-192-
opined that the $68,000-price per title represents: “an amount
that investors were willing to pay for a library that included
many titles that were significantly stronger than the titles in
the SMHC Film Library.” In considering the lesser quality of the
EBD film titles, Mr. Medress concluded that his estimate of
$24,219 per title for the EBD film rights appeared reasonable.
c. Court’s Analysis
i. Reconciliation of Expert Opinions
Both experts used an income approach, a discounted cashflow
analysis, in valuing the EBD film rights. In their discounted
cashflow analyses, both experts made sales projections based on
the number of VHS units shipped in the rental or sell-through
market. In valuing the EBD film rights, both experts relied on
information from AMR and the IMDb database. Both experts assumed
that SMHC had no responsibility for residual payments to guilds,
participations to talent, or shares to producers.
Neither expert relied on projections for sales in the DVD
format. Neither expert relied on the revenue-sharing pricing
model (Rentrak) for the rental market that evolved after 1996.
Neither expert considered direct sales of videos via the
Internet. Neither expert assigned any value to the 26
development projects or the sequel rights to any of the EBD film
titles.
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