1 / 57

Reorienting Game Show Network for Casual Games Market

Proposed reorientation of Game Show Network to capitalize on the growth of casual games off TV. Seeking a multi-platform game business model to attract a similar but not identical audience with a similar but not identical consumer experience.

krolando
Télécharger la présentation

Reorienting Game Show Network for Casual Games Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Discussion MaterialsOctober 4, 2007

  2. Summary • Very undesirable audience from a TV perspective • Limited reach to launch hit or demo-changing shows • Incremental improvements more difficult due to: declining ratings, fragmentation, return of game shows to broadcast, affiliate pressures • Ambitious re-orientation of business proposed to capitalize on growth of casual games off TV • Seek genuine multi-platform games biz model: packaging, online ad sales, online fees, formats, mobile • Key issue: can Game Show Network broaden to attract similar, but not identical, audience with similar but not identical consumer experience?

  3. Current Situation

  4. 2007 Forecast * Other Revenue includes casino site fees, international series licensing, lottery ticket and merchandise licensing. SG&A & Other costs exclude benefit from appreciation plan settlement.

  5. Historical financial performance * Other Revenue includes online ad, online games, participation TV fees, casino site fees, international series licensing, lottery ticket and merchandise licensing. 2007 SG&A & Other costs include Participation TV and exclude benefit from appreciation plan settlement.

  6. Ratings trend 2007 07 Budget targets HH ratings P25-54 ratings Source: Nielsen Media Research, full-day average basis.

  7. Efforts to broaden the audience: original programming Cash spend by genre (000): * * Does not include World Poker Tour, $2.8M spent in 2007, $4.1M due in 2008, plus $3.0M marketing commitment ($1.5M hard-dollars) in 2008.

  8. 2007 programming & marketing spend * Does not include World Poker Tour, $2.8M spent in 2007, $4.1M due in 2008, plus $3.0M marketing commitment ($1.5M hard-dollars) in 2008.

  9. Female skewing audience Audience composition: Source: Nielsen Media Research via Marketbreaks. 1/1/07-8/26/07.

  10. Older skewing audience Audience composition: * * GSN median age = 61. Source: Nielsen Media Research via Marketbreaks. 1/1/07-8/26/07.

  11. Competitive ranker P25-54 VPVH prime Source: Nielsen Media Research via Marketbreaks. 1/1/07-7/29/07. M-Su 8p-11p.

  12. Moderate to low income audience Source: Nielsen Media Research via NPower. 1/1/07-7/29/07. M-Su 8p-11p.

  13. Dayparts are not clearly differentiated Current GSN schedule; ratings / VPVH for 3Q07.

  14. Majority of GRPs still from re-run game shows Formats as % of total GRPs: • Casino, reality, all other • GSN original game shows • Library game shows, modern • Library game shows, classic * 2007YTD is through end of 8/31/07.

  15. DR unit rates higher than general rate

  16. Declining delivery creates make-good challenge

  17. Participatory elements are minor Revenue (000): * * Other includes casino site fees, international series licensing, lottery ticket and merchandise licensing.

  18. Online business still small Source: Rank out of 125 listed games sites; ComScore, My Metrix, July 2007

  19. Reach is low, new show launches a challenge Source: Nielsen Media Research , August 2007. Rank out of 72 major nets, total monthly cume, HH basis.

  20. Poker is an island % female comp: Source: Nielsen Media Research, 1/1/07 – 9/21/07.

  21. We are vulnerable to migrations • Migrations 2006-2007 YTD • Comcast: 6.0M EB subs lost (net loss = 2.1M) • Time Warner: 850K EB subs lost (net loss = 425K) • Threatened migrations through 2008 YE • Comcast: 4.8M EB subs (proj. net loss = 1.5M-2.2M) in Boston, Albuquerque, Sacramento, Pittsburgh, Florida • Charter: 2.5M EB subs (proj. net loss = 850K) in Los Angeles, Madison, Greenville • Time Warner: 350K EB subs (proj. net loss = 125K) in NE Ohio

  22. GSN’s strategic advantages • The only network in this space • 66.4 million Nielsen UE • Solid household core • Audience is highly engaged • Audience over-indexes on computer / internet usage • Casual games space has exploded • GSN demographic a plausible fit with casual games

  23. Opportunity

  24. Casual games opportunity • 55 million online casual gamers in the U.S. • The #2 activity on AOL, behind only email / IM • The “stickiest” form of online entertainment • Heavily female • Older than typical internet audience • Multiple but modest-sized revenue streams (ad, subscription, download, cash games, etc.)

  25. Casual games usage is heavily female Total time spent on game sites (US): (in millions of minutes) Women 55+ • F25-54 player averages: • 9.0 days per month • 22.1 min per usage day • 199 min of play per month • F55+ averages: • 296 min per month Men 25-54 18-24 41% 59% Source: ComScore Media Metrix, July 2007

  26. “Stickiness” of best-in-breed sites Frequency Duration Sources: ComScore Media Metrix, July 2007

  27. GSN and casual games audience intersection GSN TV audience Casual games top sites All US TV HH WorldWinner Sources: ComScore Media Metrix; Nielsen Media Research

  28. High audience engagement Length of tune-in; rank out of 72 major nets: RANK 1 HALL 7 LIFE GSN 10 COURT 13 23 FAM 35 WE 36 OXYG G4 50 Source: Nielsen Media Research, full-day HH basis.

  29. Audience over-indexes on computer / internet usage Of 72 major networks, GSN ranks #1 in F25-54 and #4 in P25-54 for indexing of heavy computer / internet usage: Source: MRI Doublebase 2006. P25-54 and F25-54. Heavy computer / internet = 10+ hours per week.

  30. What to do

  31. 6 key objectives in building business plan • Accept fundamentally older female demo, gradually seek to get marginally younger • Make play, accessible participation central to all programming • Focus on brand • Market untraditionally • Build multi-platform business models • Own, exploit our own IP

  32. Revitalize air while staying true to core • Game shows remain the workhorse of the schedule • Create sense of “lights on” at network • Interstitials • Games • Same-day promotion • IDEA: Utilize a substantial live-hosted block to establish unique tone, new business models, refresh library programming • Current thinking: fringe 4-7pm, 6-8 minutes per hour • GSN, online promotion • Live games with prizes • Tied to programming • Major sponsorship vehicle

  33. continued… • Substantial programming / marketing investment • Production costs estimated at $2 million per 13 weeks • Prizes estimated at $0.5 million per 13 weeks • Lost ad inventory to stay on clock, foregoing $1 million in revenue per 13 weeks • Single feed (some cost recapture) • Build greater differentiation between dayparts • Idea: use varying degrees of participation to define blocks, counter-program broadcast game shows • Poker as an island • Drop or create “male swim”

  34. Play games, utilize accessible interactivity all day • Trade technological innovation for accessibility • Vary levels of interactivity • Interstitials • Audience participation shows (e.g. “Bingo”) • Playmania-type • Long-term games, continuity • Real stakes • Invest in prizing • Seek sponsorships, partnerships • Create currency • Cross-platform driver • Encourage team, league play to build community • Drive subscriber growth • Partner with affiliates for walled garden games

  35. Build strong well-defined brand, targeting actual core audience • Look and feel of network, programming / marketing choices reflect: • Female • Casual • Accessible, not edgy • Family friendly • Competitive but fun • Ever-present diversion • Participatory but not technology driven • Focus on brand in everything we do • Focus on our community – GSN is “their” network • 4.9 million registered users • Embrace identity • Celebrate, don’t run away from classics • Tie classics to online games

  36. Market unconventionally • Shift off-air media resources to prizing • Focus marketing on community • Focus on GSNtv.com community • Games as continuity – build our own currency • Be TV partner of all major games sites • Barker channel for games community • Syndicate games widely • Affiliate sites • Partner portals • Advertisers • Arbitrage opportunities to showcase brand • GSN HD (see appendix 1) • GSN radio (costs < $1 million / year) • GSN location

  37. Build cross-platform business model • Packaging value: use online to monetize low-value TV audiences, TV to monetize free casual gamers • Targeting, engagement the key to ad pricing, not audience size • Merge WorldWinner into GSN.com (see appendix 2) • Jump-start monetization online • Greater sophistication regarding traffic, metrics • Acquire female-oriented casual games sites to achieve necessary scale (approx. 10 million uniques) • Immediate need to expand model • GSN slow starter – 700K monthly uniques • Several sites at 1 to 3 million uniques can be bought for 5-7X revenues • Advertising services agreements an alternative, complement

  38. continued… • Focus programming spend on sub-brands, formats that can thrive cross-platform • Create GSN mobile brand • Packaged with ad sales effort • Acquire or partner • Use prizes to build audience • IDEA: launch an all-participation network on revenue share model with affiliates

  39. Own IP as core of originals strategy • Focus on cross-platform franchises and rights • Experimental (shorter runs, varied formats) • Lower cost, higher frequency • Development lab (team of 7-10 people, cost < $1 million / year) • Build flexible production facility (see appendix 3) • Partner with Imagination Entertainment (see appendix 4) • IDEA: buy library, preferably Goodson (at least North America) • Essential to secure base, defensive position • Unlimited multi-platform rights • Format, remake rights • Clip flexibility • BUT, remain open to external development • Full freedom to monetize

  40. Team

  41. Senior management

  42. Build an equity culture • Current bonus programs have essentially no performance variability • Annual cost: $2.5 million • “Profit-sharing” scheme anything but • Annual cost: $425K • Need team focus on building long-term equity value, rather than annual EBITDA • Recent payout demonstrates problems with “valuation” approach to group compensation • IDEA: rolling deferred bonus plan (see appendix 5)

  43. Governance

  44. Proposed changes to governance • Remove normal operating decisions from required board approvals • Greenlighting original shows • Licensing IP • Replace approvals with approval thresholds • Affiliate agreements impacting > 10% of subscriber base • Budgeted line item increases or unbudgeted expenses > 0.5% of annual revenue • Hiring approvals limited to CEO, CFO, and executives with guaranteed comp > $1.5 million over length of contract • Approvals for commencing or settling litigation limited to cases with settlement or amount in controversy > 0.5% of annual revenue • IDEA: bring in outside board members to add perspective, establish relationships • Differentiation between owners’ required approvals (capital structure, M&A, CEO hiring, annual budget) and normal board operations

  45. Appendices

  46. Appendix 1: GSN HD • Upgrade current Bowtruss master control, operations center, and uplink infrastructure to full HD capabilities • Increased exposure for GSN within narrower HD channel lineups • Meet affiliate needs for HD programming volume • Modern acquired programming increasingly available in HD • GSN would begin building an original HD library • Financial impact • Facilities cap ex: $1.9 million • IRD receivers for MSO head-ends: $7.4 to $12.4 million over several years, pending MSO demand and receiver pricing declines • Incremental operating expenses: $822K per year • 15% premium to produce originals in HD

  47. Appendix 1: GSN HD

  48. Appendix 2: WorldWinner • The #1 ranked casual skill games site • 2.1 million uniques • Skill games provider to AOL, MSN, Pogo, GSN • Business model based on fees for administering online cash entry tournaments and competitions • Entry fees range from $1 to $10 per tournament • Average entry fee: $1.90 • WorldWinner retains 20% • High growth mode • Revenue: 2007 = $43M; 2008E = $65M; 51% growth • EBITDA: 2007 = $8M; 2008E = $12M; 50% growth

  49. Appendix 2: WorldWinner is an “upsell” for the most passionate online players 12 DAYS+ (74% of users) PLAYING DAYS / MONTH: AVG. = 4 DAYS Sources: ComScore Media Metrix, July 2007; WorldWinner study

  50. Appendix 3: GSN Studios production facility • Flexible production facility allows GSN to bring content from conception to air quickly, while saving costs • Environment in which to rapidly pilot and test new concepts • Produce more programming in-house; greater control and savings • Increased live programming capabilities, interstitials • Improved flexibility in advertising / sponsorship integration • Increased production of online broadband content, GSN radio, etc • GSN will realize financial and operational efficiencies • $12.4 million capital outlay • 14 FTEs decrease reliance on outside companies • $2.1 million annual operational savings (Bowtruss rent, studio rentals, outside production teams) • 5.8 year payback period, assuming $0 rental revenues

More Related