DRAFT FOR DISCUSSION

Illustrative Crackle Valuation

September 2013
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Illustrative Valuation
DISCUSSION

($ in thousands)

Based on comparable companies and comparable transactions we have determined that a

3.0x 4.0x revenue valuation is appropriate for Crackle implying a valuation range of $166mm
$222mm
Recent valuations of Hulu and discussion with bankers support our 3.0x multiple while comparable
companies and operating metrics support our 4.0x multiple

FY14 Revenue(1) Uniques(2) Streams(2)

($mm) (mm) (mm)

US $46.4 12.9 22.9

Canada 1.9 0.6 1.5
Australia 0.2 0.1 0.2
Latam 7.0 3.3 5.0
Total $55.5 16.9 29.5

FY14 Revenue Multiple

3.0x 3.5x 4.0x
Enterprise Value ($mm) $166 $194 $222
Implied EV/ Unique $10 $11 $13

Note: Analysis excludes the UK business.

(1) Based on latest MRP available.
(2) Based on the April Cross Platform Overview for the US, Canada and Australia. Latam uniques and streams based on March 2013.
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Public Trading Comparables

DISCUSSION

($ in millions)

Publicly traded international video platform providers trade close to 4.0x CY13 revenue
The most relevant comps to Crackle are Netflix and Youku Tudou
Akamai Technologies, Blinkx, Brightcove and Limelight Networks are video services and content
delivery providers and not as relevant to Crackle

Enterprise Value /

Revenue EBITDA Enterprise Market

LTM FY14E FY15E LTM FY14E FY15E Value Capitalization

International Video Platform Providers

Netflix, Inc. 4.5x 4.0x 3.4x NM NM NM $17,893 $18,473
Akamai Technologies, Inc. 6.0 5.5 4.8 16.3x 12.8x 11.1x 8,871 9,401
Youku Tudou Inc. 10.7 7.7 5.2 NM NM NM 4,178 4,720
Blinkx plc 4.2 3.7 3.1 NM 22.6 16.3 838 897
Brightcove, Inc. 2.9 2.5 2.2 NM NM NM 282 313
Median 4.5x 4.0x 3.4x 16.3x 17.7x 13.7x $4,178 $4,720
Mean 5.7 4.7 3.7 16.3 17.7 13.7 6,412 6,761

Source: CapIQ.
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Description of Comparables
DISCUSSION

Company Description

Netflix Internet television network with more than 37 million members in 40 countries and more than one billion hours of TV
shows and movies per month, including original series

Akamai Technologies Provides content delivery and cloud infrastructure services for accelerating and improving the delivery of content and
applications over the Internet in the United States and internationally

Youku Tudou Internet television company in China; Offers an online video content library consisting primarily of professionally produced
content, including television serial dramas, movies, current event reports, variety shows, and music videos

Blinkx Internet media platform that connects digital consumers with advertisers through professionally generated content

Brightcove Provides cloud-based solutions for publishing and distributing professional digital media

Limelight Networks Provides content delivery and related services to deliver media files, such as video, music, games, and software, or live
streaming of corporate or entertainment events

Source: Company website and CapIQ.

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Comparable Transactions
DISCUSSION

The comparable transactions below are viewed on an EV/unique basis and represent transactions
of various web content platforms going back 6 years
The average EV/Unique is $16
If the Deadline Hollywood Daily, Hollywood Reporter and Tech Crunch transactions are excluded
based on date and relevance, the average EV/Unique would be $11

EV EV /
Announced Target Buyer ($mm) Unique Users Unique

8/ 6/ 12 Bleacher Report Turner $175 10.0 $18

11/ 14/ 11 Babble Media Disney 43 4.0 11

5/ 31/ 11 Flixster Warner Bros 75 12.0 6

3/ 4/ 11 Clicker CBS Interactive 26 2.5 10

2/ 6/ 11 Huffington Post AOL 315 25.0 13

9/ 28/ 10 Tech Crunch AOL 40 1.5 27

The Hollywood Reporter, Billboard and

12/ 10/ 09 E5 Global Media Holdings 70 4.0 18
Ad/ Brand/ Media Week

6/ 23/ 09 Deadline Hollywood Daily MMC 14 0.5 28

Mean $95 7.4 $16

Median $56 4.0 $15

Source: HitFix Fall 2012.

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Description of Targets
DISCUSSION

Company Description

Bleacher Report Delivers digital sports content

Babble Media Online magazine for parents

Flixster Operates as an online movie community enabling users to share movie reviews and movie ratings

Clicker Internet video directory and search company aimed to be the TV Guide for all full episodes of programs available to watch
on the Web

Huffington Post Online news aggregator and blog; offers news, blogs, and original content and covers politics, business, entertainment,
environment, technology, popular media, lifestyle, culture, comedy, healthy living, women's interests, and local news

Tech Crunch Online provider of information related to start-up companies, people, and investors for technology companies and
transactions

The Hollywood Reporter, Billboard Delivers news on movies, television, music, technology, business, style and culture, awards, and videos
and Ad/ Brand/ Media Week

Deadline Hollywood Daily Offers news, calendar, music, bars and clubs, eat, stage, art and books, blogs, classifieds, and slideshows online

Source: Company website and CapIQ.

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Multi-Channel Network Precedent Transactions

DISCUSSION

The average valuation per thousand views for MCNs is $82; if the Revision3 transaction is
excluded, the average valuation per thousand views is $51
Valuation or cost per view may not be a relevant metric for Crackle given the difference in content
quality and length of views
Most Recent Investment Round/ Acquisition
Valuation Per
Monthly Subscribers Amount Valuation Thousand
Company HQ Employees Views (mm) Channels (mm) Date Type ($mm) ($mm) Views Investors/ Acquirers

Canal+, Astro, SingTel Innov8, Lakestar, Northgate

Maker Studios Culver City, CA 340 4,000 60,000 260 9/ 12/ 13 Investment $26 N/ A N/ A
Capital, and existing investors

Blip New York, NY 50 330 5,000 N/ A 9/ 6/ 13 Acquisition 10 10 $30 Maker Studios

Tastemade Santa Monica, CA 18 50 N/ A N/ A 8/ 16/ 13 Investment 10 N/ A N/ A Raine Ventures, Redpoint Ventures

BroadbandTV Vancouver, CA 51 800 7,800 100 6/ 26/ 13 Investment 36 71 88 RTL Group

Fullscreen Culver City, CA 160 2,500 10,000 150 6/ 17/ 13 Investment 30 110 44 Chernin Group, Comcast, WPP

Machinima Los Angeles, CA 150 2,200 N/ A 200 5/ 21/ 13 Investment 35 190 86 Google, Redpoint Ventures, MK Capital

StyleHaul Los Angeles, CA 40 300 3,150 76 5/ 14/ 13 Investment 6 N/ A N/ A RTL Group (Majority owned by Bertelsmann)

DeFranco Creative Los Angeles, CA 25 50 N/ A 3 5/ 13/ 13 Investment N/ A N/ A N/ A Revision 3 (subsidiary of Discovery Communications)

AwesomenessTV Los Angeles, CA N/ A 800 55,000 14 5/ 1/ 13 Acquisition 33 33 41 DreamWorks Animation

Chernin Group, Machinima CEO Allen DeBevoise,

MiTu Culver City, CA N/ A 60 520 5 12/ 12/ 12 Investment 3 N/ A N/ A
Advancit Capital, Shari Redstones VCfirm, Code
Advisor
Base79 (1) London, UK 75 540 800 20 11/ 14/ 12 Investment 10 25 47 Chernin Group

Anthem Venture Partners, Daher Capital, DFJ

Big Frame Culver City, CA 20 150 N/ A N/ A 6/ 7/ 12 Investment 3 3 20
Frontier, LaunchPad LA, New World Ventures, The
Media Farm, Social Starts
Revision 3 San Francisco, CA 50 100 27 N/ A 5/ 3/ 12 Acquisition 30 30 300 Discovery Communications

Mean $82
Median 46

(1) Evolution Media Capital (subsidiary of CAA) made an investment in Base79 on July 4, 2013. Financial terms of the transaction were not disclosed.
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Other Considerations
DISCUSSION

In June, Hulu was rumored to be for sale with bids in the range of $1.4bn $2.1bn which included
the additional immediate investment required
The purchase price range implies 2.0x-3.0x revenue of $700mm
Hulu is reportedly no longer for sale; its current owners, 21st Century Fox, Disney and
NBCUniversal, have decided to invest $750mm into the business
France Telecom Investment in Dailymotion in May 2013 was at 2.5x revenue
The Providence sale of Hulu interests to other current shareholders in October 2012 was at 2.9x
revenue
Discussions with investment banks have indicated 2.0x-3.0x revenue valuations seen on the market
for companies similar to Crackle
For digital properties growing faster organically (which double or triple revenues every year,
for example the Annoying Orange property), valuations are at 4.0x-5.0x revenue