Precisely
Traking
Multi-Screen Media
David Chemerow
COO/CFO
June 4, 2012
Safe Harbor Statement
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Our Mission
To expand our leadership role as the leading
provider of consumer entertainment behavior
information databases across all digital media
distribution platforms including Box Office, Home
Video, Television, Mobile & Broadband using
Rentrak’s proprietary intelligence and technology.
…We are the census-based currencies
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The Largest Multi-Screen Coverage
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Media Fragmentation
REQUIRES:
• Advertising to become more targeted
• Better measurement as traditional samples become
less relevant
• Convergence of mass marketing and direct
marketing disciplines
• Merging of customer segmentation and consumer databases
• Databases are the solution
All play to Rentrak’s strengths…
We are the Census-Based Currency
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Box Office
• The only company measuring box office gross
revenues worldwide. . .census-based
• In 26 territories with offices in 10 countries
• Focused now on growth opportunities:
• Add new global territories, including China
• Measure admissions in the US
• Develop consumer sentiment product for realtime consumer feedback
• How many attend. . .How much they spend. .
What they think
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On Demand Everywhere
• Rentrak is the only company measuring VOD
• Measuring 102 million+ TVs daily. . .Census-Based
• Growth from expansion of client base and
volume-based pricing
• New initiatives:
• Advertiser/Ad Agency Transparency
• Providing advanced advertising and measurement
of On Demand content Everywhere
• International
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TV Essentials
• Rentrak is only company to integrate satellite,
Telco TV and cable viewing information projected
to the viewing population:
• 20 million TVs
• All 210 TV local markets & nationally
• Census-based currency receiving 90% of the
return path TVs
• Focus on syndicated, recurring research
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Stability: All Households
RATINGS BOUNCE
Note: Based on Rentrak sample of 7.7MM HH vs. Nielsen 20K HH
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Power of Census-Like
Measurement
Source: CNBC presentation at the Collaborative Alliance, October 5, 2011
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TV Currency Landscape
INDUSTRY SPECIFIC ADVERTISING TARGETS:
Automotive • Movie • Political • CPG • Retail
Financial • Insurance • Telecom • Travel • Restaurant
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Competitive Barriers
• Quantity of Data: Requires the ability to process and
aggregate an enormous amount of data with sound business
rules
• Need the Research Knowledge of how to Project to the
TV Universe
• Technological Ability: Ability to capture, clean, process,
deliver data and analyze multiple analytics with sound
business rules
• Privacy: Experience with the highest level of respect for the
privacy of the American consumer
• Data Standardization: Data from operators is complex and
has thousands of standards today
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Local Stations
• 160 local station clients (up from 0 at 12/31/09)
• Stations in all 210 local markets benefit from
providing targeted advertising to their clients
• All stations benefit from automated posting from
Donovan and others
• Stations within diary markets (#60–210) receive
ratings 365 days/yr, rather than current 4 days/yr
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Stations Signed and
Stations Available
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Local Market Clients
160 stations; 36 station groups; 77 markets
6 Stations:
Detroit
Jacksonville
Orlando
5 Stations:
BeaumontPt. Arthur
Dallas-Ft. Worth
Houston
Miami
San Antonio
Tyler-Longview
Waco-TempleBryan
21 Stations:
Milwaukee
St. Louis
Champaign
Des Moines
Portland, ME
1 Station:
Columbus, OH
San Antonio
Cedar Rapids
Charleston
Mobile
Syracuse
Salt Lake City
2 Stations:
Tri-cities
3 Stations:
South Bend
Jackson Broadcasting
3 Stations:
Jackson
3 Stations:
Sherman
1 Station:
Columbus,
OH
1 Station:
Detroit
2 Stations:
Las Vegas
Reno
6 Stations:
Ft. Wayne, IN
Rochester, NY
Springfield, MO
Washington, DC
4 Stations:
Bakersfield
Seattle
Holston Valley Broadcasting
2 Stations:
1 Station:
Ft. Myers
7 Stations:
Albany
Albuquerque
Duluth
Minneapolis
Rochester, MN
Rochester, NY
Tri-Cities
2 Stations:
New Orleans
2 Stations:
Cleveland
Des Moines
13 Stations:
Augusta-Aiken
Charleston
Columbus, OH
Hattiesburg
Mobile-Pensacola
Savannah
Birmingham
Columbus, GA
Greenville
Jackson
Myrtle Beach
24 Stations:
Baton Rouge
Charleston
Cincinnati
Columbia, SC
Jackson
Louisville
Myrtle Beach
Savannah
Tyler-Longview
Birmingham
Charlotte
Cleveland
Columbus, GA
Knoxville
Memphis
Richmond
Tuscon
West Palm Beach
6 Stations:
Dallas
Phoenix
13 Stations:
Charlottesville
Grand Junction
Omaha
Topeka
Panama City
Ft. Myers
3 Stations:
Hartford
Portland, OR
Colorado Springs
Greenville
Reno
Wichita
3 Stations:
Birmingham
Portland, OR
Wichita
1 Station:
Columbus
2 Stations:
LaCrosse
Madison
Sun Broadcasting
1 Station:
Houston
Seattle-Tacoma
10 Stations:
Roanoke-Lynchburg
Springfield, MO
Wichita
WPSD, LLC
2 Stations:
Paducah
PeakMediaofPA
2 Stations:
Johnstown, PA
Prime Cities Broadcasting
2 Stations:
Minot
Koplar Communications
1 Station:
Ft. Myers Broadcasting
1 Station:
Springfield, MO
Neuhoff Family
2 Stations:
Orlando
1 Station:
360 more stations owned by these groups have not yet signed with Rentrak
Ft. Myers
Twin Falls, ID
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National Media Agency Clients
8 of the Top 15 National Ad Agencies
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Networks
• 45 current network clients
• All TV networks will benefit from:
•
More effective, targeted advertising measurement
•
Automated posting from Donovan and others
• Of 500 TV networks, 400 are too small for Nielsen ratings
• Highly Targeted Networks are the ideal customers for TV
Essentials as we offer each the ability to
•
Learn for the first time who is watching
•
Identify their most popular shows
•
Obtain ratings
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National Television Clients
45 networks; 27 network groups
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Rentrak Potential Revenue
From TV Stations/Networks
Local Stations
Potential
2,000
TV Networks
500
Total
2,500
Assume Sell 80% in 5 years
2,000
Average, Annual Contract Value
$ 150,000
Annual Revenue
$
300M
Reduce Revenue by 50%
$
150M
Gross Margin
$
75M
Less: Selling, Servicing Costs (10% of Revenue)
$
15M
Pre-Tax
$
60M
After Tax
$
40M
~$
4.00
M AKE M ORE CONSERVATIVE ASSUM PTION:
Free Cash Flow/Share
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Home Entertainment Division
• PPT was the start of Rentrak – providing revenue
sharing services to video retailers and studio
clients since 1988
• Strong cash flow generator: Over $5M annually –
funding growth of the AMI Division
• Moving towards more information products:
• Direct Revenue Share – 10+% of Home
Entertainment revenues
• High margin, growth product
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Financial Profile
• $24 million in cash & short term investments
• No debt
• Our Home Entertainment products typically supply
$5 million annually in free cash flow
• Used in F’12 for a $5 million stock buyback
• Fully funded business plan with only maintenance
capital expenditures required
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F’11
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Updated Financial Metrics
10% with some
year-to-year variability
15% after flat F’12
75%
with recurring pro-forma
F’12 at 15%
Double for the
next 4 – 5 years
50%
–8 to –12%
32%
with expected volatility for quality
of titles; -15% to -20% in F’12
DRS has gross margin
similar to BOE/VOD
with variation for fixed
cost deals
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Updated Financial Metrics
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Extrapolation of Metrics
• Extrapolate advice over 5 years; show what
Rentrak can look like
• NOT our forecast … but reasonable projection
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Modeled Revenues*
$
18
$
$
22
$
24
$
27
$
29
10%
9
9
10
12
13
15
15%
6
12
23
46
93
162
100% / 75%
33
40
55
82
133
207
23%
37%
49%
61%
56%
53
48
43
39
35
64
$
20
97
$
94
-3%
$
103
10%
$
125
21%
$
172
37%
$
44%
–17%/10%
242
41%
20%
•
Expect 15% VOD growth after flat F’12 due to large custom projects in F’11
•
Expect TV to double for next 4+ years; then perhaps 75%
•
Expect Home Ent to decline 17% in F’12, then -10%
* These sample extrapolations are not projections, are based on assumptions and are subject to various risks, uncertainties and changes in
circumstances. Rentrak’s actual results may vary materially from these extrapolations, particularly in later periods.
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Compensation Philosophy:
Align Interests with Shareholders
• CEO and COO/CFO
• Took major reduction in cash comp to a small base to receive
option/RSU packages
• . . .Livek currently owns about 123,000 shares, he spent
$750,000 of his own capital purchasing 48,000 shares
• . . .Chemerow currently owns about 55,000 shares,
he spent $215,000 of his own capital purchasing
13,000 shares
• Next 4 senior officers took 10-50% salary reductions
for equity or enhanced bonus plans
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Summary
• Rentrak has a strong core business with
high barriers to entry
• Advertisers want to plan and buy TV better
using their Advanced Demographics
• TV Stations and TV Networks want a
census-based currency in a world where we
use a basket of currencies
• ONLY Rentrak has the years of experience
and systems to capitalize on this large market
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