Background Data for December 16, 2010 Sony Network Services Strategy Meeting Materials distributed in conjunction with memo dated December 10, 2010 CONFIDENTIAL

page 1 (1) ScreenDigest (2) Strategy Analytics 03.10, SEL. (3) Parks Associates WW Broadband HHs (1) (MM) WW Smartphone Shipments (2) (MM) WW Connected Game Console HHs (3) (MM) WW Internet Connected TV HHs (3) (MM) CAGR: 6% CAGR: 38% CAGR: 14% CAGR: 51% Growth in Digital Access Expanding Beyond the PC

CONFIDENTIAL page 2 Video Viewing by Platform in the U.S. Note: numbers may not add up to 100% due to rounding Source: Morpace, "Omnibus Report," Aug 25, 2010

CONFIDENTIAL page 3 Small But Growing Group Of U.S. Consumers Says Online Video Has Them Seriously Thinking About Canceling Cable/Satellite Subscription Source:2010 Frank N. Magid Associates Base: Respondents with a basic or digital TV service, N=1, How much do you agree with the following statement: Now that online video is available, I am seriously thinking about canceling my cable/satellite subscription. Agree (4+5) 2010: 16% agree (4+5) 2007: 6% agree (4+5)

CONFIDENTIAL page 4 Theatrical Hotel & Airline DVD and Blu-Ray Disc Sell-through Standard PPV/VOD Pay 1 (HBO, Starz, SHOW, EPIX) Pay 2 (HBO, Starz, SHOW, EPIX) Broadcast/Cable (F/X, TNT, USA, AMC) EST (Starz Studios) EST (HBO Studios) +2 Months +4 Months +5 Months Years 0 Days Generally +8 Months (1) Home Theater Day & Date PPV/VOD EST (HBO Studios) EST (HBO Studios) Broadcast/Cable (F/X, TNT, USA, AMC) Library PPV/VOD Library PPV/VOD Library SVOD (NFLX)/ FOD (Hulu) Years Proposed New Window Subscription Disc Rental (Netflix) / Kiosk Rental (Redbox) A subset of titles avail. day & date Pay 1 SVOD* (Starz/EPIX w/NFLX, HBO GO) Pay 2 SVOD* (Starz/EPIX w/NFLX, HBO GO) SVOD (F/X, TNT, USA, AMC) Physical Rental/ Sell-through/EST PPV/VOD Linear TV SVOD/FOD * In order for Netflix to get an earlier window, they must either buy-out the Pay window or carry another pay service (Starz, HBO, EPIX or Showtime) Current and Potential Windows for U.S. Film Content (1) Pay 1 commences the earlier of 10 months from general theatrical, 4.5 months from initial home entertainment street, and 3.5 from PPV/VOD. It is feasible for Pay 1 to commence as early as 6.5 months post theatrical (assuming day-and-date VOD at 3 months post theatrical), but this is still an infrequent scenario.

CONFIDENTIAL page 5 Available U.S. Models for Viewing Film (Post Theatrical) Example Providers (U.S. and Not Comprehensive) Pricing Selection of Content at Any Moment of Time Blu-ray and DVD Sell-thru Best Buy, Wal-mart, Target $5 - $25 (Approx. Selling Price, Not List Price) Nearly all titles ESTiTunes, Amazon VOD, PSN, Xbox$9.99 (SD, Library) - $19.99 (HD, NR)Nearly all titles Subscription Rental – Physical Netflix$9.99+/mo.Nearly all films KioskRedbox$1.00/night70 – 200 titles per kiosk PPV/VOD – Day & Date with DVD iTunes, Amazon VOD, DirecTV, Comcast, Verizon $ $5.99 < 25 titles during any two week window PPV/VOD – Standard window (28-30 days after DVD release) iTunes, Amazon VOD, DirecTV, Comcast, Verizon $ $5.99Approximately 40 titles PPV/VOD – Library (Post- Pay 1) iTunes, Amazon VOD, DirecTV, Comcast, Verizon $ $2.99Hundreds of titles Pay TV – Current (1 st and 2 nd Windows) 1 HBO, Starz, Showtime, Epix~$15/mo.Dozens of films Broadcast/Basic CableDirecTV, Comcast, VerizonFree (Ad-supported)Hundreds of titles Subscription – Streaming (during Pay 1 and Pay 2) Netflix 2 $7.99/mo.Dozens of films Subscription – Streaming (Library) Netflix$7.99/mo.~6,000 movies 1) The Pay TV Library window offers hundreds of titles 2) For SPE titles, Starz content via Netflix

CONFIDENTIAL page 6 Consumers Face a Complex Landscape for Finding & Viewing TV Content Program Type Initial TV Run EST Ad-supported Internet DVDTV Off-netSVOD Broadcast Scripted 4-8 yrs exclusive but limited runs Next day Episodes are commonly available for ad- supported streaming during the month after air date; however, availability date on network owned sites vs. Hulu varies show to show 1 yr. (1 season) delay Starting season 5 (prior season only) UnscriptedPerpetualN/A N/A (very little) Daytime Soaps Run of show (exclusive 4+ years) N/A Basic Cable Scripted 5-6 years exclusive, runs Next day 1 yr. (1 season) delay Starting season 5 (prior season only) UnscriptedPerpetualN/A N/A (very little) Premium Pay Scripted only 5-6 years exclusive, unlimited runs Starting 6 mos. from last episode of season On networks own internet services for subscribers only Starting 6 mos. from last episode of season Starting season 5 (prior season only) Unclear – Probably starting season 5 (prior season only) First Run Synd. Unscripted only Duration of show N/AN/A – clips onlyN/A Television content is not windowed as consistently or rigidly as film content Windows vary by genre and networks, making it difficult for users to know when and where TV content is available Availability of ad-supported streaming is particularly variable and confusing for consumers

CONFIDENTIAL page 7 Leading Services Are Known for Providing the Most Content Under a Well-defined Payment Model Segment Leading US Player Customer Value Proposition Supported DevicesNumber of UsersCountries Video TV-Real TimeNo dominant player to date TV-Catch Up Streaming access to ~900 TV series (free ad-supported or $7.99/mo. subscription) PC, TV, BD, Xbox, PS3 19.7MM Monthly US Uniques US TV-Library Unlimited streaming access to 600 TV series on multiple devices ($7.99/mo.) PC, Xbox, TV, BD, Roku 20.2MM Monthly US Uniques US Home Video- New User interface & integration with apple devices (Computers, iPad, iPhone, etc.) PC, Apple TV, iPod, iPhone, iTouch, iPad 11.5MM Monthly US Uniques US, CA UK, DE, AU, JP, 5 EU, 2 APAC Home Video- Library Unlimited streaming access to 5,000 films on multiple devices ($7.99/mo.) PC, Xbox, TV, BD, Roku 20.2MM Monthly US Uniques US Music Radio 40 hours of free streaming with ads PC, TV, BD, Western Digital, Boxee, Mobile 20MM Monthly US Uniques (300K paying subs) US Music User interface & integration with apple devices (Computers, iPad, iPhone, etc.) PC, Apple TV, iPod, iPhone, iTouch, iPad 11.5MM Monthly US Uniques US, CA UK, DE, AU, JP, 5 EU, 2 APAC Video Games No dominant player to date

CONFIDENTIAL Device Manufacturers Broaden Range of Content and Purchase Models to Drive Adoption First GenerationSecond Generation Device Price$229 - $299$99 1 st Party Business ModeliTunes purchase (buy-and-store)iTunes streaming rental only (no storage capability) 1 st Party Content Pricing TV: $2.99 purchase NR Film: $ $19.99 purchase TV: $0.99 rental NR Film: $4.99 rental 3 rd Party OfferingsFlickr, Mobileme, YoutubeNetflix, Flickr, Mobileme, Youtube Media Server Functions/Device Integration PC Only Remote Control: iPhone, iPad, or iPod Airplay: Stream videos, music and photos from computer, iPhone, iPad, iPod to Apple TV Units SoldEstimated 2MM+ in the first 12 months (1) Estimated 4.5MM in the first 12 months (2) (1) News articles and blogs (2) Stifel Nicolaus estimates, September 2, 2010 Second generation box is roughly a quarter of the size of the original Case Study: Apple TV page 8

CONFIDENTIAL page 9 Expansion of iTunes from music to video 1 Strong Service Brands Have Expanded Beyond Their Traditional Core Offerings 1) Source: ScreenDigest. ScreenDigest reports 1 bundled transaction as 1 TV transaction, although 1 bundle actually converts to multiple single episodes purchased as a package 2) Source: FastCompany, Netflix CEO: We’re a Streaming Company, 10/21/2010 Expansion of Hulu from free/ad-supported model into paid model Hulu launches in 2008 and with ad-supported model and hits 100MM video streams first year By 2010, Hulu reached over 900MM streams Hulu Plus (monthly subscription) launches 2010 –Service includes commercials, but offers expanded library of content and use on a wider range of platforms Expansion of Netflix from physical to digital rental “By every measure, we are now primarily a streaming company that also offers DVD-by-mail.” 1 – Reed Hastings 66% of subscribers have streamed content, up from 41% year-over-year “Next quarter the majority of members will watch more content streamed than delivered on DVD.” 2 iTunes Hulu Netflix

CONFIDENTIAL page 10 Overview of U.S. Third Party Service Premium and Entry-level Offerings – Sony Qriocity vs. Samsung

CONFIDENTIAL page 11 Overview of U.S. Premium PSN and Xbox Live Third Party Service Offerings PSNXbox Live (App) Access requires a subscription to the services above, and to Xbox Live Gold ($50 / year) Access requires a subscription to the services above, but not to PlayStation Plus (App)

CONFIDENTIAL page 12 Overview of PlayStation and Xbox Owned Service Offerings PlayStation Network Xbox Live Live Gold For $49.99/year, users receive exclusive features such as online multi-player gaming, party chat, video chat, Netflix streaming, ESPN3, and personalized music from Zune and Last.fm, among others Zune Video A la carte film & TV rental and purchase (2,500 films and 900 TV series) Users have the ability to purchase and access content across three screens: the TV through Zune on Xbox LIVE, the PC through Zune Marketplace, and on the Zune HD device Zune Pass (Music) Streaming access to millions of songs for $14.99 / month Ability to download 10 MP3s per month PlayStation Plus For $49.99/year or $13.99/quarter, users receive exclusive features such as full game trials, PS store discounts, automatic firmware downloads, free games & downloads, priority beta invitations, and exclusive offers, among others PSN Video A la carte film & TV rental and purchase (6,000+ films and 900 TV series) Users have the ability to purchase and access content across the following devices: PlayStation, PlayStation Portable, and PC Music Unlimited Powered by Qriocity Streaming access to millions of songs for $9.99 / month Provides cloud rights to existing library

page 13 Comparison of Digital Video Services (streaming) Primary Business Model: N/A Purchase of recent and library film and TV N/A Subscription film and TV Purchase of recent and library film and TV Next day TV (ad- supported and, likely subs) N/A Major Studio Support Yes, Worldwide No Fox/Dis in EU No DisneyYes, US only Yes, but no new releases Yes, Worldwide Yes, Worldwide (no CBS) Yes, Worldwide # of Films 6,1342,500 Approx 1 10,000 2,300+ Approx 5,000 Approx 10, ,4588,352 # of HD Films 3,0711, Approx 1000Approx ,000+ # of TV Series 700 (19,000+ episodes) 900 (23,000+ episodes) 4,700+ (80,000+ episodes) 170 (4,000+ episodes) 600 (12,000+ episodes) 3,000 + (50,000+ episodes) 927 (23,700+ episodes) 151 Titles (13,000 + episodes) N/A Next Day TV Yes LimitedN/AYes N/A Countries/ Regions US, CA, UK, FR, DE, AU, IT, SP, JP US CA, UK, FR, DE, AU, IT, IR, 6 EU, 2 APAC US AU US US, CA UK, DE, AU, JP, 5 EU, 2 APAC USN/AUS Supported Devices PS3, PSP, PC, TV, BD, Sony Ericsson Mobile Xbox, Zune PC, TV (SONY, Samsung, Vizio, Panasonic) PC, TV (Vizio, Samsung), STB (Tivo) PC, Xbox, TV, BD, Roku PC, Apple TV, iPod, iPhone, iTouch, iPad PC, TV, BD, Xbox, PS3 PC, TV, BD, Tivo Archos TV, BD, VUDU devices, PS3 1) Excludes video clips

CONFIDENTIAL Exclusive Content on Select Digital Offerings Examples of Exclusive Content & Services Notes ESPN3, Games (Halo, Fables, etc.) ESPN 3 requires an Xbox Live subscription and internet access from an ESPN3.com affiliated provider The Tester (1), select content from the Sports Illustrated Swimsuit edition, Games (Gran Turismo) Sports Illustrated exclusivity limited to a subset of video clips MTV app exclusively on the Galaxy Tab Apps come with one episode each of 5 shows: The Hills, Jersey Shore, The Dudesons, Pimp My Ride and Cribs (1) Reality TV series Note: Examples only and not comprehensive page 14

CONFIDENTIAL page 15 Third Party Services Are Widely Available Across Connected Devices NetflixHuluPandora Connected TVs LG, Sanyo, Sharp, Sony, Toshiba, Vizio Samsung, Sony, VIZIO LG, Mitsubishi, Panasonic, Sanyo, Toshiba, Vizio Mitsubishi, Samsung, Toshiba, Vizio Mitsubishi, Panasonic, Samsung, Sharp, Toshiba, Vizio Home Theater Systems (Includes BD Players) Insignia, LG, Samsung, Sony, Vizio Samsung, Sony, VIZIO Insignia, LG, Panasonic, Sony, Vizio Samsung, Sony Game Consoles Xbox 360, PS3, WiiXbox 360, PS3PS3Xbox 360, PS3 (1) Digital Media Players Roku, Boxee, Seagate, TiVo Premiere, WD TV Live Roku, Boxee, Tivo Premiere Roku, Boxee, Tivo Premiere, WD TV Live Boxee, Tivo Premiere (1) Accessible through PS3’s web browser (compared to direct links on Xbox Live) Devices are examples only and not comprehensive

CONFIDENTIAL page 16 Overview of Samsung’s App Store Apps Store Apps available for download today span information, video, lifestyle, games, and sports (both free and paid) Pricing for premium apps will be similar to smartphone apps Popular free apps include Netflix, Blockbuster, Hulu, YouTube, Napster, ESPN, Cinemanow, Pandora, Facebook, Twitter, Vudu, and soon-to-come Amazon VOD Samsung is projecting over 200 apps by the end of 2010 Application Platform Open platform that allows apps from premium content owners and individual developers Store lets content owners and developers gain access to multiple device types with a single app In March 2010, Samsung opened the first ever HDTV-based application store for its TV sets, Blu-ray players, and home theater systems

CONFIDENTIAL page 17 UGC Music & Video Music & Video 3 rd Party 3 rd Party 3 rd Party 3 rd Party Qriocity PSN BIV for all partnership PS Experience Sony Experience Fragmented value proposition Duplicated contents category offer UGC separately managed 3 rd party not well integrated Relationship between Qriocity and PSN: Today Qriocity Limited exposure PSN Marketing vehicle Source: SNEI Mid-range Plan

CONFIDENTIAL page 18 UGC Qriocity – as a platform/venue Enhance Sony Value Proposition Relationship between Qriocity and PSN: FY2013 Reading Contents Reading Contents Music & Video Music & Video App & Other App & Other “PS” Game “PS” Game 3 rd Party 3 rd Party 3 rd Party 3 rd Party 3 rd Party 3 rd Party PS Non- game PS Non- game “xxx powered by Q”“PlayStation” Registration/ID Security Reporting Recommendation Drive additional Revenue & traffic BIV for legacy partnership Qriocity Clear brand definition PSN Gaming experience Source: SNEI Mid-range Plan

page 19 Near-term Alignment of Qriocity and PSN Service Brands ServicePlayStationTVBlu-ray PlayStation Video powered by Qriocity (“Powered by” branding will be launched in the coming months) Qriocity Video-on-Demand PlayStation Games Music Unlimited powered by Qriocity (Qriocity branded service available across devices in the coming months)

CONFIDENTIAL page 20 Sony Network Services Roadmap for Premium Content in the Americas Sony Owned Services3 rd Party Services on Sony Devices Segment Dominant Player CurrentPlannedCurrentPlanned Video TV-LibraryNetflix PSN Video, Qriocity VOD N/ANetflix, Vudu (Limited) Cinemanow, HBO Go, Showtime, Crackle TV-Catch UpHulu PSN Video, Qriocity VOD N/AHulu/Hulu PlusN/A TV-Real Time-N/A MLB.TV, NHL Gamecenter NBA Game Time, NFL, Turner March Madness, MLS, UFC Home Video- Library Netflix PSN Video, Qriocity VOD N/ANetflix, Vudu Cinemanow, HBO Go, Showtime, Epix, Crackle Home Video-NewiTunes PSN Video, Qriocity VOD N/AVuduCinemanow Music RadioPandoraN/A PandoraN/A MusiciTunesN/A Music Unlimited powered by Qriocity N/A Vevo (ad-supported music videos) Video Game s -PSN GamesN/A Note: Services are examples only and not comprehensive. Excludes 24 current 3rd party services and 7 planned 3rd party services in Asia.