Channel Acquisition Opportunities SPE INTERNAL Channel Acquisition Opportunities September 2008

Executive Summary Until recently, the window for new domestic channels has been closed and existing channels have been prohibitively expensive Now several mid-size channels are seeking strategic investment Simultaneously, demand for HD content has opened a window for HD-only channels; several now need strategic partners to strengthen their programming voice and reach These trends provide us new opportunities for expanding our domestic channel presence Lower investment “HD build” strategy: Use library to secure carriage and minimize investment; new channel on-par with MGM HD Lower investment “HD partner” strategy: Invest in a smaller HD player (e.g., HD Net, Mojo); use the Sony brand and library to reinvigorate and grow the channel Significant investment in a mid-size channel: Invest in a sizable channel (e.g., G4); better define the channel’s voice and grow the audience by leveraging all Sony assets As we begin informal discussions, we need to confirm SPE and SCA’s appetite for a significant investment (e.g., up to $200MM-$400MM for 50% of a mid-size channel)

Demand for HD Content has Opened the Window for New Channels Drivers Available Slots Both launching new satellites in 2008 (DirecTV 11 to be launched in Q1 2008/ Dish in 2008-9 to expand HD offerings) DirecTV > 150 national Dish > 100 national DirecTV is launch partner of choice for HD channels IPTV architecture with fiber to the home or node inherently allows hundreds of HD channels with exact number depending on how far fiber extends toward the customer premises and whether MPEG-2 or MPEG-4 compression is used Verizon FiOS extends all the way to the home, while AT&T U-verse has fiber to the node only Verizon plans over 150 HD channels by 2008, capacity for > 250 in MPEG2 format and > 500 in MPEG4 format AT&T currently facing pixelation issues but slots should be between MSOs and Verizon in number Conversion of analog channels creates room for greater number of digital or HD channels (greater than one-to-one conversion) Node splits also impact the number of channels that can be offered and MSOs shift node size on a market-by-market basis Switched Digital Video (SDV) technology theoretically allows infinite number of HD channels – SDV implementation is based on demographics and competition on a market-by-market basis MSO’s will need to be handled on a case-by-case basis Most likely initial candidates would be Charter, Cox, Cablevision

Target Opportunity: Younger; Male Skewing Percentage Female-Oriented Analysis of the Network Demographic Landscape Suggests a Younger, Male-Skewing Network is an Attractive Opportunity and Fit with Sony’s Strengths Median Age 70 Median Age 40 Target Opportunity: Younger; Male Skewing Median Age 5 80% Percentage Female-Oriented 50% 20%

Distribution/ Syndication Sony’s Capabilities and Assets Would Enable us to Create Significant Value for a Network with a Male-Slanted Programming Voice Proposed Approach Re-brand channel to leverage the strength and relevance of the Sony brand with the targeted male demographic Branding Given its brand, programming and distribution strengths, Sony is uniquely positioned to invest in and re-program a network to target the male 18-49 demographic Leverage the development, production, and programming expertise of the Sony Pictures Television to create distinctive original programming that resonates with the male audience Programming Syndicate channel content on key Sony assets that share the target male demographic (e.g., PSN, Crackle) Distribution/ Syndication

Seller’s Likely Valuation Investment Advantages/Challenges We Believe Investment/Partnership is the Way to Capture This Opportunity and Have Identified Four Potential Targets “Partner Large” “Partner Small” Target Demographic Male 18-34 Male/Female 18-49 “Males and Movie Lovers” Male 25-49 Affluent, early adopters 2007 Subscribers 66.6MM 83.3MM 8.1MM 9.0MM 2007 Cash Flow* $58MM $46.5MM $1MM $18MM Seller’s Likely Valuation $700-800MM $400-500MM <$100MM <$100MM Investment Advantages/Challenges Excellent fit with Sony target demo and brand Asking price may be prohibitively expensive High subscriber count and strong channel placement on with most affiliates Carriage agreements may limit our ability to rebrand/reprogram channel After initial conversations with Marc Cuban, HDNet is currently a lower priority Provides access to targeted male demo; Ad sales relationship already in place Network is being shut down and thus carriage opportunity may not exist *Cash Flow as reported by SNL/Kagan; Defined as Net Operating Revenue less SG&A and Programming Expenses. These numbers seem high and are subject to further review

NEXT STEPS Continue discussions with target channels, including value expectations and critical diligence areas (financial, operational/carriage agreements) G4: Initial discussions with Comcast complete; diligence commencing TV Guide: Approaching in conjunction with Constellation Ventures; diligence commencing Mojo HD: Need to initiate discussion with Comcast immediately to confirm if investment is feasible prior to December ’08 shutdown HDNet: Completed initial conversations with Mark Cuban; currently lower priority for diligence Confirm SCA support for an approximately $200MM-$400MM channel investment