1. Thoughts on Next 3 Slides
Interesting concepts re: “real-time TV”
Interesting point about where there are dominant players (either on content or brand). I wouldn’t quite parse it they way they do
In memo landscape section where we talk about dominance, be clearer about dominance in brands that have been around a while
Subscription film and TV – Netflix
Next day TV (ad-supported and, likely subs) – Hulu
Purchase of recent and library film and TV – iTunes, Amazon
In memo where we talk about newer device based services trying to differentiate in the face of dominance, be clearer about what is emerging and has no dominant player
Real-time TV over IP to devices (e.g., MLB streaming)
Early Windows
In memo
Sony section – clarify “real-time” TV on devices is as an opportunity as an area that we compete and, in some cases lead

2. Executive Summary
Real-time pay television is a significant opportunity for Sony
Pay TV is the largest segment of media industry worldwide (6X video game & 4X film industry revenues)
Technology is enabling new players to compete with traditional Pay TV distributors (Cable, Satellite & Telco TV)
New players are not focused on real-time TV which represents over 60% of PayTV revenues & is growing
We have identified 4-5 products to add to our current video services
Products are complementary to, & integrate with current VDS offering
Three types of live TV content offered: Live sports seasons, premium cable channels, basic cable bundles
3rd party video services like VUDU, CinemaNow & exclusive Sony content to be introduced as well
Consumers & cable networks have expressed interest in these offerings
A phased implementation is expected to positively contribute to the video services P&L
Products to be phased in over starting with sports & premium cable in the US
Remaining products & geographies to launch pending success of the initial offering
The combined offering is expected to contribute $3-5 M of op. profits in ‘10-11, growing to $30-40M by ’13
The broader video offering is expected to be a key differentiator for Sony products
Specific competitive gaps need to be closed in order for us to succeed
Consistent & seamless user experience across devices is a key gap vs. competitors
Acceleration of TAM interface rollout, cloud storage & common video streaming protocols across devices essential

3. SNEI Business Model Options
The market and competitive landscape, along with profit potential, primarily determine if SNEI should BUILD, BUY or Partner
Market Landscape
Profit Potential
Competitive Landscape
Segment
Market Size? (US Mkt. >$5B)
Digital Growth? (CAGR >10%)
Segment Economics
Dominant Player?
Sustainable Advantage?
Business Model
Video
TV-Library
Netflix
Partner
TV-Catch Up*
Hulu
TV-Real Time -
1st Party
Home Video- Library
Home Video-New
iTunes
Box Office
Music
Radio
Pandora
Publishing
Newspaper
Wait
Magazines
Books
Amazon
Other
Internet Search/Ads
Video Games
Compete

4. Thoughts on Next Slide
Interesting concepts re: our services are only on our devices; competitors are across devices
Get the concept into the memo:
Sony Section -- Today, our services are only available on Sony Hardware
Landscape Section – Another competitive advantage of 3rd party services is that they are now available broadly across devices; hence more awareness / familiarity / popularity

5. Incubation Strategy Feasible
Two feasible models for network svc & devices to compete together in a market
Network Service
Exclusive
Network svc. on 1st Party devices only
Open
Network svc. on all devices
Device
Integrated model
Devices & service compete together
Focus on differentiated & seamless user experience
e.g. iTunes and iPhone/iPad/iPod
Mixed model
Service competes independently
Devices uncompetitive
Competitor devices offer same service + other 3rd party services
e.g. Netflix svc. & original Netflix/Roku box
Exclusive
Competing 3rd party services have limited functionality
1st party svc. storefront integrated in device UX
No Going Back
Sony cannot move back to an integrated model without alienating consumers and partners
Incubation Strategy Feasible
Sony can transition from an integrated to open model at any time
Mixed model
Devices compete independently
Service uncompetitive
Competitor services work on 1st party devices + other devices as well
Open model
Devices and Service compete independently on their own merits
Open
Multiple competing services
No preferential integration in UX

6. Thoughts on Next Slide
Interesting concepts re: we don’t seem to be taking a uniform approach to whether we only build services where there is not a dominant competitor
Get the concept into the memo:
Sony section – call out that our “ambitious plans” include both competiting head-to-head where there are dominant competitors (e.g., video stores) and competitng where there are limited competitors (e.g., real-time TV). Note that we should consider whether to take a more uniform approach to prioritization or whether we must build across categories if we want to offer integrated bundles and a killer UI

7. Sony has ended up adopting different market strategies by segment
Market Segment
Sony Network Svc
Potential Competitor on Sony Devices
Market Strategy
Real time-Pay TV
Premium & Cable Lite
Google?, Boxee?
Fully Integrated Model?
New-Home Video
VDS/Q Video
Vudu, CinemaNow, Alphaline, Amazon
Open Model?
Box Office
VDS/ Q Video- Early Window
Video Games
PSN
Zynga?
Fully Integrated Model
Radio
Q Music
Pandora, Napster, Iheartmusic
Fully Integrated Model (Incubation Strategy)
Music
Books
eBooks
Amazon?
Is a consistent strategy needed going forward?