Grass Valley Ignite Multicast Market Opportunity Technology and System for Live Production & Business Case White Paper

Grass Valley Ignite Multicast Market Opportunity Technology and System for Live Production & Business Case White Paper Grass Valley Integrated Production Solutions Alex Holtz Manager, Integrated Production Solutions Product Management Page 1 of 34

Table of Contents 1. Executive Summary 2. Overview 2.1. Digital Television Multicasting Defined 2.2. Market Competitive Threats from New Media & Distribution Platforms 2.3. The Broadcast Multicast Applications Opportunity 2.4. Cost Impact of Multicasting 3. Producing Locally Originated Live Production Cost Effectively 3.1. Live Production Control Room Automation Defined 3.2. How it Works 3.3. Workflow Requirements 3.3.4. Newsroom Computer Systems 3.3.5. Digital News Production 3.3.6. Graphics Automation 3.3.7. Multi-Distribution & Interactive Services 4. The Planning & Implementation Process 4.1. Establishing the Product and Service Requirements & Staffing 4.2. Design, Integration, Project Management & Commissioning 4.3. Training 4.3.4. Basic Training 4.3.5. Event Library Planning & Building 4.3.6. Show Shadowing 4.3.7. Rehearsals with On-Air Talent 4.3.8. Launch & Review 5. The Business Case for Multicasting 5.1. Application Specific Production Staffing, Shifts & Salaries by DMA 5.2. The Budget: Solution Costs System, Project Management, Training & Service Level Agreement Annual Expenses 5.3. 3 rd, 4 th & 5 th Year ROI: Payback, Net Present Value & Internal Rate of Return 6. Conclusion 7. Appendix II: NAB Survey Results, June 2005 Page 2 of 34

1. Executive Summary Ignite Multicast Market Opportunity & Business Case White Paper Digital Television (DTV) permits broadcasters to deliver more channels of programming over their allotted digital spectrum, allowing local stations to send multiple simultaneous streams otherwise known as multicasting. Because of network affiliations, broadcasters are limited in the amount of local broadcasting time available over their traditional channel. Therefore, digital multicasting allows broadcasters to expand local broadcast programming significantly. In an NAB research survey conducted last June 2005, broadcasters surveyed told NAB they would like to produce the following types of multicast programming: Examples of the types of locally produced/locally focused programming respondents reported they are considering: Local News/Weather/Sports (nearly 90% of respondents cited this) Church Services/Religious programming Public Affairs and Community Affairs programming Coverage of Community Events, and Political Events and Meetings High School and College programming (sports and non-sports) Foreign Language programming Educational/Children s programming Cultural Events and Local Arts and Entertainment programming Reading some of the feedback you start to see that broadcasters possess the potential of becoming a video newspaper giving consumers the resolution of their daily local newspaper while delivering it leveraging their most valuable asset, video. Therefore, this gives broadcasters the ability to compete effectively with other mediums. The question regarding multi-channel application costs and the distribution to multiple content delivery platforms arises. Who originates this content and who distributes it? While the largest roadblock to multicasting is currently the cable must carry rules, the next largest barrier to success will be how to produce all of this content cost effectively while developing each of the vertical application markets. This white paper discusses the technology solution that addresses a more efficient means of producing content. To make the point, the author selects a multicast system solution for a 24-Hour News Channel application using the most conservative salary level and resulting ROI with a combined Grass Valley Ignite Control Room and NewsEdit Digital Page 3 of 34

News Production Solution as a B multicast control room at a top 20 market local television station. The results are: Calculate Annual Salary Impact (Avoided Salaries) Data Description 4 Number of resources affected by shift 2.5 Number of shifts affected $50,000 Average salary of employee with benefits $500,000 Average annual savings Avoided Costs of Employees w. Cost of Living Adj. + Interest Data Description $500,000 Initial Annual Savings Value 7.00% Annual Interest Rate 3.00% Cost of Living % Increases Per Year $500,000 Value 1st Year $1,052,450 Value 2nd Year $1,658,045 Value 3rd Year $2,323,529 Value 4th Year $3,053,666 Value 5th Year Calculate Total Investment & Budget Target Data Description $384,490 Ignite system price $58,941 Project mgnt., training & 1st year service agrmt. $0 Conversion & distribution equipment $80,000 Integration service fees $523,431 SubTotal for Invesment $0 Legacy Switcher Trade-In Value $0 Ignite HD Upgrade $171,975 Ignite SDC/HDC Robotic Cameras $0 Grass Valley SD/HD Studio/ENG Cameras $0 Vinten or Radamec or Telemetrics Robotics $350,000 Grass Valley Digital News Production Products $54,450 DNP Prof. Services (Project Mgmt/Training) $1,099,856 Total investment Recurring Service Agreement Expense Data Description $37,186 Recurring Annual Support Agreement Page 4 of 34

Calculate Net Present Value (NPV) Data Description 10.00% Annual discount rate. This might represent the rate of inflation or the interest rate of a competing investment. -1,099,856 Initial cost of investment $500,000 Return from first year $515,264 Return from second year $568,409 Return from third year $628,298 Return from fourth year $692,951 Return from fifth year Formula Description (Result) $207,582 Net present value of this investment after three years $636,718 Net present value of this investment after four years $1,066,986 Net present value of this investment after five years 3 Year Comparison Results of Investment Data Description $207,582 NPV of Investment After 3 Years 20.20% IRR Required for NPV = 0 $1,099,856 Total Investment -$892,274 Difference Between NPV & Investment $1,500,000 3 Year Payback Budget $400,144 Difference Between 3-Year Budget & Inv. Payback The above business case includes a combined live production control room and a digital news production solution. It does not include field acquisition cameras, a graphic automation system nor costs for cabling, racks, distribution, conversion, feedback monitors or other ancillary products. An additional $200K is reserved for build-out not including the $80K for design and integration. If the broadcaster uses the existing digital news production system utilized by the main channel, then an additional $350K of savings can be realized for build-out use. The end result is an economical solution for a startup multicast 24-hour news channel with low overhead to compensate for the time it takes to gain high demographic levels of support. The solution covered in this sample business case allows for the build-out with an approximate positive NPV in year 3. With some of the highest market television stations already reporting multicast revenues in the $500K range, an Ignite based solution gives a broadcaster the best and quickest road to profits without compromising the quality of programming. Page 5 of 34

2. Overview 2.1. Digital Television Multicasting Defined Digital Television (DTV) permits broadcasters to deliver more channels of programming over their allotted digital spectrum, allowing local stations to send multiple simultaneous streams otherwise known as multicasting. Digital compression techniques enable television stations to broadcast not only one stream of high definition digital programming, but also multiple streams of standard definition digital television programming with a higher quality picture and audio sound. For example, rather than being limited to providing one analog programming signal, a broadcaster will be able to provide a sharp "high definition" (HDTV) program and multiple "standard definition" digital programs simultaneously. The number of programs a station can send using the digital spectrum depends on the level of picture detail, also known as "resolution," desired in each programming stream. DTV can provide picture resolution, interactive video, and data services that easily surpass the capabilities of analog technology. Multicasting will empower television viewers with more choice whether they view the additional content live, on-demand or time-shifted. It will drive demand for more local programming and services from their local television station providers seeking new revenue streams and alternate parallel production methods for getting local content onto multiple distribution platforms. 2.2. Market Competitive Threats from New Media & Distribution Platforms The transition to digital has given the local broadcaster an extremely valuable tool to compete with new media. Local broadcasters can now produce live content in HDTV and provide multiple digital multicast channels at the same time. Yes, there is the roadblock of the must carry issue, but once this is resolved, the local broadcaster will be equipped better than any other medium including newspapers, radio, billboards, the Internet and mobility. Why? The reason is simple. Video is the best tool for communications and the expected norm for consumers desiring both live and on-demand content on what ever device is most convenient at the time including: Traditional television with or without a digital video recorder (DVR) Internet connected PCs Mobile phones via 3G, DVB-H or MediaFLO Page 6 of 34

Wireless PDAs and laptops via WiFi or WiMAX 2.3. The Broadcast Multicast Applications Opportunity So how exactly does multicasting allow a broadcaster to support multiple television applications and deliver all of this content to multiple distribution outlets? Because of network affiliations, broadcasters are limited in the amount of local broadcasting time available over their traditional channel. Therefore, digital multicasting allows broadcasters to expand local broadcast programming significantly. In an NAB research survey conducted last June 2005, broadcasters surveyed told NAB they would like to produce the following types of multicast programming: Examples of the types of locally produced/locally focused programming respondents reported they are considering: Local News/Weather/Sports (nearly 90% of respondents cited this) Church Services/Religious programming Public Affairs and Community Affairs programming Coverage of Community Events, and Political Events and Meetings High School and College programming (sports and non-sports) Foreign Language programming Educational/Children s programming Cultural Events and Local Arts and Entertainment programming Reading some of the feedback you start to see that broadcasters possess the potential of becoming a video newspaper giving consumers the resolution of their daily local newspaper while delivering it leveraging their most valuable asset, video. Therefore, this gives broadcasters the ability to compete effectively with newspapers not to mention their websites. Newspaper websites will eventually move quickly towards video. Many newspapers will seek out video experts in some cases by partnering with their local broadcaster or in cross-ownership arrangements. Others will do their best to develop video production and programming expertise inhouse. Meanwhile, other major application specific providers (ASP) or Internet portals such as YAHOO, GOOGLE, AOL and MSN are aggressively acquiring rights to local content in text, audio and video mediums. Will they become the networks of the future? Will they successfully establish relationships with the local broadcaster or will they develop their own local origination and programming? The broadcaster, like cable in the past, should not take this potential threat lightly. Page 7 of 34

2.4. Cost Impact of Multicasting The question regarding multi-channel application costs and the distribution to multiple content delivery platforms arises. Who originates this content and who distributes it? While the largest roadblock to multicasting is currently the cable must carry rules, the next largest barrier to success will be how to produce all of this content cost effectively while developing each of the vertical application markets. Let us examine the staff sizes and economics of traditional News programming using figures from the recent October 2005 issue of the RTNDA Communicator: While the average salary in the newsroom ranged from $30,000 to $80,000 depending on position held and staff responsibilities, the production staff had similar ranges depending upon market size. Small markets ranged anywhere from $25,000 including benefits to $45,000, mid-markets from $45,000 to $75,000 and large market stations from $75,000 to $100,000. In 2003 it was reported that the average local affiliate spent $3.4 million in news department costs and in the largest markets the costs exceeded $28 million. Obviously this is a tremendous range but the point is that local programming is not cheap by any means. In the most recent RTNDA Newsroom Salary Survey dated June 2006, the average salary increase Page 8 of 34

over the last 5 years was 13.1%. Therefore the most likely annual budget ranges from a low of $3.9 million in small markets to a high of $31.7 million in the largest markets. In addition, with 24.2% of local television stations only breaking even and 12.1% showing a loss in 2005 (19.2% no response and 44.5% showing a profit), its clear that something needs to change for the 45.5% of stations not showing a profit. Either costs need to decrease or revenue needs to increase or a combination of the two. This is an example of the challenges to local broadcasters with their main traditional channel News programming representing 42.8% on average of total revenue generated. Therefore, understanding the economics of news and venturing into a new vertical niche that requires local broadcasters to deliver compelling locally generated programming to develop the market demographics enough to sellout advertising avails requires an entirely new approach to the traditional production model. The new approach will require a seamless efficient workflow model that integrates newsroom computer systems, digital news production, graphic systems automation. Also, new tools to address the pre-planning and production for primary and multicast over-the-air channels, internet and mobility formats while being driven by a single operator graphical and tactile user interface are required. 3. Producing Locally Originated Live Production Cost Effectively 3.1. Live Production Control Room Automation Defined A live production control room system comprises an application software platform with integrated video switcher, audio mixer and teleprompting plus control of third party devices including video and audio servers, VTRs, character generators, still stores and camera robotics all controlled by a staff of one operator from a centralized graphical user interface. The system replaces the typical production staff of 4 10 people depending on market size with a single operator. A traditional production staff includes: Director Technical Director (TD) Audio Operator Graphics Operator Tape Operator 1 3 Camera Operators Floor Director Teleprompter Operator Page 9 of 34

In an automated live production control room system environment typically the TD takes on the operational duties while some stations also elect to keep a separate Teleprompter Operator to control read rates for talent. Others prefer to give read rate control to the talent via a variable foot pedal control. Camera robotics are typically preset in advance for on-air pan, tilt, zoom, focus, CCU and pedestal moves to be triggered by the system. Therefore, the system does not require a camera robotics operator during show execution. The remaining elements such as scripts, CGs, stills and video clips are all orchestrated through the MOS workflow process with parsed IDs embedded into the systems Transition Macro Technology event driven control objects and management lists. Control Room Newsroom ` ` News Server ` ` Producer Director MOS Gateway ` ` Ignite System ScriptViewer Ignite Computer Ignite User Interface Prompters Closed Caption ScriptViewer User Interface Ignite Video, Audio and Device Control Processing Air System Overview 3.2. How it Works Transition Macro technology is a Grass Valley patented method and process to produce and orchestrate production elements comprising one or more commands to create both scripted and non-scripted on-air events in real time to execute a show. Page 10 of 34

NRCS Resolution Ignite Event Resolution Manual Control Resolution The above illustration shows resolution of control between a newsroom computer system, an Ignite control room system and traditional manual control. It is critical that the control room system be capable of controlling at all 5 levels of resolution: Show Story Page Transition Macro Element/Event (TME) Object The event or TME level of control is the equivalent of a Director calling a show through their IFB system and the production staff initiating commands in concert to create the event. In the Ignite control room system, this event or TME is executed by the Automation Director. Switcher/DVE Keyers ers Tel eprompter Aud io Gr aphics Cam eras Ser vers Web & Mobility GPI/GPO TME Events Page Level Story Level Transition Macro Event Driven Timeline The Event Timeline is a graphical representation of the show Rundown There are one or more commands to a TME or event and one or more TMEs to a Page or line item to a newsroom computer system rundown. Page 11 of 34

TMEs are marked or entered into the NRCS Rundown during show preparation using association names linked to specific TMEs within a library built for the television station during the training process. TMEs are built and configured based on the evaluation of existing shows or desired show effects, transitions, back-to-back events and other elements desired by the production staff. TMEs in essence are your pallet from which the Director can call up any event style at any time in any order to create a show. TMEs and Clip, CG, Still IDs can be entered during the pre-planning process or during show execution to address on-the-fly dynamic changes. TMEs are what drive Ignite through automation via the timeline. Each element of your show will have a corresponding TME. One TME will dissolve up on Camera One with Mic One, another will take the Server at a VO level, and another still might transition in a full page graphic or something similar. Each icon in the group completes a task. There are key components to TMEs other than the Icons. The marks at the top of each group control what the timeline cursor does as it crosses sections of the group. is the jump mark. When the cursor encounters this mark it will jump to the next (GPI), stop, and wait for you to transition. When it jumps, it takes all the information in between the red and blue marks and executes it in preparation for your next transition. This is called bus prepping. It is also why the section between the first red mark and the GPI is called the prep area of the TME. TME Color Structure recommended by GV: Red White Dark Green Light Green Blue Light Blue Black Yellow Orange Chroma-Green Pink Double Boxes SOTs VOs SOT VOs Cameras Cameras w/ots Fade to Black Live Shots Full Screen Graphics Chromakey Miscellaneous Page 12 of 34

Most Common TME Naming Conventions: 1. What is the transition? 2. What Video is involved? 3. What Audio is included? 4. CG/SS elements that might be needed. The most commonly used abbreviations for TME naming are: C M T VO SOT SVO DB TB FS CK SS CG V TZ LP WX CAMERA MIC TALENT ANYTHING WITH NAT SOUND ANY VIDEO WITH SOUND FULL SOT VO or NATS PAUSE DOUBLE BOX TRIPLE BOX FULL SCREEN CHROMA KEY SLIDE STORE CHARACTER GENERATOR FOR VIDEO SOURCES (TAPES OR SERVERS) TEASES LOAD PROMPTER WEATHER So a C1T1CG2 for example would be Camera One, Talent One, With Character Generator Channel 2 keyed on top. TME File Structure: You will want to organize your TMEs very carefully when you start to save them so that you are able to quickly find them. It is necessary to create a file management structure within Ignite to maintain control of existing elements and allow for better back-up procedures. All Folders for MACROS and TMEs should be created under the C: Drive. You will have one folder for station MACROS, this folder should contain ALL macros for all shows and directors. Page 13 of 34

A separate folder for Station TMEs should reside in the C: Drive as well. Within the TME folder you should have sub-folders for each type of TME: Cameras, Graphics, Live Elements, Taped Elements, etc The file Structure should be as follows: During the rundown conversion process from the newsroom to the control room, rundown marked TMEs populate the Transition Macro Event Timeline for show execution. In addition, another view similar to the rundown referred to as the Rundown List allows the Director to track stories, pages/slugs, TMEs synchronized with the graphical event timeline. In addition, the Rundown List allows Directors to float stories and delete stories during show management. Event Timeline Rundown List CG List Teleprompter Late Breaking News Ignite Control Room System center automation control screen Page 14 of 34

SCRIPT and CG PLAYLIST: The Script/CG Playlist is found on the center monitor, below the timeline. It allows users to keep track of scripts/stories within a show rundown and their corresponding CGs. Active On-Air Page/Slug and CG Script item rows display the page and slug as it appears on the rundown and has a colored dot. Scripts have both colored text and backgrounds to denote different states. There are two buttons on the module, Previous CG on Playlist and Next CG on Playlist. They load the previous or next CG item on the list. Shows can either be scripted through a NRCS or non-scripted such in the case of talk segments, elections, breaking news, hurricane or other disaster real time coverage requiring the Director to execute the show without a script. Many of these events are entered into the system by the Director using ShowBuilder Keys or Late Breaking News (LBN) Keys. ShowBuilder or LBN keys are TMEs that are not part of the library, but part of quick access pages on the graphical user interface for quick nonscripted event recall and execution. This process has been proven to work faster than the traditional manual control system in which a Director can call the event and have their staff execute that event with a traditional manual control system. Page 15 of 34

Show Builder Keys 7 P ages x 44 Studio Cameras Packages Live Shots Intros/Toss ShowBuilder or Late Breaking News (LBN) Keys ShowBuilder Keys allow a Director to execute non-scripted live production applications beyond just newscasts. Therefore, all other locally generated content can be produced with Ignite. Ignite s ability to monitor a rundown allows for a fully automated, semiautomated or manual rundown conversion process. In addition, quick access ShowBuilder or LBN keys allows the Director to address breaking news, non-scripted events or even to produce non-news live programming quickly, effortlessly with minimal errors and with show pacing as fast or slow as the Director desires. What about manual video switching such as a talk show segment? The Director can choose to use the ShowBuilder keys for these, but they prefer to leave all mikes live and just cut switch between cameras, Ignite s video switcher GUI with application specific tabs makes it easy to list only those buttons necessary for camera shots. Supports up to 4 ME mixed effects banks. Each bank has 10 customizable pages with 1 to 24 input buttons per page Page 16 of 34

What about Audio? Ignite handles audio commands within the event timeline as an object or command representing as many channels as necessary for the particular event. Audio is treated in a similar fashion to video in that as events move into preview/preset mode and transition to air, only the live channels are illustrated for quick and easy feedback and for manual intervention either via the graphical user interface or through the tactile programmable QUICbox. Camera Shots Server Control CG Controls Timers Application Channels On-Air Channels P review Channels Audio GUI with Preview/Program View & Application Specific Tabs Tactile Programmable Ignite QUICbox User Interface Page 17 of 34

The QUICbox interface also allows the Director to program in the following functions: Manual Video Switching & Audio Mixing Event Timeline Take Next Event Command Manual CG & Keyer Controls GPI Triggers ShowBuilder Key Insert & Take Commands Audio Talk-Back, Cue, Hold & Group Commands QUICbox was designed to be a compact automation interface panel that is synchronized and dynamically works with the Ignite software to replace cumbersome traditional switchers and audio panels that are not conducive to an ergonomic single operator control environment. As you can see, the Ignite control room system allows a single operator to orchestrate a live production for any application. Now let s discuss workflow. 3.3. Workflow Requirements 3.3.4. Newsroom Computer Systems For news primary and secondary multicast applications, the Newsroom Computer System is the heart where Producers architect their show. Stories are assigned and the Director uses the Rundown to mark production elements or TMEs for show execution. To accomplish this, Ignite leverages the MOS messaging standard to parse and access key data and show elements. Ignite & ScriptViewer (the Ignite automated teleprompting system) access all ENPS & inews rundown data via the Ignite MOS Gateway. Both parse the MOS (rostorysend) message to extract: Rundown RO (Running Order) Slug Titles Script Text Rundown Column Data TME (Transition Macro Events - Ignite TME; Production Commands) Video Server Clip ID (Non-MOS compliant devices) Graphic ID (Non-MOS compliant devices) Video servers and graphic devices that are MOS compliant and that have been integrated into Ignite use the MOS (objid). The way Ignite uses the Page 18 of 34

MOS (objid) data is a little different than most traditional control rooms that are just creating multiple play list for the various MOS devices. Ignite parses for the MOS ID of devices that have been integrated with Ignite and embeds the MOS (objid) into control objects on the Ignite Event Timeline, so the timeline becomes a unified production play list for internal devices (switcher, audio, cameras) and peripherals devices (video servers, audio servers, graphic devices). The benefit derived from this approach allows Ignite to continue with show execution when de-latched from NRCS for non-scripted breaking news, hurricane coverage, talk show segments or any other non-scripted events. Ignite monitors the active MOS Rundown and notifies the Ignite operator that changes have been made, so they can determine the appropriate time to import the changes to the Ignite Event Timeline. 3.3.5. Digital News Production Digital News Production has now become the rule rather than the exception to the tapeless workflow process. Many stations now support digital from acquisition through the newsroom to playout in many cases automating the playout process. The Ignite control room system integrates this workflow starting with Grass Valley s own Aurora product line (NewsEdit & NewsQ PRO). The new integration will allow for a common NewsEdit workflow for independent play out of clips by either Ignite or NQP. Ignite will extract the NQP MOS (objid) and embed the clip ID into (Ignite NQP Timeline Objects), and displays the following data for each clip on the Ignite GUI: MOS ID to Server Clip ID Description Clip Status Server ID Category Type (Sot/VO, etc.) Duration Thumbnails Ignite Rundown List Configurable to show a simple list or a more detailed list: Clip List (with or without Thumbnails) Still Store/CG (with or without Thumbnails) TME. Below is an example of the Ignite Rundown List with embedded clip information associated at the page level: Page 19 of 34

Rundown List Illustrating Clip Data at Page Level with Associated TME 3.3.6. Graphics Automation Graphic Automation Systems are also fast becoming the norm in today s broadcast facilities. Most of the major graphics system vendors including Chyron HyperX, AVID Deko and VizRT are all leveraging MOS and have implemented a workflow automation process using ActiveX interfaces in the newsroom and moving graphics all the way out through playout. The Ignite Control Room System integrates with these third party systems and performs the following: Extract (ID) from MOS generated graphic workflows Embed these commands within the Ignite system, to allow the user to break away from the NRCS and run Ignite independent of the rundown or make manual recalls from the Ignite system in breaking news situations. Put automated CG ID into the CG List, and put Still (Scene) ID into timeline objects. Be able to send additional play commands to animations that have multiple pauses. And finally be able to recall Looped animations. Page 20 of 34

Below is an illustration of the signal and messages between the NRCS, Ignite and the Graphic System: 3.3.7. Multi-Distribution & Interactive Services It is important that any new live production solution leverage its workflow to accommodate multi-distribution for web and mobile devices and closes the loop for interactive feedback. The Ignite Control Room System software application platform takes this strategy and initiative into account. Today, the objective of Ignite is to provide an economical method of producing live content. This first step allows broadcasters to cost effectively produce locally generated live content on their main or multicast channels while developing the market demographics necessary to generate revenue with advertisers. The next objective is to leverage the new workflow and integrate multidistribution modules for pre-planning, production, publishing and distribution for both web and mobile device content. These modules will require integration with third party Content Delivery Networks (CDN) and wireless service providers. Since the focus of this white paper is on Multicasting, we will focus on the first objective which is to get you Page 21 of 34

started with a cost effective method of producing live content for your new multicast channel applications. 4. The Planning & Implementation Process 4.1. Establishing the Product and Service Requirements & Staffing This process involves both sales and technical support to meet with the broadcaster to determine staffing, product configuration and third party interface objectives with respect to current and/or future programming. If currently producing content, an air-check evaluation and on-site survey is required. This process identifies current input/output, video effects, backto-back sequences and on-set monitor transition video requirements, audio inputs and mix-minus requirements, third party NRCS, digital news production, video/audio servers, character generators, still stores, camera robotics, closed captioning and other peripherals. In addition, workflow processes will be evaluated and a plan of action initiated. In this phase, a detailed proposal will be generated with an explanation of what third party products can and cannot be supported. Various configuration options will be discussed to deliver a solution that fits both the broadcaster s requirements to deliver content as good or better than with their current manual process and their budget. Appropriate financial ROI models will be created and discussed with the broadcaster. This topic is further discussed later with sample ROI calculations. 4.2. Design, Integration, Project Management & Commissioning Upon receipt of a purchase order, a Project Manager with a Field Service Engineer is assigned to the broadcaster. Their responsibilities include working with the Chief Engineer of the station on design and drawing reviews, assisting with distribution and conversion requirements, planning and coordinating product shipment and field installation logistics. In addition, the Field Service Engineer is the liaison with Ignite Engineers concerning third party integration or other system performance issues. Once the equipment is on-site and installed, the Field Service Engineer configures, tests and resolves any outstanding issues before commissioning the system. Once the system is commissioned, the Field Service Engineer stays on to educate the Ignite trainer on system configuration and third party integrations. The entire process typically takes approximately 2 weeks with a one week overlap with the assigned Ignite trainer. Page 22 of 34

4.3. Training The trainer will introduce themselves initially by letter and then via phone conference to discuss pre-requisites and necessary preparations for training. Key questions to be addressed are: a. Are all operating systems in place: CG, Still Store, Graphics Automation System, Video Server, Digital News Production, Audio Server, VTRs and Newsroom Computer System (NRCS)? b. Are Ignite Directors trained and do they understand the operation of peripheral devices? Has the staff been notified of the change by Management and addressed any dissention in the ranks? Are they ready to make the transition to Ignite control? c. Are items set-up in the Control Room: Monitors, IFB, Producer Talkback and NRCS Work Station? d. Are production elements ready and available: Opens, CG Templates, OTSs and Full Screens? e. Is the studio set up: IFB for talent and Monitors for Ignite Output? All, or the vast majority, of the answers to the above questions must be yes to begin on-site training. Equipment list confirmation including: f. Getting the list of third party equipment serves several purposes. It acts as a check to avoid surprises of new hardware not previously identified by the Project Manager or Systems Engineer. It gives the trainer an opportunity to know what hardware they will be working with, and if necessary, study up on its operation. All trainees should be familiar with the operation of the equipment that will be attached to or integrated into the system. g. What NRCS do they use? Next, the trainer inquires about Trainees: how many people, who are they, what is their experience? h. The standard number of trainees is four or fewer. It is generally expected that trainees have been directors and understand the workflow of the news production environment or other application. It is also assumed that the trainee has working knowledge of Windows operating systems. If this is not the case, the trainer may have to alter the agenda, which may cause delays and potential additional costs. This is clearly expressed to the station to set proper expectations. Page 23 of 34

The trainer then sets an on-site training schedule and determines their anticipated air date. i. The trainer has five weeks (25 working days) to train the station. If the broadcaster wants to be on the air in three weeks, the issue must be addressed immediately. Conversely, if the station has no immediate plans, they will be encouraged to go to air within that timeframe. If other circumstances exist, such as a new start-up, that cause the air date to be unknown, delay of the training start date should be explored. If the date falls within expectations, it will be expressed that we can only meet that target if the station partners with us to meet that goal. Success can only be achieved through cooperation by both parties. The trainer then sets a working schedule j. Discussions include setting dates for training, hours of training, building access and time off. This should be reaffirmed in the meeting with management during the trainer s first visit. The trainer will schedule a meeting with the GM, News Director, Production Manager and Executive Producer. k. The primary objective of this meeting is to set expectations. Meeting with station management is highly recommended and will provide the trainer with information of the station s commitment to success which is essential in any new technology and workflow adoption. Additionally, it is an opportunity for the trainer to establish a relationship of trust as a knowledgeable professional with whom the station management can trust with their on-air product. The trainer will request show tapes and copies of newscast rundowns if not already in their possession. l. The trainer will watch the newscast to gather information on show pacing, effects and transitions. m. Ignite Directors will prepare their show solely from the rundown. This is likely different from the way they work with their current system. The News Department will most likely need to modify the way they mark rundowns. Knowing to what extent changes will be required, before the trainers arrival, to help prepare for the initial meeting. Materials will be sent to the station the following: n. User Manuals Page 24 of 34

o. Ignite System Overview CD p. Contact & Travel Information (if available) 4.3.4. Basic Training Basic Training includes system video and effects, audio, server, camera, graphics, timers and teleprompting manual control setup, execution and familiarization. Automation workflow overview with detailed discussions about the purpose, setup and use of the Transition Macro Event Timeline, Rundown List, CG List, ScriptViewer window and ShowBuilder/Breaking News Keys. Emphasis is placed on the assembly or building of TMEs and how they work. Workflow discussions include NRCS, digital news production and graphics automation interfaces and processes. a. The trainer will pass out a Syllabus and Reference Guide The syllabus is the guideline for trainees to know what they can expect in the program. The Reference Guide contains the actual course material in hardcopy. b. When training concludes, trainees should be able to: i. Build TMEs ii. Build Simple Effects iii. Build Wipes iv. Build DPM Effects v. Understand TME Naming Convention vi. Code NRCS Rundowns vii. Operate System (step through) viii. Know how to operate all GUI controls ix. Understand Camera control x. Understand QUICbox programming and operation xi. Understand ScriptViewer operation This is a very general guide to what trainees should be able to accomplish on their own when introduction basic training concludes. Using the syllabus and reference guide, the trainee should understand how the system operates and the general rules that apply to TME construction, library creation and system operation. c. Assign TME Excel Worksheet (homework). This task should be completed by the trainees before the next phase of training. Completion of the worksheet will save time in determining what needs to be built and should be updated during the TME construction process. Duration of this phase: approximately 1 week. Page 25 of 34

4.3.5. Event Library Planning & Building The core task of this phase is getting the TME library constructed. Before TMEs are built, audio set points, camera preset hotkeys, transitions, and DPMs must be built. Variations from this process make it more difficult for the Trainer and ongoing support personnel and should be strongly discouraged. 1. Verification of homework and corrections as needed. 2. Begin System Build a. Create Audio Set Points b. Create Camera Preset Hotkeys c. Build Switcher Transitions: Cut, Fade, Wipes, Fade with Key d. Build Effects: ChromaKey, Double Boxes, other DPMs e. Begin Building TME library and creating association names 3. Assign homework to trainees a. Continue building TMEs Duration of this phase: approximately 2 weeks. 4.3.6. System Operations & Show Shadowing This is the phase of training where the trainee puts together the knowledge learned during basic and applies it using the TMEs developed for the library in a practical operations setting. Techniques for rundown conversion and change alert monitoring, change recovery and breaking news are practiced so that the operator is well versed on handling non-scripted events and methods for recovery to get back on track with the show. Once this phase is complete the operator starts shadowing shows using their learned skills in real time. The process involves mimicking all aspects of the show including non-scripted events. The goal of this phase is to be able to replicate the shadowed show precisely without errors. The goal of this phase in the training process is to ensure that everything is in place to transition Ignite to air. To accomplish this goal, the TME library must be complete. In addition, show macro items will need to be recorded. During this phase, the trainees will be required to develop a variety of new skills. The Trainer will maintain a delicate balance, between supportive encouragement and drive of the trainees, in order to reach the stations objective. Any items incomplete by the end of this time on-site must be immediately addressed, as the system launch could be jeopardized. 1. Verification of homework and corrections as needed. Page 26 of 34

2. Complete System Build a. Create LBNs b. Program QUICbox c. Record CG/SS Hotkeys d. Create ScriptViewer CG Templates 3. Mark NRCS Rundowns 4. Error Message Troubleshooting 5. Fundamentals of Stepping Through a converted show a. Have trainees slowly transition through their timeline of a converted show, watching each TME execute. 6. Shadow on-air shows if applicable a. Follow along with Ignite while a show is on live with the legacy equipment. This will give the Ignite Directors a good feel for show pacing with the system. 7. Recovery Training a. Direct via LBNs b. Rundown conversion during a show c. Simulation of dropping, adding and floating stories d. Manual Operation 8. Technical Rehearsals a. Simulation of a live newscast, using previously aired rundown and show elements. Technical rehearsals are for the benefit of the Director. Stand-in talent should be used. 9. Assign homework a. Continue show building, step through, shadowing, and technical rehearsals Duration of this phase: approximately 2 weeks. 4.3.7. Rehearsals with On-Air Talent Talent rehearsals involve producing real time mock shows as if the show was live. This accomplishes 2 objectives. It gets talent prepared to work with the new system including cues and pacing while the second objective is to give the operator real time experience with the system executing a show before actually going to air. During this phase, the producer is brought in to get them comfortable with both the system and the communications expectations with the Director. Producers are encouraged to make dynamic changes and to call mock non-scripted breaking news events. The objective being to place the Director in quick response situations to use the skills and methods learned for handling show dynamics, abrupt changes and system recovery. Page 27 of 34

Process: 1. Verify Technical Rehearsal with each director 2. Introduce Producer to the system and perform Technical Rehearsal a. Confirm that the producer is aware of necessary rundown marking and deadlines. b. This rehearsal should be used as an opportunity for the producer to simulate breaking news. 3. Talent Rehearsal a. Full dress rehearsal using all staff and elements of a previously aired show. This rehearsal should be considered live, performed in real-time. Any issues that arise should be dealt with as they would during a live production. Duration of this phase: approximately 1 week. 4.3.8. Launch & Review Once rehearsal results are evaluated by management and deemed successful with the establishment and confirmation of an on-air date, Ignite is launched. All macros and TME files are backed up for safety, storage and recall if necessary. The trainer observes all live newscasts or other application shows and provides feedback as necessary. Continued Station Support The trainer will encourage the staff to call or email them with questions or any other future assistance or needs and contact names/numbers are reviewed before the trainer s departure. Page 28 of 34

5. The Business Case for Multicasting 5.1. Application Specific Production Staffing, Shifts & Salaries by DMA Using the current going rates for production staff, we will propose a business model using 2.5 shifts covering mornings and afternoons, evenings through late nights Monday through Friday and ½ shift Ignite staff for weekends. The table below illustrates the Business Model matrix. Choose the model that fits your DMA and expectations: Ignite Staff Per Shift 2 DMA 1-10 DMA 11-20 DMA 21-50 Ignite Director $100,000 $75,000 $50,000 Teleprompter Operator 1 $75,000 $50,000 $25,000 Totals $175,000 $125,000 $75,000 (1) Teleprompter Operators are only necessary for applications requiring a script or if the broadcaster does not want talent to operate their own read rates with a variable foot peddle. (2) This matrix does not cover the costs associated with a newsroom or preproduction and interactive staff for other applications such as educational distance learning, local retailing and local civic and entertainment channels. Assumptions in the ROI calculations will include cost of living increases plus interest to capital avoidance, i.e. what it would cost the broadcaster had they moved forward with a traditional manual production staff. In addition, a cost of capital of 10% will be used in this analysis. 5.2. The Budget: Solution Costs System, Project Management, Training & Service Level Agreement Annual Expenses A multicast system solution for a 24-Hour News Channel application will be addressed using most conservative salary level and resulting ROI with a combined Ignite Control Room and NewsEdit Digital News Production Solution. (1) Ignite-SD-2001 2ME partial redundant system (upgradeable to HD) with Prep Station, 48 video inputs, 48x24 digital audio, ScriptViewer teleprompting, QUICbox tactile user interface, SHOT Director multicamera controller and 3x SDC Ignite robotic camera systems. (2) NewsEdit Non-linear Editing System with Digital Playout Includes NewsEdit XTT w. 6 Edit Controllers, 5 NewsEdit SC Basic Edit Stations, 5 NewsEdit LT Laptop Editors, 2 NAS Servers, 1 Ingest and 2 playout ivdr Servers, NewsQ-PRO Playout Controller. Page 29 of 34

5.3. 3 rd, 4 th & 5 th Year ROI: Payback, Net Present Value & Internal Rate of Return Used most conservative salary of the 3 profiles. The 4 positions avoided are 2x camera operators, 1 audio and 1 graphics operator at a minimum. Results are significantly better if the broadcaster decides to use existing Digital News Production system. Calculate Annual Salary Impact (Avoided Salaries) Data Description 4 Number of resources affected by shift 2.5 Number of shifts affected $50,000 Average salary of employee with benefits $500,000 Average annual savings Avoided Costs of Employees w. Cost of Living Adj. + Interest Data Description $500,000 Initial Annual Savings Value 7.00% Annual Interest Rate 3.00% Cost of Living % Increases Per Year $500,000 Value 1st Year $1,052,450 Value 2nd Year $1,658,045 Value 3rd Year $2,323,529 Value 4th Year $3,053,666 Value 5th Year Calculate Total Investment & Budget Target Data Description $384,490 Ignite system price $58,941 Project mgnt., training & 1st year service agrmt. $0 Conversion & distribution equipment $80,000 Integration service fees $523,431 SubTotal for Invesment $0 Legacy Switcher Trade-In Value $0 Ignite HD Upgrade $171,975 Ignite SDC/HDC Robotic Cameras $0 Grass Valley SD/HD Studio/ENG Cameras $0 Vinten or Radamec or Telemetrics Robotics $350,000 Grass Valley Digital News Production Products $54,450 DNP Prof. Services (Project Mgmt/Training) $1,099,856 Total investment 3 Maximum payback years $1,500,000 Maximum budget 4 Maximum payback years $2,000,000 Maximum budget 5 Maximum payback years $2,500,000 Maximum budget Third party design & integration fee allowance Recurring Service Agreement Expense Data Description $37,186 Recurring Annual Support Agreement Page 30 of 34

Calculate Net Present Value (NPV) Data Description 10.00% Annual discount rate. This might represent the rate of inflation or the interest rate of a competing investment. -1,099,856 Initial cost of investment $500,000 Return from first year $515,264 Return from second year $568,409 Return from third year $628,298 Return from fourth year $692,951 Return from fifth year Formula Description (Result) $207,582 Net present value of this investment after three years $636,718 Net present value of this investment after four years $1,066,986 Net present value of this investment after five years Calculate Internal Rate of Return (IRR) Data Description -1,099,856 Initial cost of investment 500,000 Net income for the first year 515,264 Net income for the second year 568,409 Net income for the third year 628,298 Net income for the fourth year 692,951 Net income for the fifth year Formula Description (Result) 20.20% Investment's internal rate of return after three years 33.53% Internal rate of return after four years 41.00% Internal rate of return after five years 3 Year Comparison Results of Investment Data Description $207,582 NPV of Investment After 3 Years 20.20% IRR Required for NPV = 0 $1,099,856 Total Investment -$892,274 Difference Between NPV & Investment $1,500,000 3 Year Payback Budget $400,144 Difference Between 3-Year Budget & Inv. Payback Not including the $80K of design & integration fees, an additional $200K can be spent before NPV = 0 in year 3 Page 31 of 34

4 Year Comparison Results of Investment Data Description $636,718 NPV of Investment After 4 Years 33.53% IRR Required for NPV = 0 $1,099,856 Total Investment -$463,138 Difference Between NPV & Investment $2,000,000 4 Year Payback Budget $900,144 Difference Between 4-Year Budget & Inv. Payback 5 Year Comparison Results of Investment Data Description $1,066,986 NPV of Investment After 5 Years 41.00% IRR of Investment After 5 Years $1,099,856 Total Investment -$32,870 Difference Between NPV & Investment $2,500,000 5 Year Payback Budget $1,400,144 Difference Between 5-Year Budget & Inv. Payback 6. Conclusion The above business case includes a combined live production control room and a digital news production solution. It does not include field acquisition cameras, a graphic automation system nor costs for cabling, racks, distribution, conversion, feedback monitors or other ancilliary products. An additional $200K is reserved for build-out not including the $80K for design and integration. If the broadcaster uses the existing digital news production system utilized by the main channel, then an additional $350K of savings can be realized for build-out use. The end result is an economical solution for a startup multicast 24-hour news channel with low overhead to compensate for the time it takes to gain high demographic levels of support. The solution covered in this sample business case allows for the build-out with an approximate positive NPV in year 3. With some of the highest market television stations already reporting multicast revenues in the $500K range, an Ignite based solution gives a broadcaster the best and quickest road to profits without compromising the quality of programming. Page 32 of 34