Contract analysis

I. Executive Summary The purpose of this memorandum is to synthesize our preliminary damages analysis in support of the anticipated pre-suit demand and litigation strategy against StreamNow Holdings, Inc. ("StreamNow"), Meridian Digital Distributors, LLC ("MDD"), and Franklin Ogilvie (collectively, "Defendants"). As set forth more fully below, our analysis demonstrates that Aurelius Global Media Group PLC ("Aurelius"

II. Scope and Methodology A. Scope of Analysis This damages analysis covers all 217 audiovisual works at issue in this matter. The portfolio consists of 142 feature-length motion pictures and 75 television series comprising a total of 1,038 individual episodes. These works span a wide range of genres, production vintages, and commercial profiles, and include several of Aurelius's most commercially significant propert

1. StreamNow Holdings, Inc., a Delaware corporation (Secretary of State File No. 7291843), headquartered at 3400 Wilshire Boulevard, Suite 1800, Los Angeles, California 90010. StreamNow is the operator of the "StreamNow" digital streaming platform, which offers both subscription-based (SVOD) and advertising-supported (AVOD) tiers to consumers in 14 countries. StreamNow is privately held, with Pinnacle Ventures Fund I

2. Meridian Digital Distributors, LLC ("MDD"), a California limited liability company (California Secretary of State File No. 202115729430). MDD purported to act as a content aggregator and sublicensor, and represented to StreamNow that it held the rights to sublicense the Aurelius titles at issue. MDD was incorporated in late 2021 and has no meaningful track record as a legitimate content distributor outside of the

3. Franklin Ogilvie, an individual residing in Los Angeles County, California. Ogilvie is the sole member and manager of MDD. Ogilvie was formerly employed by Aurelius Media Americas, Inc., a wholly owned subsidiary of Aurelius Global Media Group PLC, from approximately 2017 through June 30, 2021, when he separated from the company following an internal investigation into unauthorized access to Aurelius's content man

III. Copyright Registration Status and Its Impact on Available Remedies A. Overview of Registration Categories The availability of certain remedies under the Copyright Act is contingent upon the timing of the copyright owner's registration of each work with the United States Copyright Office. Under 17 U.S.C. § 412, a copyright owner may not recover statutory damages or attorneys' fees for infringement of a work unles

IV. Actual Damages Under 17 U.S.C. § 504(b) A. Legal Framework

Section 504(b) of the Copyright Act provides that the copyright owner is entitled to recover two distinct categories of monetary relief: (1) the actual damages suffered by the copyright owner as a result of the infringement, and (2) any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. The statute provides: "The copyright owner is entitl

1. Methodology. Hargrove's damages model estimates Aurelius's actual damages using the comparable license approach, which is well-established and widely accepted by courts in the Ninth Circuit and elsewhere. See Davis v. The Gap, Inc., 246 F.3d 152, 164–66 (2d Cir. 2001); On Davis v. The Gap, Inc., the Second Circuit recognized that "a reasonable license fee may be a component of actual damages." The Ninth Circuit ha

2. Valuation. Based on Hargrove's analysis of the comparable agreements and the specific characteristics of the 217-title portfolio, the fair market value of a hypothetical arm's-length license for the full portfolio over the 22-month infringement period in the relevant territories is estimated at $14.2 million. This valuation takes into account the following factors: • Catalog composition. The 217-title portfolio in

3. Strengths and Limitations The comparable license approach has several notable strengths. It is a well-established and judicially recognized methodology in the Ninth Circuit and other federal circuits. It reflects the actual market value of the rights at issue, as demonstrated by real-world arm's-length transactions between willing licensors and willing licensees. And it is directly tied to Aurelius's demonstrable

1. Methodology — Revenue Attribution The second component of the § 504(b) recovery is StreamNow's profits attributable to the infringement. CipherTrace Analytics performed comprehensive content fingerprinting that confirmed the presence of all 217 Aurelius titles on StreamNow's platform throughout the infringement period. CipherTrace further conducted detailed viewership and traffic analysis to attribute StreamNow's

2. Subscription Revenue StreamNow operates multiple subscription tiers, ranging from a basic ad-supported plan to premium ad-free plans with enhanced features. During the 22-month infringement period from April 2024 through January 2026, StreamNow's total estimated subscription revenue was approximately $497.6 million. This figure is derived from StreamNow's estimated FY2025 revenue of $312 million, annualized and pr

3. Advertising Revenue (AVOD Tier) In addition to its subscription tiers, StreamNow operates an advertising-supported (AVOD) tier, through which content is made available to viewers at no or reduced subscription cost in exchange for exposure to advertisements. Revenue on the AVOD tier is generated through the sale of advertising impressions, with rates determined by CPM (cost per thousand impressions) pricing, progra

4. Sublicensing Fees from FAST Channel Operators StreamNow sublicensed bundles of content—including Aurelius titles—to four third-party FAST (Free Ad-Supported Television) channel operators: • Brindoval Channel Networks, Inc., headquartered in Dallas, Texas; • BrightLoop Media, LLC, headquartered in Miami, Florida; • Velvet Stream Partners, LP, headquartered in Toronto, Ontario, Canada; and • Pacific Lantern Digital

5. Total Attributable Gross Revenue The three revenue streams yield the following total attributable gross revenue for StreamNow during the 22-month infringement period: Under § 504(b), Aurelius need only present proof of this gross revenue figure. The burden then shifts to StreamNow to prove its deductible expenses and any elements of profit attributable to factors other than the copyrighted works. If StreamNow fail

6. Anticipated Deductions by StreamNow StreamNow will almost certainly assert deductions against the gross revenue figure in an effort to reduce the net profits attributable to the infringement. Anticipated categories of deductions include: • Platform operating costs, including server infrastructure, software development and maintenance, employee compensation for engineering and operations personnel, and general plat

Section 504(b) expressly provides that the copyright owner may recover both actual damages and infringer's profits, but only to the extent that these two components do not overlap. The statute's requirement that infringer's profits be those "not taken into account in computing the actual damages" reflects the fundamental principle that the copyright owner is not entitled to recover the same dollar twice. In this case

2. Hargrove's Apportionment Methodology To address this overlap and ensure that Aurelius does not recover the same dollar twice, Hargrove applies a standard apportionment methodology that is consistent with prevailing case law and economic principles. Under Hargrove's approach, the lost licensing fee of $14.2 million is treated as Aurelius's minimum recovery floor—the amount that Aurelius would have earned in a legit

3. Reconciliation. The reconciliation of the gross combined figure to the net recoverable damages is summarized as follows: Gross combined actual damages plus infringer's profits: $52.8 million Less: Apportionment for overlap between lost licensing revenue and infringer's retained profits, anticipated deductible expenses, and apportionment for non-infringing profit elements Net recoverable damages (preliminary): $41.

V. Statutory Damages Under 17 U.S.C. § 504(c) A. Legal Framework

Section 504(c)(1) of the Copyright Act provides that a copyright owner may elect, at any time before final judgment is rendered, to recover statutory damages in lieu of actual damages and profits. This election is wholly within the discretion of the copyright owner, subject only to the registration timeliness requirement of § 412. The statutory damages framework provides for the following ranges of awards: • Non-will

VI. Willfulness and Its Impact on Damages A. Relevance to Damages The willfulness of the infringement has a direct and significant impact on the damages analysis in three respects. First, as discussed in Section V above, willful infringement enhances the maximum statutory damages from $30,000 to $150,000 per work under § 504(c)(2). This five-fold increase in the per-work ceiling transforms statutory damages from a mo

VII. Revenue from Downstream FAST Channel Sublicensees A. Direct Revenue Already Captured As discussed in Section IV.C.4 above, StreamNow received total sublicensing fees of $6.5 million from the four FAST channel operators (Brindoval Channel Networks, BrightLoop Media, Velvet Stream Partners, and Pacific Lantern Digital) for content bundles containing Aurelius titles during the infringement period. This $6.5 million