Latin America Approach Summary

• A contemplated high-level roadmap for SPT’s Latin America channels is geared towards achieving greater brand distinction, consumer value and channel awareness among consumers and advertisers

– The Latin America channels need to more clearly define their brands (separate from each other) to focus on targeted audiences in order to give consumers a compelling value proposition and to give advertisers a reason to increase their investments

i.e., Put a face on each of these channels, prove why they are premium (SET – female trend setters; AXN – male metro-climbers)

– As the channels take ownership of their distinct brands, the channels need to utilize research (and the marketing/positioning of such research) to clearly identify and sell their respective consumer profiles i.e., how they are different from each other and from competitive networks

– The channels need to then leverage that research, which defines the relevant and desirable characteristics of each channels’ audience, to create strategic selling propositions for advertisers and distributors

• Spin faces distinct challenges due to their re-focused effort on tailoring their channel to capture the growing “C” class market/youth market

– Though this burgeoning “C” market provides growth opportunities, Spin lacks the scale and expertise compared with local market players such as Globosat and Televisa

– SPT may want to consider selling a stake in Spin to a larger local Latin America player (i.e., 50%) and/or re-brand the channel as a “C” class Spanish language dubbed channel (female genre, lower scale production – i.e., like Oxygen) with local programming, flavor and appeal

• Additionally, it is clear that there needs to be organizational changes made in order to provide a greater focus on each of the distinct channel properties

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Strategic Roadmap

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• Step 1: SET, AXN and Spin to focus on developing distinct channel brands, with each having a clear set of consumers, through marketing, programming and scheduling strategies thereby strengthening the audience’s relationship with the channel brand while growing the user base for each channel

Channel Channel Focus– SET to focus on a core AB female audience, similar to Bravo, who are upscale viewers i.e., metropolitan,

professional and trendy– Example: “This cable network is the premiere lifestyle destination for food, fashion, pop culture, beauty and design…that

pulls back the curtain on the creative process and makes influential and inventive original programming…[that] show a different side of celebrities, break exciting new personalities, and shake up the way we look at style, media, fame and Hollywood…”

More high-gloss original unscripted content building on the success of a tent-pole (i.e., MNTM) More human interest/inspirational stories about talented and motivated individuals (i.e., Queen

Latifah type shows) and Hollywood/celebrity vs. traditional acquired scripted programming Utilize Kalixta as a complement to SET (i.e., movie blocks on SET sponsored by Kalixta)

– AXN to focus on the AB professional male skewing metro-climber audience who enjoy the finer things in life, competition, action, epic type programs, sexy procedurals and an affiliation with Hollywood/celebrity

Cool content for influential male TV watchers (some scripted, some movies, some unscripted) Consider local talent pieces on celebrity, sports figures/male appeal athletes Turn Crackle into AXNs complementary service (Crackle movie blocks on AXN) with sharing of

content/windows/marketing across platforms; making a cool cross-platform entertainment play

– Spin to focus on a core audience who lives in BC counties, yet have metropolitan aspirations, more likely to have children and be heavy TV viewers

Local/dubbed programming via co-productions, low cost unscripted programs and lower cost acquisitions

Follow the Oxygen model; pan-regional play

Strategic Roadmap (Cont’d)

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• Step 2: As the channel brands take focus, the channels need to utilize research to put a face on each channel so the consumer and advertiser know what these premium brands represent

• Step 3: The channel then needs clearly enumerate the key properties of the SET/AXN/Spin consumer that are desirable to advertisers while raising top-of-mind awareness of the channels as a valuable ad medium

– Create unique advertiser campaigns highlighting the channel’s unique on-air content and its unique relationship with its audience, when combined, greatly benefit advertisers

– Illustrative example: Brands that appeared on the channels were elevated in the minds of the channel’s viewers; viewers were so engaged with the programming, they had higher brand opinion and purchase intent for the integrated brands

Channel Differentiators (NOTE: Illustrative only)

– Trend-setters– Females with more purchasing power than the average consumer– Brand and trend conscious. Likely trendsetters in areas of fashion, beauty and style

– Metro-climbers– Brand and tech savvy males who have the latest cars, use the latest brands, clothes,

alcohol, gadgets and who are career focused– Uses their social status and affiliation to being a trend-setter to enhance and extend

their personal social experience – Geared towards younger females living in BC counties– Heavy TV viewers who are more likely to have children

Management Latin America and Brazil Head overseeing all channel properties

Channel Management (by Channel vs. territory)

SET GM (Latin America and Brazil)

AXN GM (Latin America and Brazil)

Spin GM (Latin America and Brazil)

Brazil specific Management VP Brazil VP Brazil N/A

Shared Ad Sales GM, Agency and Brand leads across the portfolio

Ad Sales SET Ad Sales Team(Channel lead w/ team by Country)

AXN Ad Sales Team(Channel lead w/ team by Country)

Spin Ad Sales Team (Channel lead for region)

MarketingVP VP VP

(1) Create differentiation among brands, (2) build consumer relevance and (3) build brand awareness among advertiser community

Programming

VP VP VP

(1) Select programming initiatives by country with focus on a key tent-pole, (2) fewer output deals, (3) acquire specific consumer focused programs for each distinct brand, (4) more specific local productions and (5) more

(not less) investment on programming/production

Shared Services Affiliate, Creative, On-Air Programming, IT, Tech Ops, Finance, HR, etc.

Digital Team SET specific and complement to Kalixta, Crackle’s Women’s Channel

AXN specific and complement to Crackle

Spin specific and complement to Crackle’s localized

programming

Additional ConsiderationsIn order to focus on creating 3 distinct channel brands, SPT also needs to (1) re-organize management and ad sales, (2) re-examine programming and marketing and (3) leverage shared services and digital cross-platform opportunities

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