2. Executive Summary
BIVL test provides SPE with an opportunity to achieve two goals
Establish market terms that support SPT’s efforts to launch an early window VOD offering with cable, MSO, and DBS partners
Ancillary benefit of supporting a Sony United initiative to generate market awareness for Bravia/BIVL
Prior to announcement (June 26), the following issues must be addressed
SPE to discuss the offering with talent, Starz, and VOD partners
Talent payments in excess of wholesale may be required
Agreement with SEL/SCA for indemnification of SPE and approach to transaction tracking / watermarking
Determine whether DirectTV, iN DEMAND, Verizon, Movielink are able to opt-in to the test
Agreement on price
List price of $29.99 (or $19.99)
Viewers pay $7.99 (or $3.99) after any coupons / discounts
Viewing Period: 24 hour rental via streaming (agreed)
Availability: 4 weeks prior to DVD/Blu-ray street date for a two week period (Oct 14-18)
Offer to include promotional trailer for Blu-ray and other titles
Confirm overall comfort with quality of service

3. Recommended Offering and Rationale
Parameter
Recommendation
Rationale
Deemed Price
$29.99 (or $19.99)
At premium to day-and-date; within “Home Theater” pricing range
Cash Charge
$7.99 (or $3.99)
After any discounts or coupons, users must pay at least this amount with a cash equivalent to validate testing parameters
Cash price would be in-line with current PPV offerings or proposed prices for new, day-and-date offerings
Viewing Period
24 Hours
Viewing period longer than 24 hours would conflict with Starz deal
Availability
4 weeks, prior to DVD/ Blu-ray window
Price and HD format are the primary drivers of consumer interest
Timing is likely a more sensitive issue to exhibitors than customers
Duration
2 Weeks
Allows for 2 week blackout period before DVD/Blu-ray release window
Split
Greater of 85% of the deemed or actual price
Increased percent split over current offerings is justified by increased revenue retained by distributor
Timing
Distributor to announce availability no earlier than +60 days from theatrical
Market practice to not announce VOD before announcing DVD street date

4. Potential User Experience
Discover Hancock channel
Coupon pays balance to $29.99
Click movie
Enter Payment Service credentials to pay $7.99
Payment Service examples:
PayPal
Amazon FPS
Google Checkout
Confirm rental
Enjoy movie

5. Pricing Oliver Wyman Day-and-Date Analysis (1)
Optimal day-and-date pricing is $7.99 to $8.49 per Oliver Wyman study
Early window HD should clearly be at a premium to day & date
Between $14.99 and $34.99, buy rates for HD early window are comparable to standard VOD at $3.99 (1-4% depending on title/genre)
At this stage, HD early window test pricing should at least be in the mid-range of early window analysis (e.g., it’s too early to go low)
We are evaluating $29.99 for the Hancock early window test
Incremental Revenue ($MM)
Optimal at $8.49
Offer Price
Magid Early Window Analysis
Offer Price
Buy Rates
(1) Relative to 2006 actuals, HD day-and-date rental at $8.49 yields net increase of $375MM (10%) in SPE U.S. Studio Revenue

6. Bravia / BIVL Early Window (1 month early)
Wholesale
SEL would pay SPE on the same terms as MSOs and DBS partners, satisfying obligation to participants
Greater of 85% of the deemed or actual retail price is generally consistent with the $ value retained by service providers in the HD day-and-date window
Pricing
Format
Model
Split
$ to Service Provider
$3.99
Standard Def
Standard VOD
60/40
$1.60
$4.99
High Def
70/30
$1.50
Day-and-Date VOD
$ $8.49
$ $2.55
$29.99 (or $19.99)
Bravia / BIVL Early Window (1 month early)
85/15
$4.50 (or $3.00)
= Proposed pricing and split, no deals currently in place

7. Hancock Windows
Proposed Early VOD to run for 2-week period between Oct 14-28, 2008
VOD would be dark for the two weeks immediately preceding HE release (11/11/08)
Early VOD window does not affect Starz window as long as it starts later than 9/11/08
Starz is the earlier of 6 months from HE release date, 8 months from VOD, or 12 months from theatrical release
Additional constraint of 3 month post-theatrical release (not before October 2, 2008) `
2008
2009
Jul
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Standard Hancock Windows
Theatrical Release
7/2
Hotel
10/1 
4/11
Home Ent.
11/11
PPV / VOD (30-45 days post DVD)
12/11 or
12/26
Starz (through 8/10/2010)
5/11
FX (starts 10/11/2010 – 10/10/2015)
Early Hancock VOD Window
VOD on BIVL (2 wks)
10/1410/28
Starz Window

8. Messaging
Process
SPE to preview the terms of the initiative with Starz, Talent, and MSO/DBS partners in advance of the announcement; conversations may alter recommendations
SPE to review the June 26 announcement
Promotion of the offering would not commence before the normal black-out period extending 60 days from the theatrical release
Message Elements
Hancock will be the first blockbuster movie streamed directly to TVs and available in an early window
Address the quality and timing of this offer relative to the ultimate HD offering (Blu-ray)
Blu-ray and theatrical trailer to run at the start of the stream
Press release should support our messaging of Hancock / BIVL as a test