1. CONFIDENTIAL September 2012 SPE 4K Update

2. page 1 CONFIDENTIAL DRAFT Potential Supply of SPE Films in Year 1- New Release Conversion Requirements Total TitlesCurrent ConditionServices Lead Time Per TitleCost Per Title 13 newly released titles 4k content captured on Film Restore final color corrected data from tape Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$29K 5 newly released titles4k content captured Digitally Restore final color corrected data from tape Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$29K 12 previously released titles 2k content captured on Film 4k Scan OCN for all non-vfx shots restore data from LTO tape for vfx/title shots Conform Up-rez vfx/titles Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$105K 1 previously released title 2k content captured on Film Restore data from LTO tape of 4k DOCN for all non-vfx shots restore data from LTO tape for vfx/title shots Conform Up-rez vfx/titles Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$102K

3. page 2 CONFIDENTIAL DRAFT Potential Supply of SPE Films in Year 1- Library Conversion Requirements Total TitlesCurrent ConditionServices Lead Time Per TitleCost Per Title 34 library titles35mm cut negative 4k dirt cleaning Conform Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$56K 15 library titlesCaptured on Film and remastered in 4k Restore final color corrected data from tape Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$29K

4. page 3 CONFIDENTIAL DRAFT Potential Supply of SPE TV Series in Year 1 Conversion Requirements Total EpisodesCurrent ConditionServices Lead Time Per TitleCost Per Title 4 new series/ 43 episodes 4k capture, posted at Colorworks Up-rez vfx/titles Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$10K/episode 2 new series/ 24 episodes 4k capture, posted at 3rd party 4k re-conform Up-rez vfx/titles Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$23K/episode 1 current series/ 60 episodes 35mm capture, 3-perf remaster 4k Scan 3perf OCN restore vfx/titles from LTO tape or video capture Conform Up-rez vfx/titles Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$47K/episode 1 current series/ 26 episodes 4k capture on RED Epic 4k re-conform Up-rez vfx/titles Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$45K/episode 1 library series/ 35 episodes 35mm cut negative 4k scan cut negative 4k dirt cleaning Conform Color Correct 4k P3 Master xvYCC and REC709 Deliverables Data Archive TBD$6K/episode

5. page 4 CONFIDENTIAL DRAFT Projected SPE 4K Content Availability By April 2013* By September 2013* Films TV Series Total Conversion Cost ~ 40 titles incl.: all Spider- Man films, all MIB films, That's My Boy, Grown Ups 2, Total Recall, Elysium, Premium Rush, Bad Teacher, Karate Kid, Money Ball, The Other Guys, Battle LA, Hancock, Think Like a Man ~ 80 titles incl.: April 2013 package plus After Earth, Smurfs 2, Da Vinci Code, Angels & Demons, Pineapple Express, Captain Phillips, Evil Dead, The End of the World, Julie & Julia, Crouching Tiger 4 titles incl.: Breaking Bad, Save Me, Mob Doctor, Made in Jersey 8 titles incl.: April 2012 package plus Bewitched $5.4 million$9.2 million * Assumes Oct 2012 start for conversion work

6. page 5 CONFIDENTIAL DRAFT Market Challenges A consensus on the definition “4K” from a content creation and delivery perspective has yet to be established ‒ “Shot in 4K” vs. “finished in 4K” ‒ “4K mastered BD” vs. “up-converted HD/2K as ‘4K’” 4K-ready content is currently not available ‒ Few new titles have been finished in 4K ‒ A small number of “library classics” have been remastered (principally by SPE and WB) in 4K Most other studios do not appear to be pursuing 4K content in the short term ‒ Additional costs involved in preparation of 4K content pose challenge with little chance for upside/financial recoupment given limited reach/high cost of hardware (includes requirement to support Sony’s expanded color gamut scheme, xvYCC) ‒ Likely to be waiting for a “significant customer base” to be created ‒ Cable MSOs/broadcasters are unable to deliver 4K, limiting revenue opportunities ‒ No format standard for physical delivery has been established Post houses are not yet equipped to handle 4K/xvYCC content ‒ Capital investment required to upgrade current HD/2K facilities to 4K capability ‒ Lack of professional grade monitors for QC and color grading pose operational challenge

7. page 6 CONFIDENTIAL DRAFT Current HDCP 1.4 content protection on HD HDMI links is compromised and therefore not sufficient for 4K, forcing the studios to require HDCP 2.2 Current DRM architectures are not sufficient to protect 4K content in today’s landscape of threats, resulting in the need for a significantly different approach ̵ Several studios already disallow HD/2K content delivery via PCs due to security risk ̵ Assuming the system will be hacked, the questions become 1) how to respond quickly and 2) how to design a system that limits the number of titles compromised with each hack (preferably 1) ̵ With some discontent with the content protection for HD/2K, the studios see 4K as an opportunity to significantly increase content security Sony’s content protection must be very robust ̵ Any hack similar to what has been experienced with Blu-ray, that exposes a large number of published titles, may drive the studios to withdraw content completely ̵ There are security technology providers who have the components but not complete solutions, and we are working with Sony Corp’s 4K Technology WG to address The State of 4K Content Protection

8. page 7 CONFIDENTIAL DRAFT Business Model Considerations Prior to launch of a delivery service, a content bundle appears to be the best model for delivery ‒ Content would be pre-loaded on a hard drive or Blu-ray discs packaged with customer hardware, eliminating need network delivery ‒ Customer would own bundled copies outright [Once a delivery service is established, per unit ownership and rental models (i.e., transactional models) would maximize available content and offer access to recent releases after theatrical run (if offered on a non-exclusive basis)] A subscription model would limit available content to deep catalog product (films released more than ~9 years ago) due to rights controlled by Starz For catalog films bundled with the hardware, content value and costs are as follows: ‒ Estimated $[10-15] market value per copy bundled ‒ Estimated $[2-4] out of pocket 3 rd party cost per copy bundled TO BE REVIEWED WITH THE HE TEAM