Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 100

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          physical elements associated with the 65 film titles are                    
          available, and (b) alternatively, that physical elements for only           
          some of the film titles are available.  In estimating the fair              
          market value of the EBD film titles, Mr. Wagner relied upon the             
          income approach.  Because of the market limitations associated              
          with B film titles, Mr. Wagner forecast income only for VHS                 
          (Video Home System) sales into the rental market.                           
                    i.  Income Projections                                            
               Mr. Wagner projected the number of gross units shipped per             
          film title on the basis of information obtained from Adams Media            
          Research (AMR), a media and entertainment data research firm.128            
          Mr. Wagner isolated the AMR data for 270 film titles that he                
          found to be comparable to the EBD film titles.129  Using                    
          “STARmeter” ratings found on the “Internet Movie Database                   
          (‘IMDb’),” Mr. Wagner then separated the 270 film titles into two           
          groups:  (i) titles with more well-known actors; and (ii) titles            
          with lesser-known actors.130  He further categorized the 270 film           

               128 AMR provided information for film titles that were                 
          released direct-to-video by independent distributors for the                
          period 1994 through Sept. 30, 1996.                                         
               129 Mr. Wagner assumed that the EBD film titles would be               
          comparable to film titles that were released direct-to-video by             
          independent studios.                                                        
               130 According to IMDb, its STARmeter rankings provide a                
          snapshot of an actor’s popularity based on input from IMDb users;           
          the ratings are based on several statistical indicators,                    
          including the frequency and number of people who access a                   
                                                             (continued...)           





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