1. CONFIDENTIAL Grouper Acquisition Opportunity June 2006

2. page 2 Agenda Digital Distribution Landscape –Trends and Opportunities –Emerging Threats Competitor Response Grouper Acquisition Rationale Grouper Valuation Next Steps

3. page 3 Rough Storyline (Summary for M. Paull, Will Not Include) Digital distribution is taking off –Broadband has reached critical mass –Change has historically driven growth in filmed entertainment Opportunity if we capitalize on this / threat if we don’t –Opportunity Build direct customer relationships (Internet Bypass) Diversify types of content SPE offers Expand distribution to new audiences –Threat Consumption shifts to non-studio content Revenues shifting to ad-based models We have almost all transactional / non-advertising revenue base Competitors see the opportunity and are capitalizing on it –Acquiring and partnering across business types (promotional, channels, stores, social networks) –Ad-based models are gaining the most traction If SPE is going to enter we must partner or acquire –Traditionally we have huge gaps in technology –Speed-to-market issues If we’re going to buy, we must buy now –Valuations going through the roof –Attractive players being pulled off the table Grouper is the right company to buy –Leading technology –Leading management team –“Right Scale” – small enough to be affordable, large enough to prove viability

4. page 4 Executive Summary Sony Pictures must develop a solution for the digital distribution of our content –Digital delivery of video is reaching critical mass –SPE must address the risks associated with a changing distribution landscape and shift to advertising-supported models –Owning a service for digital delivery enables SPE to: Diversify revenue streams and position the studio to benefit from growth in ad-supported models Establish direct relationship with new audiences Distribute a greater breadth of content, including short-form and user generated Market dynamics require us to act quickly –Market for online video destinations and technology providers is consolidating –Valuations for potential acquisition candidates are increasing Acquiring Grouper provides a compelling solution for digital distribution –Accelerate speed to market and builds scale quickly –Address historical challenges in technology development –Secure market-leading management team –Provide platform for future growth

5. CONFIDENTIAL Digital Distribution Landscape Trends and Opportunities

6. page 6 Broadband Access and Content Availability Are Driving Growth in Digital Video Source: SG Cowen Research dated June 7, 2005, Morgan Stanley Broadband Update, April 2005 30%38%46%52%57%61% 33.2 42.6 51.0 58.9 69.6 65.1 Broadband-enabled U.S. Households (MM)Video Downloads (BN) 0.28 18.0

7. page 7 Downloadable Video Should Drive Growth in Filmed Entertainment Pay TV/ SubscriptionVHS/ RentalDVD/ Sell thru Evolution of Content Distribution & Revenue Growth of Filmed Entertainment Industry in the US* New consumer benefits Introduction drivers Movies without advertising Consumer controlled viewing Ownership, high quality, additional features New cable network entrants Consumer electronics manufacturers Warner Home Video & CE industry 100%=$4Bn 100%=$18Bn Complete library, convenience & control Technology Companies IP Delivery $37Bn $47Bn 2004 2008e $2Bn $9Bn Video /DVD 7% TV 41% Box Office 52% Video /DVD 41% TV 32% Box Office 27% Source: Entertainment Industry Economics Vogel 4 th ed., PricewaterhouseCoopers Global Entertainment & Media Outlook 2004-2008. Models with unique consumer benefits have been consistently adopted by Hollywood Adoption has often been led by outside entrants and new industry players Double digit annual growth has doubled the market approximately every 7 years 1995 1980 * Includes revenue generated by films from major studios across content distribution windows – box office, video (rental, sell thru), television (ppv, pay, network, made for TV), and foreign revenues for each

8. page 8 Evolving Infrastructure Represents an Opportunity to Build Direct Relationship with End-users and Increase Control of Distribution Broadcast Model Cable Model Digital Distribution – Licensing/Syndication Broadcast Network Broadcast TVLocal Affiliate ProductionCustomerDistributionAggregation SPE Cable Network Cable TVCable MSOSPE PortalPC or TV Broadband ISP SPE Customer-facing Service SPE-owned Service PC or TV Broadband ISP SPE

9. page 9 Digital Video Delivery Represents an Opportunity to Reach a Younger Demographic Source: Pew Internet & American Life Project, December 2005 Percent of Each Age Group Downloading Video (18-28)(29-40)(41-50)(51-59)(60-69)

10. page 10 SPE Can Best Reach Younger Demographics with Models that Include Two-way Interactivity and Social Networking Source: Pew Internet & American Life Project, December 2005 Percent of Each Age Group Participating in Online Activity (18-28)(29-40)(41-50)(51-59)(60-69) Instant MessageRead a Blog

11. CONFIDENTIAL Digital Distribution Landscape Emerging Threats

12. page 12 Emerging Digital Models Represent Threats to SPE on Multiple Fronts New Distribution Channels Shift to Ad-supported models Changing Consumer Habits Digital distribution of all packaged media is lowering barriers to entry for content alternatives and changing inter-channel competition Ad dollars are shifting toward online, following growth in consumer interest SPE has limited exposure to ad- supported models, primarily generating revenues on a transactional basis Consumers are shifting time away from studio-produced products and toward games, online, and mobile entertainment Challenges Facing SPE

13. page 13 Consumers are Shifting Time Away from Traditional Media Toward Online and Interactive Media Note: Consumer Internet includes both dial-up and broadband Source: Veronis Suhler Stevenson, Val Morgan, Harris Interactive, L.E.K. Analysis, Jupiter analyst interview, Corporate Development Analysis Cable and satellite TV hours rise slightly due to increase in channels, VOD and PPV services Consumer time spent on broadcast TV may flatten with emerging technologies (a la TiVo) But the real growth is in Interactive/wireless, home video, internet and games

14. page 14 New Distribution Models are Shifting Consumer Consumption toward “Long-Tail” Titles

15. page 15 Studio Content May not Be as Dominant in Emerging Channels Sources: Nielsen Videoscan data, Wired 2.0, Industry Interviews, select store visits across Los Angeles area Product Mix of Units Books Music Home Video  Surveyed 6 B&N and Borders stores  Calculated number of SKU’s for a sample of fiction titles  Reviewed 8 to 12 stacks  Counted the number of separate SKU’s  Determined which titles were major (including sub-labels)  Amazon figures are units sold in 2005 (source Wired 2.0 and Bain consumer study)  Publishing analysts from First Research conclude that there is a strong correlation between SKU’s and units sold Methodology Niche (All Others) Major (RH, TW, Simon, HC, Pearson) Niche (All Others) Major (Uni, War, Sony/BMG, EMI) Niche (All Others) Major (7 Majors)  Surveyed 5 Borders and Best Buy stores  Calculated number of SKU’s for a sample of new release and catalog titles  Reviewed 6 to10 stacks  Counted the number of separate SKU’s  Determined which titles were major (including sub-labels)  Digital figures are units sold in 2005 (source Wired 2.0 and Bain consumer study)  Units sold figures for music via traditional stores is being researched through Nielsen Musicscan data  Surveyed 7 WalMart, Best Buy and Target stores  Calculated number of SKU’s for a sample of new release/catalog titles  Reviewed 12 to15 racks  Counted the number of separate SKU’s  Backed-up SKU findings with units sold data from Nielsen VideoScan  Digital figures are units sold in 2005 via Amazon & other online retailers

16. page 16 Media spending does not yet reflect consumption Advertising dollars are shifting online to address the current gap 2003-’05 US Advertising CAGR Contribution to Growth Television: TV Stations1.5%2% Cable Networks15.6%19% Cable MSOs8.1%3% CBS Net, FOX Net5.8%9% Total Television7.0%34% Magazines8.9%5% Newspapers3.4%11% Radio0.2%0% Outdoor7.1%5% Online50.4%45% Total8.4%100% SUMMARY Traditional Media5.1%55% Online50.4%45% Total8.4%100% Ad Market is Changing Significantly as Ad Dollars Following Consumers and Two-way Infrastructure Becomes Available 1999 2005

17. page 17 SPE Currently Has Limited Ability to Capitalize on the General Growth in Ad Revenues, Particularly in the Online Space US $ (Billions) Overall ’05 – ’09 Projected CAGR: 10.1% Broadcast ’05 – ’09 Projected CAGR: 4.9% Cable/Sat ’05 – ’09 Projected CAGR: 11.4% Online ’05 – ’09 Projected CAGR: 22.3% TV & Online Advertising Spend Source: Veronis Suhler, 2005 Note: Cable/satellite growth expected to be driven by increasing audience share of prime time ratings, ability to target within specific demographic groups, improved sales system; broadcast growth expected to be driven by sustained ratings and ad rates, continued appeal as optimal means to reach large audiences Online %:12%10%12%13%16%18%21%23%25% 57.9 60.7 63.2 71.7 78.3 87.6 95.1 106.0 114.9

18. CONFIDENTIAL Competitor Response

19. page 19 Competitors Have Seen the Potential for Digital Video Distribution and are Introducing Offerings Across Business Models PromotionalChannelStore Social Network Predominantly short video clips that promote the site owner’s content, merchandise, and brand May include some advertising, and minimal commerce capabilities, but is promotional in nature Includes on-demand videos available in programmed micro- channels, on a show- by-show basis, or in a traditional channel lineup Business model primarily includes advertising, with some upsell to subscription Aggregates video across content providers for purchase Uses a range of models including sell-thru, rental, and subscription Generally consists of short video clips from users of the service May also provide tools for creating video clips or interacting with video content Primarily ad-based business models

20. page 20 Networks Are Investing Heavily in Online Distribution, Including Over $1BN of Acquisitions by Newscorp Alone ParentStudioNetwork Online Destinations ABC.com: ad-supported full episode streaming ESPN.com: ad-supported streaming and subscriptions Disneychannelcom: Launching new broadband player today with a dozen free episodes CBS.com: ad-supported and limited download-to-own Innertube: ad-supported broadband channel MTV Overdrive: ad-supported video channel Acquired iFilm for $49 MM Invested over $1BN to acquire online properties (IGN, Scout, and Intermix / MySpace) Now selling episodes of “24” on MySpace Fox.com: primarily clips and previews Launching “NBC 360 Digital” with classic comedy and new previews available online Acquired iVillage for $592MM Promoting content on YouTube Launched AOL In2TV, ad-supported classic TV episodes Acquired Lightningcast to improve video advertising technology Licensed content through BitTorrent (P2P site) and Guba (social network)

21. page 21 Social Networks have Seen the Most Traction Among these Business Models PromotionalChannelStoreSocial Network Source: Nielsen NetRatings. Figures as of 6/21/06. * Grouper unique user numbers as provided by company.

22. CONFIDENTIAL Acquisition Rationale

23. page 23 Summary Acquisition Rationale and Key Target Characteristics Acquisition Rationale Expand SPE revenue streams and content base –Address limited exposure to ad-supported models –Expand offering to new forms of content (e.g. user generated) Address gaps in SPE core competencies –Service operation and design –Tool / software development –Consumer data usage Accelerate market entry –Vehicle for SPE content Reduce overall cost of entry –Leverage existing base of knowledge in the marketplace Acquire experienced management team Key Target Characteristics Characteristics for highest potential acquisition targets include –Small companies with existing consumer offer up-and-running –Offer specifics features to address user-generated content and interactive features –Ownership or direct control of key technology capabilities

24. page 24 SPE Target and Competitive Landscape Technology Capabilities LowHigh Low High Existing Service Penetration Google (97.2) Yahoo (105.5) AOL (72.0) YouTube (20.1) MySpace (42.0) Grouper* (8.0) Brightcove (0.2) Veoh (.12) FOX.com (8.5) ABC.com (8.0) MLB.com (9.3) Facebook (7.7) Metacafe (1.6) Friendster (0.8) CinemaNow (0.3) Connect (1.2) MovieLink (0.6) iTunes (20.5) Singingfish (0.2) Gather (0.1) Dave.TV (NA) Fleapit (NA) Extend Media (NA) Acquire capabilities to build Focus on complimentary content (e.g. user generated) Look for proprietary or differentiated technology CBS.com (5.4) MTV Overdrive (4.4) (Monthly Unique Users in millions) Source: Nielsen NetRatings. Figures as of 6/21/06. * Grouper unique user numbers as provided by company.

25. page 25 Grouper Acquisition Rationale Grouper balances strong management and leading technology with reasonable scale Management team has experience building market leading services –Developed Spinner and sold to AOL Scale and growth demonstrate credibility without commanding a prohibitive valuation –#2 and fastest growing video community –4MM unique users visit the site directly each month –7MM total unique users visit site content (directly and via partner links) Technology is ahead of larger user generated video sites (e.g., YouTube) –Provides multi-platform download support (iPod, PSP, Mobile Phone) –Portability enabled by proprietary P2P technology –Proprietary desktop software Represents significant revenue and growth potential as a standalone business Can be leveraged across SPE digital distribution initiatives

26. page 26 Potential for Advertising Revenue 11MM streams on ABC could equal $x per year MySpace expected to be generating over $100MM per year WSJ and other articles re: can barely meet demand for ad-inventory online Quang building

27. page 27 Grouper as a Platform for Growth (Version A) ChannelSocial NetworkStore Grouper Underlying Infrastructure and Technology Grouper’s leading technology will allow SPE to not only gain access to the growing social network business model, but will provide infrastructure for launching new channels and online store concepts

28. page 28 Grouper as a Platform for Growth (Version A) New Brand and Destination for Broadband Channels (Sony Owned) ChannelSocial Network New Brand and Destination for Online Store (Sony Owned) Store Grouper’s leading technology will allow SPE to not only gain access to the growing social network business model, but will provide infrastructure for launching new channels and online store concepts Grouper Underlying Infrastructure and Technology

29. page 29 Grouper as a Platform for Growth (Version B) ChannelSocial NetworkStore Grouper Underlying Infrastructure and Technology Grouper’s brand and technology extend to new business models, including channels and online video store

30. page 30 Grouper as a Platform for Growth (Version B) ChannelSocial NetworkStore Grouper Underlying Infrastructure and Technology Grouper’s brand and technology extend to new business models, including channels and online video store

31. CONFIDENTIAL Valuation To come: 1 page on comps, 1 page on “waterfall” Will show value based “pre-revenue tech comps,” “successful players (MySpace, Yahoo, Google) if we count (a) direct unique users only or (b) direct and embedded

32. CONFIDENTIAL Next Steps To Come

33. CONFIDENTIAL Appendix

34. page 34 Addressable Boxes and 2-way Infrastructure Could Change the Ad Market Significantly How will the $55 billion in untargeted spend respond to the interactive capabilities being rolled out by cable MSO’s?

35. page 35 Examples of Online Video Destinations by Category CBS.com Fox.com NBC.com Sonypictures.com ABC.com Atomfilms CBS.com / innertube ESPN.com iFilm In2TV MLB.com MTV Overdrive Yahoo Google iTunes Facebook Friendster Google Grouper Metacafe MySpace YouTube Yahoo PromotionalChannelStore Social Network Larger Audience Smaller Audience Blinkx Innertube Multi-media Networks Singingfish CinemaNow Connect MovieLink Dave.TV Fleapit Gather Tag World Varsity World

36. page 36 Categories for Online Video Technology Providers Content Management Interactivity and Social Networking Consumer Tools Content preparation –Ingestion –Metadata / tagging –Ad insertion Content delivery –From content owners to aggregators –Onto P2P networks Content classification and discovery Tools and infrastructure for: –Chat –Instant Messaging –Blogs –Ratings –Recommendations –Clickable Video Video creation Video editing Media mixing software (integrate video, photo, audio) Video publishing (cross-platform) Personal channel creation DVD burning

37. page 37 Examples of Technology Providers by Category Grouper BrightCove Maven / The Platform Veoh Networks MLB Adanced Media Roo Media Grouper Sonic Sony Media Software Veoh Networks Content Management Interactivity and Social Networking Consumer Tools More Established Newer Entrant Extend Media Intent Mediaworks Kontiki Redswoosh Solid State Networks SyncCast Tandberg TV Zetools Avant Interactive Intent Mediaworks Imeem Kozuru vMix Dave.TV (Social Broadcast Network / MyChannels) Fleapit Intercasting / Rabble.com Oddcast Participatory Culture Video Publishing on Demand (vpod.tv) vMix

38. page 38 Key Attributes of Digital Video Services Content Accessibility 1 LowMediumHigh Content Value 2 Range of Content Providers 3 Content Breadth 4 Degree of Interactivity 5 ConnectedPortable Anytime, Anywhere PromotionalUser-Generated Produced Company Owned Aggregated Single GenreMulti Genre On-DemandAncillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-Based Pay

39. page 39 Promotional Video Websites Overview Attributes Predominantly consist of short video clips to promote site owner’s content, merchandise, and brand May include some advertising, and minimal commerce capabilities, but is promotional in nature Content Breadth 4 Single GenreMulti Genre LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-BasedPay

40. page 40 Content Breadth 4 Single GenreMulti Genre Broadband Video Channels Overview Attributes LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Includes on-demand videos available in programmed micro-channels, on a show- by-show basis, or in a traditional channel lineup Business model primarily includes advertising, with upsell to subscription Business Model (Cost to Consumer) 6 FreeAd-BasedPay

41. page 41 Video Store (Content Aggregation) Overview Attributes Aggregates video across content providers for purhcase Uses a range of models including sell-thru, rental, and subscription Content Breadth 4 Single GenreMulti Genre LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-BasedPay

42. page 42 Social Network (User-generated Video Sites) Overview Attributes Consists of short video clips from users of the service May also provide tools for creating video clips or interacting with video content Primarily ad-based business models Content Breadth 4 Single GenreMulti Genre LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-BasedPay

43. page 43 Potential View of a New SPE Digital Video Service LowMediumHigh Business Model (Cost to Consumer) 6 FreeAd-Based Pay Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Service At LaunchTrend Over Time Range of Content Providers 3 Company Owned Aggregated Content Breadth 4 Single Genre Multi Genre

44. page 44 Unique Users for Online Video Sites Extend Portal BrandsExtend Network Brands Source: Nielsen NetRatings and comScore Media Metrix, May 2006. Video sites with large audiences are affiliated with established network brands or leading portals Monthly Unique Users (mm)

45. page 45 Unique Users for Online Video Sites Source: Nielsen NetRatings and comScore Media Metrix, May 2006. While some independent video sites have succeeded, most have failed to build an audience Monthly Unique Users (mm)