1. New York Production Guide
Using e-commerce to connect
Buyers and Sellers in Film, TV and
Commercial Production
Q1 2013
1
2. History of Film, TV and Commercial Production
1. Very large “connected” community of CUSTOMERS
2. Freelance and fragmented
3. Word of mouth and “Yellow pages”
Led to the creation of NYPG which has been around for
30 years
2
3. $38.6B N. American Market Film, TV and
Commercials
Below the Line Costs - Film
40%
($16B)
is
below
the line
3
5. Slow Process Today
I
need
some
props
for
TV
Sorry,
we
in
one
wsome
I
need
eek
don’t
have
props
for
TV
that
in
one
wsome
I
need
eek
props
for
TV
in
one
week
I
can
email
you
a
picture
I
have
it
at
this
price
–
OK!
I
missed
out
on
a
sale
5
6. Opportunity
Technology is changing the way buyers and sellers
interact
Smartphone
Tablet
e-commerce
Evolving our proven revenue MODEL
Directory
Web presence
To build an e-commerce platform for the industry
There is no targeted e-commerce platform for the
film, TV and commercial industry today
6
7. Our Vision
NYPG
Adding e-commerce to NYPG.com e-‐commerce
PlaLorm
Allowing buyers to make direct purchases
Allows sellers a shot to bid
NYPG collects a fee for facilitating the sale
7
8. Management Team
Rick Babchak Gary Kazmer
• Founder and CEO of the • 30 years of experience in
New York Production operational and customer
Guide for 30 years contact roles with the last
• Well connected member 16 at the executive table
in the Association of • 14 years focused on e-
Independent Commercial commerce growth
Producers – 30 years designing new platforms
and new customer facing
applications
• High growth background
with QVC and Shop NBC
($30M to $1.4B)
8
9. Transaction Flow
Seller input Shopping
Search
Pictures and
descriptions are
Database
Engine
Cart
entered into our
The buyer uses the AICP
database so the
form to create an order by The items in the
buyer can search
searching the database and shopping cart
for the item she/
creating a shopping cart. are split into
he needs
There is a free form section separate
for items not found. Reverse
requests and
sent to multiple
AucWon
sellers for bids.
Format
Bids and seller
questions are
Buyer accepts bids, sellers notified sent back to the
Seller revealed and bills buyer directly Buyer buyer.
Database updated with sales and negotiates The buyer
rentals price responds to the
The buyer pays each seller for the bids on price,
rental of the products availability etc.
Multiple
suppliers bid on
items on the list
A
B
C
9
10. Timing
Initial beta test group will include both buyers and
sellers
Our plan requires an investment of $1.5m
Build Test Roll out NY Expand to LA
$500k
$450k
$550k
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Initial Funding Break even at
$1.5m burn 10
11. Financial Summary – NY and LA
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
Positive
cash flow
in 2014
$10,000,000
$0
2012
2013
2014
2015
2016
2017
2018
2019
2020
-‐$10,000,000
Total NYPG Revenue Base (dollars) Net Income 11
12. Marketing Strategy
Engage 30 years of relationships
Allow buyers to utilize real time bidding to make
direct purchases
Sellers have an opportunity to competitively bid
on more projects
Easy DISTRIBUTION beyond New York
12
13. Summary
$16B addressable USA/Can MARKET
Big and accepted PROBLEM
Clear and marketable SOLUTION
Highly defined CUSTOMER
Easy path to DISTRIBUTION
Proven e-commerce MODEL
SCALABLE
Access to the right TEAM
13
14. Appendix
NYPG Digital Operating Plan
2012 2013 2014 2015 2016 2017 2018 2019 2020
Annual
Growth
New York Media Sector Spend ($M) (3 YR) $7,100 $7,143 $7,185 $7,229 $7,272 $7,316 $7,359 $7,404 $7,448
Los Angeles Media Sector Spend ($M) $27,500 $27,500 $27,665 $27,831 $27,998 $28,166 $28,335
USA total (95% of all markets) $7,100 $7,143 $34,685 $34,729 $34,937 $35,147 $35,357 $35,570 $35,783
70% increase since 2002 12.7% growth 2010-2011 Assume future growth of .6% per year for each sector
Future annual growth rate per channel 0.6%
Television 1.0% $3,144 $3,163 $3,182 $3,201 $3,220 $3,239 $3,259 $3,278 $3,298
News 1.0% $2,006 $2,018 $2,030 $2,042 $2,055 $2,067 $2,079 $2,092 $2,104
Film 21.9% $1,402 $1,410 $1,419 $1,427 $1,436 $1,445 $1,453 $1,462 $1,471
TV Commercials -1.0% $416 $418 $421 $424 $426 $429 $431 $434 $436
Music Video and Documentaries -1.0% $132 $133 $134 $134 $135 $136 $137 $138 $138
Total Below the Line Expenses NYC ($M) 40% $2,840 $2,857 $2,874 $2,891 $2,909 $2,926 $2,944 $2,961 $2,979
Total Below the Line Expenses LA ($M) 40% $0 $0 $11,000 $11,000 $11,066 $11,132 $11,199 $11,266 $11,334
Platform adoption New York 0.40% 0.70% 1.00% 1.60% 2.00% 3.00% 4.00% 5.00%
Platform adoption Los Angeles 0.25% 0.35% 0.60% 1.00% 2.00% 3.00% 4.00%
Spend thru the platform ($M) $0.00 $11.43 $47.62 $67.41 $112.94 $169.85 $312.30 $456.45 $602.32
Platform Fee Percent 10% 10% 10% 10% 10% 10% 10% 10% 10%
NYPG Revenue Base (dollars)
e-commerce Platform $0 $571,408 $4,761,928 $6,741,427 $11,293,641 $16,984,853 $31,229,739 $45,644,951 $60,232,022
Digital Set Up $30,000 $40,000 $50,000 $50,000 $100,000 $100,000 $100,000 $100,000
Subscriptions $20,000 $40,000 $75,000 $100,000 $150,000 $150,000 $150,000 $150,000
Advertising - banners $20,000 $40,000 $60,000 $100,000 $150,000 $150,000 $150,000 $150,000
Affiliates $10,000 $40,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000
Total NYPG Revenue Base (dollars) $0 $651,408 $4,921,928 $7,001,427 $11,643,641 $17,509,853 $31,779,739 $46,219,951 $60,832,022
Summary of Operating Expenses
Total Staffing Salaries $0 $972,000 $1,584,000 $1,911,360 $2,298,854 $2,390,809 $2,486,441 $2,585,899 $2,689,334
Total Outsourcing Expense $0 $780,000 $1,030,000 $530,000 $540,000 $540,000 $540,000 $540,000 $540,000
Total Additional Revenue Expense $0 $60,000 $120,000 $195,000 $262,500 $393,750 $412,500 $431,250 $450,000
Advertising and Marketing $0 $150,000 $150,000 $150,000 $300,000 $150,000 $150,000 $150,000 $150,000
Total G&A Expense $0 $175,000 $276,600 $284,898 $293,445 $302,248 $311,316 $320,655 $330,275
EBITDA $0 -$1,485,592 $1,761,328 $3,930,169 $7,948,842 $13,733,046 $27,879,482 $42,192,147 $56,672,413
Taxes 40% $1,572,068 $3,179,537 $5,493,218 $11,151,793 $16,876,859 $22,668,965
Depreciation
Net Income $0 -$1,485,592 $1,761,328 $2,358,102 $4,769,305 $8,239,828 $16,727,689 $25,315,288 $34,003,448
Capital 0 50000 50000 25000 25000 25000 25000 25000 25000
Max Outlay
Cash Flow $0 -$1,535,592 $175,736 $2,508,837 $7,253,142 $15,467,970 $32,170,659 $57,460,948 $91,439,395
14
15. Advisory Board
Michael Wheeler
Mr. Wheeler is the managing partner in Westerly Partners, LLC, an
investor advisory that provides strategic, financial and technology
solutions to early stage companies focused on the new media and
technology industries. He has more than 25 years of senior
management experience at NBC, MTV, Showtime, FNN, Meredith
Broadcasting and CBS.
Jesse Fink
Jesse Fink is an entrepreneur. His professional career involved
developing innovative business models including co-founding
Priceline.com, and serving as its founding Chief Operating Officer
Open
We have vetted the business plan with several buyers and sellers
and upon an initial investment plan to add 2-4 buyers and sellers to
the Advisory Board. 15
16. Appendix
BCG –Evaluating NYC media sector development and setting the stage for future growth –
Final Report May 8, 2012
www.nyc.gov/film
Tracking the Trends:
A Comparison of Above-the-Line & Below-the-Line
Expenditure Trends
A Sponsored Report from V12 Group and Winterberry Group
January 2006
TV INDUSTRY PERSONNEL
by Dr. George Vinovich
ABOVE-THE-LINE vs BELOW-THE-LINE
Report to The New York Film, Television and Commercial Initiative From Cornell University
New York State School of Industrial and Labor Relations, New York City
Department of City and Regional Planning, Ithaca
Fiscal Policy Institute, New York
NEW YORK’S BIG PICTURE
ASSESSING NEW YORK’S POSITION IN
FILM, TELEVISION AND COMMERCIAL PRODUCTION
August 2006
16
17. Appendix
The Economic Contribution of the Motion Picture & Television Industry to the United States
The American Motion Picture and Television Industry:
Creating Jobs, Trading Around the World
2010
Mpaa.org
Mpaa.org
Policy and Research
State by State Statistics
State-by-State Film and Television Economic Contribution
B.C.’s overall ranking drops despite rise in 2011 film and TV spending
An interview with Peter Leitch, chair of Motion Picture Production Industry Association of
British Colombia
17