SONY / GLOBAL NEW AGE MEDIA

POTENTIAL MIDDLE EAST PARTNERSHIP

PRELIMINARY QUESTIONNAIRE ~ 12 Jan 2012

Global New Age Media Corporate Structure

1. Please provide a current organisational chart for the Company and its subsidiaries,

operating divisions, business units or other affiliates and chart reflecting hierarchy of

officers

GNAM Subsidiaries

Organisational Chart

2. Please provide a list of all jurisdictions/territories in which the Company currently does

business or has employees of agents

I. Since we are a FTA ( Free to Air) Channel, the beaming covers all of the Arab Region from Dubai

& Abu Dhabi in UAE to Oman, KSA, Bahrain & Kuwait in Gulf, to LEVANT and North Africa

II. However while beaming is free and covers the entire region, PUSHING of Direct businesses with

marketing and sales network extends specifically areas in UAE/Dubai, Cairo, KSA. These markets

are represented by Full employees except for Morocco/ Tunisia is represented through Agents

3. Please provide a list of all jurisdictions/territories/country that GNA would like to have the

new JV channel available and how it will be available, if different from #2 above.

I. We will be actively marketing channels extending from:

a. Abu Dhabi – UAE

b. Libya – North Africa

c. Iraq

OPERATIONAL QUERIES

Ad Sales

1. Who currently represents the GNA channels?

I. Kids Media is the Exclusive Media Partner of Space Toon & Space Power Media Group in the

Middle East & North Africa

II. Kids Media is not just delivering its business expertise through promoting GNA’s specialized

edutainment media but as well leveraging GNA’s penetration by increasing the hub of

representation throughout the region and in turn selling advertising space in order to achieve

market share.

III. Kids Media re-enforce’s its ability as an effective business & marketing consultant for the Group.

Through embracing its vision it has supported in building successful partnerships with new

businesses through value added media planning and creatively exploiting the category

2. How is advertising measured and sold in the region?

I. As in most regions here as well, The Measurement of Advertising and its Sale is derived through

tools such as TRP( Television Rating Point) & GRP’s( Gross Rating Point)

a) The PUSH is done through optimizing rating points by keeping channel Top of Mind by

ensuring consistently contemporary and relevant content and as well indulging in continous

engagement with our audience

II. While the Sale of Advertising is based on various forms such as:

a) Spot Buys – purchase of spots of various duration at a particular time segment based on rate

card that is developed on a 30 sec copy. Incase a advertiser has a different duration i.e. 20

or 45 sec the cost is calculated based on special intermediate spot by rate cards

b) Sponsorship packages that include Exclusive sponsor and co-sponsors for a particular

program and gets additional benefit in form of break bumpers, promotional previews and

opening and closing credits.

c) Special Executions – Scrollers, Strip ads, intrusions, and product placement. The cost is

customized based on mechanics

3. Is advertising actively sold in each territory?

Kids Media geographic network ensures its effective reach in key markets such as:

I. KSA-Covering both Jeddah and Riyadh being the biggest market for local clients

II. UAE - as the regional platform for multinational clients

III. Egypt – Despite our presence due to uncertain political situation that it experienced the

advertising industry was real slow in 2011.

IV. North Africa- The Arab spring situation here was similar to Egypt. Yet we estimate both markets

to flourish again as of 2013

4. Are the GNA channels rated and if so, could you please provide historical ratings?

I. THERE IS NO SPECIFIC RATINGS FOR KIDS CHANNELS AS THE TARGET AUDIENCE IS BELOW 15

YEARS OLD. Hence alternatively the GNA Channel ( Space Toon) like the rest of all Kids channels

the region is covered in the KIDS TELEMETRY a IPSOS research study in Egypt and KSA

II. Key findings suggest:

a. Awareness in KSA & Egypt is at 94% & 90% respectively, at 2nd position after MBC3

b. It stands close 2nd after MBC3 on key parameters rated on

i. Most regularly watched Kids station, Image perception( Entertaining, Newness,

For me)

III. SPACE POWER, Considering our key Target Audience 15-24 the following rating has been

historically achieved:

REACH:

FEB 2009 FEB 2010 FEB2011

0.41 0.57 1.36

SHARE OF AUDIENCE:

FEB 2009 FEB 2010 FEB2011

0.11 0.87 1.01

However, at a Qualitative level, it is importantly to be noted that the above low rating

historically was as the channel was intended to be an extension of SpaceToon viewers and the

fact it fully relied on acquired foreign programs that were largely dubbed and subtitled the

result was an issue of mismatch of wrong program to the wrong audience.

Importantly, the first 5 years was a learning curve for Space Power to redefine itself and as a

first step it extended its target audience to 15+. Next key objective was to keep a close track of

the viewer taste in a very rigorous manner in order to summarize it into business learnings for

the future which helped in reversing the decline.

Today, all of this has been achieved through a huge pool of viewer resource that the channel

had been successful in building in these years that comprise of 150 Freelance enthousiast in our

Editorial Board and more than 50,000 users on SpacePower’s Blog Spot, 2500 active users and

30,000 likes for SpacePower’s facebook page. These have helped Space Power to re-orient and

rediscover itself for its future success by being engaging and relevant to the choice of

programming.

Additionally, another important learning being the fact that localization is important and more

so it has to be broadened to offer a complete entertainment.

A successful case in example can be concluded from MBC group. MBC1, MBC 4 and MBC action

have variety of programs covering talk shows, Arabic dubbed soap operas, social programs,

movies etc that attract females and males alike and in turn drive high program TRP and attract

high share of audience’s.

The bottom-line resulting in achieving a threshold of 3.5% share of audience to 5,minimum

range that is important for a channels survival and is the success benchmark.

Operational and Editorial Services

1. Could you please provide a summary of the languages in which each existing channels are

transmitted? Are they dubbed or subtitled?

I. Space Toon Kids TV is fully Arabic and is Dubbed in the Middle East & North Africa.

II. Space Power MENA combines Arabic dubbed manga series & drama series with science

documentaries & entertainment shows in English with Arabic subtitling

Transponder Capacity

2. What satellite space does GNA use for its existing channels and is there capacity for additional

channels?

I. Yes Nile sat is used

II. And Specifically GNA has no extra capacity

Carriage

3. Please provide a list of carriage operators for channels in each region and typical length and terms

of agreements

I. No carriage operations since its falls under a FTA ( Free to Air)

Content Licenses and Programming

4. Please provide a list of content with pricing and license period?

I. list of content covered under section Expenses, Q.12

5. Please provide a breakdown of local vs. Western content aired, and description of content mix

I. 100% western content ( with subtitles or dubbing)

6. Is any of the content shared across the existing GNA channels?

I. Yes – Manga episodes is co-shared between Space Toon and Space Power

FINANCIAL QUERIES

7. Please provide P&L by line item for SpacePower and SpaceToons (last 2 years plus 3 years forward

budget, if available)

Revenue

8. What are the key advertising revenue drivers in the region / territories?

The PULL to advertising revenue is derived from the Share of Audience (SOA) which in turn is based on:

I. Content Curation based on the audience’s likability and localization of it

II. Combined with Channel’s own Communication to attract the target audience to its programs

III. Achieving 4-5% SOA puts a specific channel amongst the top advertising players.

9. Could you please provide 3-5 year industry forecasts and inflation by territory?

ARAB Advertising Revenue by platform – US$ MN

ARAB Advertising Revenue by Region – US$ MN

Economically, over the projection period 2011-2013, these countries are also expected to display the

strongest recovery, showing significant GDP growth. The majority of countries from the Levant and

North Africa are also anticipated to grow, at a pace of between 6% and 11%.

10. What are the assumptions/drivers behind the revenue forecasts?

I. New government and private media initiatives across the region, coupled with the opportunity

for the Arab Region to learn from other more developed markets, suggests that the industry will

see high growth over the next three years.

II. Firstly, from a consumer point of view, the TV sector in the Arab Region is in a strong position

relative to other markets. While in other markets consumers are increasingly moving away from

TV and spending more time on other platforms, viewers in the region continue to be some of

the highest consumers of television in the world. In terms of the amount of time spent watching

TV, the Arab Region watches 13% more television per day than Europe and 53% more than Asia

Pacific, behind only North America. Specifically, Kuwait is the nation with the highest level of

television viewing in the world, with Saudi Arabia and the UAE also in the top five22.

Consequently, the Arab TV industry has the potential to be one of the biggest in the world from

a consumption point of view

III. Finally, The pan-Arab FTA satellite industry is seeing increased interest in audience

measurement systems, as well as many initiatives to improve the quality of local content, both

of which are expected to contribute to an increase in advertising revenues in the long-term

Expenses

11. What is the total headcount and breakout by function/channel? Are there shared headcount with

SpaceToon, Space Power and other GNA companies?

The Number of Headcount is as follows:

- In Damascus: 16 people; technical, executive and marketing - (9 exclusive, 7 shared)

- In Dubai 8 people; technical, executive and marketing.( 4 exclusive,2 shared)

12. Please provide historical annual content costs for 2009–2011. What are the key drivers for cost

fluctuations?

13. Is the programming cost the full license fee for each program or is this cost shared across GNA

channels?

The cost of programs is not shared across GNA Channel; it is the full license fee for each program

14. Marketing – please could you provide details of the various promotional and marketing

inventory/support for the GNA channels

An integrated media campaign for the channels covering:

I. Customized marketing presentations

II. Media Kits

III. Ongoing Internet advertising

IV. Social Media advertising

V. Print advertising

VI. Events in shopping malls

VII. Press conferences

15. Could you provide a breakdown of Technical/Broadcast and Distribution expenses for existing

channels?

I. Broadcasting on Nilesat.

II. The annual charges and Expenses are: $ 357K

16. Could you please provide a list of all services that are shared with or provided by other GNA

companies (office space, back office functions, fees etc.)?

I. Production Facilities:

GNAM Equipment ( Shared )

Damascus:-

- Five dubbing studios with different capacities and full hardware and software equipment

(Computers, Microphones, Headphones, Monitor…), 45m2 + 25m2 + 35m2 + 20m2

- A music studio 12 m2.

- Three advanced montage units working on the most recent computer programs and betacam

digital.

- Three mixing and after effect units.

- A huge stadium with 100-person capacity, 135 m2 – under equipping (as design attached).

- Two big advanced studios for collective and life production, 100m2 each under equipping (as

design attached).

- Broadcasting monitoring and observation screens.

- Two full news-bar units.

- Subtitle Unite.

Dubai:-

- Major Studio 60 m2 (Monitors, PCs, Sound Equipment, Betacam, Mixers, Music Instruments).

- Copy Units (PCs, Copying Equipment).

- Transmission and Control (Monitors, Receivers, PCs… etc).

Malaysia (perak):

- A workstation 2335 m2 (LCD monitors, PC, LCD Cinema Display…)

- Two Audio Studio (DigiDesign) 5.1 Surround 100 m2

II. Sales and Marketing

a. Beirut/Dubai ( Marketing planning and support)

b. Dubai/Riyadh/Jeddah/Cairo / Morocco ( Sale)