Question-and-Answer Session
Operator
(Operator instructions) We'll have our first question from Ralph Schackart with William Blair.
Ralph Schackart – William Blair
Hi, good afternoon guys. This question for Paul. Paul can you walk us through the math again? Sorry, it went kind of fast. Did you say that from your first RIF you had $14 million in annual savings from 100 people, and then incremental to that was your $8 million RIF of 75 people, so in aggregate $22 million in OpEx taken out and roughly 175 people?
Paul Norris
Yes, you got it dead on right.
Ralph Schackart – William Blair
And then, so can you help us think about that $22 million, how much of that sort of big picture percentage will flow through calendar ?09 actually coming out of the company?
Paul Norris
Well, if you're talking about calendar ?09 struggling to get a bulk of that. You're going to get essentially all of the $14 million from the RIF that we announced in October, essentially all of that. You know, it may be a little bit still kicking in, but basically you're going to see all of that. And then on the reorg that we just announced in January, that's going to sort of phase in over the next quarter or two. So you're going to start seeing the – I think of it as – $2 million a quarter savings. There are going to see the slow impact of that probably until after next quarter.
Ralph Schackart – William Blair
Okay, so more than half of the $22 million –
Paul Norris
Yes, you will certainly see more than half of it.
Ralph Schackart – William Blair
Okay. And then as it relates to – this is probably a better question for Dave. Dave, can you give us a sense of reaction from the end market, both from the CE side and the studios, now that you have the CinemaNow asset in-house, and sort of maybe give us an update of what your partners are saying?
Paul Norris
Sure. Thanks, Ralph. The reaction's been very favorable and I think it's fair to say the studios obviously have to be involved and endorsed deals like that and the reaction from the studios has been very positive. OEM and CE partners have responded well both with CinemaNow and Blockbuster relationships. And it's timely in that the market for digital downloads has, we think, reached a point of maturity. For us it's just like any other format and we've always worked very closely with the studios to release formats, whether that was CDs or standard def or Blu-ray. And I think it is fair to say they are treating this just like any other format. The electronics sell-through of content to devices both PCs and CEs, it's really just another format, and that requires serious software engineering, it requires production tools, closely working with studios to conclude that ecosystem. And you know, so at this point, I think we are very pleased and the people we deal with in the space and the customers that want to deliver those products are happy.
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