Report on Partnership Meetings – City, October 19-20

It was a very productive few days in NYC in terms of developing opportunities for expanded distribution of content, in learning more about whatʼs happening in the video marketplace in general, and in establishing some potentially valuable new contacts. The overarching takeaway from my meetings is basically something we already know - in a world of commodity hard news and dramatically expanded consumption of video, our video content (as well as the written word) is becoming more and more valuable to the big media players as differentiated content. Herewith is a summary of my meetings:

1. Thomson Reuters - I met with Chris Cramer, Global Head of Multimedia and Brent Clepper, our POC at the Reuters Insider video service. There has been a reorganization at Reuters in two areas that affect us. One is Reuters News and the other is Eikon, the markets data/news platform that is gradually becoming the successor to the Reuters 3000 and the Thomson 1000 flagship products for the financial community. Without going into the weeds, the bottom line is that the reorg may represent an opportunity for us. Our current videos, including Portfolio, will continue to be distributed on Reuters Insider, which is part of Eikon. Insider won't be as integrated into Reuters News as was planned (we were hopeful that some of our Insider videos would start being distributed also on Reuters News platforms like Reuters.com). However, Chris Cramer (who used to head CNN International) told me that he would be interested in geopolitically oriented videos for Reuters News services, including Reuters.com, and in doing video interviews with George. In addition, he expressed interest in the STRATFOR-Digital Globe pilot we're working on now (as did AP and CNN - see below). Chris also will provide an introduction to Chrystia Freeland, who formerly was US Managing Editor of the FT and is now Global Editor-at-Large for Reuters. Chrystia will be heavily involved in the effort to bring in more relevant third party content to Reuters. This could include op eds by George and others at STRATFOR. Next steps: Chris asked me to send him a list of ideas; contact Chrystia Freeland and the op ed editor, Kenneth Li.

2. Associated Press - I met with Tom Curley, President and CEO of AP. AP is investing $30 million in video, largely to upgrade its infrastructure, especially HD. AP, by the way, has advised Canon on development of a new small video camera for field use. It will be unveiled at the Olympics and AP will have exclusive use of the camera for six months. I asked Tom about AP's recently announced deal with the North Koreans, under which AP will receive high-def video from the DPRK and will establish a bureau in Pyongyang - the only one, Tom said, to be allowed to have Western staff. I asked him if it was a difficult negotiation and he said it was easy compared to dealing, for example, with the Silicon Valley. Tom said thatʼs because it was obvious that the North Koreans had already decided that they wanted a Western news service there and they picked AP. AP certainly is going into the DPRK eyes open, and obviously it is getting something valuable vis-a-vis its competition. I suggested that if AP would give us some HD video from the DPRK, we would provide AP with some of our analysis on North Korea. He agreed. Tom also indicated strong interest in the segment we're developing with DG. This could be an opportunity to license the program to AP and others. He said that in addition to China and North Korea as topics for the STRATFOR-DG videos, AP wants imagery tied to analysis on the impact of climate change. Next steps: Work with Rodger on DPRK analysis to be exchanged with AP for the HD video; consult with STRATFOR analysts and DG on topics for the segment; complete STRATFOR-DG pilot and send to Curley.

3. CNN – It was a bit chaotic when I arrived in the wake of the news of Gadhafiʼs death. Because of that, I didnʼt get to meet as many people as I expected, but did spend a good chunk of time with Bob Hand, a producer on OutFront, Erin Burnettʼs new show. As you know, Kyle helped in getting George on the show that night. Bob and Erin were familiar with George and STRATFOR from their CNBC days and are big fans. They mentioned that theyʼve read The Next 100 Years and also that Fred is one of their “favorite security experts.” In addition, Ken Jautz, who I knew when he was Berlin bureau chief and now heads CNN/US, put in a pitch for us with the executive producer of OutFront.

The upshot is that this show in particular wants our people on it on a regular basis. Bob was excited to hear about our new live capability. He said they are particularly interested in going live to our Austin studio. I got some useful info on daily timing for decisions on guests for the program, which I will share with Kyle. Bob also expressed interest in the STRATFOR-DG pilot (folks seem to really like the idea of satellite imagery coupled with our analysis). OutFront is a good opportunity for exposure. The program wants to be international in orientation and, moreover, CNN is heavily promoting the new show. Next steps: Coordinate with Brian and Kyle on getting CNN the specs for live feeds from Austin; establish a regularly scheduled call with the showʼs producers; follow up Ken Jautzʼs introduction to CNNʼs DC-based national security correspondent, Suzanne Kelly.

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4. Bloomberg – I met with Andrew Bowyer, who is in business development for the new Bloomberg service called Bloomberg Mart, which was created by Bloomberg Ventures. B-Mart, as they call it internally, represents a significant departure from the traditional Bloomberg approach to third party content. Until now, Bloomberg almost never sold it. B-Mart is a search mechanism and marketplace for selected third party content. B-Mart is being fully integrated into the Bloomberg terminal. So, if for example, if a financial services user of the terminal wants some geopolitical analysis on a particular China issue, he could search for it and find a STRATFOR report for which he would have to pay. Video isnʼt yet a part of the service but will be. In addition, Bloomberg is developing mechanisms that will call up third party content of potential interest to a customer without that user having to search for it.

Of course making any of our content available on an a la carte basis raises pricing and cannibalization issues, but in the Bloomberg terminalʼs relatively closed and protected environment, it might be a good way to test a la carte pricing and distribution. Moreover, just being on B-Mart will give us some exposure to a qualified audience, and our content would be provided to Bloomberg on a completely non-exclusive basis. As far as pricing is concerned, B-Martʼs early experience shows what they call a “sweet spot” of under $500 per piece. Many are sold at $200 and those often are under ten pages in length. The highest listed price on B-Mart is a report for $12,000, but it hasnʼt sold at all. The highest-priced piece that has sold was one for $5,000. If we decide to do this, the revenue share would be 60% to STRATFOR, 40% to Bloomberg. The content and frequency of delivery would be totally up to us. Btw, PRS Group is part of the service and sold a 64-page report for $200, which seems a bit crazy given the average length of pieces sold at that price (maybe it was an old report?).

Bowyer, who had approached us, also told me about a new Bloomberg service called “AV,” for “all video,” that is separate from B-Mart but will distribute third party video via the terminal. Obviously, we want to find out more about that.

Finally, Bowyer suggested that I contact a Bloomberg Executive Editor, James Rubin, directly about George doing op eds for “Bloomberg View.” Rubin, who of course, was State Dept spokesman in the Clinton administration and later worked for , among others, was brought in to run Bloombergʼs op ed department. Next steps: Discuss internally whether we want to participate in B-Mart and if so, decide on content and pricing to test; contact the people at

3 Bloomberg who are developing AV; contact James Rubin.

5. AOL Video – I met with Dan Treinish, who heads content acquisition for AOL Video. This meeting was a last minute addition to the itinerary that proved to be very interesting. Marla Dial forwarded me a fairly obscure news item last week about AOL expanding its video efforts. That prompted me to contact AOL Video. It turns out that AOL recently bought an Israeli video company that has some proprietary technology and an online video ad network. That company and its execs now form the core of AOL video, which is based in New York and provides video content to various AOL properties, including Huffington Post. AOL Video is not building a video destination site but is incorporating video throughout AOL, especially on HuffPo, which now has 36 million unique monthly users. Dan said AOLʼs “strategic imperative is for more video on every page – that makes every page more valuable.”

Between HuffPo and other AOL properties, AOL video generates 400 million video views per month. Dan told me that after I contacted the execs there, they looked at STRATFOR and were very “excited.” They really like our videos, and their interest is based on the same imperative as the other companies I met with – differentiated quality video content. The way it works is as follows: we send video of our choosing to AOL; AOL Videoʼs editors “market” the videos in a context-driven way to various AOL publications; advertising is sold around videos; and if a STRATFOR video is published on Huffington Post, we receive 50% of the revenues on a cost-per-thousand basis of $6-7 (the cut is 25% for non-HuffPo properties). As an example, Dan said one major video partner generates 7m page views a month on HuffPo, bringing $49k to AOL in ad revenues, and taking $24,500 as its share. I think it would take awhile for us to get to that level; nonetheless, this partnership has the potential to deliver some real revenue. As with any of the non-licensed content deals, we would provide video on a non-exclusive basis. There is no cost to us other than taking the trouble to send AOL the video. AOL is eager to get our material – I received the paperwork on Friday. There doesnʼt appear to be any downside to this and plenty of potential upside. Next steps: Decide internally whether or not to proceed, and if so, process the paperwork and start uploading videos, in particular, Dispatch and potentially Tearline.

6. Fordham University Graduate School of Business – this was another unexpected meeting. An old colleague and friend of mine who is a long- time VC, knowing that I was in New York, invited me to a meeting with David Gautschi, the Dean of the school. It was about establishing an internationally-oriented New Media Center. It turned out to be a

4 fascinating meeting. One of the participants is a Turk named Mithat Bereket, who founded and runs a very successful 60 Minutes-type program called Pusula (“Compass”) that has been on Turkish television for 15 years and has a broadcast audience of seven million viewers. He is also on-air, is very well known in Turkey, and has vast experience covering wars. Mithat showed me some clips and what impressed me was his ability to consistently get on-air interviews across various divides. So for example, he recently interviewed a Hamas senior person one day and was in Israel the next to interview Shimon Peres. In any case, Mithat, like seemingly all Turkish public figures, is very familiar with STRATFOR, and says George is famous in Turkey (which you know already). Mithat is quite an entrepreneur and has too many ideas to recount here, but would like to talk with me further about various ways in which we might work together. I have already mentioned this to Meredith, and certainly we should think about potentially leveraging this for confederation and/or other purposes.

During the meeting there was also discussion of an interesting program of conferences the school is developing. The program involves a series of conferences on the business implications of contentious or strained relationships between two countries. The first set of countries is Israel and Turkey. The first conference will be in . Participants will be limited to UK business people who will offer their perspectives. The second conference will be in Istanbul, and participants will all be Turkish business people. The third one will be in Jerusalem and will have only Israeli businessmen as participants. All the discussion and any subsequent analysis will be captured in a documentary to be done by Mithat, the Turkish guy referenced above. If there is interest on our part in being involved in some way, I can facilitate that.

Also, this morning I received an email asking me to join the advisory board for the new Social Media Center at the business school. Mithat is on it, as Sunny Oh, Global Marketing Director/Local at Google. I think this will be a good opportunity to make great US and international contacts we can leverage at STRATFOR. Next steps: Have a further conversation with Mithat Bereket and discuss with Meredith and Jen, among others, about how we might best further the relationship.

7. Financial Times – I wasnʼt able to meet with anyone on this trip. However, I was in touch with Paul Murphy, with whom I met on another trip to New York. Paul formerly headed FT blogs, including the very successful Alphaville. He told me has moved back to London and been replaced in New York by John McDermott. McDermott and I couldnʼt work out the logistics of a meeting but agreed to follow up by phone this

5 week. With regard to Paul Murphy, he now is Editor-in-Chief of FT Tilt, a relatively new service described by the FT as “a subscription-based online financial news and analysis service from the Financial Times, focused exclusively on the emerging world.” Next steps: Talk on the phone with John McDermott and introduce him to Antonia, who is interested in expanding STRATFORʼs presence on the FT blogs; Set up a call with Paul to determine if there are any opportunities for us with Tilt.

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