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L3 Video Content Protection, Distribution & Monetization. “L3”. Scenario Today. MPAA (Motion Picture Association of America ) says Hollywood loses 40% of revenue ($4 billion) to Piracy And Piracy is on the rise – a rock-solid solution is required

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L3 video content protection distribution monetization

L3

Video Content Protection, Distribution & Monetization



Scenario today
Scenario Today

  • MPAA (Motion Picture Association of America) says Hollywood loses 40% of revenue ($4 billion) to Piracy

  • And Piracy is on the rise – a rock-solid solution is required

  • Content-Owners give their content to intermediaries losing up to 80% of potential revenue

  • Most try YouTube distribution – sometimes coupled with physicalDVD shipping

  • Premium content (e.g. new movies and eLearning) limited to Ad-supported streaming sites (including YouTube) – No Pricing Power

  • Those who try to self-distribute spend significant amounts on bandwidth, servers and custom DRM solutions



Market friction1
Market Friction

In simple terms

  • Video rights owners have to either

    • Accept piracy of their content (from DVDs, YouTube, Tivo etc.)

    • Spend lots of money on Servers, CDNs, and eCommerce (> $5,000 per month)

    • Sell out to Netflix, Hulu and other such aggregators (and sacrifice their own brand)

      OR

    • Use “L3”


The l3 solution
The L3 Solution

L3 Content

  • The mission of Layer 3 Media’s (L3) is to smoothen the movie/video distribution chain through disruptive innovation

    • Protect content owner’s interest

      • Piracy-proof the content

      • Enable content monetization

    • Easy Content Accessibility to audiences globally

      • “Viral”/”Social” distribution (Build on current eco-system)

      • Computers, tablets, Mobile phones, TV – All devices

      • Enable value added services such as sub-titles to enable intermediaries

      • Watch content free with relevant ads

    • Address ground realities of infrastructure

      • Download & Play orStreaming orTorrent orPhysical distribution

L3 is the world’s first LEGAL TORRENT system

Other Devices

Desktop Software

Cable TV/DTH

Cellular Network

ePVR (Enhanced Personal Video Recorder)

Enhanced Cell Phone


More on l3
More on L3

  • Viral distribution/Content Marketing

  • Rock solid copy-protection

  • Easy Payment methods for end customers (including “free-with-ads”)

  • A Cross-platform solution

  • Scalable platform to address Global demand of content

  • Control for Content Owners


How it works

+

How it works

+ L3 =

or

Owner

L3

Mobile TV Desktop


Customers
Customers

  • Market Segments in order of focus

    • Independent Film and documentary makers

    • Small Studios and distribution companies in India and other countries

    • How-To video makers (Cooking, Musical Instruments, Exercise videos etc.)

    • Other Semi-Professional content (migrate from YouTube)

    • Music Videos

    • Large Film Distribution companies (including Netflix, Hulu…)

    • Formal eLearning distributors/creators

    • Large Studios (Sony, Disney...)


Industry market
Industry/Market

  • Global market estimated at almost $1 trillion (TAM) and can be grown by this platform

  • Video creation and consumption rising due to lowered technology barriers

  • Recent SOPA and PIPA bills in the US Congress attest to how seriously business and government are taking threat of Piracy

  • Without protection, unfettered distribution cannot happen


Addressable market
Addressable Market

  • Entertainment Piracy alone accounts for at least $6 billion worldwide ($4B Hollywood)

  • We can reduce this by 25% over 5-7 years giving us…

  • Expected share of market in 5-7 years of $2 billion (top-line collections) giving $200MM in revenue with margins over 75%

  • Long term, as this platform becomes mainstream, we can capture much more

  • Growth can only be explosive as adoption will be viral


Management background
Management Background

  • Anil Gupte

    • IIT Kharagpur alumnus

    • Ran a Computer Aided Design Training and Consulting business from 1989 to 1993 with Fortune 100 clients

    • Founded iCinema – one of the first streaming video sites ever (1997)

    • Morphed above into maxNetwork – a service oriented business model with better revenue/profit

    • Grew above business 680% from 2000 to 2004 then sold it

    • Introduced the first Personal Video Recorder in India (2006)

    • 4 US Patents received + 1 more in pipeline


Management background1
Management Background

  • Amit Abhyankar

    • IIM Lucknow Alumnus

    • 12 years of experience in Media and Entertainment

    • As MD of Outreach Motion Pictures has experience of distribution across all platforms - Theatrical, Digital, Satellite and Home Video

    • Has worked as Executive Producer/Director and many other roles in all aspects of Film-making

    • As Founder/Director Outreach Media Services specialized in Management of Brands for Companies and Image for Individuals

    • Most recent film – “Jana GanaMana” (Producer/Director) received Best Director and Best Film (Rural) in India (Maharashtra)


L3 external validation
L3 – External validation

  • Wipro Wharton Global Innovation Challenge – Category Winner

  • DST-Lockheed Martin India Innovation Growth – Winner

  • Economic Times Power of Ideas Competition – Winner (~$40,000 seed investment by CIIE, IIM Ahmedabad)

  • 4 US Patents issued, 1 pending



L3 competitive advantage
L3 – Competitive Advantage

  • L3 is the only secure, multi-pricing, download-cum-streaming-cum-torrent distribution model for video

  • Almost all our competitors can also become our customers

  • Fundamental differentiation – L3 content is protected before it leaves the content-owner’s hands

  • L3 is the only platform where ads can be dynamically inserted into content in online as well as offline mode




Deal summary
Deal Summary

  • Equity funding of ~$1.1 Million needed

  • 20% equity offered

  • Estimated Year 5 PAT~$45 Million

  • Estimated Company valuation in year 5 $900 Million (PE = 20) or higher

  • Investors ROI estimated to be 180X in five years (earlier exit possible)


Contact anil gupte ag@layer3media com 91 9370131365

Contact:

Anil Gupte

[email protected]

+91 9370131365

Thank You!


Appendix
Appendix

(Additional Details)


L3 technology
L3 Technology

L3 Video File

  • Distribution on DVD, Internet and other media in a single format

  • No need for separate process or format for Internet distribution, Broadcast or DVD/CD

  • “Morphing” copy-protection

    • A unique key & algorithm required on each machine, so that even if one “pirate” cracks the encryption, the “crack” cannot be reused

    • Also, algorithms and keys keep changing to create a moving target for pirates

    • Patented technology

Peers

Physical Media

Cable TV/DTH

Internet

ePVR (Enhanced Personal Video Recorder)

Servers


Value added services
Value added services

  • Content owners or anyone else can add value to the L3 content

    • Example: Subtitles in any language can be added to the L3 file

      • Expands the market exponentially

      • Incremental revenue for such value added service is tracked separately and goes back to the entity that built the value-added feature

= Opportunity

+

And we will have a little house with big windows


Benefit to the content owner 1 3
Benefit to the content owner… 1/3

  • Monetize content

    • Extra revenue with not much incremental cost

    • Significantly lower risk of piracy

  • Global customer reach

    • Access established, new and uncharted geographies

  • A vibrant distribution channel

    • More efficient than all existing distribution networks

    • Most cost efficient

    • Peer to peer virally distributable

    • Through any media

    • Can also be hosted on L3 owned sites


Benefit to the content owner 2 3
Benefit to the content owner… 2/3

  • Content ownership remains with owner

    • Don’t have to sell the internet rights

    • Owner can place it on any medium and send it anywhere

  • Secure the content before its distributed

    • Superior encryption with L3 patented technology

  • Gives complete pricing flexibility to content owners

    • Maximize returns through dynamic pricing

      • Content not selling well in one market can be re-priced to make more attractive

    • Complete control on pricing

      • Expands the market by creative pricing

    • Can block any geography


Benefit to the content owner 3 3
Benefit to the content owner… 3/3

  • Assured collection

    • Payments received through Credit Cards, Net Banking, PayPal

  • L3 is no extra cost for content owners

    • Owner uses the “free” L3 software to encrypt and distribute content from any source

    • Users/audience pay a transaction fee to L3

  • “Not new” content can also be monetized

    • If broadcast rights sold, one can still earn money from Internet or DVD distribution

  • No lawyers and accountants involved

  • Save cost and time


Benefit to the consumers
Benefit to the consumers

  • Increased availability and access to content

  • End customer finally has the ability to decide what kind of experience he/she wants

    • Choice of watching on computer or TV

      • Internet downloaded content can be watched on TV or computer

    • Choice of watching with ads or without ads

    • Choice of paying or not paying

      • No ads or with ads

    • Choice of how much violence/sex to be shown

    • Choice of passing on the download to others without piracy guilt

      • Torrent, USB, CD, DVD etc.


Benefit to advertisers
Benefit to advertisers

  • Pay only if Ads play

  • Micro-targeted advertisements

    • Age

    • Sex

    • Geography

    • Time of the year/day

  • New ads on re-runs

  • Detailed reporting


Benefit to the industry
Benefit to the industry

  • Wider distribution and quicker break-even

    • Encourages Content-creators to experiment

  • Good content once produced will continue to accrue rewards perpetually

  • More expression of art

  • Reduced dependence on distribution channels


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