its
services index various videos from the Web; and enables
users to watch videos on PCs
Summerhill Venture Partners; Innovacom
Gestion; JK&B Capital; BDC Venture
Capital; Tudor Growth Equity; Entrepia
Ventures
Matrix Partners; Trinity Ventures;
Lightspeed Venture Partners; Panorama
Capital; Verizon Ventures
Tennessee Community Venture Fund
Whitecap Venture Partners; Pinetree
New Enterprise Associates; SingTel
Ventures (Pte) Ltd.; JAFCO Ventures
NA
2.0
D
13.5
D
10.0
A
B
D
1.8
7.0
15.0
Source: CapitalIQ and Siemer Proprietary Research
59
Summer 2013
Digital Video Report

60. Select Mobile Video Precedent Financings
Date
Company
4/26/2012 Viddy
2/3/2012
Viddy
1/31/2012 Socialcam Inc.
1/25/2012 Skyfire Labs, Inc.
11/29/2011 Reality Mobile LLC
10/5/2011 Keek Inc.
8/22/2011 Mogreet, Inc.
7/21/2011 Vringo, Inc.
4/27/2011 Viddy
3/31/2011 XinLab, Inc.
Description
Offers a social mobile application that helps in capturing,
producing and sharing bite-size videos with the world
Investors
New Enterprise Associates, Khosla
Ventures, Goldman Sachs Group,
Merchant Banking Division
Offers a social mobile application that helps in capturing,
Bessemer Venture
producing and sharing bite-size videos with the world
Partners, QUALCOMM
Ventures, Greycroft Partners LLC
Develops a video sharing application for capturing, editing Y Combinator
and sharing videos from smartphones
Develops and creates a compression-as-a-service based Matrix Partners; Trinity Ventures;
Lightspeed Venture Partners; Verizon
mobile video optimization browser / platform for wireless
Ventures
carriers and device makers
Develops enterprise-class real-time mobile video visual
NA
data collaboration solutions
AlphaNorth Asset Management;
Operates a social networking platform enabling users to
create and watch videos using Webcam, iPhone, Android Plazacorp Ventures
or BlackBerry devices, as well as tablets and laptops
Operates Mogreet Messaging System (MoMS), a mobile Draper Fisher Jurvetson; Ascend
video messaging platform that delivers and monetizes rich Venture Group, LLC; DFJ Frontier; Black
Diamond Ventures, LLC; Bryant Park
media to mobile devices
Ventures, LLC
Provides software products for mobile video entertainment Benchmark Capital; Alpha Capital AG;
Offers a social mobile application that helps in capturing,
Bessemer Venture
producing and sharing bite-size videos with the world
Partners, QUALCOMM Ventures
Provides mobile video services that work on videoNew Enterprise Associates; JAFCO
enabled mobile phones with an Internet access
Ventures
Mean
Median
Source: CapitalIQ and Siemer Proprietary Research
60
Round
B
Amount
Raised ($mm)
$30.1
A
6.4
NA
1.5
C
8.0
NA
5.8
NA
5.5
NA
4.1
NA
NA
2.5
$1.6
C
8.0
$7.9
$6.1
Summer 2013
Digital Video Report

61. Contact Information
61
Summer 2013
Digital Video Report