Studio Category Assessment Defining the Entertainment Category

What’s Covered in this Deck

STREAMING STUDIOS LINEAR TV SERVICES

2 Need to Know Movie Industry Facts…

Action/Adventure remains the Admissions are plateauing, but most popular genre to date as they box office revenue is still growing can appeal most widely to global due to ticket inflation market

Opening weekends are an early Over the past decade the average indicator of a film’s expected age of movie goers has shifted success, typically accounting for and skewed older (60+) 35-40% of total domestic box office

3 Key Players • Releases from 6 major studios typically 2019 Revenue Share by Studio account for 80% of total box office revenues

Total U.S. Box Office - $11.6B • Following the acquisition of Fox, Disney now controls 38% of the U.S. box office

11% • Overall, Disney dominated the box office in 2019, driven by sequels, and these revenue 7% shares are usually consistent year over year 33%

13%

Production is increasingly concentrated around blockbusters, franchises, and sequels: 12% 14% Disney: Marvel, Star Wars, Pixar 5% 5% Fox: X-Men, Avatar Warner: DC Universe Universal: 007, Fast&Furious Disney Warner Bros. Paramount : Spiderman, Jumanji, Bad Boys, 20th Century Fox Sony Universal Ghostbusters, Venom Lionsgate Other The Modern Purchase Journey of Moviegoers (Pre-COVID)

1 2 3 DISCOVERY EVALUATION PURCHASE Moviegoers tend to learn about new Several factors play into a guest’s Despite in mobile and films by seeing trailers on TV and decision to see a particular film in digital purchase pathways, the online and by word of mouth from theaters, especially the genre majority of moviegoers buy tickets friends in person at the box office • 68% of moviegoers decide to see a • 58% discover new films online film before the day of viewing • 78% purchase tickets at the theater • 44% hear about new films through • 67% say genre is influential, with • 23% buy tickets online in-person conversations action and comedy being the most • 21% buy tickets on mobile popular to see in theaters

5 Source: Facebook IQ, Understanding the Journey of the Connected Moviegoer, January 2019 The COVID Impact 2020 Was a Catastrophic Year for Industry

Status of Brick & Mortar Cinemas across the U.S. as of December 2020

Box Office Admissions Fell 82% In 2020 vs. 2019

6 The COVID Impact The Pandemic Has Drastically Impacted Distribution

SHORT TERM LONG TERM

Theaters on Brink Studios Off-load Hybrid Distribution of Bankruptcy Titles to Streamers Model Takes Hold

Regal Cinemas Owner Lands Streaming Salvation: How Studios Warner Bros. will release 2021 Financial Lifeline, Averting Made Bank Selling Movies to movies simultaneously on HBO Max Bankruptcy Netflix, Amazon

AMC Theatres Plans to Raise $47.7 Hollywood Agents Push to Sell Films How COVID-19 Could Spark a Million to Stay Afloat During to Streamers Amid Theater Tectonic Shift to Premium VOD Pandemic Shutdown

7 The COVID Impact Three Pivots Studios Have Made

Divest Titles Monetize Titles Directly Use Titles to Drive Broader Strategic Initiatives

Released as PVOD on Sold to Netflix Acquisition: Streams free streaming platforms for HBO Max subscribers day & date w/ theatrical

Released in theaters, PVOD ~17 days later

Retention: Streams free Sold to Amazon for Disney+ subscribers, no theatrical release Sold as PVOD inside an SVOD

Impact to NBCU Ad Business

• Monetize campaigns from Netflix/Amazon • Monetize campaigns at reduced budgets, • Monetize campaigns @ competitive rates at lower budgets adjust rates if competitive issues arise (D+) • Eliminate marketing • Evaluate marketing partnerships

8 Movies & Streaming: Two emerging PVOD strategies

“WIDE RELEASE” PVOD O&O PVOD/SVOD

• Non-exclusive, “broad digital” approach to distro • Exclusive distro on owned platforms pushes to pay-as-you-go platforms • Messaging touts titles, with strong CTA for platform • Marketing focuses on the movie, not the distro • Multiple competitive issues platform • Peacock streaming competitors • an active participant in multiple distro channels • DDT concern for NBCU linear

NBCU POV: Akin to conventional HE strategies, not competitive NBCU POV: Competitive due to exclusive O&O distro

9 2021 Studio Outlook & Recovery Timeline Many Outstanding Questions Remain Which Will Dictate Box Office Futures

SLATE BOX OFFICE Over 40 films scheduled for release in 2020 moved to 2021, Best case scenario: majority of population is vaccinated by late Spring in creating a “blockbuster backlog” of content time for the Summer movie season, resulting in a healthy recovery from year prior Worst case scenario: there’s delays in vaccinations coupled with unemployment, fears of safety, and new viewing habits (i.e. SVOD) that AD SPEND continue to jeopardize theaters future The unusual number of releases in 2021 is expected to give TV spend a +12% bump versus long term growth averages

Long Term Trend Growth/Forecast of Linear Ad Spend Total U.S. Revenue from Box Office Admissions, 2015-2021 15% 12% 12.00 10.03 10.45 9.99 10% 9.60 9.77 Best Case 10.00 5% 8.53 0% 8.00 -5% 2015 2016 2017 2018 2019 2020 2021 -2% -3% 6.00 -10% -5% -6% -9% -15% 4.00 -20% Worst Case 2.00 -25% 1.80 1.59 -30% 0.00 -35% -30% 2015 2016 2017 2018 2019 2020 (est) 2021(fore)

10 COVID Is Disrupting the Legacy Distribution Model

Pre-COVID

~75-90 days DVD Purchase ~60 days PVOD Theatrical Release Download to Own Rental

During Pandemic

Theatrical Release ~75 days 14 days DVD Purchase 60days SVOD Stream Download to Own PVOD Rental PVOD Rental for Free

Projected Post-COVID

~25 days TBD Theatrical Release PVOD Rental TBD Distribution Studio Category Trends What We’re Seeing & Hearing in the Industry

COVID-19 is Accelerating Streamers Generate Franchise Films Dominate A Resolute Commitment Changes to Distribution Increased Competition the Box Office to the Big Screen

Widespread theater closures caused Studios face increased competition for The highest-grossing films are reliably Although they are experimenting with by COVID-19 necessitated consumer mindshare, as audiences tied to established franchises. With new distribution windows and rollout, experimentation with distribution and enjoy an unprecedented level of box office success as the ultimate Studios remain committed to the windowing. Now, theatrical openings choice when it comes to the what, north star, many studios’ slates theatrical moviegoing experience and with fast-follow PVOD releases are where, when & how to consume depend on existing IP and beloved business, despite the challenges quickly becoming the new norm premium content characters presented by COVID and shifts to in- home viewing. Studio Category Trends How Studios Are Evolving Their Marketing Approach

Big Reach in a Tight Marriage of Show IP + Data-Informed Targeting Cobranded Marketing Timeframe Movie IP

Studios must achieve big reach in Integrated marketing remains key in With more moviegoer data available Studios are piggybacking off their a tight timeframe in order to ignite generating excitement for a film. than ever, studios are in a unique subscription services to provide social chatter for their film. A Custom, authentic marketing position to eliminate waste and exclusive access to new titles, and singular moment – or several activations that blend film IP with speak directly to key persuadable in turn bringing the movie going moments in close proximity – that show IP create the perfect marriage audiences and drive ticket purchase experience to living rooms while garner huge audiences are to inspire audiences to want to see driving subscription growth as well essential the film Want to Learn More? Contact Your NBCU Studio Team

Steve Treinen Riley Bryson VP, Client Partnerships Director, Client Partnerships [email protected] [email protected]

Nick Youngman Cory Hinton Olivia Zderic VP, Client Strategy Director, Client Strategy Manager, Client Strategy [email protected] [email protected] [email protected]

14 Thank You!