1. 1 SEAN CAREY EVP, DIGITAL DISTRIBUTION & PRODUCT ACQUISITION SONY PICTURES HOME ENTERTAINMENT

2. 2 GROUPER UPDATE

3. 3 Agenda  Grouper acquisition update  Product update  Revenue strategy and financial projections  Cross-Sony integration

4. 4 Grouper Acquisition Summary  SPE completed the Grouper Networks acquisition on August 21, 2006  Total consideration of up to $65MM  $52.5MM was paid at closing  $12.5MM contingent consideration Deal Status Service Summary  Multi-platform Video Distribution Network focused on watching, sharing, and creating user generated video  Significant traction demonstrated with customers  Robust technology  Syndicates video to other sites through one-click posting  P2P proprietary technology  Video portability to multiple devices (PSP, iPod)  Widely distributes easy-to-use video editing tools Strategic Rationale  Represents a compelling standalone business opportunity  Provides SPE opportunity to participate in the growth of online advertising  Offers potential support for other Sony businesses

5. 5 Media Coverage Has Been Positive, Citing Grouper’s Value as a Standalone Service and the Opportunity to Leverage Sony Content and Devices A good strategic grab. Grouper was a shiny target for Sony. (Business Week Online) A good strategic grab. Grouper was a shiny target for Sony. (Business Week Online) Immediately gives Sony a significant presence in Internet video distribution. (Variety) Immediately gives Sony a significant presence in Internet video distribution. (Variety) Reinforces positive investment thesis for the broadband video sharing subsector, driven by: (1) strong usage growth, (2) current excess of demand relative to supply of advertising inventory, (3) synergies with mainstream content, (4) the proliferation of digital video capture devices for consumers, and (5) innovation in consumer-oriented video editing tools. (Rutberg & Co) Reinforces positive investment thesis for the broadband video sharing subsector, driven by: (1) strong usage growth, (2) current excess of demand relative to supply of advertising inventory, (3) synergies with mainstream content, (4) the proliferation of digital video capture devices for consumers, and (5) innovation in consumer-oriented video editing tools. (Rutberg & Co) Gives Grouper access to Sony’s television and movie content, enabling it to develop video community sites around the new material, thus generating more traffic and ad dollars. (Business Week Online) Gives Grouper access to Sony’s television and movie content, enabling it to develop video community sites around the new material, thus generating more traffic and ad dollars. (Business Week Online) A way to distribute video content through broadband Internet connections directly to the TV. (Variety) A way to distribute video content through broadband Internet connections directly to the TV. (Variety)

6. 6 Grouper Has Provided SPE an Entrance into the Growing and Quickly Evolving User-Generated Video Space Partnerships forming to extend user generated video across platforms Content owners have determined that User-Generated Video sites are a viable means of distribution Warner Music licensing music and videos to YouTube, through a revenue sharing agreement Acquired Atom Entertainment for $200MM Yahoo!/Current TV distributing programmed channels of high- quality user generated content across TV and PC Signed an exclusive promotional deal with Helio allowing users access to their MySpace homepage via mobile device Grouper must respond quickly to remain competitive User generated video is demonstrating the ability to create hits with mass market potential “Lonelygirl15” generated over 5MM views and has now become a serial on Revver Brooke Brodack, a popular poster on YouTube, recently received a production deal from Carson Daly Productions TrendsExamples Important channel for promoting studio content Sony Pictures releasing trailers of upcoming films on Grouper Sony Pictures and other studios regularly creating character pages to promote new releases

7. 7 Grouper Service Highlights: Watch Videos Home page with “video wall” of user generated content (80% click- through) Content can be discovered through: –Rotation in video wall –Search –Channels

8. 8 Grouper Service Highlights: Share Videos 1.P2P client enables download of original, high quality files to desktop and portable devices 2.One click publishing to other sites 3.Instantaneously add video comments via web cam 4.E-mail to friends in users’ MSN, Hotmail, and Yahoo accounts 1. 2. 4. 3.

9. 9 Grouper Service Highlights: Create Videos Real-time recording and upload from web cams Proprietary client with easy-to-use editing tools –Select video –Select photos and tracking / panning effects –Select music

10. 10 Grouper Product Roadmap DeviceSupport NewFeatures FY07  Expansion of embedded player  Integrate search, upload, comments, and “ shoutout ” features into player  1-Click publishing (e.g., Digg, EBay)  Family Filter  Initial camera integration (Pure Digital) FY08  Continue expansion of embedded player  Add real-time community features including chat  Add geographic data and search  Personalized recommendations/channel  Customized functionality  User profiles, instant messaging Content  Basic user-generated video  Movie trailers  Music videos  Higher quality user-generated video ( “ prosumer ” )  Premium content (ad-supported)  Expand premium content offering (ad- support/sell-thru)  Mashups  Send video from/to mobile phone  Hardware integration (e.g., PCs, Cameras)

11. 11 Overview of Grouper Revenue Strategy Video ads Sponsored placement SearchBanner ads Traditional banner ads driven by page views, banner CPM, and inventory sales rate Leverage SPT ad sales Incorporate with offerings to traditional customer base Expand to new customers Dedicated new media sales force Leverage ad agency relationships Revenue driversDescriptionOperational Approach Leverage distribution relationships Strike partnership deals with major internet portals (e.g., Google) In-stream pre-roll ads placed in 1/4 to 1/3 of videos driven by number of ad-supported streams, ad duration, video CPM, and inventory sales rate Premium advertising, placement, and promotion bundles customized for select major advertisers Contextual ads delivered during the search process Ad Revenues Commencing Early CY 2007

12. 12 Grouper Financial Projections

13. 13 Cross-Sony Integration  SPE is eager to discuss opportunities to collaborate with Sony divisions  We are in the process of hiring additional engineering and business resources to ensure that we are able to execute on the discussed opportunities  It is critical that Grouper focuses on a select number of initiatives  Primary focus over next 12 months needs to be customer and revenue growth  Therefore, it is important that we work together to systematically prioritize initiatives, and adhere to a coordinated execution timeline

14. 14 Cross-Sony Grouper Integration Timeline  Primarily focus on growing traffic  Complete basic integration: Finance, Ad sales, HR, Legal, Marketing  Expand content offering Phase 1Phase 2Phase 3 Grouper focus Cross-Sony marketing and product integration  Simple co-marketing campaigns requiring no product modifications ( e.g., messaging on product box)  Initiate standard, API-based integration Corporate Alliances working closely with Tim Schaaff to facilitate communications between Sony divisions and Grouper  Co-marketing requiring simple product modifications (e.g., link to Grouper on device)  Investigate/validate feasibility of complex integration ideas and prioritize accordingly  Primarily focus on growing traffic; begin monetizing traffic  Implement limited number of high-impact new features  Premium content (ad- supported/sell-through) March 2007Sept 2007March 2008  In-depth cross-Sony marketing campaigns  Fully integrated products, e.g., custom software incorporated into devices  Cross-platform promotions (e.g., print, TV, radio)  Initiate top 2-3 customized product integrations  Primarily focus on growth and increase focus on revenue  Implement limited number of high-impact new features

15. 15 Technology Strategy / Business Development Groups Examples of Cross-Sony Integration Opportunities PlayStation Incorporate Grouper into PS3 online service mylo Include Grouper in second generation product Televisions Align IPTV plans with Grouper product roadmap Camcorders Potential direct posting of video from WiFi enabled camcorders Digital Cameras Potential direct posting of video from WiFi enabled digital cameras VAIO Inclusion of a Grouper shortcut on the VAIO desktop eBooks Download of Grouper content if eBooks expand to support video Connect (hardware) Incorporate Grouper in product planning for Digital Video Players Sony Hardware Products Add music videos to Grouper Other Sony Business Units Sony BMG Upload videos from mobile phones Sony Ericsson PSBG EyeVi Group SEL Corporate Development SCA Advanced Technologies Tokyo Electronics Strategy Tokyo IPTV Group

16. 16