Digital Shelf Space Corp. (DSS:CA)

CORPORATE PROFILE

Digital Shelf Space is an independent creator and producer of home entertainment content and online distribution provider to digital retailers, content owners and aggregators.
Digital Shelf Space's overall content partnership strategy is aligning itself with world-class, global brand partners in the creation, production and distribution of online direct-to-home entertainment content.
Digital Shelf Space's proprietary technology platform has been custom built to distribute home entertainment content directly to consumers. The platform blends e-commerce functionality and paid video content delivery, including DVD, digital download and streaming video formats.
For more information please visit www.digitalshelfspace.com and to view our recently launched project with Georges St-Pierre, please visit www.gsprushfit.com.

BUSINESS OVERVIEW

• The Company has spent the past three years developing and running a large digital media ecommerce marketplace for video content, and has become established experts in selling entertainment media direct online.
• The Company has developed a proprietary technology platform that blends e-commerce with digital video delivery, and user engagement tools.
• The Company signed its first major project starring one of the biggest names in Mixed Martial Arts ("MMA"), Georges St-Pierre.
• Digital Shelf Space was granted the rights to Georges St-Pierre's brand to use in the creation, production, marketing and distribution of a series of MMA inspired DVD workouts titled GSP RUSHFIT.
• The GSP RUSHFIT program was completed Dec. 2010. Fast revenue growth is anticipated from the sales of the DVDs as wider retail and direct marketing distribution is planned, and the strong demand for fitness and health content.
• Digital distribution technology solutions are in demand by entertainment content producers as distribution of content moves online. The company is well positioned to capitalize on the trend towards entertainment studios outsourcing online e-commerce execution and management.

BUSINESS MODEL

• Content Ownership and Royalties: Direct investment and financing of video productions, either as partial or majority owners. The Company expects to receive a percent of all global net profits and to build and operate the online direct sales storefront.




• Technology Licensing Fees: The up front licensing fees include the provisioning of an online storefront powered by the Company's proprietary technology platform. The platform includes digital video sales (DVDs, downloads and streaming) capabilities, an extensive suite of e-commerce services, and user engagement tools.
• E-commerce Revenue Sharing: In return for managing the day-to-day operations of the e-commerce storefront, the Company plans to negotiate a revenue split of 10-15% of gross sales. The operations include customer service, order fulfillment, site content updates, and continual buyer conversion optimization testing and improvements.
• Marketing Management Services: Project Consulting services in the creation, merchandising and distribution of paid content strategies for entertainment content. Including design and management of e-commerce sites, project advertising strategies, and online marketing.

MARKET OVERVIEW

• Digital distribution of entertainment content grew in 2010, with total consumer spending on electronically delivered movies and other programming jumping 19% to an estimated $2.5 billion.
• DVD remains by far the most popular format for consumer movie watching in the U.S., taking in $16.4 billion of the $20 billion home entertainment business, though sales of the mature DVD format continue to decline.
• Similar to music CDs and consumers shopping direct with music services such as iTunes, retailers can no longer justify stocking their shelves with a wide selection of DVDs as consumers move to cheaper alternatives and more direct access to content.
• Retailers are cutting back on shelf space, discount DVD rental services are gaining in popularity, and production studios are being forced to adopt new online distribution models, witnessed by overall DVD profits dropping 13% in 2009.
• Distribution channels for entertainment content are shifting, primarily driven by the emergence of new channels of distribution for movie entertainment, such as by-mail delivery, kiosk vending and digitally. It is important for companies to capitalize on the emerging digital delivery channels for entertainment.
• Nearly two-thirds of internet users – 65% – have paid to download or access some kind of online content from the Internet, ranging from music to games to news articles.

PROJECT: GSP RUSHFIT

Digital Shelf Space is pleased to announce its ground breaking product starring one of the biggest names in Mixed Martial Arts
("MMA"), Georges St-Pierre. Digital Shelf Space has been granted the rights to Georges St-Pierre's brand for use in the creation,
production, marketing and distribution of a series of 6 MMA inspired DVD workouts titled GSP RUSHFIT.
The GSP RUSHFIT home DVD workout series was designed specifically with home fitness fans in mind. Digital Shelf Space's
decision to partner with GSP was largely due to the massive interest in Mixed Martial Arts and MMA training methods as a home
fitness workout.

Market for Fitness DVDs

The company currently targets the $1B+ Fitness Video market, one of the most lucrative content segments within the entertainment
industry, and will later extend its offering into other video media markets. We are now working with our partners to develop
and produce new fitness titles and branded e-commerce sites that engage visitors and maximize high-margin direct sales.

Entrepreneur Magazine: The 10 trends that will define opportunity in 2011

As people continue to spend cautiously, working out at home becomes more popular, too. The quality and variety of options has
improved greatly in recent years... "As Seen on TV" products are leading this explosion--home fitness was the top-selling infomercial
category in 2010.

–Jennifer Wang and Kara Ohngren , Dec. 2010


Bloomberg BusinessWeek

Beachbody, the Santa Monica (Calif.) Company that sells P90X…has sold $420 million worth of P90X DVDs since they were introduced

in 2005, and buyers of the program will drive nearly half of Beachbody's $430 million in revenue this year.

–Esme´E. Duprez, Nov. 18th, 2010
THE COMPLETE 6 DVD SET RETAILS FOR $89.99

INCLUDING:

• 7 GSP RUSHFIT workouts
• Workout Guide
• Nutrition Guide
• 3 different levels of training:
• Beginner, Intermediate and Advanced Program

Cautionary Note Regarding Forward-Looking Information:


This information contains "forward-looking information" within the meaning of Canadian securities laws.  Forward-looking information is generally identifiable by use of the words "believes," "may," "plans," "will," "anticipates," "intends," "budgets", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions.  Forward-looking information in this document includes statements about the revenue growth from the sale of the Company’s content (including GSP Rushfit), the receipt of royalties from the Company’s investment in video productions, the potential for revenue splits on gross sales, and the comparative advantage of the Company’s core technology.


The forward-looking information contained in this document is based on numerous assumptions by the Company regarding, among other things, the size of the fitness content market, the changing distribution channels and technological shifts in the market, and the ability to negotiate advantageous terms with customers and partners.  While the Company considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies.  Additionally, there are known and unknown risk factors which could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein.  Known risk factors include, among others, the size of the market being smaller than anticipated, increased competition, lower than expected popularity of the Company’s content, uncertainty in operating costs and estimated economic return, and uncertainty as to the availability and terms of financing.


A more complete discussion of the risks and uncertainties facing the Company is disclosed in the Company’s disclosure filings with Canadian securities regulatory authorities at www.sedar.com.  All forward-looking information herein is qualified in its entirety by this cautionary statement, and Digital Shelf Space disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.