FMG/

Advisory, Inc .

FINANCIAL MANAGEMENT GROUP, LTD.

Eden Park II, 1755 Oregon Pike Lancaster, PA 17601

717-569-4100

STANLEY J. CATERBONE
PRESIDENT

APRIL 11, 1987

DIGITAL MOVIE
PROJECT
THE DIGITAL MOVIE
A Joint Venture Proposal for The Sony Organization

Developed by.
Stan J. Caterbone
Representing: Tony Bongiovi
Power Station Studios
Flatbush Films
Gamillion Studios
Advanced Media Group, Ltd.,

Created in May of 1987

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LAW O F F I C E S

SEIDEL, GONDA,GOLDHAMMER& ABBOTT,P. C.

PATENT A N D T R A D E M A R K A T T O R N E Y S
S U I T E 1800 T W O P E N N C E N T E R

PLAZA

P H I L A D E L P H I A , PA. 1 9 1 0 2
A R T H U R H. S E I D E L

TELEPHONE:(215) 5 6 8 ~ 8 3 8 3

3 O E L S. GOLDHAMMER
M I C H A E L P . ABBOTT

p~

2 5 J u n e 1987

p~

GROUP

D A N I E L A . MONACO
ROBERT H. HAMMER lil

I. I , b I 8 4

E D W A R D C. G O N D A
I 1 9 3 0 I S e 5 i

DURLiNG

S T E P H E N J. M E I E R S
AMANDA L A U R A N Y E *
NANCY A

845~218

CABLE. SIPAT

TELkCOP$ER 1 2 1 5 1 5 6 8 ~ 5 5 4 9

G R E G O R Y J. LAVORGNA

THOMAS J

TELEX

OF C O U N S E L
SYLVIA A . G o s r T o r r v l
S T A N L E Y H. Z E I H E R

RUeNER

SCOTT J FIELDS

N r . S t a n l e y Caterbone
FMG A d v i s o r y , I n c .
Eden P a r k I 1

1 7 5 5 Oregon Avenue
L a n c a s t e r , PA 1 7 6 0 1
RE:

Power S t a t i o n
Our F i l e :
7351-G

Dear S t a n :
I h a v e now r e c e i v e d t h e r e s u l t s o f a s e a r c h
p e r t a i n i n g t o t h e above s u b j a c t .
I have a l s o r e v i e w e d t h e f i l e
f o r w a r d e d w i t h y o u r l e t t e r o f May 2 9 .
The f o l l o w i n g i s my
a n a l y s i s and e v a l u a t i o n of t h e r i g h t t o u s e "Power S t a t i o n " a s
d e f i n e d below.
A s I understand the s i t u a t i o n , your b u s i n e s s c l i e n t ,
Power S t a t i o n S t u d i o , h a s , s i n c e 1 9 7 7 , o p e r a t e d a r e c o r d i n g
s t u d i o with a widely regarded r e p u t a t i o n f o r providing high
q u a l i t y r e c o r d i n g s e r v i c e s u s i n g s t a t e of t h e a r t e q u i p m e n t .
The
e n c l o s e d r e p o r t r e v e a l s t h a t Power S t a t i o n s t u d i o h a s r e g i s t e r e d
t h e t r a d e m a r k "Power S t a t i o n " f o r s o u n d r e c o r d i n g s t u d i o s .
(See
Reg. No. 1 , 4 3 3 , 3 2 8 r e g i s t e r e d March 1 7 , 1 9 8 7 . )
You h a v e a s k e d me
t o i n v e s t i g a t e t h e p o s s i b i l i t y o f Power S t a t i o n e x p a n d i n g t h e u s e
o f i t s mark i n t o m e n ' s and women's c l o t h i n g i n c l u d i n g b e a c h w e a r ;
a n d f o r a u d i o a n d vide(:, e l e c t r o n i c s f o r c o n s u m e r s a n d
professionals.
I h a v e assumed t h a t t h i s l a t t e r c a t e g o r y i n c l u d e s
radios, television receivers, video c a s s e t t e r e c o r d e r s , a u d i o
r e c o r d e r s , compact d i s c players, turn t a b l e s , amplifiers,
r e c e i v e r s , t u n e r s , c o n t r o l p a n e l s , mixing b o a r d s and c o n s o l e s ,
among o t h e r t h i n g s .

Based upon t h e r e s u l t s of t h e e n c l o s e d s e a r c h , i t i s
my o p i n i o n t h a t i t would be i n a d v i s a b l e f o r Power S t a t i o n , I n c .
t o u s e i t s mark f o r c l o t h i n g a s a f o r e s a i d .
The b a s i s f o r my

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SEIDEL, GONDA,GOLDHAMMER
& ABBOTT;F! C .
Mr.

S t a n l e y Caterbone

-2-

25 J u n e 1 9 8 7

o p i n i o n i s R e g i s t r a t i o n No. 1 , 4 3 1 , 2 4 2 r e g i s t e r e d :.larch 3 , 1 9 8 7
Eor "Power S t a t i o n " .
The r e g i s t r a n t c l a i m s a f i r s t d a t e o f u s e
o f A p r i l 3 , 1986 f o r w o m e n ' s c l o t h i n g i n c l u d i n g s w i m w e a r a n d
o t h e r goods a s l i s t e d .
A l t h o u g h y o u r c l i e n t h a s a s t r o n g r e p u t a t i o n , and
a l t h o u g h i t h a s p r i o r i t y o f u s e f o r t h e mark, t h i s r e g i s t r a n t h a s
a s t r o n g p o s i t i o n f o r arguing t h a t it has superior r i g h t s f o r
women's c l o t h i n g .
One would n o t o r d i n a r i l y a s s o c i a t e c l o t h i n g i n
a n y way w i t h r e c o r d i n g s t u d i o s e r v i c e s .
Thus, your c l i e n t ' s
r i g h t s i n i t s mark d o n o t a p p e a r t o d o m i n a t e t h o s e o f t h e
registrant's.
A c c o r d i n g l y , u s e of t h e Power S t a t i o n mark f o r
women's ( o r m e n ' s ) c l o t h i n g would i n v o l v e a s i g n i f i c a n t r i s k o f
b e i n g a c c u s e d of t r a d e m a r k i n f r i n g e m e n t .
Use o f t h e Power S t a t i o n m a r k f o r c o n s u m e r a n d
p r o f e s s i o n a l a u d i o and v i s u a l e l e c t r o n i c e q u i p m e n t r a i s e s some
i s s u e s , b u t o n t h e w h o l e I am o f t h e o p i n i o n t h a t i t i s
permissible.
A g a i n , I a s s u m e , a s I have b e e n i n f o r m e d , t h a t t h e
Power S t a t i o n s t u d i o i s w e l l k n o w n a n d d o e s h a v e a g o o d
reput-ation f o r its e x i s t i n g s e r v i c e s .
Given t h a t , i t s movement
i n t o e l e c t r o n i c e q u i p m e n t s h o u l d be p e r m i s s i b l e .
Here t h e good
w i l l a s s o c i a t e d w i t h i t s c u r r e n t s e r v i c e s c a n be more r e a d i l y
extended t o audio v i s u a l e l e c t r o n i c equipment.
T h e s e a r c h r e v e a l s t h a t M a n v i l l e C o r p o r a t i o n ' s Ken
C a r y l Ranch i s t h e owner o f t h e mark "Power S t a t i o n " f o r b a t t e r y
o p e r a t e d emergency e l e c t r i c a l 2ower s u p p l y u n i t s .
S e e Reg. No.
1 , 0 4 0 , 3 0 8 r e g i s t e r e d May 2 5 , 1976 and c l a i m i n g a f i r s t d a t e o f
u s e of November 2 3 , 1970.
I n my o p i n i o n , a u d i o v i s u a l e l e c t r o n i c
e q u i p m e n t c a n b e c o n s i d e r e d t o be s u f f i c i e n t l y u n r e l a t e d t o
emergency e l e c t r i c a l power s u p p l y u n i t s t o a v o i d a l i k e l i h o o d of
c o n f u s i o n even though t h e marks a r e i d e n t i c a l .
I r e a c h t h e same c o n c l u s i o n r e g a r d i n g t h e pending
a p p l i c a t i o n by E l e c t r i c a l C o n d u c t o r s , I n c . f o r a m u l t i p l e o u t l e t
power s t r i p .

A c l o s e r q u e s t i o n is r a i s e d by G o u l d ' s S u p p l e m e n t a l
R e g i s t e r r e g i s t r a t i o n f o r Power S t a t i o n f o r m i n i a n d
microcomputers.
G o u l d ' s mark is r e g i s t e r e d on t h e S u p p l e m e n t a l
R e g i s t e r u n d o u b t e d l y b e c a u s e "Power S t a t i o n " a s a p p l i e d t o
computer equipment is considered t o be d e s c r i p t i v e .
A
Supplemental R e g i s t e r r e g i s t r a t i o n h a s none of t h e p r o c e d u r a l
b e n e f i t s of a P r i n c i p l e R e g i s t e r r e g i s t r a t i o n .
Moreover, i f
G o u l d ' s u s e o f t h e mark i s l i m i t e d t o a p a r t i c u l a r m a r k e t w h i c h

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f,lr. S t a n l e y C a t e r b o n e

-3-

25 J u n e 1987

is d i s t i n c t from your c l i e n t s , t h e r e d o e s n o t a p p e a r t o b e a
l i k e l i h o o d of confusion.
T h u s , G o u l d may b e s e l l i n g i t s
c o m p u t e r s i n t o a s p e c i a l i z e d c o m m e r c i a l m a r k e t i f i t is p r e s e n t l y
s e l l i n g computers a t a l l .
Next I c a l l y o u r a t t e n t i o n t o t h e f a c t t h a t s e v e r a l
r a d i o s t a t i o n s have a d o p t e d a n d a r e u s i n g t h e t r a d e m a r k "The
Power S t a t i o n " i n v a r i o u s c i t i e s throughout t h e Unlted S t a t e s .
Conceivably, these radio s t a t i o n s could o b j e c t t o t h e
i n t r o d u c t i o n o f consumer e l e c t r o n i c s i n t o t h e i r market a r e a on
t h e g r o u n d t h a t t h e u s e o f t h e same mark i m p l i e s s p o n s o r s h i p b y
them.
I n o t e t h a t a l l o f t h e s e m a r k s were r e c e n t l y r e g i s t e r e d ,
and I s u s p e c t t h a t a l l of t h e s e r a d i o s t a t i o n s a r e r e l a t e d o r
c o m m o n l y owned.
I a l s o s u s p e c t t h a t t h e a d o p t i o n o f t h i s mark
may b e o f r e c e n t v i n t a g e .
Thus, your c l i e n t i n any n e g o t i a t i o n
w i t h t h e s e p e o p l e would have t h e a d v a n t a g e of b e i n g a p r i o r u s e r ,
and t h e r e l a t i o n s h i p between r e c o r d i n g s e r v i c e s a n d e l e c t r o n i c
e q u i p m e n t on t h e o n e hand and r a d i o s t a t i o n s e r v i c e s and
e l e c t r o n i c equipment on t h e o t h e r hand i s a t l e a s t c o - e q u a l .
Thus, your c l i e n t should have t h e dominant p o s i t i a n .
I n v i e w o f t h e f o r e g o i n g , i t i s my o p i n i o n t h a t The
Power S t a t i o n s h o u l d n o t a d o p t o r u s e " P o w e r S t a t i o n " f o r m e n ' s
a n d w o m e n ' s c l o t h i n g , b u t i t may a d o p t a n d u s e t h e m a r k f o r
p r o f e s s i o n a l and consumer e l e c t r o n i c s a s d e s c r i b e d above w i t h t h e
u n d e r s t a n d i n g t h a t t h e m a t t e r is n o t e n t i r e l y w i t h o u t d o u b t a n d
issues could arise.
I t i s , h o w e v e r , my o p i n i o n , b a s e d u p o n t h e
f a c t s p r e s e n t l y a v a i l a b l e t o me, t h a t The Power S t a t i o n , I n c .
should prevail i f those issues arise.
I f you have any q u e s t i o n s concerning t h e f o r e g o i n g ,
p l e a s e f e e l f r e e t o c a l l me.
With k i n d e s t p e r s o n a l r e g a r d s ,
Sincerely yours,

,'.

SEIDEL, GONDA, GOLDHAMMER

& ABBOTT, P.C.

JSG:mp
Encl.

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SONY CORPORATION
I,
II.
III.
IV.

Scope of Project
Marketing and Distribution
Financial Proposal
Contracts

Tony Bongiovi and Power Station Studio is about to undertake one of the
most interesting projects in the entertainment industry that the Business World has
ever seen. His fascinating elements of this project are as follows:
A).
B),
C).
D).

Musical Overtones
Technology
Marketing and Distribution
Limited Downside Bisk Potential

When you put all of the above elements together in any business venture you
have a very strong and powerful entity. Now, put the above elements in one of the
largest and most visible industries available in the Entertainment Industry.
SONY OBJECTIVES
We want to position Sony as the printer manufacturer of Professional Recording
Equipment in both the Record Industry and also the Theatrical and Video Industry as
well as Television and Pay TV. In addition and even mare important we would like to
credit Sony with contributing in the development of the Sony/PSDMS Digital
Recording System that will recognized throughout the World by way of several
different medium exposures. This will have tremendous effects in the way of
increased sales in both the Consumer/Retail level as well as the Professional
Environment.
SCOPE OF PROJECT
In the following paragraphs I will address the above elements and prove to
support the potential for this project. The Movie was developed to help Tony Bongiovi
take his creative and genius talents in the music industry to capture other industry's
that are complimentary - theatrical, television and cable, video, international film and
now electronics manufacturing. Because of Tonys -track record and accomplishments
in both technology and musical production Bon Jovi! The film already will have
appeal through the feature of his latest band French Lick. Tony has used the same
musical format for their first album as he used for Ben Jovi, which has sold nine ail
lion albums thus far no album has ever sold sore albums in its first six months in
the history of the recording industry. Because of the timing of the album which will
dominate the musical score the two should and will compliment one another very
profitably! To further the marketability of the picture he wrapped this into a horror
script widest marketability due to international distribution and an element that
will prevent the "critics" from influencing the audiences!
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To add further to the project, Tory will produce the first movie ever with a digital
sound track from set to theatre and video. This technology alone would cost anyone
else 190% of the total budget just for the sound production. This is when the project
gets interesting as far as marketing and distribution is concerned. Because of the
exclusivity of the technical elements and the "band", the marketing and distribution
should be powerful alone in even the most conventional deals.
MARKETING AND DISTRIBUTION
Now lets take this project and look at it with regards to two elements:
a). Video Industry
b). Digital recording and playing
The video industry is a 56 billion dollar industry that is in need of product, when
you look at the potential for a product that will be the first actual product that will
compliment the fast paced VCR/Stereo Entertainment components with a Musical
score that nay have enough merits of its ownyou have an amazing potential for
distribution!
The Digital and Disc Industry has proven to be the future standard for recording
and playing in due time. Because of its newness, there are more people who have
yet to hear the digital sound. Because of the visibility and exposure that will come
from this projectthis could be the first time ever people hear digital by way of
theatre and video! As to how many people? 1-10 - 50 - 100 million?
Well, what win be their first reaction? I NEED TO BUY A DISC PLAYER!
Their second reaction will be I WANT TO HEAR THAT SOUND IN MY NEXT TV SHOW,
VIDEO, MOVIE, ETC.,
We would like Sony to commit fifteen million fear three to four future products
that will follow the same format as the Mutant Mania Project so that Tony and Sony
will position themselves as the pioneer and leaders in the industry. This will not allow
composition to gain assets to the marketplace until we are all firmly situated and
profitable.
We will also assist in any way possible in the distribution of the theatrical and video
distribution.

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THE DEAL
In a 60 second spot in the beginning of the video, we will do
commentary on Sony and its contributions to the Digital Industry and the
difference between conventional and digital recording.
I)

The spot will be a commentary with music from French Lick in the
background. The commentary will discuss the Sony/PSDMS SOUND
SYSTEM and the process by which the PURE SOUND Is developed. To
send home our point the "Difference Test" will be used. The movie
Mutant Mania will be promoted as the FIRST Feature Film to use this
system.

II)

Through a merchandizing campaign using the video, (similar to Top

Gun"), We will market a full line of Sony will offer a low
budget but profitable disc player to all purchasers of the
video. The offer will be at wholesale prices. The reason for
the low budget product is that we hope when people actually
get to the store they will upgrade and buy at full retail!
For Sony it will automatically insinuate that Sony is responsible
for Tonys technical accomplishments from the view of the
audience which Tory will not be concerned with. It will also
promote all of Sony's entertainment products.
We will also develop a "60" second spot to be used on television
to promote the (entire project for both Sony and Tony Bongiovi).

III)

We will also include Sony Equipment in the PSDMS System

that will be needed to convert the Theaters to the New Sound
System. We will convert the Theatres Free if the Theatre
commits to showing the next THREE BONGIOVI PRODUCTIONS.
This will give us a guaranteed continued exposure and will give
us guaranteed distribution for both Sony Software and
Bongiovi/Productions. We will recover the true costs of
equipment from distribution profits from the films.

IV.

We will produce a 60 second stand alone commercial for

television, cable and theatre that will be used to promote the
project before the release of Mutant Mania.
Eg\: A 6O second spot utilizing the following elements
a.
French Lick
b.
Rawer Station recording facility
c. Sony's contributions to the manufacturer of the equipment to
produce the sound. This may show "'the difference".
A spot showing French Lick recording in Bower Station for the
Mutant Mania movie.

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We would like to introduce to you the Sony/PSDMS give

input on what it is. "New sit back and let us know if you hear
the difference."
What would you rather listed to when listening to feature films;
video, cable or television.
MERCHANDISING DEAL
Sony will private label a "Stony
equipment:
a). Television
b), Stereo Component
c). Disc Player
d). Video Player

Bongiovi"

or

Power

Station

line

of

The above package will include a free video of Mutant Mania of which Sony
will rebate full price back to distribution.
Tony and Stan will receive credits for complete line:
Total will be negotiated after we have an idea of Sony margins. We want to
make money only if Sony makes money!
We will also provide a marketing package for all retail outlets that is now
being developed.
POWER STATION DIGITAL MUSIC SYSTEM (PSDMS)
Tony will include in Copyright Agreement that SONY EQUIPMENT must be
used to be PSDMS. SONY will receive "Credits on all video, theatrical,
television, and cable "PSDMS/SONY System"
Tony and Stan will also receive credits en all systems using Sony equipment
sold to other film studios Also to be negotiated after margins are figured.
We will arrange a deal where, we along with Sony, will cover exists to
install the necessary equipment in all studios. We will provide a one-day
seminar to all thirty operators of the largest theatre chains.
FINANCIAL STRUCTURE
I.

Sony will only pay for expenses to produce 60-second spots. SONY
and Power Station will utilize any and all services to help produce the
spot and will allow reimbursement for only true costs with no mark-up
excluding all of Tonys time, which will be free.

II.

Power Station and Power Productions I will receive a negotiated

percentage
of
profits
from
all
profits
generated
from
the

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merchandizing campaign of the Sony products and the sale that may
result to other film studios utilizing Sony equipment in the DNS
System.
III.
IV.

We will receive three sets of a full entertainment system Television, VCR, Stereo, Etc, that is top of the line to help during the
production of the film to be utilized by Marcia, Stan and Scott.
Sony will have first right and first refusal of all and any distribution
contracts for theatrical, video, cable, and television syndications. We
will promise not to even talk to anyone else until we feel that Sony is
not going to offer a fair and reasonable deal. We will give Sony a 5%
margin to gain a competitive edge.

The purpose of the above and all aspects of this Deal is to let the
separate entities involved maximize their profits for their respective talents;
Tory in film and music production and Sony in manufacturing and eventually
distribution of both equipment and merchandise and later video and film
distribution.
World wide marketing available after this picture through cinaworld and
Marcia. Sony will be on credits of the film world wide PSDMS? Power
Station Digital to be shared with PSDMS?

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Property of Advanced Media Group

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SONY JOINT VENTURE PROPOSAL FOR THE DIGITAL MOVIE

(May of 1987 by Stan J. Caterbone/Global Entertainment Group)
(PSDMS - Power Station Digital Movie System by Stan J. Caterbone)
I.
II.
III.
IV.
V.

INTRODUCTION
SONY'S ROLE
MARKETING AND DISTRIBUTION
PRODUCT DEVELOPMENT
APPENDIX

I.

INTRODUCTION

Tony Bongiovi and Power Station Studio are undertaking a project that has the
potential of revolutionizing the entertainment industry. In the next few pages of this
proposal, I will outline the elements involved and how Sony can participate in this
landmark event.
The technology of the recording industry has been advancing by leaps and
bounds. We have seen the advances from monaural long playing record to stereo
record to compact disc. Now we are seeing tape systems that use digital rather than
analog signals appear, matching the quality of compact discs. What has happened to
the theatres? The audio portion of a film, is as responsible for the sensations one
experiences at a motion picture as the visual, yet many theatre's are still equipped only
for mono sound. Why is this? We feel there are two basic reasons.
1) The relative high cost of upgrading a theatre to be able to
incorporate the advanced technologies of the audio industry.
2) The lack of proper equipment for the film industry to
produce high quality digital audio tracks.
These two problems should not be addressed separately.
There is little
motivation for upgrading until the product is available and even less motivation to
produce a product that cannot be heard.
Tony Bongiovi and Ed Evans at Power Station in New York, have now made it
possible to address these problems simultaneously. Their creation of the new "Power
Station Digital Movie Sound" (PSDMS), will not only enable the film industry to produce
the highest quality audio tracks for film, but will also allow theatre's to upgrade their
existing sound system at a minimal cost.
To introduce this revolutionary new sound, Bongiovi is in the process of
producing a film entitled "Mutant Mania", which is a science fiction action horror film,
shot in a small ocean resort town in New Jersey. This film has many elements that
make it perfect for the introduction of PSDMS. The most prevalent of these being the
heavy music score by Bongiovi's latest band "French Lick".
Producing bands is
definitely one of Bongiovi's fortes. Bongiovi was instrumental in creating "Bon Jovi"
who is probably the strongest force in the rock and roll circuit today. "Bon Jovi's" third
album "Slippery When Wet", has sold more copies in a short period of time than any
other band in history.
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Another is the fact that this is a horror film. The use of audio in horror films is
important to create tension, fear, excitement etc. Using a horror film also lessens the
influence the critics have on the audience.
By and large this film will stand on it's own merits. Now add PSDMS, and you
have a potential block buster event. How does Sony fit into all of this?
II.

SONY'S ROLE

What we are seeking to do is establish a distribution route in which the message

of Sony's new technology and its benefits can be more easily and directly passed on to
the consumer.
SONY/PSDMS
Picture a one or two minute commentary at the beginning of the movie and home
video, demonstrating the difference between the quality of theatrical sound now and
the new SONY/PSDMS sound. This does two things. First, by demonstrating the
difference in quality of the new sound, you reinforce in the audiences mind that it is
much better, which as you will hear, there is little doubt. Secondly it reinforces in the
audience that Sony truly is a pioneer of advanced innovative technologies.
In addition to the commentary, Sony will receive credits on the film, ie.
SONY/PSDMS. We will include in the copyright agreement that Sony Equipment must
be used to be
SONY/PSDMS.
Sony's name will also be strategically placed throughout the film. This may be
done in the form of billboards, advertisements, or Sony equipment being utilized.
A commercial may be developed for TV promoting both the film and Sony's
contributions to advanced audio techniques in the film industry. This could be done as
a joint venture between Sony and the distribution company for the theatrical and video
exhibition.
Inside every video tape that is sold, a coupon may be placed to promote Sony
products.
A full line of quality equipment may be SONY/POWER STATION labeled for
consumer use to enhance marketability of Sony entertainment products.
Sony Video Software Corporation will receive right of first refusal on all contracts
for video and theatrical distribution. We will allow Sony a preferred 5% margin under
any other distributor for a competitive edge.

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TIMING
Timing is crucial in a project that touch so many different areas.
III.

MARKETING AND DISTRIBUTION

Most of the industry by their own admission is at least two years away from an
effort to upgrade the sound in movie theatres. With the SONY/PSDMS system, other
companies may adapt easily and economically to produce products with digital movie
sound. With companies adapting to this process, the future should see the prominence
of the SONY/PSDMS insignia much the same as you see the Dolby insignia today. This
will act as a constant reminder to the public that Sony truly is a pioneer of advanced
audio visual technologies.
Sony will receive exposure in the professional market place by having the
SONY/POWER STATION equipment used in theatres and studios to produce the
SONY/PSDMS sound.
The video industry is a 56 billion dollar industry that is in need of product. When
you look at the potential for a product that will be one of the first feature films to
compliment the fast paced VCR/Stereo Entertainment components, with a musical score
that may have enough merits of its own, you have an amazing potential for distribution.
The Digital and Disc Industry has proven to be the future standard for recording
and playing. Because of the relative newness of the digital format, there are more
people who have yet to experience the digital sound. With the high exposure that will
come from this project, this could be the first time ever people hear digital. How many
people? 1 - 10 - 50 - 100 million?
What will be their first reaction? I need to buy a Disc Player!
Who's name will they think of first? SONY/PSDMS
IV.

PRODUCT DEVELOPMENT

Bongiovi and Evans at Power Station have developed a revolutionary hybrid

mixing console to penetrate the video post production market. This console was
developed to enable engineers to produce high quality audio tracks for the film industry
as well as the recording industry. This new console utilizes an automation system that
can be used by both industries. This new console is especially attractive to the film
industry, as it will greatly reduce production costs since mixing costs in a recording
studio are much less. At present the console that is being used is a bastardized system
that utilizes components from many different pieces of equipment, from a number of
different companies, of which Sony is one. Because we already have a working model
of this console, it would take very little time for a finished product to be manufactured
that could carry the SONY name.
The other piece of equipment that is essential to the PSDMS process, is the box
that enables the laser disc to automatically read the synchronization track encoded on
the film. This piece of equipment can be produced at an extremely low cost. It is this
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low cost and the fact that the theatres will not have to replace their present projectors
that make digital movie sound a reality in 1988.
We feel that with consumers demanding the same quality audio at theatres, as
they have become accustomed to with their home entertainment systems, theatre
owners will have little problem investing the nominal amount of dollars involved, to
upgrade their theatres for digital audio. This investment could be as low as $1000.
With the cost being so low, the distribution company may want to consider
bearing the burden of this cost, if the theatre owners agree to show Bongiovi's next
three films.
FINANCIAL STRUCTURE
SONY will commit four million dollars for the production of Bongiovi's film to be
released in 1988. We would like SONY to commit fifteen million for three to four future
products that will follow the same format as the first, so that Bongiovi and SONY will
position themselves as the pioneer and leaders in the industry. This will not allow
competition to gain access to the marketplace until we are all firmly situated
and profitable.
Sony will only pay for expenses to produce 60 second spots. Tony and Power
Station will utilize any and all services to help produce the spot and will allow
reimbursement for only true costs with no mark up including all of Tony's time which
will be Power Station and Power Productions I (Stan Caterbone - Power Productions I)
will receive a negotiated percentage from all revenues generated from the
merchandizing campaign of the SONY/POWER STATION products and the sale that may
result to other film studios utilizing Sony/POWER STATION equipment in the PSDMS
System.
We will receive four deluxe entertainment systems - Television, VCR, Stereo, Etc.
that is top of the line to help during the production of the film.
The purpose of the above and all aspects of this Proposal is to let the separate
entities involved maximize their profits for their respective talents; Bongiovi in film and
music production and Sony in manufacturing and distribution of equipment and
merchandise and later video and film distribution. END

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Power Station
Power Station was formed in 1977, in partnership with Tony Bongiovi and Bob Walters.
Power Station, within a short period of time established itself as the premiere recording
facility in the world. The studios success to a large degree is due to Bongiovi's
tremendous creative talents in the fields of studio design, production and
entertainment. The ability to anticipate what the public at large wants to hear and to
create a format that will produce a highly marketable product.
Bongiovi's creative genius became most evident with his recent success producing the
band "Bon Jovi". After years of work developing their talent and structuring the format
for their music, "Bon Jovi" rapidly became one of top bands in the world.
Bongiovi's most recent project is a band called "French Lick", which he brought into the
studio approximately two years ago. You may have heard French Lick's music in Ron
Howard's production of Gung-Ho. French Lick's music and talent have been developed
along the same format as "Bon Jovi" and have recently been showcased to the major
recording labels. Contracts should be finalized with Quantum Medium in a few weeks.
Quantum Medium is a division of MCA, owned by the same people that own MTV.
French Lick is wholly owned by Power Station, along with their first album, which gives
Bongiovi the ability to use any and all the songs from the album in the movie.
By placing the band in the movie and having the music score written by the band, we
are able to take advantage of marketing potential normally not available to other
productions. The music video for the band will be shot at the "same time as the movie
and will primarily be scenes from the movie. The release of the video will be timed to
promote the opening of the movie. The release of the songs off the first album will also
be -coordinated to promote the movie. To fully understand the marketing potential the
band brings to the project, picture what, gross receipts at the box office would look like
if "Bon Jovi" were appearing in a movie this year (Any movie). If French Lick does one
tenth as well as Bon Jovi, this movie is a guaranteed hit.
During Bongiovi's work on "Star Wars", "Apocalypse Now" and "Gung-ho", he was able
to make many of the contacts necessary to form the extremely talented group of artists
that are essential for a production to be successful.
Barbara Peters: Director/Writer/Producer
Barbara has directed many programs such as "Matt Houston", "Falcon Crest", "Cagney
and Laoey", "Misfits", "Berrengers", and "Remington Steele" to name a few. The film
Barbara directed that convinced Tony to hire her for this production was "Humanoids
From The Deep". Humanoids was made in 1978 for $ 980,000 ($ 20,000 under budget
and four days ahead of schedule) and grossed over $28 million in domestic and foreign
theatrical Sales. This was during a period in time when the video market was in its early
stages of development. A film released today that would gross $ 28 million in 1978
dollars has even greater potential for a much higher gross with the strong video market
that is available now. What impressed Tony the most with Barbara's direction of
Humanoids was her ability to bring a high degree of quality to a film on such a limited
budget.
Peter Hock: Stunt Ooordiiator/Actor/Stuntman
Peter's credits include films such as, "Trading Places", "Stepford Wives", "To Kill A
Cop", "Ghost Busters", "FX", and a host of other Films, Broadway, Musicals and
Television Shows.

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There are many factors, which contribute to a projects success. If you were to take a
cross section of the movie industry to find which types of projects were most likely to
succeed, you would find that movies in the two to four million dollar range have much
greater chances of success than movies in the ten to fifteen million dollar range. The
reasons for this are quite simple. A movie in the two to four million-dollar ranges is a
high enough budget to produce a quality film but limiting the risk to the investor since
it needs less of the market share to produce a profit.
Horror movies, from the investors point of view are the safest type of movie to
finance. Horror movies have an almost cultist following. The type of audience that
attend horror movies rarely wait to see what the critics have to say about the movie.
There is a fascination with gore that this audience would rather see than have
described to them. The overseas market for movies of this genre is tremendous. In
almost all cases the gross revenues from the theatre, will be greater overseas than in
the domestic (US and Canada) market. This especially holds true for horror movies.
Over the last few years, we have been seeing a trend for movies to have a much
heavier music score than in the past. The feelings that can be invoked in an audience
from audio are sometimes as great or greater than the visual aspects of a film. With
Bongiovi's experience and past track record, we are assured of having one of the best
quality sound tracks to a movie ever made. This production could very well
revolutionize the movie industry in that this will be the first time that the sound track
will be totally digitized from the set to the theatre or home video. What this means is
that the quality of the sound, which is typically extremely poor in a movie theatre or
home video cassette, will now be tremendously crisp. This new movie sound will be
similar to the quality you would expect from a laser disc. Normally the costs involved to
produce a movie with this type of sound track would greatly increase the budget to a
point where the project would nave an increased element of risk. With Power Station,
which already has in place state of the art equipment, some of which can be found in
only one or two other studios in the world, this sound track can be produced for a
fraction of the costs that another production company would have to pay. This greatly
reduces the risk to the investor to be able to produce state of the art audio at a fraction
of the costs.
It is a very natural progression for a recording studio such as Power Station to evolve
into an entertainment complex, which includes the production of films. Power Station
currently has financing in place for a $ 3.5 million video mix studio to be built next to
the recording studio. Distribution companies are constantly looking for new sources of
product to market. With Bongiovi's track record in the entertainment industry, any
product that carries the Bongiovi label should create a bidding situation with the
distributors.
Advanced public relations work is currently being done to set the stage for negotiations
with the distribution companies. "Billboard11, "Variety", and "Box Office" have already
agreed to do articles on Bongiovi and the movie. On April 30, ABC will be airing a radio
talk show with Bongiovi that will air on 2300 stations to a total listening audience of
over six million people. "Pame, Fortune, and Romance" have also agreed to give
network TV coverage.
The home video market has rapidly been changing the potential movie profits for the
industry. A Nightmare On Elm Street was made for well under two million dollars and
has earned New Line Cinema more than $24 million at the domestic box office. In
addition, after a short video release, this production has sold over 3 million cassettes.
In the past videos were sold only to video rental stores for approximately $70 apiece.
Recently the price has been lowered to expand the market to the general public. The
video rental stores won't disappear, but they may become more like record stores that
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also rent their albums. All of this translates into more profit potential for producer and
investor.
It is an extremely rare opportunity to be able to get in on the ground floor in an
offshoot of an already well established entertainment company. Any investor willing to
back this project will have first right of refusal on any future projects. The percentages
will remain the same for at least the first two projects.

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INVESTING IN MOTION PICTURES

Independently produced motion pictures are a better investment today than ever
before.
Reasons:
1) Increased Markets: There is much wider distribution of motion pictures today
than ever before (i.e. Pay TV, Cable TV, videocassettes, satellite transmissions,
etc.)
2. 'Presale1 contracts which bind the buyers (i.e. networks, pay TV, foreign
distributors, etc.) to specific payments at a future date, this insuring return of
capital and, in some cases, a profit before the film is released.
Investment Structure:
The producer and investor form a limited partnership for the purposes of producing
one or more motion pictures. The investor receives 100% of the net profits until
recoupment, after which the split is 50-50. Profit participation of others (actors,
director, writer, etc.) comes out of the producer's end.
Packaging:
The producer secures the services of a director, principal actors, and a writer.
Presale Deals:
The producer can negotiate presale (preproduction) arrangements with
distributors, networks, pay TV, merchandisers, etc. Whereas such arrangements
can minimize the downside risk, they can also inhibit the eventual profitability of
the film.
Risk Factors:
It is very difficult to determine exactly how much of a risk one runs in financing a
theatrical film. Adequate statistics are impossible to find. Sharmat Services of Los
Angeles a four-year-old study which revealed that 60% of all films released make
money. This study, however, did not include long range TV syndication (foreign
and domestic) revenues, and was made before Pay TV and video cassettes became
significant additional markets, chemical Bank of New York reports that they have
never lost money on film financing.
Another risk is the possibility that no distributor will want to release the picture.
That is why some independent producers include, a provision for distribution
financing in their investment agreements. If worse comes to worst, producers can
distribute the film themselves. (Notable examples are "Billy Jack" and "Benji".)
There may be production catastrophes that will delay or cancel production once it is
under way. Producers will carry various forms of insurance (including completion
bonds) to at least repay whatever funds have already been spent.
Marketing:
If a distribution arrangement has not already been made, the producer now
secures such an arrangement. If the picture is good, it is possible to negotiate a
much better deal than could have been done earlier. On the other hand, the
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producer could have trouble securing the kind of distribution commitment wanted.
The main factors here are how much money the distributor is willing to commit to
selling the picture, how much influence the producer can have on the marketing
campaign, and the distribution fee. Sometimes small distributors are able to give
more time and attention to independent pictures and offer better terms, but the
producer may have to provide some distribution expenses.
Out of gross domestic box office receipts, the exhibitor (retailer) usually subtracts
his fixed costs and then receives 10%. Out of the remaining 90% gross film rentals
received by the distributor (wholesaler), he usually recoups all or part of his costs
plus a distribution fee of 20-35%, then passes the rest on to the producer/investor.
Terms of distribution deals vary considerably. '
Box office receipts, however, only account for a part of the producer/investor's
revenues. As the enclosed figures show, the ancillary markets are at least as
significant as the domestic theatre box office. TV syndication, for instance, can
continue to bring in revenues for the next twenty years.
Demand for Product:
Today's supply comes nowhere near to matching real demand. At the present time,
there are over 18,000 theatres in the United States, it can readily be seen that
roughly 400 films produced and rated last year did not begin to meet; their needs.
Theatres are compelled to show any type of film they can obtain to keep their
doors open.
To date, independent producers are responsible for 72% of all films made worldwide. The domestic figure is 62%. The independent producer has three primary
options regarding distribution. These include the sale of the film outright to a major
national distributor, their merchandising of the film by the production company
itself, or the use of smaller regional sub-distributors who may promote the film in
their respective geographical areas. Distribution of films often relies on all' three
methods to one degree or another.
Another market, television, can consume nearly every film that has been, or is
presently being produced. If each of the three networks would show only one film
per night, they would need over 1,000 films per year. In Los Angeles area alone,
there are nearly 10,000 films aired each year in a combination of local and network
viewing time. Many films are shown time and time again because there are no new
films to replace them.
Today, virtually every film of quality has residual value in television, either by
outright sale or by term licensing. The latter is preferable since it allows the
production company to retain ownership of the negative. The time lag between
theatre release and TV sale has diminished from seven years to an average of 18
months. However, some major features such as "The Wiz" have been sold to TV
before completing a full year in theatrical release. The trend seems to be toward
purchase of 'fresh1 films, and the outlets appear willing to pay the higher costs
involved.
Because of the great demand and the outrageously competitive attitude that
pervades the networks, handsome deals are being consummated before the
production has been completed and then, by prearrangement ' with the producers,
hold the film until it has completed its theatrical run.

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Forecast A

Breakeven for Limited Partners:

Based on gross revenues of $ 11,200,000 collected from 1st and 2nd theatrical
runs
1st run ticket costs of $ 6.00 2nd run ticket
costs of $ 5.00
1st Run
50 people per show x $ 6.00

$ 300.00 Gross per show $ 300,000 Gross $

$ 300.00 per show X 1000 houses

4,200,000 Gross
$ 250.00 Gross per show $ 500,000 Gross $
7,000,000 Gross

$ 300,000 X 14 days
2nd Run

$ 4,200,000 $ 7,000,000 $11,200,000

50 people per show X $ 5.00

$ 250.00 per show X 2000 houses
$ 500,000 X 14 days
Total 1st Run
Total 2nd Run
Total

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Forecast A

Total Box Office Gross -------------------------------------------------- $ 11,200,000

Less 15% For Theatres --------------------'-------- ;----------------- $

1.680.000

Motion Picture Profits -------------------------------------------------- $

9,520,000

Less 30% Distribution Fee --------------------------------------------- $

2,856,000

6,664,000

Less : Investors Capital ----------------------------------------------- $

4,000,000

Net Profit ---------------------------------------------------------------- $

2,664,000

Producers Split @ 50%------------------------------------------------- $

1.332.000

Investment Company Return

1,332,000

less : General Partners Split @ 15% -------------------------------- $

199.800

Investors Return ------------------------------------------------------- $

1,132,200

These are only projections and are for informational purposes only. Any investment
made, based solely on these projections would be unadvisable as actual performance
could vary greatly.

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Forecast B
Forecast B is based on a total box office gross of $ 28 million
A film that produces a theatrical gross of $ 28 million can be expected to gross at least
that much from TV, Cable and video markets. Depending on how distribution agreements
are negotiated we can expect 50% to be net profits
Forecast B

Total Box Office Gross ------------------------------------------------- $ 28,000,000

Less 15% For Theatres ------------------------ ' ---------------------- $ 4,200,000
Motion Picture Profits -------------------------------------------------- $ 23,800,000
less 30% Distribution Fee --------------------------------------------- $ 7,140,000
$ 16.660,000
T.V., Cable and Video Net ---------------------------------------------- $ 14,000,000
Ttotal Net---------------------------------------------------------------- $ 25.340,000
Less : Investors Capital ------------------------------------------------ $ 4,000,000
Net Profit ---------------------------------------------------------------- $ 21.340.000
Producers Split @ 50% ------------------------------------------------ $ 10,,670,000
Investment Companies' Return

$ 10,670,000

Lsss :..General Partners Split @ 15% --------------------------------- $ 1,600,500

Investors Return -------------------------------------------------------- $ 9,069,500

These are only projections and are for informational purposes only. An investment
made, based solely on these prxyiections would be unadvisable as actual performance
could vary greatly.

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07/23/2007

PAYROLL SERVICE (WAIVED)

MISCELLANEOUS
OTHER
OTHER
OTHER

. (.

TAL INSURANCE/TAX /LICENSE/FEES:

.
.
.
.

<
<;
<;
r

3 1 1 33 1 . ::

. GENERAL OVERHEAD:
FLAT CHARGE
CORPORATE OVERHEAD EXPENSE
CASTING OFFICE SALARIES
ENTERT A I NMENT-EXECUT I VES
TRAVEL EXPENSE-EXECUTIVES
OFFICE RENTAL AND EXPENSE/P MO
. OFFICE RENTALS/SUPPLIES/P WK
AUDITOR
TIMEKEEPER
SECRETARIES
PUBLIC RELATIONS HEAD
PUBLIC RELATIONS SECRETARY
LEGAL FEES (P/HR)
POSTAGE/ TELEPHONE/P WK
CUSTOMS BROKERAGE
GENERAL OFFICE OVERHEAD
FILM SHIPPINGOTHER
OTHEROTHER

10

200.00

4
17

1000.00
45O.OO

50
17

175.00
60O.OO

80

40. 00

FAL GENERAL OVERHEAD:

.C
.C
.0
2000. C
.0
4000. 0
7650.0
.0
.0
.0
.0
.0
8750.0
10200.0
.0
.o
3200.0
.0
.0
.0
.0
35800. 0<

. FINANCE
CHGS/J^GN^lW6EfclCY/BONDS:
S ROBERTSON/STAN CATERBONE
COMPLETION BOND ' ------COMPLETION BOND-NO CLAIMS
CONTINGENCY

.
4000000
0
:00
. 0275 (400OOOO.OO
.1
3367502. OC

$2OO,000
110000.0;
336750.2'
646750. 2<

\ND TOTAL BELOW THE LINE

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1013052.9'

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07/23/2007

POWER PRODUCTIONS I LETTER OF INTENT

FOR
JOINT VENTURE PARTICIPATION CONTRIBUTION
(May 20, 1987)
The undersigned, intending to be legally bound , in consideration of his
admission as a participant in the j o i n t venture to be known a s "POWER
PRODUCTIONS I" and receipt of a profit/loss distribution share of % of
___________ such joint venture, hereby declares and acknowledges his intent to
participate in such joint venture and hereby covenants and agrees to contribute the
sum of $_______________________ to the capital of such joint venture, which
sum shall constitute his initial capital account in such joint venture.
This Letter of Intent is entered into by the undersigned upon the following
general understanding:
Power Productions I will be a joint venture to be formed under
the laws of Pennsylvania, having the specific purpose to invest
(loan) its funds to MUTANIA PRODUCTIONS, INC. t o finance
such corporation's production of a motion picture. The joint
venture shall receive full repayment of its investment from
MUTANIA PRODUCTIONS, INC. before the distribution of any
profits to any party. Thereafter, the joint venture shall receive
50% of the profits from such motion picture of which 85%
shall be distributed to the non-managing joint ventures
(including the undersigned) and 15%

shall be distributed to

Stanley J. Caterbone as the Managing Joint Venturer of Power

Productions I.

The joint venture shall have a right of first

refusal to finance the next movie production of MUTANIA

PRODUCTIONS, INC. and/or TONY BONGIOVI.
The undersigned agrees that he will execute and deliver a countercounterpart of the joint venture agreement (which shall be consistent with the
above general understanding) and that he will execute and deliver all documents
required for the joint venture to elect not to be taxed as s a partnership.
Contemporaneous with the execution of this letter of intent, the undersigned
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is contributing 10% of his total agreed contribution, or $__________________,

within fifteen (15) days from the date hereof, time being of the essence, the
undersigned shall contribute the 90% balance, or $_____________________ .
Such contribution shall be held by Stanley J. Caterbone at interest pending
completion of all negotiations and execution and delivery of all documents with
MUTANIA PRODUCTIONS INC..
If such negotiations, delivery and execution are not completed within thirty
(30) days after the full contribution is made, the entire contribution, with all interest
earned thereon, shall be returned to the undersigned without demand. Stanley J.
Caterbone shall be responsible for collection, receipt, interim investment and
management, and ultimate investment or return of all funds contributed, and shall
be the Managing Joint Venturer of the joint venture.
The undersigned hereby authorizes and empowers Stanley J. Caterbone to
negotiate, execute, and deliver all documents necessary or required to implement
the joint venture purpose and to take all other actions and negotiate, execute and
deliver all other documents necessary or desirable to implement of effectuate the
joint venture purpose.
SIGN
NAME:_____________________________________(L.S.) Date: May ______,1987
PRINT
NAME:_____________________________________________________________
STREET
ADDRESS:__________________________________________________________
CITY:_______________________ STATE:___________________ ZIP:_________

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07/23/2007

RICHARD C. FOX, PC
ATTORNEYS AT LAW
1015 ROBERTS VALLEY ROAD
HARRISBURG, PENNSYLVANIA 17110
RICHARD C. FOX*
ADMITTED ALSO FLORIDA

May 20,

1987

Mr. Stanley J, Caterbone

FMG Advisory, Inc.
Eden Park II, 1755 Oregon Pike
Lancaster, PA
17601

For Professional
Services rendered
in connection
with
Power
Productions
Including
conference,
preparation of Letter of Intent, and express mailing,
and follow-up telephone check.
Professional Fee
U.P.S.

250.00
8 .95
$258.95

PAID RIA #117

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FLATBUSH
FILMS,INC.
May 23, 1987

Mr. Stan Caterbone Financial

Management Group 17 S 5 Oregon
Pike Lancaster, Pa. 17601 '
Dear Stan:
At your request Ive investigated the requirements of the Completion Bond.
Bert Schneiderman of Worldwide Completion Services in New York has given me a
figure of 5*5%, excluding contingencies, with a 50% No Claims Bonus, Since Bert also
owns Bon Bon Payroll Service he has agreed to waive the payroll fee if we xise their
bonding service.
Requirements: They need copies of the budget and/or production board revenues for
the director and producers as well as copies of their contracts and any other
production agreements which have been completed.
Further they need to know when we will commence principal photography, editing
location and if we intend to have a distribution deal up front.
I spoke to Jerry Vandersonde and Bill Hudson of DeWitt Stern Insurance in Los
Angeles, who were recommended by Worldwide. Since I couldn't show him a budget
or a script we did some educated guessing and came up with a figure of
approximately $75,000. The Production Package policy should include: General
liability, cast insurance* negative film, faulty stock and camera processing, props,
sets, wardrobe, rented equipment, extra expenses, third party property damage,
non-owned auto, Errors and Omissions including a one year bond and a minimum
workmen's comp policy for anything that is not covered by workmen's comp.
I understand you're going to Wildwood this weekend. We need to house a crew of
about 60-80, production offices, catering service, We'd like to get as many free extras
as possible and need high quality promo type giveaways. For screen credit, of course.
If you have any such contact we'll need mutant dolls (500?) and if you can help bring
down location costs that would be great. I'm talking about beaches, amusements, the
pier parking facilities. Probably well handle that better next week when we can talk in person.

Sincerely,
Arlene Davidson

4334 STERN AVE.,

Property of Advanced Media Group

SHERMAN OAKS, CALIFORNIA (818} 995-3417

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07/23/2007

FLATBUSH
FILMS,INC
May 23, 1987

Ms. Ellen Libman Power

Station, Inc. 441 West 53rd
Street New York, N.Y. 10019
Dear Ellen:
Barbara and I have mapped out a skeleton schedule for our trip to New York and I
thought I'd send it off and see if it works for everyone else. By the way, we've decided
to stay in New York until Tuesday instead of Monday as originally planned.
Thursday

Arrive about 3:00PM. You have the exact time since you've
booked our flights. Please let us know if someone will pick
us up or if we should take a taxi,
We'll come to Power Station and give you and Tony
copies of the script and budget, which we'd like you to read
Thursday night,
Barbara and I have a dinner meeting with a Director of
Photography.

Friday

Sunday
Monday
Tuesday

Leave for .New Jersey in the morning. Discuss script and

budget, Meet Mayor of Wildwood and bring him a synopsis
of script which he has requested. , Meet with Steve Garelick,
the Production Coordinator of the New Jersey Film
Commission. Look at locations.
Stan Caterbone arrives in New Jersey. Meet the rep from
Maury's Pier to discuss location costs. Check out hotels for
crew and cast.
Last minute details in New Jersey, Leave for New York
around noon.
Meetings at Power Station for final discussions
About script, budget, contracts, etc.
Afternoon - Leave New York approximately 4PM to
arrive Los Angeles about 5 pm.

Cc: Stan Caterbone

Barbara Peters

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Page 28 of 30

07/23/2007

STATISTICS FOR SONY DEAL

I.

Power Station
1. Bon Jovi - Tony's creation
1% - $1 Million in I987 in
Revenues
a. Format
b. Mixing
Sold 9 million albums in 6 months
2. Power Station - High Tech Award - Last 4 Years
Best in World By Peers!
3. 4 - 5 Grammys in 1987 recorded there Steve Winwood
Others: Jagger,, B. Joel, Springsteen, Diana Ross,
Madonna, J. Lennon, on and on.
4. Tony - Multi Track Recording
Defied Theory
Designed Sound - Voyeger
Produced Star Wars Album - Mixed
5. French Lick - MTV may sign Free Promotion

II. Technology
1. First Video, film, tv in digital. All first for full entertainment
2. Kodak and Mitsubish - Not till end of Decade
3. Dolby - Sony/PSDMS - $10,000 per license to any tv, film,
video, etc.
4. Only mix board that will mix albums/video's
Sell to all recording and film studios $300,000 $500,000 per console.
5.
Sony spends 9% of gross revenue on R
&D
9% of billions 2 = $180,000,000
6. Put Sony 5 years ahead of strategic plan
Disc players - Only 23% of consumers currently own a disc
player. First time to hear for how many?
III.

Film/Video
1. 23,000 theaters to sell system
2. First will sell movie and video
Add French Lick
3. Top Gun - sold 9 million @ $30.00 - $60.00 per video
$270,000,000 +
4. Horror International Film $20 - $60,000,000
Pay TV, Cable, TV - ?

IV. Commercial -180 Sec Commentary

Sony - $4,000,000 - $8,000,000 for commercial
Visa Demonstration $2 Million - $6 Million
Pepsi Paid $8,000,000 60 Second in front of "Top Gun" video.

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Page 29 of 30

07/23/2007

V. Merchandise - Private Label

Power Station Beach Line
In movie, free by original designer and owner - "Hang Ten" swim
wear Power Station Electronics Line/Sony
Best recording in world - is it good?
Beach Accessories Promotion in
movie, video, TV
Sell all of above
Video - Mail Order, Stores
VI. Sony
1. Needs help
a. Low profits
b. Beta Bust
2. Best name electronics Manufacture
3. Film and video distribution (new)
4. Willing to work together
a. Share tech
b. Joint venture
c. Horizontal distribution
5. Horror Elements and P/S name already international
Deal would involve:
1. Retail electronics division
2. Professional electronic
3. Film distribution
4. Video distributionrevenues
30% - 50% = $600,000,000
Tony said 50/50
All costs - $4 Million
New - Film studio?/with Sony
Deal worth 100,000,000 Now??
Would Kodak or Mitsubish like deal?
Will Sony let this deal go to competition?
No - Beta
PERFECT ENDING: Profits and Respect
creation-4/11/87
11:00-1:00 a.m.
Stan 98% 1%
Scott-Call Ron Cell
Research Sony
Star Wars - $2 Billion in 10 Years from all
1% Marcia - Sony give 4 million Raise 15 Million
Call Head of video distribution
Merchandising - Hang Ten Off
Kodak Sony Difference test visa add in

Property of Advanced Media Group

Page 30 of 30

07/23/2007