CONFIDENTIAL

Grouper: Prosumer Expansion Opportunity

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Executive Summary

• Grouper currently focuses on a simple, elegant solution for users to watch and share videos

• Grouper’s long-term leadership will require further expansion– Increase emphasis on near-professional quality user generated content

(“prosumer” content)– Increase options for monetizing content and sharing revenue with users– Add studio content from SPE and others

• Selected acquisition candidates would provide a complementary tool set to address prosumers’ needs

– Robust tools for users to program and promote videos– Support for a wide range of revenue models (ad-supported, subscription, and sell-

through) with the ability to share revenue with users– User or advertiser sponsored contests to increase submission of high quality

videos

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Number of Videos in the CategoryMillionsThousands

Mill

ions

Doz

ens

SPE and Grouper have an opportunity to address the lack of near-professional quality “prosumer” content

Studios“Professional”

User Generated Video Sites“Consumer”

Nu

mb

er o

f P

eop

le V

iew

ing

Current Gap“Prosumer”

Area of OpportunityArea of Opportunity

Increase distribution for near-professional quality user generated videos

Broaden base of Studio content

Increase ability to target

Acquire content at a lower cost

Increase distribution for near-professional quality user generated videos

Broaden base of Studio content

Increase ability to target

Acquire content at a lower cost

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“Light Users” and “Prosumers” have distinct needs

Watch

Share

Create

• Passive viewing or simple browsing

• Upload and leave placement decisions to the service

• Easy solutions for sharing with friends (one click publishing, P2P)

• Light editing tools

• Active engagement with in-depth channels

• Share content in a marketplace- Program content (channel

creation, movie micro-sites)- Promote content (ads, syndication)

• “Prosumers” own editing tools but need publishing tools

• “Aspiring prosumers” need basic editing tools

Needs of The Light User(Grouper Focus Areas)

Needs of The “Prosumer”(Emerging Opportunity)

Monetize • Not critical, “it’s just for fun” • Share in revenues

• Multiple revenue models required

CONFIDENTIAL

Competitor Comparison

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Focus Areas and Differentiators of Online Video Sites

• Focuses exclusively on high quality user content

• Displays videos from contest winners after elaborate screening process

• Simple, elegant user experience for exploring a wide range of content

• Attract users with a wide range of content (“Video Wall” with 80% click through)

• Easy tools for sharing content with friends and on other sites

• Traditional user generated site that differentiates through user revenue sharing

• Focus on higher quality “prosumer” generated content and programming

• Supports a broad range of revenue models and user revenue sharing

• Enable user driven promotion through movie microsites, channels, press releases, rich blogs and banner ads

• Focuses on light video editing tools

• Working to build a larger base of user generated and studio content

• Focuses on hosting various contests for different types of content (photo, audio, video)

• Allows users to submit, create and vote on contest entries

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Competitor Comparison

EASY ONLINE VIEWING

Wide range of videos on home page

Genre-based channels

USER GENERATED PROGRAMMING

User Channel Creation

User created Movie “Microsites”

CONTENT PROMOTION/SHARING

User Generated Ads

User Generated Blogs/Chat

User Generated Press Releases

P2P Client

One Click Posting to MySpace/Other Sites

Editor’s List/Contest Winners

MONETIZATION

Ad Insertion/Filtering

User Revenue Sharing

Sell-through / Subscription

VIDEO EDITING TOOLS

Downloadable

Online