Internet Bypass CONFIDENTIAL

SPE/Sony and/or Partner Internet Bypass Creates Opportunities for New Licensing/Syndication Relationships and Potential for a Customer-facing Service Broadcast Model Production Aggregation Distribution Customer SPE Broadcast Network Local Affiliate Broadcast TV Cable Model SPE Cable Network Cable MSO Cable TV Digital Distribution – Licensing/Syndication SPE Portal Broadband ISP PC or TV Customer-facing Service SPE SPE/Sony and/or Partner Broadband ISP PC or TV

Capitalizing on IP Delivery Requires a Full End-to-End Solution Advertisers Detailed Customer Data For Addressability Content TV Film Commercial Short-form User-generated Infrastructure Web Design E-Commerce Servers Storage User Experience Programming Search Features & Community Online Brand / Audience Playback PC TV Mobile Portable Hollywood has traditionally been resistant to new market opportunities brought on by new technology Despite this hesitancy, the industry has consistently benefited as technology has ultimately been adopted Two-way Communications For Interactivity Customers

Areas of Strength for Portals and Cable MSOs Strong for Cable MSOs Strong for Portals Advertisers Detailed Customer Data For Addressability Content Infrastructure User Experience Playback TV Web Design Programming PC Film E-Commerce Search TV Commercial Short-form Storage Features & Community Mobile User-generated Servers Online Brand / Audience Portable Hollywood has traditionally been resistant to new market opportunities brought on by new technology Despite this hesitancy, the industry has consistently benefited as technology has ultimately been adopted Two-way Communications For Interactivity Customers

Areas of Strength for Portals and Cable MSOs Strong for Cable MSOs Strong for Portals Advertisers Detailed Customer Data For Addressability Content Infrastructure User Experience Playback TV Web Design Programming PC Film E-Commerce Search TV Commercial Short-form Storage Features & Community Mobile User-generated Servers Online Brand / Audience Portable Hollywood has traditionally been resistant to new market opportunities brought on by new technology Despite this hesitancy, the industry has consistently benefited as technology has ultimately been adopted Two-way Communications For Interactivity Customers

Areas of Strength for Sony Advertisers Detailed Customer Data For Addressability Content Infrastructure User Experience Playback TV Web Design Programming PC Film E-Commerce Search TV Commercial Short-form Storage Features & Community Mobile User-generated Servers Online Brand / Audience Portable Hollywood has traditionally been resistant to new market opportunities brought on by new technology Despite this hesitancy, the industry has consistently benefited as technology has ultimately been adopted Two-way Communications For Interactivity Customers

Implications for Sony Pictures SPE should consider alternatives to enter the network business directly and is uniquely positioned among studios to do so Unencumbered by distribution platform or network relationships (vis-à-vis Viacom, Time Warner, Disney, Universal, Fox) Not yet significantly committed in VOD content distribution The only studio with a relationship to hardware However, Sony’s limited experience building online offerings requires partnering to build a true end-to-end solution Partnerships should focus on established online players whose assets and needs are complementary to our own Established online brands bring audience reach, interactivity, a path to the PC, and technology Focus on emerging players most in need of our content, opening the door to an exchange of content for equity participation Sony compliments online brands by bringing a path to the TV via the PS3

Appendix – Impact on Competitors CONFIDENTIAL

Impact of Internet Bypass on Key Players Online Destinations Networks and Infrastructure Providers Leverages established brands and large audience base Adds direct relationship with customers for video content Capitalizes on ability to provide interactivity Taps into base of user-generated content Shifts basis of competition from traditional content to community features and new capabilities Advantages Capitalizes on ability to provide detailed customer data (advertising addressability) Builds on ability to provide a direct pathway to the TV Challenges Inability to provide advertisers detailed customer data (limited data on unique users) Technical barriers to transfer of video content from PC to the TV Limited experience with interactivity and community features Commoditization of broadband ISPs as customers identify more with online brands and consumer-facing services

Internet Bypass: Online Portal Reaction Established online brands extending presences into video offerings Google Video Yahoo Video Search iTunes Video New entrants rapidly gaining scale and credibility through unique capabilities, community features, and user-generated content Nearly half of all Internet users visited a social-networking Web site in April Youtube and Myspace building large customer bases in a short time period Portals increasing advertising addressability Adding subscription-based services and targeted offerings (MLB.com and ESPN.com) Introducing new platform to offer targeted, interactive advertising tools (new Yahoo! solution) Online destinations cutting deals for access to commercial content Studio sell-through deals with MovieLink and CinemaNow MySpace offering ad-supported and sell-through episodes of 24 BitTorrent / Warner Brothers licensing deal for motion picture and television content

Internet Bypass: Infrastructure and Network Reactions STB and DVR manufacturers improving path to the TV for internet-based content and enhancing advertising capabilities Motorola investing in IP-enabled STBs Cisco / Scientific Atlantic investing in ethernet-enabled STBs and hedging with investment in Moviebeam TiVo partnering with Brightcove to add internet-based videos and adding interactive ad capabilities (e.g, Lexus Car Configuration Tool) Enhancing infrastructure to offer direct measurement / targeting capabilities Cable Co’s and Networks extending brands online (Comcast.net, ABC.com, NBC.com, CBS.com) Cable and telco industry lobbying against net neutrality laws As broadband ISPs, cable and telcos seek right to block, degrade, or charge premiums for access to Web-based content Telcos investing in interactivity Fiber-to-the-home initiatives for full interactive TV AT&T introduction of “Homezone” STB from 2Wire; includes Akimbo and Dish satellite TV service

Resulting Competitive Landscape Source: Nielsen NetRatings and comScore Media Metrix, May 2006. Note: * MTV Overdrive connected to directly through MTV.com.