TV Content Traditional And Digital Syndication

EQUITYRESEARCH RBC Capital Markets, LLC
David Bank (Analyst)
(212) 858-7333
david.bank@rbccm.com
Kristina Warmus (Associate)
(212) 428-6622
kristina.warmus@rbccm.com
Leo Kulp (Associate)
(212) 301-1457
leo.kulp@rbccm.com
Kutgun Maral (Associate)
(212) 437-9151
kutgun.maral@rbccm.com
October 23, 2014
TV Content: Traditional And Digital Syndication
Media And Entertainment Deep Dive Series: The Evolving TV Content
Ecosystem
We Continue To See CBS, TWX, Fox and LGF as the Biggest Winners In What Remains A Growing
Demand Environment For TV Content Across Both Linear and SVOD Distribution Platforms — While
the traditional "mega deal" linear syndication pipeline offers less visible multi-year backlog visibility
today than it did a few years ago, the SVOD pipeline is subtly filling that backlog with more single season,
single show deals. This single show model is also offering greater visibility into the sustainability of SVOD
content monetization as the economics of bulk library deals become less certain. While the content
monetization landscape might become more opaque and difficult to model, it remains very healthy.
• CBS Studios, Warner Brothers Studios and 21st Century Fox studios continue to dominate the
landscape, while Lionsgate continues to become a bigger player. However, we view CBS’s TV studio
and LGF’s studio as having greater ability to move the needle of their parent company’s, given the size
of their TV content business relative to the broader business mix.
After Years of Deep Pipeline, Big-Cap Off-Network Syndication Deals Face Tough Comps — While there
have been a few major deals (Elementary for CBS and Person Of Interest for TWX's Warner Brothers in
2015), the multi-year revenue visibility investors enjoyed a few years ago in traditional, linear syndicated
TV has diminished. Fewer linear syndication-friendly format shows are "breaking", and they are breaking
later.
But Demand for Linear Off-Network Content is as Robust as Ever Thanks to a Competitive Landscape —
While we see players like TNT, AMC or A&E relying more on original content, others, like WGN America,
are coming in with massive moves in linear TV off-network syndication spend. If smaller alternative
networks aspire to get bigger (and they always do), the acquisition of premium off-network syndicated
content is generally the first chapter in the playbook.
SVOD Acquisition of Off-Network Programming Economics are Beginning to Look Like Traditional
Linear Syndication, But With Earlier Windows — We have migrated from "bulk" library deals to more
show-specific acquisitions in the off-net SVOD (Amazon, Netflix and HuluPlus) ecosystem. We are
seeing off-net programming acquisitions for multiple seasons, such as the Hulu/CBS Elementary deal,
estimated at ~$1.5MM/episode for three seasons, or the Netflix/Sony Blacklist deal for ~$2MM/episode
for the one prior season, the current season, and future seasons. Amazon and Hulu purchased four
seasons of The Good Wife for a combined ~$2.0MM per episode.
Despite Original SVOD Content Ramp, Demand for Acquired Off-Network Programming is Deep —
Netflix, Hulu and Amazon have undertaken massive ramps in original programming. That said, even as
original budgets increase in the hundreds of millions of dollars, we see no real slowdown in demand for
premium linear off-network TV content.
Emerging Players are Taking the Lead in SVOD Co-Production Deals — With the exception of Lionsgate,
we don't see many traditional TV programmers playing in the SVOD original landscape meaningfully.
Emerging players (i.e., Legendary, Electus, etc.) are more involved as co-producers with the SVOD
platforms themselves. Further, SVOD original rights are becoming more restrictive, with limitations on
ancillary exploitation outside of "first run" windows for up to five to 10 years and lock-ups on territories,
including where the first run SVOD platform has yet to even launch.
Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in USD unless otherwise noted.
For Required Conflicts Disclosures, see Page 73.

Table of Contents
Key Investment Theme: Linear And SVOD Content Monetization.............................................3
Understanding Syndication Trends To Decode The Black Box Of Media Companies ................8
ABC Studios ..............................................................................................................................27
CBS Studios...............................................................................................................................30
Lionsgate ..................................................................................................................................36
Sony..........................................................................................................................................38
Twentieth Television................................................................................................................41
Universal Television .................................................................................................................45
Viacom......................................................................................................................................49
Warner Brothers Television .....................................................................................................51
Digital Content Distributors .....................................................................................................57
Netflix Programming ................................................................................................................61
Amazon Programming..............................................................................................................64
Hulu Programming ...................................................................................................................68
Appendix ..................................................................................................................................70
October 23, 2014 2

Key Investment Theme: Linear And SVOD Content Monetization
Off-network syndication of scripted shows to traditional and digital distributors continues to
play a major role for much of our large-cap media universe. With respect to the studio and
production businesses, CBS derives the vast majority of its revenue and profit from the
production and distribution of television content (as opposed to theatrical film production).
For Time Warner's Warner Brothers TV (WBTV) and 21
st
Century Fox’s 20
th
Century Fox
Studios, this figure is closer to 50%. For the smaller market cap Lionsgate, it is closer to 20%.
The biggest driver of profit in the TV production business generally remains the syndication
of network programming, primarily situation comedies and hour-long procedurals for linear
platforms, and arc-based dramas in the Subscription Video-on-Demand (SVOD) market.
Procedurals & Sitcoms Rule The Linear Market; Serialized Dramas Dominate SVOD
Just a few years ago, the only option for content syndication was off-network and only after
80-100 episodes had been produced. Procedurals such as CSI, Bones, and NCIS have
performed well in this market, as have multi-camera male-audience-skewing situation
comedies (e.g., The Big Bang Theory on TBS). However, with the array of SVOD options
available today, there are multiple windows in which to syndicate content, including one-two
seasons after first-window airing and even current season SVOD syndication. Interestingly, as
consumers are prone to “binge watching” content via SVOD, serialized dramas that have not
tended to syndicate well on an off-net basis are finding a higher probability of syndicating
online (The Blacklist on Netflix or Under the Dome on Amazon).
New Buyers Are Emerging On Both Linear And SVOD Platforms, Promising To Drive
Growth For Years To Come
While the more traditional off-net syndicated-content buyers (TBS, TNT, USA, etc.) are
entering a more mature phase, we see more linear platforms in the earlier phases of their
development that aim to be top 10-20 players, such as WGN America or FXX. These new
players are pouring huge dollars into the off-network syndication market (for example,
(WGN/ION with Blue Bloods at $1.1MM/episode or FXX with The Simpsons at
$650K/episode), driving new demand as more mature players shift slightly to originals. On
the SVOD side, while Netflix appears to be entering a more mature phase on the program-
acquisition side, other players at a less mature point in the cycle with respect to subscriber
count, such as Hulu, are stepping up their spend in a big way. In other words, there always
seems to someone who aspires to be a new major player as well as a need to defend
incumbent position on all platforms. As long as this is the case, the demand for premium
content should grow.
While Big Budgets Continue To Be Spent On Linear, Individual Shows On SVOD
Now Command Commensurate Budgets To Off-Net Linear As Bulk Deals Fade
As SVOD players have gained scale (and audience), investors have expressed concern that
pricing for off-network TV content will suffer. In part, we believe this concern is warranted,
as the price SVOD players appear willing to pay to renew “bulk” content deals is lower. With
years of data now available, SVOD distributors are more aware of which components of the
“bulk library” subscribers truly value, and are less willing to pay for marginal content. This
has resulted in a lower “bulk” opportunity. However, our proprietary analysis suggests that
Netflix, Amazon and Hulu are spending more money on one or two individual shows than
they did in their initial bulk library deals. These show-by-show deals rival the traditional
syndication market in scale. New Girl, for example, syndicated on Netflix for $900K/episode
versus the ~$400K/episode MTV/TBS are jointly paying. Increasingly, even procedurals can
be monetized in SVOD in a range fairly similar to that of linear off-net, as illustrated by CBS’s
With a more bifurcated
syndication market – off-
network and digital –
monetization channels and
new windows are evolving
for both procedurals and
serialized dramas
October 23, 2014 3

sale of Elementary to WGN and ION for $2.0MM/episode, which was similar to the
$1.5MM/episode paid by Hulu.
The Syndication Market (Both Linear And SVOD) Has Historically Been Very Lumpy
(And Thus Difficult To Model)
TV studios may have many shows in first-run production that could take years to earn
modest profits on first-run license fees. However, when even one of these shows reaches a
total of ~80-100 episodes (or even fewer today), it can deliver all of its episodes to cable
channels and local TV stations for off-network syndication, resulting in massive upfront
revenue and profit recognition (with revenues easily reaching $1.0MM+/episode and
margins upwards of +50%). However, investors (and studios) often are unaware of the
pipeline for syndication because it is unclear whether any given show actually will stay on the
air for four-five seasons, and if it does, what the demand in the off-network market would
be. Similarly, studios are striking major SVOD deals for shows for four+ seasons of episodes
(The Good Wife, Elementary, etc.), driving lumpy profitability upon completion of the target
number of episodes.
The SVOD Market Has Opened Up To Shows With As Little As One Season Of
Content, Allowing For Greater Visibility Of Revenue Associated Per Show, But
Creating An Ever-Increasing Pool Of Revenue That Is Harder To Track
In contrast to the traditional syndication models, some first-run shows are being sold into
SVOD windows before they have even premiered in their first-run windows (Zoo or Gotham
to Netflix, or Under the Dome and Extant to Amazon, for example). Some shows will be sold
into SVOD somewhere between 20-40 episodes at substantial per-episode prices (The
Blacklist was sold to Netflix at $2.0MM/episode during season 2).
With linear syndication, the mystery is whether the studio will be able to produce enough
episodes to get to the monetization opportunity in one fell swoop, by keeping the show on
the air for 80-100 episodes. With SVOD monetization, the difficulty in predicting revenue
streams lays in estimating how long a show will stay on the air to monetize each individual
season at a rate determined as early as season one in initial deals.
Exhibit 1 offers a snapshot of some of the syndication deals powering the SVOD syndication
ecosystem across primary players Netflix, Amazon and Hulu. We took a few shows and
calculated the estimated revenue impact of adding one season to SVOD. Our findings show
Sony/UTV probably has the biggest opportunity with The Blacklist, whereby one additional
season could generate $44MM in revenues. The Good Wife (CBS) and Gotham (WBTV) are
not far behind at $40MM and $39MM, respectively. Elementary (CBS) could generate
$36MM. While the total dollars per show might be smaller than the mega off-network linear
syndication deals for five seasons, the total dollars associated with them, in aggregate, has
become a needle mover. Measuring the needle move has become more difficult because
tracking these individual SVOD window deals is getting harder as more and more of them
occur.
Individual shows are
syndicating on SVOD in a
price range similar to off-
net linear deals
October 23, 2014 4

Exhibit 1: Estimated Revenue Potential Of Select Shows Available On SVOD If One Additional Season Is Licensed
202
134
72 65
78
44
65 66 59
39 42
27 23 13 12 11 11 10
40
33
36
35 14
44
22 21
20
39 20
9 11
13 12 11 11 5
167
108
100
92 88 86 87
79 77
62
36 34
26 23 23 23
15
0
50
100
150
200
250
The Good
Wife (CBS)
Blue Bloods
(CBS)
Elementary
(CBS)
Orange is
the New
Black (LGF)
Mad Men
(LGF)
The
Blacklist
(Sony/UTV)
New Girl
(FOX)
The Walking
Dead (Sony)
Revenge
(ABC)
Gotham
(WBTV)
Scandal
(ABC)
Person of
Interest
(WBTV)
Under the
Dome (CBS)
The
Americans
(FOX)
Manhattan
(LGF)
Extant (CBS) Zoo (CBS) The
Following
(WBTV)
Millionsof$s
Value of Incremental Season Estimated Current Deal Value
241
The value derived from one show sold into SVOD, after several
seasons, can approach the levels we historcally saw in bulk deals.
And, simply keeping a show on the air and adding subsequent
seasons to SVOD can result in real dollars adding up over time.
Source: Press reports, Amazon, Netflix, Hulu, Variety, Deadline, The Hollywood Reporter, industry sources, RBC Capital Markets estimates
Even if one knew whether a show would be a hit in syndication, it is difficult to predict the
specific quarter in which the show will be delivered. Thus, investors may face opaque Y/Y
comps since they might not know that a major syndication deal affected the prior year’s
quarter, unless it was disclosed. In our opinion, CBS does the best job of telling investors
about large syndication deals on both linear and digital platforms, but it remains difficult to
keep track of all the levers being pulled at once because so many pieces of content are
entering and exiting syndication.
Stripping Is Giving Way To Stacking In Off-Net Cable, Perhaps As A Result of the
Evolution Of Binge Viewership “Taught” To Us By SVOD Platforms
Traditionally, the ability to syndicate a show on a linear basis was dictated by the magic 80-
100-episode count so “stripping” without seeing the same episode in a three-month period
could be achieved. However, as consumer behavior has moved more toward stack binging (in
SVOD as well as traditional VOD through cable boxes), we believe we are seeing the
programming of off-network syndication content more in the form of “blocks” or “stacks”
rather than strips. Instead of five episodes of five shows spread evenly across a week filling
25 hours, one is more likely to see a block of a different show every day for several hours. As
a result, we believe the syndication window likely is open to shows with slightly fewer
episodes. A case in point is a show like Elementary, which is being rolled in 2015 with ~70
episodes on WGN.
For some perspective on how consumer behavior and scheduling have changed, we have
illustrate the greater prevalence of scheduling in stacking versus stripping using TBS
scheduling during 2005 and 2014. We can see the comedy blocks have stretched from one
hour in 2005 to two hours in 2014.
We ran the same analysis on USA and found that the network ran large film blocks on a daily
basis in 2005, while in 2014 it is running larger blocks of NCIS, Law & Order: SVU, and CSI.
TNT aired Castle from 2:00 PM through 10:00 PM on Mondays in 2014.
Linear scheduling today
consists of more binge
viewing, likely transferred
from SVOD viewership
trends
October 23, 2014 5

Exhibit 2: TBS Programming Schedule – 2005 versus 2014
Mon Tues Wed Thurs Fri
2:00PM Steve Harvey Steve Harvey Steve Harvey Steve Harvey Steve Harvey
2:30PM Steve Harvey Steve Harvey Steve Harvey Steve Harvey Steve Harvey
3:00PM Drew Carey Drew Carey Drew Carey Drew Carey Drew Carey
3:30PM Drew Carey Drew Carey Drew Carey Drew Carey Drew Carey
4:00PM Yes, Dear Yes, Dear Yes, Dear Yes, Dear Yes, Dear
4:30PM Yes, Dear Yes, Dear Yes, Dear Yes, Dear Yes, Dear
5:00PM Home Improvement Home Improvement Home Improvement Home Improvement Home Improvement
5:30PM Home Improvement Home Improvement Home Improvement Home Improvement Home Improvement
6:00PM Seinfeld Seinfeld Seinfeld Seinfeld Seinfeld
6:30PM Seinfeld Seinfeld Seinfeld Seinfeld Seinfeld
7:00PM Everybody Loves Ray… Everybody Loves Ray… Everybody Loves Ray… Everybody Loves Ray… Everybody Loves Ray…
7:30PM Everybody Loves Ray… Everybody Loves Ray… Everybody Loves Ray… Everybody Loves Ray… Everybody Loves Ray…
8:00PM Friends Friends Everybody Loves Ray… Friends Friends
8:30PM Friends Friends Everybody Loves Ray… Friends Friends
9:00PM Friends Sex and the City Everybody Loves Ray… Film Film
9:30PM Friends Sex and the City Everybody Loves Ray… Film Film
TBS - 2005
Mon Tues Wed Thurs Fri
2:00PM American Dad American Dad American Dad American Dad American Dad
2:30PM American Dad American Dad American Dad American Dad American Dad
3:00PM The King Of Queens The King of Queens The King of Queens The King of Queens The King of Queens
3:30PM The King of Queens The King of Queens The King of Queens The King of Queens The King of Queens
4:00PM Friends Friends Friends Friends Friends
5:30PM Friends Friends Friends Friends Seinfeld
6:00PM Seinfeld Seinfeld Family Guy Seinfeld Seinfeld
7:30PM Seinfeld Seinfeld Family Guy Seinfeld MLB Baseball
8:00PM The Big Bang Theory The Big Bang Theory MLB Baseball The Big Bang Theory MLB Baseball
TBS - 2014
Source: TV Guide, RBC Capital Markets
While SVOD (And Linear Cable Networks) Are Devoting More Dollars To Original
Content, Off-Network Platforms Will Still Program Predominantly With Acquired
Programming
While TNT’s The Last Ship, FX’s The Americans and USA’s Royal Pains are all original flagships
of their linear networks, just as Netflix’s House of Cards, Amazon’s Transparent and Hulu’s
(soon to be) 11/22/63, are flagships of their respective SVOD networks, the vast majority of
content spend (even as original slates ramp) is going to acquired programming. While much
has been made of the potential for original programming to lower demand for acquired off-
network programming, we think such concerns are overstated. The average linear cable
channel or SVOD platform alike has to program 24 hours per day of viewer demand. This
demand cannot be satisfied by a slate of six or so original shows.
Traditional TV Studios Largely Are Not Playing The SVOD Original-Content Game
The dominant players on the network TV first-window side (CBS, Warner Brothers, Fox, etc.)
are playing a virtually immaterial role in the production of content for the emerging original
content SVOD ecosystem, even as its growth accelerates. Mini-majors and independents are
taking the lead on SVOD originals, increasingly through co-production roles with the SVOD
platforms themselves. Examples include players like Lionsgate (Orange Is the New Black and
Deadbeat for Netflix and Hulu, respectively) or Legendary TV (which, in association with Judd
Apatow, has a two-season commitment from Netflix for Love), Gary Trudeau (Alpha House
for Amazon), or Electus (with Marco Polo for Netflix).
Traditional TV studios
largely have not
participated in creating
SVOD original content
October 23, 2014 6

While these original SVOD series opportunities offer lucrative first run license fees, it remains
to be seen how the ultimate financial model will compare to the more traditional TV business
since we have yet to see a jump from “off-net SVOD” to another platform that would
demonstrate that SVOD originals have true syndication value outside of window one. We
suspect Orange Is the New Black could be one of the first litmus tests for this model since
Netflix has not locked up exclusivity beyond season 4. We note that JJ Abrams’s Bad Robot
Productions is working with Warner Bros. on 11/22/63 for Hulu, which could be the first
example of a major studio creating original content for an SVOD provider.
We suspect the major TV studios might be less inclined to play in the SVOD original side in a
big way even if an off-net opportunity proved real. The SVOD platforms providing window
one for the content are seeking long-term exclusivity in both time and geography, which
would essentially prevent real exploitation of content in syndication even if demand
developed.
Longer Term, The Biggest Impact On More Procedural And Sitcom Oriented
Content Producers (And Thus The Linear Syndication Pipeline) Will Be The Need To
Balance Urgency To Watch Now With Potential For Monetization Over The Long
Term
Network TV programmers likely will seek more “event”-type programming to counteract
time shifting viewership trends. Additionally, SVOD content acquirers want “binge-inducing”,
“high rabidity-type” programming. This tends to play toward arc-based serialized dramas.
However, traditional linear syndication and international TV likely will continue to offer
enormous monetization opportunities for self-contained procedurals and multi-camera
sitcoms. This will create an enormous tension, in our view, over whether networks will use
their “first” window to accomplish maximum audience in window 1 on US network TV on a
C+3 basis, or maximum monetization throughout the life of a piece of intellectual property
(IP).
October 23, 2014 7

Understanding Syndication Trends To Decode The Black Box Of Media
Companies
To some extent, virtually all of the major media companies in our coverage universe are TV
content producers as well as distributors; thus the TV content syndication business plays a
role in their studio/network operations. Historically, the broadcast TV marketplace was the
only end market for TV content; further, it was the only market for syndicated content.
Digital pay TV carriage expanded rapidly during the past ~15 years, making domestic demand
for content far more competitive. Also, as the global market for television content
developed, the demand for content has accelerated dramatically. Further, the rapid rise of
Over-the-Top (OTT) Subscription Video-on-Demand (SVOD) digital online distribution has
begun to drive demand for TV content as well. Nowhere has this increased demand for TV
content been more obvious than in the syndication market. However, the very opportunity
that has offered so much growth for the major media companies also lacks obvious
transparency and predictability.
The addition of digital distribution agreements into the mix has made revenue streams even
more opaque: it is often unclear what the duration of online streaming content agreements
is and what the content fees really are. New features such as “content put” rights (such as
those CBS has arranged with Netflix for its CSI franchises) are also playing a role. Further the
advent of new syndication windows for SVOD, which can be as early as seven days after the
initial airing of an episode on network or as far out as three years later (but before the linear
window) have made it harder to predict the length and consistency of SVOD revenue
streams. While per-episode values can be determined earlier for SVOD, the total number of
episodes available for monetization remains an unknown. Thus, syndication streams can be
lumpy and the source of many surprises for investors. In this section, we provide more clarity
on the important drivers in the syndication market for key players in our coverage universe.
Historically, syndication was a method of distributing TV programming to national cable
networks (i.e., TNT, USA, etc.) and local television stations (network affiliates and
independents). Additionally, syndication for US content also pertains to the distribution of
content produced domestically to markets outside of the US. This can be first-run
programming or programming that has had a successful run on a network or elsewhere.
Further, some studios are producing first-run programming SVOD (Lionsgate’s Orange Is the
New Black, for example).
While first-run syndication (e.g., Dr. Phil or Wheel of Fortune) can be lucrative, we focus far
more on the second-run off-network business (e.g., Big Bang Theory on TNT, CSI on Spike or
The Good Wife on Amazon and Hulu) because:
A. Profit margins are often higher, with much of the negative cost of program production
having been amortized in the first run and the bulk of expenses associated with the
show being largely back-end participations; and
B. It is a more important driver of fundamentals for the major media companies in our
coverage universe.
We estimate off-network domestic syndication alone provides ~$23B of revenue to content
producers. SVOD (with only a modest non-domestic contribution) could add another nearly
$7.0B. Beyond that, we assume SVOD spend on content grows in the double digits, especially
in light of international expansion.
The addition of digital
distribution agreements
has made revenue streams
even more opaque as it is
often unclear what the
duration of online
streaming content
agreements is and what
the content fees really are
October 23, 2014 8

Exhibit 3: Historical And Projected Linear And Digital US Syndication Revenues
1
5.3 6.7 7.2 8.3 9.4 10.4 11.2 11.8 12.6 13.6 15.2 16.4 17.4 18.4
2.7
3.0 3.1
3.1
3.2
3.3 3.4 3.3 3.2
3.2
3.1
3.2
3.2
3.3
0.8
3.0
4.0
5.2
6.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014E
2015E
Billionsof$s
Digital Content Revenue Broadcast Syndication Revenues Cable Syndication Revenues
$1.8
$2.3
$2.8
$3.3
$0.5
$1.0
$1.5
$1.7
$0.5
$0.6
$0.8
$1.5
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
2012 2013 2014E 2015E
Billionsof$s
Hulu Amazon Netflix Other
$3.0
$4.0
$5.2
$6.8
We expect digital content spend to
approach $7.0 billion in 2015
Source: SNL Kagan, industry sources, RBC Capital Markets estimates
Six Studios Provide Scripted Content In The Domestic First-Run TV Market, Which
Feeds Into Linear And SVOD Syndication; SVOD Market is More Fragmented
Six primary content producers (the major TV studios) supply the vast majority of TV
programming to the broadcast networks (where most syndicated scripted content
originates). Four of these studios are affiliated with sister networks (CBS Television Studios
with the CBS Network, ABC Studios with the ABC Network, Fox Television Studios with the
Fox Broadcasting Network, and Universal Television with the NBC Network) for whom they
generally supply the majority of scripted content airing on the network. The remaining two
TV studios (Warner Brothers Television Studios and Sony Entertainment Television Studios)
play a more neutral role, supplying content to the highest bidder. Other players are
becoming more active in the syndication market with made-for-cable content (a more
nascent market), and Lionsgate (a major player in both SVOD and linear) and Viacom
(through outsourced TV studio operations) have become more important players in the
space.
We expect digital
syndication revenues to
approach $7B in 2015, and
to grow in the double digits
thereafter
October 23, 2014 9

Exhibit 4: Key Players In Domestic Content Production
Exclusively3rd partyProducers Primarily Produce ContentforSisterNetworks Original SVODProducers
Source: Company reports, RBC Capital Markets Research
It Takes Several Seasons Of Episodes And Particular Types of Formats To Make
Traditional Linear Syndication Possible
Historically, in order to sell content on an off-network syndication basis, a content producer
had to produce 60-100 episodes of a show (generally three-five seasons) so that the buyer (a
cable network or a local TV station) could run an episode a day each weekday in ~four-five
cycles per year (referred to in industry parlance as “stripping”). Additionally, content had to
be syndication friendly; situation comedies or procedural dramas that are “self contained”
and reach a broad audience tend to do well here.
It’s Easier For Cable Originals To Syndicate Than It Used To Be
Historically, it was much more difficult for cable-based originals to be syndicated, but that
has changed as cable originals have become longer-running series and more format-friendly.
Made-for-cable originals were typically:
1. Not in formats that were “syndication friendly”. Typically, cable shows were arc-based or
reality-based.
2. Cable network shows would order 13 or 14 episodes per season; therefore, it would take
cable originals almost twice as long to hit the syndication hurdle. We are beginning to
see more high quality original situation comedies made for cable featuring “household”
names (e.g., Betty White in Hot In Cleveland, or Charlie Sheen in Anger Management).
Additionally, cable has had some “breakout” hits that are not suitable for broadcast
stripping but have found a home on lower-tier cable networks (Breaking Bad on
Sundance TV).
3. While we do not expect to see a major cable network-to-cable network syndicated
content market develop, SVOD offers the opportunity for more arc-based serialized
formats to be monetized in binge-like viewing, creating increased demand for such
content. Cable has created some of the most high-profile arc-based dramas during
recent years (Walking Dead or Mad Men on Netflix).
SVOD offers the
opportunity for more arc-
based serialized formats to
be monetized in binge-like
viewing
October 23, 2014 10

Networks Affiliated With Studios Have Different Incentives As Network Broadcast
Isn’t An End Unto Itself, But Rather Window One For Monetization In Both Linear
And SVOD Syndication
Networks that are affiliated with studios have unique incentives to keep some shows on the
air (feeding syndication) or to cancel others (thus stunting the syndication pipeline). This is
where synergy between ownership of a studio and a television network can really come into
play. If a show is not affiliated with its network’s sister studio and it is performing marginally
but perhaps well enough to squeeze out another season with relatively weak ratings, there is
minimal incentive to keep the show on the air.
However, if the studio is affiliated with a network and the show is a good candidate for
syndication (or better yet, is already in syndication with a proven demand for episodes in the
off-network market), the network might decide to order another season of the show because
its studio sibling will be able to generate solid earnings from the syndication run, even if the
first run doesn’t bring much incremental profit for the TV studio.
Further, in the emerging SVOD landscape, studios with networks can lock in SVOD license
fees, in some cases before a program has even aired (in many cases, guaranteeing
profitability). As a result, networks could produce programming that might have seemed
more risky, especially for “event” programming, such as CBS with Under the Dome or Zoo on
Amazon and Netflix, respectively.
The Current Content Landscape
Exhibit 5 offers a snapshot of some of the linear syndication deals powering the off-network
syndication ecosystem on both the broadcast and cable network side. One of the things that
should not go unnoticed is the tendency for procedural dramas to find a more prominent
home on cable networks compared to broadcast stations, while situation comedies tend to
find more prominent homes on broadcast stations.
What is not apparent from this chart is the fact that procedural dramas generally perform
more favorably on an international basis than situation comedies from a price-per-episode
perspective. After all, it is easy to identify with a criminal investigation in any culture, while
humor tends to be more culturally relevant. As far as serialized dramas go — with the
exception of relatively minor deals on broadcast (e.g., once per week or weekend-only
viewing rather than the five-days-per-week stripped distribution model more closely
associated with procedural dramas, on cable, or situation comedies, on cable or broadcast)
— linear syndication is rarely a big factor.
A network might decide to
order another season of a
struggling show even if the
first run doesn’t bring
much incremental profit
for the TV studio, since its
studio sibling will be able
to generate solid earnings
from the syndication run
October 23, 2014 11

Exhibit 5: Select Scripted Shows In Off-Network Linear Syndication Available For Stripping
2 Broke Girls WBTV Sitcom TBS CBS $1.7 mm/episode
30 Rock UMS Sitcom Comedy Central Fox/CW Comedy Central paying $0.8 mm/episode
According to Jim ABC Studios Sitcom n.a. ABC -
American Dad Fox TV Animated Sitcom TBS/Adult Swim CW -
Bones Fox TV Procedural Drama TNT - -
Blue Bloods CBS Studios Drama WGN, ION - $1.1 mm/episode; $1.7 mm with Hulu Plus
Brothers & Sisters ABC Studios Serialized Drama Reelz Channel - -
Castle ABC Studios Procedural Drama TNT - TNT paying $1.5 mm/episode
Cold Case WBTV/CBS Studios Procedural Drama TNT - TNT paying $1.4 mm/episode
Community UMS/Sony Sitcom Comedy Central - -
Criminal Minds CBS/ABC Studios Procedural Drama A&E/ION - A&E paying ~$0.65 mm/episode, Ion Stations paying $0.175 mm per week
CSI CBS Studios Procedural Drama Spike/USA - Spike paying $1.6 mm/episode
CSI: Miami CBS Studios Procedural Drama A&E/AMC - A&E paid ~$0.75 mm/episode in '03, AMC paying $0.4 mm/episode
CSI: New York CBS Studios Procedural Drama Spike/USA - Spike paying $1.9 mm/episode
Curb Your Enthusiasm HBO Sitcom TGN/TV Land CW TGN paying $0.6 mm/episode
Desperate Housewives ABC Studios Serialized Drama Lifetime Fox -
Elementary CBS Studios Drama WGN, ION - $2.0mm/episode; $3.0 mm with Hulu Plus
Entourage HBO Sitcom Spike CW Spike paying $0.6 mm/episode
Everybody Hates Chris CBS Studios Sitcom NickatNite/BET Fox/CBS -
Everybody Loves Raymond CBS Studios/HBO Sitcom TBS/TV Land CBS Totaling $5.3 mm/episode throughout 2 syndication cycles
Frasier CBS Studios Sitcom Lifetime/Hallmark NBC NBC affiliate stations paying $3.1 mm/episode
Friends WBTV Sitcom NickatNite/TBS NBC Totaling $5.9 mm/episode from 2 syndication cycles
Fringe WBTV Serialized Drama Science Network - Science paying $0.4 mm/episode
Futurama Fox TV Animated Sitcom Comedy Central/Adult Swim CW Comedy Central paying $0.4 mm/episode
George Lopez WBTV Sitcom NickatNite/TBS - -
Glee Fox TV Sitcom Oxygen - -
Grey's Anatomy ABC Studios Serialized Drama Lifetime - Lifetime paying $1.2 mm/episode
Hawaii 5-0 CBS Studios Drama TNT - $2.2 mm/episode
Heartland Independent Serialized Drama TNT Fox/CBS Canadian show syndicated to CBS/Tribune/etc. stations
House UMS Procedural Drama USA/Bravo Fox/CBS USA/Bravo paying $1.4 mm/episode
How I Met Your Mother Fox TV Sitcom Lifetime, FX Fox/CBS Lifetime paying $0.75 mm/episode with CBS paying $1.4 mm
It's Always Sunny in Philadelphia Independent Sitcom FX Fox/CBS -
King of the Hill Fox TV Animated Sitcom FX Fox FOX O&O and affiliates paying $3 mm/episode
Law & Order UMS Procedural Drama A&E/TNT - A&E paid $0.16 mm/episode while TNT is paying $0.25 mm/episode
Law & Order: Criminal Intent UMS Procedural Drama USA/Bravo - USA/Bravo paying $1.925 mm/episode
Law & Order: Special Victims Unit UMS Procedural Drama USA - USA paying $1.3 mm/episode
Mike & Molly WBTV Sitcom FX CBS $0.8 mm/episode
Modern Family Fox TV Sitcom USA Fox Close to the $1.5 mm/episode The Big Bang Theory received from TBS
Monk ABC Studios/UMS Serialized Drama USA NBC -
My Name is Earl Fox TV Sitcom TBS/ION Fox/CBS TBS paying $0.625 mm/episode
My Wife and Kids ABC Studios Sitcom ABC Family/BET/NickatNite Fox Totaling $2.15 mm/episode in broadcast syndication
NCIS: LA CBS Studios Procedural Drama USA - -
New Girl Fox TV Sitcom TBS, MTV - $0.4 mm/episode estimated; SVOD moves it to a total of $1.5 mm/episode
Numb3rs CBS Studios Procedural Drama TNT - -
Parks and Recreation UMS Sitcom WGN - Also sold to Amazon
Person of Interest WBTV Procedural Drama WGN - First time WGN purchased exclusive cable window to syndicated series
Rules of Engagement CBS, Sony Comedy - Tribune, CBS $0.4 mm/episode
Scrubs ABC Studios Sitcom Comedy Central Fox -
South Park Independent Animated Sitcom n.a. Fox -
That 70s Show Fox TV Sitcom ABC Family/NickatNite/MTV Fox -
The Big Bang Theory WBTV Sitcom TBS Fox TBS paying $1.5 mm/episode with Fox paying $0.5 mm/episode
The Good Wife CBS Studios Drama Hallmark CBS Sold to Amazon, Hulu also; combined $2 mm/episode
The Mentalist WBTV Procedural Drama TNT - TNT paying $2.2 mm/episode
The Middle WBTV Sitcom ABC Family/Hallmark - $0.4 mm/episode estimated
The New Adventures of Old Christine WBTV Sitcom Lifetime CW Lifetime paying $0.35 mm/episode with Tribune syndicating in broadcast
The Office UMS Sitcom TBS NBC/Fox TBS paying $0.65 mm/episode with stations paying $2.1 mm
The Simpsons Fox Tv Sitcom FXX - $650Kepisode
The Sopranos HBO Serialized Drama A&E - A&E paying $2.5 mm/episode
Two and a Half Men WBTV Sitcom FX Tribune FX paying $0.8 mm/episode with Tribune Stations paying $1.5 mm plus barter
Ugly Betty ABC Studios Off-network Sitcom TGN - TGN paying $0.2 mm/episode
Without a Trace WBTV/CBS Studios Procedural Drama TNT - TNT paying $1.3 mm/episode
Production StudioShow Genre Comment
Broadcast
Licensee
Cable Licensee
Source: Syndicated Network Television Association, TV Guide, Broadcasting and Cable, TV By The Numbers and RBC Capital Markets estimates
October 23, 2014 12

SVOD Players Are Creating And Buying Content, Too
We expect the total content budgets for the Big 3 SVOD players to approach ~$7B
1
in 2015,
with the expectation of continued double-digit growth for years to come, particularly as
international expansion continues and the demand for big-budget shows (particularly arc-
based dramas) continues to grow.
In 2013, we began to see a greater emphasis on single-show deals as well as “bulk library”
deals. There had been single-show deals (such as the Lionsgate Mad Men/Netflix deal in
2011); however, there were not many with the major network-affiliated studios.
Additionally, beginning in the summer of 2013 with the premiere of Under the Dome on CBS
and Amazon, we saw the creation of a new window: the network TV show sold into SVOD
before it had even aired on broadcast network TV. That model continues to play itself out
with shows like Extant and Zoo (CBS), and Gotham from Warner Brothers. This model, on
some level, has enabled the major TV studios to take more of the “hit risk” out of producing
premium broadcast content.
Often we are asked if we think a migration away from library to individual deals signals a
“late innings” play for the content producers. In other words, are the producers being forced
to sell “the best material” because demand for bulk remnants is declining? Is there a danger
in that there is only “so much good stuff”? We do not see the migration from library to
individual shows as the ninth inning of the game. Rather, it signals more of a new game.
Those players with premium content will always have demand, no matter what form the deal
takes. In fact, studios that continue to produce premium content can make more from one
show than they would have from a library sale only a few years ago. We believe total
licensing fees from an individual show like CSI: Miami to Netflix in 2012 might have exceeded
the initial bulk library deal CBS did with Netflix.
In addition, the SVOD players began creating original productions exclusively for SVOD,
opening another market for premium content to be created and sold by major studios. The
major SVOD players are differentiated in their involvement with originals: Netflix tends to
buy “packaged” content and does not necessarily focus on the need to “self produce”, while
Amazon takes almost the opposite approach. House of Cards, Hemlock and Orange Is the
New Black all have production costs in the range of, or exceeding, ~$4MM/episode. To date,
Lionsgate has been one of the biggest winners in the incumbent TV production landscape
with one of Netflix’s biggest franchise shows, Orange Is the New Black, as well as Hulu’s
Deadbeat.
At the same time, we are beginning to see some bifurcation in the continuation of many of
the original content deals. For the most part, demand for scripted dramas and comedies has
remained strong. However, we are seeing less demand for reality-based docudramas. This
has led to continued success for major players such as CBS, FOX, Disney’s ABC Studios and
Time Warner’s Warner Brothers, with less success in the SVOD space for Discovery, Scripps,
and A&E Networks. We are also seeing theatrical content becoming more marginalized in
favor of TV content (illustrated by Netflix’s willingness to end its relationships with Starz and
Epix).
1
Includes $3.3B for Netflix, $1.7B for Amazon, and $1.5B for Hulu (see Exhibit 3)
Selling network TV shows
into SVOD before airing on
broadcast has enabled the
major TV studios to take
more of the “hit risk” out
of producing premium
broadcast content
October 23, 2014 13

Even in the case where less “en vogue” programming has been dropped, we think
negotiations have tended to break down based not just on price, but also on the concept of
exclusivity. Even in the case of original productions, our sense from the channels is that
exclusivity is far more important for these new players than ownership of the content itself
(which on some level, achieves the same end, for at least some period of time).
That said, we often see one player jump into the breach when another passes based on price
or exclusivity, as was the case when Amazon picked up streaming rights to Viacom’s content
after Netflix and Viacom could not agree on terms. Further, while we have not seen evidence
of the next player to join “The Big 3”, there likely will be others entering the ecosystem.
Yahoo’s purchase of exclusive rights to prior seasons of Saturday Night Live and its order for
a sixth original season of Community could be a harbinger of things to come.
Exhibit 6 illustrates some of the more high-profile shows acquired by SVOD distributors.
Exhibit 6: Recent Individual Off-Network Acquisitions of TV Shows To Digital Distributors
Extant CBS Amazon 2014 $0.75-$1.0 mm Drama Acquired before show aired on network
Gotham Warner Brothers Netflix 2014 $1.75 mm Drama Acquired before show aired on network
Zoo CBS Netflix 2014 $0.75-$1.0mm Drama Acquired before show aired on network
New Girl Fox Netflix 2014 $0.9 mm Sit-com Acquired prior to cable off-net deal
Saturday Night Live Broadway Video Yahoo 2013 $0.2 mm Comedy/Variety
Hulu reliqunished rights in 2013 for full episode archives
from 1975-2013
Community Sony/Universal Hulu/Yahoo 2014 - Sit-com Hulu acquired original rights, Yahoo ordered 6th season
The Blacklist Sony/Universal Netflix 2014 $2.0 mm Drama Biggest per episode off-net price for SVOD
Dexter CBS Netflix 2013 $1.0 mm Drama Showtime original
Under The Dome CBS Amazon 2013 $0.75-$1.0 mm Drama Acquired before show aired on network
Revolution Warner Brothers Netflix 2013 $0.4 mm Drama -
The Good Wife CBS Amazon/Hulu 2013 $1.8 mm combined Drama Done in conjunction with linear syndication deal
Manhattan Lionsgate Hulu 2014 $0.75-$1.0 mm Drama Acquired before show aired on network
Blue Bloods CBS Hulu 2014 $1.5 mm Drama Part of new big push for Hulu
Elementary CBS Hulu 2014 $1.5 mm Drama Part of new big push for Hulu
South Park Viacom/Seth MacFarlane Hulu 2014 $0.35 mm Adult Animation Part of new big push for Hulu
Fargo Fox Netflix 2014 - Drama For Netherlands territory only
Revenge ABC Studios Netflix 2012 $0.9 mm Drama -
Scandal ABC Studios Netflix 2012 $0.9 mm Drama -
Walking Dead Sony Netflix 2011 $1.3 mm Drama -
The Following Warner Brothers Netflix - $0.33 mm Drama Season 2 recently added
Mad Men Lionsgate Netflix 2011 $1.0 mm Drama Landmark deal for individual show SVOD syndication
Gossip Girl Warner Brothers/CBS Netflix 2011 $0.7 mm Drama Part of broad output deal for WB shows
CSI: Miami CBS/Alliance Atlantis Netflix 2012 $1.0 mm Crime Procedural Part of "put option" for CBS to Netflix
CSI: New York CBS/Alliance Atlantis Netflix 2013 $1.0 mm Crime Procedural Part of "put option" for CBS to Netflix
Show
Year
Announced
Genre CommentsProduction Studio Buyer
Estimated
Budget/Episode
Source: Press reports, company reports and commentary, industry sources, RBC Capital Markets estimates
We note that content is constantly being added and dropped online, and tracking every piece
of the content is almost impossible. (We have found numerous Web sites that track what is
added or removed.) Notably, in October the full series of Gilmore Girls (Warner Bros.) was
added to Netflix while Law & Order and Law & Order: SVU (UTV) were removed entirely.
With so much content constantly rolling on and off, it feels almost futile to try to keep up
with it.
Exclusivity is far more
important for SVOD players
than ownership of the
content itself
October 23, 2014 14

Exhibit 7: What’s On Netflix
Source: http://whats-on-netflix.com/whats-new/
Docudrama And Non-Exclusive Content Is Being Dropped
In 2011, Netflix and Amazon (and to a lesser extent, Hulu) essentially transformed the
business model for the docudrama content (“reality programming”) dominant cable channel.
Docudramas on cable range from cooking competitions to do-it-yourself shows on Scripps’
networks, “mountain man” adventures or families with 19 kids on Discovery’s networks,
pawn-shop operators or hoarders on A&E’s networks, and even pregnant teen moms on
MTV. These shows basically had no residual values outside of their endemic networks; there
was no “off-network” syndication market for this content. Partially for this reason, the
content was created for a fraction of the cost of more typical scripted, higher-end fare.
But something changed. SVOD providers Netflix, Amazon and Hulu created a new
“syndication” window for this content that previously had no syndication (or window outside
of endemic network runs). SVOD players signed deals to make cable docudrama content
available on their streaming services. Bulk deals ranged from $100MM-$200MM upfront
payments for one-two years of (non-exclusive) rights to stream online content. The first deals
were done in early 2011 and the “last” was done in February 2013, when Amazon signed up
streaming rights for Scripps’ networks’ programming.
However, even as the SVOD players were signing “bulk” deals for docudrama library content,
their strategies seemed to be headed in a direction suggesting those deals might not be
around for long. The idea of Netflix choosing not to renew some content deals was not a
completely new one (it had dropped Starz and Epix in 2012). However, these were largely
theatrical-driven streaming content deals. Given commentary from our channel sources, we
believe that these early drops were more reflective of theatrical content becoming more
marginalized (versus TV content).
With so much content
constantly rolling on and
off, it feels almost futile to
try to keep up with SVOD
licensing deals
October 23, 2014 15

In May 2013, Netflix let its streaming deal with Viacom expire for content including MTV,
Comedy Central and Nickelodeon. Netflix argued that it wanted to focus on exclusive content
and “select programming” rather than more costly, broad-based deals that fill its library with
less-successful titles in addition to hits. We would note that Amazon stepped into the breach
and signed a streaming deal with Viacom. (We suspect it was motivated more by a desire to
compete in the kids’ category as opposed to docudrama, but the deal was “bundled”.)
In September 2013, Netflix dropped the remainder of A&E and History networks content,
citing the same issues. Then, only a year after signing its deal with Scripps, in March 2014
Amazon ended its streaming relationship with Scripps for Amazon Prime customers. Around
the same time, Netflix dropped its streaming deal with Discovery Networks. At this point, it
also appears (given commentary from Discovery management recently) that Discovery’s
streaming distribution deal with Amazon is likely to cease before year-end.
It is worth noting that it has been made clear in our conversations across the channels that
both Amazon and Netflix would have been willing to pay for some of the content they
dropped. However, the overall payments would no longer (in the eyes of the channel
operators) have been sufficient to compensate for the risk of potential linear viewing
cannibalization. Further, each platform has tended to want digital SVOD exclusivity.
Exhibit 8: Selected Library Streaming Deals Not Renewed
Content Provider SVOD Service Agreement Began
Agreement
Ended
Comments
Epix Netflix 2010 2012 First high profile streaming deal for premium content with major studios
Starz Netflix 2007 2012 Part of original "Vongo" deal with Starz
Viacom Netflix 2010 2013 Amazon became exclusive SVOD partner
A&E Networks Netflix 2011 2013 Amazon became exclusive SVOD partner
Scripps Amazon 2013 2014 Scripps was relatively long "hold out" for SVOD deals
Discovery Networks Netflix 2011 2014 Expected
Discovery Networks Amazon 2011 2014 Expected
Source: Company reports and commentary, press reports, RBC Capital Markets estimates
We also note that there is probably some content cyclicality related to the evolution of the
broader platform that will cause content to be in greater demand at some time and less at
others. For example, we can look to the typical launch of linear cable channels to inform us.
When a cable channel launches initially, it seeks out less expensive, often bulk library on a
non-exclusive basis. As the channel matures (and grows a brand and audience), it will often
migrate to higher quality, but not necessarily exclusive off-net programming. Then, we will
see an evolution to more exclusive, but still acquired, off-net programming. In the later
stages of maturity, the cable network will attempt to program with more original
programming to support the brand. Inevitably, a new cable channel will enter the market
and begin the cycle again.
Two years ago, most viewers had never heard of WGN America. During the last cycle of linear
syndication sales, WGN America picked up some the shows (Person of Interest and Blue
Bloods) and has launched high-profile originals such as Fox 21’s Salem and Lionsgate’s
Manhattan). In this vein, as Netflix and Amazon are cutting back on programming, we are
seeing new players like Yahoo emerge. In April 2013, Yahoo acquired the exclusive streaming
rights to Saturday Night Live’s full episode library. Further, in April Yahoo ordered an original
sixth season of the Sony/Universal-produced Community after the show was cancelled by
NBC.
Diminished SVOD demand
for reality-based
docudramas positions ABC,
CBS, and Warner Bros well
October 23, 2014 16

Due To Timing Of Revenue Recognition, Syndication Can Drive Lumpiness In
Earnings And Create Difficult Comps – Both Effects Are Often Not Obvious
In terms of the mechanics of the impact on the income statement of syndication deals for
major off-network runs, the producer delivers all the episodes produced through a given
date. In exchange, most producers typically receive one (generally significant) lump-sum
payment from the purchaser, a cable network. With the typical price of a show in syndication
of ~$0.5MM-$2.5MM/episode for the first cycle of syndication (the second cycle typically
amounts to half of cycle one), the launch of each new show into syndication, particularly for
cable, can have a large financial impact. This can lead to both a (seemingly) unpredictable
upside, and (seemingly) surprising and difficult comps.
Cable syndication deals typically are all cash or cash plus barter, with a lower value placed on
“cable barter” than “broadcast barter.” The typical broadcast syndication deal is done either
on a cash plus barter basis or entirely on barter, with deals usually lasting seven years and
including terms requiring the broadcaster to run the show 1x-2x on weekdays and 2x-4x on
weekends (viewership is higher on weekends). While the cash component of syndication
deals varies based on the quality of the show, the amount of barter time in cash plus barter
deals is relatively standard across both broadcast and syndication, with studios receiving 1.5
minutes and stations keeping the remaining 5.5 minutes for a 30-minute sitcom.
The split varies for deals that are all barter (historically only broadcast deals), but studios
typically receive three-four minutes of barter for a 30-minute sitcom. Another difference
between broadcast syndication and cable deals is the timing of payments: Cable channels
typically pay a single lump sum to studios (while most studios recognize the entire lump-sum
payment as current revenue, some studios may recognize revenues in installments over the
duration of the deal) based on the number of episodes delivered and the price per episode,
whereas broadcast stations generally pay license fees periodically (though the industry
standard is to quote a weekly rate, broadcast stations usually pay monthly or quarterly).
SVOD syndication historically has not had any barter component and will not going forward,
as long as the predominant SVOD platforms remain strictly subscriber supported and
advertisement free. In 2010-2012, when SVOD was still in its infancy with respect to the
acquired TV market, the delivery of content and implied economics were determined by bulk
library deals. There was no prior demand for streaming content and no prohibition against
selling into the streaming window, so studios could sell multiple back episodes of whatever
they wanted and generally found Netflix and Amazon to be willing buyers. There may have
been implied per-episode fees, but they were more trackable to investors through the bulk
license fees. Basically, no current content was sold into digital because the studios didn’t
want to risk an unknown potential for cannibalization of the core linear market.
I 2012, we began to see more individual show-by-show sales of premium content, many of
them back seasons of current shows such as Fox’s New Girl deal for ~$0.9MM/episode with
Netflix. These were identical to all-cash deals in off-net cable syndication, which implied per-
episode deals that were usually akin to second- or third-cycle syndication deals ($0.5MM-
$2.0MM/episode). By 2013, we began to see deals announced for current series with
basically no prior seasons (essentially delivered anywhere from one week to one year after
first airing), such as the landmark CBS/Amazon Under the Dome deal for ~$1.0MM/episode
or Warner’s deal with Netflix for Gotham for $1.75MM/episode.
The recognition of
syndication revenues can
cause lumpiness in
earnings given revenues
generally are recognized as
the content is delivered
October 23, 2014 17

Exhibit 9: Types Of Broadcast, Cable, And SVOD Syndication Deals
Studios
(CBS, WBTV, Fox,
etc.)
Cable Channels
(USA, TBS, TNT, etc.)
• Defined # of episodes (typically 100)
• Duration: ~3-5 years
License fees between $0-$1.5mm/episode
+ 1.5 minutes of barter
Cash +
Barter
Cable Deals
Single lump sum equating to ~$0.5-$1.5mm/episode
Cable Channels
Cable Channels
All Barter
Cash
Studio receives ~4 minutes of barter
• Defined # of episodes/seasons(typically 100)
• May include restrictionson broadcast times
Illustrative Example
The Mentalist
• TNT pays WBTV lump sum of
$2.2mm/episode for ~94 episodes
The Big Bang Theory
• TBS pays WBTV $1.5mm/episode for
~116 episodes plus 1.5 minutes barter
Studios
(CBS, WBTV, Fox,
etc.)
Broadcast Station Groups
(Belo, Tribune, CBS O&O, etc.)
License fees between $0-$1.5mm/episode
+ 1.5 minutes of barter
Cash +
Barter
Broadcast Deals
All Barter
Studio receives ~4 minutes of barter
Broadcast Station Groups
(Belo, Tribune, CBS O&O, etc.)
• Defined # of episodes/seasons(typically 100)
• May include restrictionson broadcast times
Two and a Half Men
• Tribune Stations pays WBTV
$1.5mm/episode for 100+ episodes plus
$1.5 millionin barter
30 Rock
• Fox O&O stations pay UMS/NBC Studios
3 minutes barter
Typically less successful or niche shows
Illustrative Example
SVODDistributor
(Netflix,Amazon,Hulu)• Variable # of episodes or seasons
• Duration: 1-5 years
• More paid for exclusivity
SVOD Deals
Single lump sum equating to ~$0.4-$2.0 mm/episode deliverable as content is delivered
Cash
Illustrative Examples
Studios
(CBS, WBTV, Fox,
etc.)
New Girl
• Netflix pays FOX lump sum of
$900k/episode for exclusive,
multiyear rights to past seasons with
subsequent seasons added post their
broadcast run
Extant
• Amazon pays CBS lump sum of
$900k/episode for exclusive rights to
the first season four days after the
initial broadcast of each episode on
CBS
*While most studios recognize the entire lump-sum payment as current revenue, some studios may recognize revenues in installments over the duration of
the deal.
Source: SNL Kagan, TVNewsCheck, industry sources, RBC Capital Markets estimates
Understanding The Pipeline Ahead Of Time Is Important
To understand the fundamentals of the syndication market and how it affects the income
statements of media companies, one must examine more than just the current shows in
syndication. Rather, one must examine shows with potential for syndication, and even shows
that have contractual agreements for syndication but have not yet been delivered to the
actual marketplace. Making matters even more complicated, initial syndication deals
increasingly are struck several years before there are enough episodes produced for a
traditional syndication run (sometimes before the first season of a show is even completed).
For example, Lionsgate began “shopping” Anger Management to station groups for off-
network syndication weeks before the first episode even premiered. As a result, income
statement impact may lag deal completion.
There are many ways to
monetize content across
cable, broadcast, and
increasingly SVOD
October 23, 2014 18

Success In Network-Based First-Run Is A Good Place To Start For Understanding
How The Pipeline Might Be Building
Thus, the first step in determining the strongest players in the syndication market is to figure
out which studio generally produces the most hits (shows that run long enough to be
potential syndication candidates). Over the past seven years, CBS and Warner Brothers
(WBTV) have been the leaders in creating hit content, arguably giving them a leg up in the
syndication landscape. Interestingly, CBS and WBTV have employed very different strategies
regarding first-run distribution. CBS uses its content primarily to program its sibling network,
while WBTV doesn’t own a network and programs others’ networks.
In Exhibit 10, we’ve laid out our calculated hit rates for each of the major content providers
during 2006-2012 and 2006-2010. The most noticeable change is at Sony, where the hit rate
has declined from 36% to 25%.
Exhibit 10: TV Studio “Hit Rate” Comparison
2006-2012 2006-2010
24
42
36 31 33
15
14 16
8 11 9
5
CBS Studios WBTV Fox TV ABC Studios UTV Sony
Canceled Hit*
28% 18% 26% 21% 25%37%
Hit rate
10 10
6 7 6 4
15
30
24 21 22
7
Canceled Hit*
25% 20% 25% 21% 36%40%
Hit rate
Note: “Hit” is defined as a new show that debuted on the networks from 2006 through 2012 and has continued for at least three seasons
Source: Company reports, cable channel Web sites, industry sources, RBC Capital Markets estimates
Even if a show is a hit in its first run, it will not necessarily be a major success in syndication.
First, prominent placement on a major network tends to help a show’s first-run ratings and
ability to syndicate – here the powerful synergy between a broadcast network and major TV
studio becomes more obvious. Additionally, certain formats lend themselves to syndication
better than others. Shows that are self-contained, or have greater elements of procedurals
than of serialized dramas, are far more syndication friendly. We’d note the two most prolific
syndicators of off-network TV shows have taken very different programming approaches –
while WBTV has used situation comedies as more of a driver of syndication dollars, CBS has
relied more on dramatic procedurals to derive syndication success.
CBS has the highest “hit
rate”, or successful
content, with Warner
Bros., ABC Studios, and
Sony following
October 23, 2014 19

Linear Syndication Performance Historically
In Exhibit 11, we illustrate the performance of TV studio production with respect to content
produced since 2006. We show:
 Already Syndicated: How many of those shows went into how many have had
syndication deals announced – the primary indicator of visible pipeline and driver of a
major bump in high margin revenue.
 Syndication Deal Signed: How many of those shows went into how many have had
syndication deals announced, but have yet to deliver content.
 Potential Future Syndication: How many have potential to be syndicated, as they have
been running for a number of seasons and the format fits the mold, but are yet to sign a
deal.
On a format-agnostic basis (which, as we note below, isn’t an easy assumption to make), this
last category should be a good indicator of the forward pipeline for deals that have not yet
been announced. The conclusion from this chart is that over the past seven years, CBS and
WBTV have been by far the most successful at creating syndicated shows, while Fox and ABC
have lagged.
In the following exhibit, we’ve laid out the change in syndication performance from 2006-
2012 to 2006-2010.
Exhibit 11: Linear Syndication Performance of TV Studios
2006-2012 2006-2010
22
19
17
13 13
6
9
11
2
6 7
2
1
2
1
Numberofshows
Already Syndicated Syndication Deal Signed Potential Future Syndication
3232
20 19 20
8 16 15
13
10 10
3
3 4
3
1
2
6
8
5
8 6
2
CBS Studio WBTV Fox TV ABC Studio UMS Sony
Numberofshows
Already Syndicated Syndication Deal Signed Potential Future Syndication
27
25
21
18
17
8
Note: “Already Syndicated” indicates shows that have been in network first-run in the past six years (2006-2011) and have already been syndicated; “Syndication Deal Signed” indicates shows with syndication
deals, and therefore in the pipeline for the future; and “Potential Future Syndication” indicates shows without syndication deals but with potential to be syndicated in the future given that they have been on
network first-run for three or more seasons
Source: Company reports, cable channel Web sites, industry sources, RBC Capital Markets estimates
Backlog Of Announced Deals Offers Less Visibility Than Before
While each of the major studios has modest visibility to future syndication revenues based
on the current revenue stream from syndication (it’s unlikely several shows in a diversified
portfolio of syndicated content will be cancelled, ceasing the revenue opportunity of
producing and selling incremental episodes), it’s more difficult to gain visibility to the big
bumps associated with brand new syndication deals, where a large number of episodes are
delivered in bulk on the launch of a syndication deal, generating a major revenue
opportunity).
The following exhibit illustrates the opportunities associated with the visible pipeline of
syndication deals announced, where revenues have been recognized recently or have yet to
be. CBS and WBTV have the most visibility into 2015 syndication revenues versus the peer
group, with Fox a modest third-place finisher.
We have less visibility into
future syndication today
than we did a few years
ago
October 23, 2014 20

We’d note that versus when we’ve looked at future backlog previously, there is less visibility
today than before. However, the growing SVOD market (see Exhibit 1) has probably
contributed to this and in certain cases, could make up for it.
Exhibit 12: Visible Recent And Future Linear Syndication Deals
140
280
76
44
348 84
73
19
226
25
244
36
80
18
0
100
200
300
400
500
600
700
800
Millionsof$s
2013 2014 2015
Warner Bros. and CBS lead 2015 in terms of
inked linear backlog deals. Fox should continue
to benefit from the sale of The Simpsons for
years to come.
Source: TV Guide, Broadcasting and Cable, company reports, RBC Capital Markets estimates
Warner And CBS Are The Leaders In Signed Deals
Since we began analyzing syndication, CBS and Warner Bros. have had the most substantial
backlog of signed syndication deals in the pipeline. The first factor is the actual dollar value in
the pipeline. We assess this by considering the dollar value per episode the distribution
partner has committed (the value of these deals is often widely reported in the trade press
and our own sources have given us insight on the shows for which data has not been
reported). Typically, the range is between $0.5MM and $2.5MM/episode. The second factor
is timing of syndication launches. This factor considers the gap between the announcement
of the syndication deal and the actual delivery of the episodes.
For instance, in one of the most successful deals in syndication history, CBS and USA entered
into a deal for NCIS: LA in 2009 after only seven episodes had aired. Thus, CBS secured a high
price for a show that had very few episodes produced even for a first-run, ensuring solid
profitability before the show had even proven itself. While the deal was for approximately
80-100 episodes at $2.4MM/episode for a total of ~$200MM upon launch of the syndication,
it took until 2013 for the actual syndication to launch as the show couldn’t be stripped until
enough episodes had been aired. In other words, CBS gained precise visibility of ~$200MM of
very high-margin revenue four years in advance in what has traditionally been a hit-driven
and unpredictable business.
CBS also struck a similar deal with TNT for Hawaii Five-0 at a price of ~$2.2MM/episode,
resulting in another ~$200MM of backlog, after less than one season in first run.
Less Visibility In The Pipeline Today
Compared to a few years ago when we had visibility in the syndication pipeline for two-three
years out, today we have limited visibility into 2015 and none into 2016, which probably
represents where we are in the content cycle.
CBS and WBTV have the
most visibility into 2015
syndication revenues
versus the peer group, with
Fox a third place finisher
October 23, 2014 21

We have some visibility into a few linear syndication deals that should hit in 2015, including:
 Elementary from CBS Studios to WGN/ION
 2 Broke Girls from Warner Bros. to TBS and CBS Stations,
 Person of Interest from Warner Bros. to WGN,
 New Girl from Fox to TBS and MTV,
 The Simpsons from Fox to FXX,
 Grimm from Universal to TNT
Exhibit 13: Timing And Magnitude Of Recent And Future Linear Syndication Delivery
0
50
100
150
200
250
300
350
400
Millionsof$s
2013 2014 2015
The Middle
$25mm
Mike and
Molly
$72mm
Blue Bloods
$98 mm
The Middle
$12mm
Person of Interest
$117 mm
Scandal $24 mm
Community1
$18 mm
The Good
Wife
$45 mm
Hawaii Five-O
$205 mm
The Middle
$25 mm
Glee $44 mm
Modern Family $134 mm
The Cleveland Show $44mm
Bob's Burgers $23 mm
Parks and Recreation
$63 mmMike and
Molly
$72 mm
2 Broke Girls
$163 mm
NCIS: LA
$226 mm
Blue Bloods
$98 mm
Elementary
$140 mm
The Middle
$12 mm
The Simpsons $38 mm
Raising Hope $35 mm
New Girl $38 mm
The Simpsons $38 mm
Cougar Town $30 mm
Scandal $24 mm
Community1
$18 mm
Community1
$18 mm
Grimm $44 mm
Source: TV Guide, Broadcasting and Cable, company reports, RBC Capital Markets estimates
October 23, 2014 22

We have some visibility into a few SVOD syndication deals that should hit in 2015, including:
 For CBS: Elementary to Hulu for $1.5MM/episode, Under the Dome (season 3) to
Amazon for $0.9MM/episode, Extant (season 2) to Amazon for $0.9MM/episode, and
Zoo to Netflix for $0.9MM/episode. We also expect The Good Wife and Blue Bloods to air
their recent seasons.
 For Warner Bros.: Gotham to Netflix for $1.75MM/episode, Person of Interest to Netflix
for $0.5MM/episode, and Friends to Netflix for $150K/episode. We also have modest
expectations for recent season of The Following.
 For Lionsgate: We assume a third season of Orange Is the New Black goes on Netflix for
$2.5MM/episode and that season 2 of Manhattan will air on Hulu for $0.9MM/episode.
We also assume the latest Mad Men season will air.
 For Fox: we assume season 4 of New Girl will air on Netflix for $0.9MM/episode. We also
include the expected delivery of Sons of Anarchy season 7 to Netflix in 2015. We have
also included The Americans for Amazon at an estimated $1.0MM/episode.
 For Sony/UTV: We expect The Blacklist season 2 to air on Netflix at $2.0MM/episode, for
a total of $44MM (to be split between the two production companies) during 2015. Sony
also gets the benefit of most recent season of The Walking Dead airing on Netflix.
 For ABC: Revenge and Scandal could both add incremental seasons.
Exhibit 14: Estimated Magnitude Of Future SVOD Syndication Backlog
179
106
61
40 43
22
40
0
20
40
60
80
100
120
CBS Studios WBTV Lionsgate Fox Sony UTV ABC Studios
Millionsof$s
2015 Estimated SVOD backlog
179
106
61
40 43
22
40
0
20
40
60
80
100
120
140
160
180
200
220
CBS Studios WBTV Lionsgate Fox Sony UTV ABC Studios
Millionsof$s
2015 Estimated SVOD backlog
Elementary $72 mm
The Good Wife $40 mm
Blue Bloods $33 mm
Under the Dome $11 mm
Extant $11 mm
Zoo $11 mm
Gotham $39 mm
Friends $35 mm
Person of Interest $27 mm
The Following $5 mm
Orange is the New Black $35 mm
Mad Men $14 mm
Manhattan $12 mm
New Girl $22 mm
The Americans $13 mm
Sons of Anarchy $5 mm
The Blaclklist $22 mm share
The Blacklist $22 mm share
The Walking Dead $21 mm
Scandal $20 mm
Revenge $20 mm
Source: Press reports, industry sources, RBC Capital Markets estimates
CBS’s digital backlog
pipeline for 2015 actually
exceeds that for its digital
one (on a per show basis,
excluding any bulk deals)
October 23, 2014 23

In the following exhibit, we estimate the value of select shows being renewed on air for an
additional season, and then feeding the SVOD pipeline once the season has aired. We can
see the value of having several different shows being added to SVOD each year – one season
at a time – can add up to significant dollars. For example, when we take the value of an
additional season of Blue Bloods, The Good Wife, Elementary, Extant, Zoo, and Under the
Dome, we come up with an estimated $143MM of incremental revenues.
Exhibit 15: Estimated Backlog Of Future Shows Adding One Additional Season on SVOD
CBS Studios WBTV Fox ABC Studios Sony UTV
Linear backlog 0 0 0 0 0 0
SVOD backlog 0 0 0 0 0 0
Total Backlog - Linear + Digital $0 mm $0 mm $0 mm $0 mm $0 mm $0 mm
Warner Bros. is the leader in 2015 linear plus digital vis
estimated $386 million.
We estimate CBS has a combined visible backlog of
143
48
35 40
61
43
0
25
50
75
100
125
150
CBS Studios WBTV Fox ABC LGF Sony
Millionsof$s
Once a stable of shows has been picked up
by an SVOD provider, simply keeping the
show on-the-air and delivering future
seasons digitally can result in signficant
revenues over time.
When we combine all of the visible linear and digital backlogs for 2015, we find that Warner
Bros. is the leader with combined backlog at $386MM. CBS comes in second with an
impressive $319MM of estimated visible total backlog next year. We would note that CBS’s
digital backlog pipeline for 2015 actually exceeds that for its digital one (on a per show basis,
excluding any bulk deals).
Exhibit 16: 2015 Linear + Digital Backlog For Select Shows And Networks
140
280
76
44
179
106
40
40 43
22
0
50
100
150
200
250
300
350
400
450
CBS Studios WBTV Fox ABC Studios Sony UTV
Millionsof$s
SVOD backlog Linear backlog
$319 mm
$386 mm
$116 mm
$66 mm
Warner Bros. is the leader in 2015 linear plus digital visible backlog, with an
estimated $386 million.
We estimate CBS has a combined visible backlog of $319 million in 2015.We
note CBS's digital visible backlog exceeds its linear one.
Having several different
shows being added to
SVOD each year – one
season at a time – can add
up to significant dollars for
content providers
October 23, 2014 24

More Ways To Handicap Additional Linear & Digital Syndication Opportunities
In general, most shows that have been on the air for several seasons are pretty good
candidates for syndication. However, not all formats lend themselves to linear syndication.
Assessing the syndication potential of new shows (ones that have been on the air for less
than a season) is somewhat like throwing darts since we don’t know what shows will be
successful enough to justify production runs long enough to support syndication (though this
is changing with remarkably early syndication commitments, a la NCIS: LA or Hawaii Five-0).
However, some of these shows are in a syndication-friendly format and we can identify them
as at least reasonable opportunities.
The most linear syndication-friendly format is the procedural drama (typically a crime, legal
or medical-oriented show) that has no arc element to it; each episode resolves itself simply
and there is no need to understand background information about the main protagonists.
These shows tend to syndicate well domestically, primarily on general market, re-run-
oriented cable channels, as well as international broadcast and cable channels.
Situation comedies also tend to have a very syndication-friendly format, particularly those
that appeal more to a male audience. They too do not need to be viewed sequentially to
understand them, generally. These shows are generally sold to be stripped across weekdays
on both cable networks and broadcast stations (shown every day for five straight weekdays
at the same time each day – typically adjacent to local stations’ news programming on the
broadcast side, for the freshest, most premium content).
The least linear syndication-friendly format tends to be the serialized drama (at least, on a
linear basis; this type of programming is seeing new life in the SVOD market). While there
have been some successes for serialized dramas (they tend to sell best as programming in
the fringe day-part – after the 11:00PM news – on local broadcast stations, particularly on
weekends – they tend not to be stripped). These shows have often tended to do well on
SVOD platforms, however.
Exhibit 17 illustrates by studio the new shows with the highest potential for linear
syndication as well as those currently being broadcast that have not yet reached major
syndication deals. We would emphasize that this process is far more art than science as:
A. We never really know what show will actually be a hit, and
B. If a show that seemingly doesn’t fit the typical syndication-friendly format will end up
being an exception to the rule. For instance, A&E licensed The Sopranos for
$2.5MM/episode in 2005 despite the fact that it was a highly serialized drama; this
proved to be a ratings debacle for their respective buyers.
CBS is positioned well for
future syndication,
particularly with new
shows airing this year that
could syndicate in 2017
October 23, 2014 25

Exhibit 17: Shows With Formats/Elements Highly Friendly To Linear Syndication
Studio New Show Airing on Type Genre Comment
CSI: Cyber CBS New Drama Police procedural format could syndicate well
NCIS: New Orleans CBS New Drama Police procedural format could syndicate well
Scorpion CBS New Drama Elements of procedural crime/problem-solving likely syndicates well
The McCarthy's1
CBS New Comedy Multi-camera sitcom format with a broad reach could syndicate well
The Millers CBS Existing Comedy Multi-camera sitcom format likely lends itself well to syndication
1
Co-produced with Sony
Forever ABC New Drama Medical procedural format could syndicate well
Stalker CBS New Drama Police procedural format could syndicate well
Mom CBS Existing Comedy Multi-camera sitcom format likely lends itself well to syndication
Cristela ABC New Comedy Multi-camera sitcom format could syndicate well
Last Man Standing ABC Existing Comedy Multi-camera sitcom format with a broad reach likely syndicates well
How to Get Away With Murder ABC New Drama Crime procedural format could syndicate well
Nashville2
ABC Existing Drama Serialized drama in 3rd season could syndicate somewhere
Resurrection ABC Existing Drama Procedural drama format could syndicate well
2
Co-produced with Lionsgate
CBS TV Studios
Warner Bros.
Television
ABC Studios
Fox Television
Source: RBC Capital Markets estimates
October 23, 2014 26

ABC Studios
ABC Studios has a few older shows in syndication, but, by and large, they are serialized
dramas that generally:
A. Have done poorly due to the typical problems with serialized dramas in syndication, and
B. Tend to under-earn versus situation comedies (domestically) and procedural dramas
(internationally).
As a result of struggling ratings, Cougar Town was moved to TBS in 2013, which allowed the
show to renew for a fourth season (it went on to air six seasons). The syndication run on TBS
began in September 2014.
Scandal also begun airing on BET this fall. The network bought rights to the first two seasons,
and will air current episodes after they air on ABC. While details of the deal have not been
reported in the press, we’d estimate the rights were purchased for $0.4MM/episode.
According To Jim and Scrubs have had modest success on the situation comedy side, while
Grey’s Anatomy and Desperate Housewives have had some success on the drama side. One
notable exception to the lack of procedural dramas produced by ABC is Criminal Minds
(actually a joint production between CBS and ABC Studios), which was syndicated to both
A&E and ION Stations for ~$650K/episode.
The 2011 syndication deal for Castle was a huge win for ABC and a bit of insurance against
some of the older shows being canceled (which would result in a lost source of syndication
dollars). Castle, a crime drama with shades of a procedural but many elements of a serialized
show, was sold to TNT for ~$1.5MM/episode in early June as it was set to enter into its
fourth season in the fall of 2011. Notably, in one of the first such deals we have seen (at least
explicitly laid out in public documents), online rights for TNT’s TV Everywhere offering were
also included as part of the syndication deal. With seasons 1 and 2 set to bow in summer
2012, ABC Studios’ near-term pipeline looks good. Six seasons of Castle have aired on TNT
with a seventh season airing on broadcast this fall (leaving upside potential for further future
syndication). At a total of almost $200MM in syndication, Castle has turned out to be a very
strong show for ABC.
Exhibit 18: Recent And Near-Term Linear Syndication Pipeline For ABC Studio
Castle 2011 2012 TNT $1.5 mm 128 $192 mm Crime procedural; has gone on to air 6 seasons
Cougar Town 2012 2014 TBS $0.4 mm 89 $36 mm TBS granted the show a 4th season (at the time)
Scandal 2013 August 2014 BET $0.4 mm 47 $19 mm Will air current episodes after they are broadcast on ABC
Progam
License
Fee/Episode
Channel Licensee
# of Episodes to
be Delivered
Est. Initial Lump
Sum Revenue
Year Off Net
Deal
Announced
Syndication
Launch
Comments
Source: TV Guide, Broadcasting and Cable, and RBC Capital Markets estimates
ABC has had just a handful
of successfully syndicated
shows over the past few
years
October 23, 2014 27

Exhibit 19: ABC Studios – Linear Syndication Status Of Select Recently Produced Shows
Program 2008 2009 2010 2011 2012 2013 2014
Year Enter
Syndication
According to Jim
Scrubs
Ghost Whisperer*
Lost
Ugly Betty
Brothers & Sisters
Desperate Housewives
Criminal Minds*
Grey's Anatomy
Private Practice
Cougar Town
Castle
Scandal
Once Upon a Time
Revenge
Mistresses
Nashville*
Resurrection
Agents of S.H.I.E.L.D.
Black-ish
How to Get Away with Murder
Manhattan Love Story
Red Band Society
The Trophy Wife
Betrayal
Intelligence
Killer Women
Lucky 7
Mixology
The Neighbors
Zero Hour
Malibu County
Red Widow
The Family Tools
Good Christian Belles
Man Up
The River
Body of Proof
Happy Endings*
Detroit 1-8-7
My Generation
No Ordinary Family
Off the Map
FlashForward
Happy Town
Gary Unmarried*
Cupid
In the Motherhood
Life on Mars*
Dirty Sexy Money
Eli Stone
Reaper
Samantha Who
Already Syndicated: 13
New Shows: 4
Canceled: 38
Potential Future Syndie: 6
*Joint production with another studio
Source: Company reports, Broadcasting and Cable, Variety and RBC Capital Markets research
ABC Studios has four new shows airing in the fall 2014-2015 broadcast primetime season. Of
the group, How to Get Away With Murder probably has the most potential to syndicate given
its crime procedural nature.
October 23, 2014 28

Exhibit 20: Potential Linear Syndication For 2014-2015 Primetime Broadcast ABC Productions
New ABC TV Show in 2014-2015 Season Studio Type
Network
Airing
Potential for Major
Syndication
Comment
Black-ish ABC Studios Comedy ABC Low Single-camera sitcoms tend not to syndciate well
How to Get Away With Murder ABC Studios Drama ABC High Crime procedural format could syndicate well
Manhattan Love Story ABC Studios Comedy ABC Low Single-camera sitcoms tend not to syndciate well
Red Band Society ABC Studios Drama FOX Low Serialized teen drama unlikely to syndicate well
Source: Company reports, RBC Capital Markets
Of the ABC Studios shows currently airing on broadcast television, Resurrection probably has
the highest potential for future syndication given its procedural nature. Agents of S.H.I.E.L.D.
has a sort of hybrid format of both serialized and procedural, similar in a way to Blue Bloods.
That said, it could syndicate in the future. While Nashville (co-produced with Lionsgate) has a
serialized nature with a female-skewing audience that doesn’t always lend itself well to a
syndication format, we think its high quality and star appeal could lead it to syndication in
the future (particularly on CMT or networks geared toward a female audience).
Exhibit 21: Potential Linear Syndication For Recent ABC Studios Productions
ABC Show Genre
Syndication
Potential
Past Seasons
Aired
Renewed for
Season
Episodes to
be Aired
Comments
Agents of S.H.I.E.L.D. Drama Medium 1 2 44 Elements of serialized and procedural; could syndicate
Mistresses Drama Low 2 3 39 Serialized drama likely does not syndicate well
Nashville1
Drama High 2 3 65 Serialized drama in 3rd season could syndicate somewhere
Once Upon A Time Drama Low 3 4 88 Serialized drama likely does not syndicate well
Resurrection Drama High 1 2 21 Procedural drama format could syndicate well
Revenge Drama Low 3 4 88 Serialized drama likely does not syndicate well
1
Source: Press reports, RBC Capital Markets research
ABC TV Studios SVOD
ABC has completed bulk deals with both Netflix and Amazon over the past several years.
While there was some overlap of content between the 2010/2011 Amazon and Netflix deals,
the 2012 extension of the Netflix deal added exclusivity of Revenge, Scandal, and Once Upon
A Time. Disney also did a sizeable deal in 2014 with Netflix, but we believe that was largely
for film content and do not include it in our table.
Exhibit 22: Select ABC TV Shows Sold To SVOD Players
Grey's Anatomy, Desperate Housewives,
Lost
Netflix Bulk 2010 - $150-$200 million One year deal with option to extend
Lost, Grey's Anatomy, Felicity Amazon Bulk 2011 - -
New deal included 800 titles from Disney-ABC with fare
from ABC Family, ABC Studios, The Disney Channel and
Marvel
Alias, Grey's Anatomy, Desperate
Housewives, Private Practice, Lost,
Brothers & Sisters, Ugly Betty
Netflix Bulk 2011 - -
Renewal and expansion; hundreds of library episodes of
series from ABC Studios, Disney Channel and ABC Family
Revenge, Scandal, Once Upon A Time Netflix Bulk 2012 - $0.9 mm/episode Added to the initial 2010 deal with Netflix
Criminal Minds1
Netflix Individual 2014 U.S. $0.9 mm/episode 9 seasons or ~210 episodes; ABC owns half
Nashville2
Hulu Individual 2014 U.S. -
All prior seasons of the series upon the start of the
subsequent season
1
Co-produced with CBS
2
Progam SVOD Licensee Type
Deal
Announced
Rights In License Fee Comments
October 23, 2014 29

CBS Studios
During the past decade or so, CBS has done an exemplary job of drawing on its wholly owned
TV studio to create hits exclusively for its wholly owned TV network, subsequently
monetizing this content (primarily procedurals and situation comedies) even more so
through lucrative syndication deals. Furthermore, few studios have done as thorough a job of
creating global franchises that take brands to span across multiple properties and appeal
both domestically and internationally— most notably with the CSI franchises (CSI, CSI: New
York, CSI: Miami, and this season CSI: Cyber) and the JAG/NCIS franchises (JAG, NCIS, NCIS:
LA). Additionally, non-franchise shows like Cold Case and Without a Trace have been solid
one-offs well suited for domestic off-network cable and international syndication on the
procedural drama side.
2014 has been a busy year thus far. The Good Wife began airing on Hallmark and CBS
Stations after being sold to both Amazon and Hulu Plus. While Hallmark probably paid
~$400K/episode, the combined license fee per episode across all platforms was probably
closer to $2MM/episode.
Hawaii Five-0 began airing on TNT for ~$2.2MM an episode, raking in upwards of $200MM.
Blue Bloods was sold to WGN, ION, and Hulu Plus. This includes 90 episodes at
~$1.1MM/episode on linear television (or $1.7MM/episode total across all platforms).
Elementary is slated to enter syndication during late 2015 on WGN and ION for
$2.0MM/episode. The show was also sold to Hulu Plus and we estimate the total price tag is
closer to $3.5MM/episode.
Going back in time, although 2011 was a relatively uneventful year, during 2012 CSI: Miami
and Rules of Engagement (co-produced with Sony) both provided a modest boost to
numbers. 2013 saw the first major syndication payoff since 2009, when NCIS: LA (syndicated
for $2.4MM/episode to USA after only a few episodes had aired in 2009) began stripping on
USA and also airing on Tribune and CBS affiliate stations.
Exhibit 23: Recent And Near-Term Linear Syndication Pipeline For CBS
CSI: Miami 2011 2012 A&E, AMC $0.4 mm 232 $93 mm Non-exclusive
Rules of Engagement1
2011 2012 Tribune, CBS Stations $0.4 mm 96 $40 mm Includes some barter
NCIS: LA 2009 2013 USA $2.4 mm 96 $226 mm -
The Good Wife 2013 1Q14 Hallmark, CBS Stations $0.4 mm 112 $45 mm
Sold to Amazon and Hulu Plus, also. Combined ~$2
mm/episode
Hawaii Five-0 2011 3Q14E TNT $2.2 mm 93 $205 mm Some press reports cite as high as $2.5 mm/episode
Blue Bloods 2014 Fall 2014 WGN, ION $1.1 mm 90 $98 mm Also sold to Hulu Plus; $1.7 mmm/episode total
Elementary 2014 3Q15E WGN, ION $2.0 mm 72 $140 mm Also sold to Hulu Plus; $3.5 mm/episode total
1
Co-production with Sony
# of Episodes to
be Delivered
Year Off Net
Deal
Announced
Syndication
Launch
Progam
License
Fee/Episode
Channel Licensee
Est. Initial Lump
Sum Revenue
Comments
Source: TV Guide, Broadcasting and Cable and RBC Capital Markets estimates
CBS has a rock-solid slate
of new programming this
season: four of seven new
shows have a high
likelihood of future
syndication
October 23, 2014 30

Exhibit 24: CBS Studios – Linear Syndication Status Of Select Recently Produced Shows
Program 2008 2009 2010 2011 2012 2013 2014
Year Enter
Syndication
Everybody Hates Chris
The Game
Without a Trace*
Cold Case*
Ghost Whisperer*
Numb3rs
Medium
CSI: Miami
CSI: NY
Rules of Engagement*
Gossip Girl*
Criminal Minds*
CSI
NCIS
NCIS: LA
The Good Wife
Hawaii Five-O
Blue Bloods
Elementary May 2015
90210
Hart of Dixie*
The Vampire Diaries*
Beauty and the Beast
The 100
The Millers
Reign*
The Originals
Under the Dome
CSI: Cyber
Jane the Virgin*
Madam Secretary
NCIS: New Orleans
Scorpion
The McCarthy's*
Extant
Unforgettable*
The Tomorrow People
We Are Men
Bad Teacher
Emily Owens, M.D.
Cult
Friend Me
Vegas
A Gifted Man
How to Be a Gentleman
Ringer*
The Secret Circle*
The 2-2
Hellcats*
The Defenders
Life Unexpected*
Accidentally on Purpose
Melrose Place
Three Rivers
Gary Unmarried*
Harper's Island
Privileged*
New Shows: 7
Canceled: 28
Syndication Deal Signed: 1
Already Syndicated: 22
Potential Future Syndie: 9
*Joint production with another studio Note: Zoo premieres in 2015 and has not been included in the table
Source: Company reports, Broadcasting and Cable, Variety and RBC Capital Markets research
October 23, 2014 31

In terms of the fall 2014-2015 broadcast season, CBS has a promising slate for potential
future syndication. CSI: Cyber marks the third spinoff from the original CSI show, which has
been an incredibly successful billion-dollar profit crime procedural franchise. CSI (or CSI: Las
Vegas) is co-produced, is airing its 15th season and currently has 321 episodes. We believe
CBS owns roughly 50% of the flagship show. The first spin-off was CSI: Miami, which began
airing in the 2002-2003 broadcast season and ran for 10 seasons. CBS wholly owns the 232
episodes that aired.
The second spin-off, CSI:NY, began airing on the 2004-2005 broadcast season and aired 197
episodes over nine seasons. The series is wholly owned by CBS. Between the CSI and NCIS
franchises, CBS has 575 episodes that have yet to be monetized on SVOD
2
(see Exhibit 30 for
more details).
We also expect NCIS: New Orleans to perform well and have a high likelihood of syndicating
in the future given its similar format of police procedural content. This is the second spin-off
of NCIS (NCIS: Los Angeles aired in 2009 and is entering its sixth season this year). The
original NCIS is airing its 12
th
season this fall.
Scorpion is also a procedural drama with elements of crime and problem solving, and could
syndicate well in the future. Conversely, The McCarthy’s is a multi-camera sitcom with a
broad reach that could also find a home in syndication in the future.
Exhibit 25: Potential Linear Syndication For 2014-2015 Primetime Broadcast CBS Studios Productions
New CBS Show in 2014-2015 Season Studio Type
Network
Airing
Potential for Major
Syndication
Comment
CSI: Cyber CBS TV Studios Drama CBS High Police procedural format could syndicate well
Extant CBS TV Studios Drama CBS Low Serialized straight-to-series drama may not syndicate well on linear
Jane the Virgin1
Warner Bros. TV & CBS TV Studios Dramedy CW Low Single-camera sitcom with female-skewing audience may not syndicate well
Madam Secretary CBS TV Studios Drama CBS Low Serialized drama with female skewing audience may not syndicate well
NCIS: New Orleans CBS TV Studios Drama CBS High Police procedural format could syndicate well
Scorpion CBS TV Studios Drama CBS High Elements of procedural crime/problem-solving likely syndicates well
The McCarthy's2
CBS TV Studios/Sony Comedy CBS High Multi-camera sitcom format with a broad reach could syndicate well
1
2
Co-produced with Warner Bros.
Source: Company reports, RBC Capital Markets
With respect to the forward pipeline at CBS, there is one show currently airing that has
potential for future syndication: The Millers. This multi-camera sitcom has a broad audience
reach and tends to fit the mold for successful syndication. Unforgettable was cancelled
recently, but its crime procedural nature means it could syndicate somewhere.
Exhibit 26: Potential Linear Syndication For Recent CBS TV Studios Productions
CBS Show Genre
Syndication
Potential
Past Seasons
Aired
Renewed for
Season
Episodes to
be Aired
Comments
Beauty and the Beast Drama Medium 2 3 44 Teen crime procedural could syndicate somewhere
Hart of Dixie1
Dramedy Low 3 4 76 Serialized teen drama may not lend itself well to syndication
Reign1
Drama Low 1 2 44 Serialized historical fiction probably won't syndicate well
The 1001
Drama Low 1 2 29 Serialized post-apocalyptic teen drama probably won't syndicate well
The Millers Comedy High 1 2 46 Multi-camera sitcom format likely lends itself well to syndication
The Originals1
Drama Low 1 2 44 Serialized The Vampire Diaries spinoff likely won't syndicate well
The Vampire Diaries1
Drama Low 5 6 133 Serialized teen drama may not lend itself well to syndication
1
Co-produced with Warner Bros. TV
2
2
Per company conference presentation on September 4, 2014
October 23, 2014 32

CBS TV Studios SVOD
It’s been a busy fall for CBS on the SVOD front as well. During October, CBS announced a pact
between Netflix and Showtime and CBS Studios International for European content licensing.
The deal includes six international markets including Germany, Austria, the Netherlands,
Switzerland, France, Belgium and Luxembourg and exclusive first-window rights to Penny
Dreadful, as well as early seasons of Elementary, Under the Dome, Ray Donovan, Dexter,
Deadwood, and Jericho.
Exhibit 27: Select CBS TV Studios Shows Sold To SVOD Players
Rules of Engagement1
Netflix Individual 2012 - - -
CSI: Miami Netflix - 2012 - $1.0 mm/episode Part of "put option" for CBS to Netflix
Bulk programming Hulu Bulk 2012 - - -
CSI: New York Netflix - 2013 - $1.0 mm/episode Part of "put option" for CBS to Netflix
Under the Dome Amazon Individual 2013 U.S.
$0.75-$1.0
mm/episode
Beginning 4 days after initial air on Prime and for purchase
America’s Next Top Model, Everybody
Loves Raymond, Jericho, The L Word,
Undercover Boss, Amazing Race and
United States of Tara, among others. In
addition, fan-favorite TV series such as
Medium, The Tudors, the complete Star
Trek franchise, I Love Lucy
Amazon Bulk 2013 U.S. - Bulk deal with Amazon
The Good Wife Amazon/Hulu Individual 2013 -
$1.8 mm/episode
combined
Done in conjunction with linear syndication deal
Dexter Netflix Individual 2013 U.S.
$1.0 mm/episode
combined
Showtime original
Undercover Boss, United States of Tara,
Everybody Loves Raymond, Ghost
Whisperer, Taxi, The Brady Bunch,
Laverne & Shirley, Melrose Place, 7th
Heaven
Hulu Bulk 2014 U.S. $65.0 mm Extension of 2012 Hulu deal; 5,300 episodes
Extant Amazon Individual 2014 U.S.
$0.75-$1.0
mm/episode
Episodes available 4 days after initial broadcast
Medium, Tudors, Star Trek, I Love Lucy Amazon Bulk 2014 U.S. $85.0 mm Expansion and extension of bulk deal with Amazon
Penny Dreadful, as well as early seasons
of Elementary, Under the Dome, Ray
Donovan, Dexter, Deadwood, and
Jericho
Netflix Bulk 2014 International -
Rights in Netherlands, Germany, Austria, Switzerland,
France, Belgium and Luxembourg
Blue Bloods Hulu Individual 2014 U.S. $1.5mm/episode Part of new big push for Hulu
Elementary Hulu
Individual
Backlog
2014 U.S. $1.5mm/episode Part of new big push for Hulu; airs in 2015; exclusive
Zoo Netflix Individual 2014 U.S.
$0.75-$1.0
mm/episode
Acquired before show aired on network; exclusive; summer
2015
Criminal Minds2
Netflix Individual 2014 U.S. $0.9 mm/episode 9 seasons or ~210 episodes; CBS owns half
1
2
Co-produced with ABC
CommentsProgam SVOD Licensee Type
Deal
Announced
Rights In License Fee
Also during October, CBS announced it would be renewing Under the Dome for season 3 and
Extant for season 2. As depicted in Exhibit 1, we think this represents a $22MM revenue
opportunity for CBS. During late summer, nine seasons of Criminal Minds (co-produced with
ABC Studios) also quietly appeared on Netflix. We estimate the price paid was
$900K/episode, which nets to ~$95MM for CBS’s 50% ownership. In addition, while CBS is
With Under the Dome,
Extant, Elementary, and
Zoo, CBS has the most
digital backlog visibility of
its peers
October 23, 2014 33

TV Content Traditional And Digital Syndication

TV Content Traditional And Digital Syndication

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