CONFIDENTIAL Grouper Acquisition Opportunity Presentation for GEC August 16, 2006 Draft v.2

page 1 Grouper Overview Service Summary SPE’s acquisition would include total consideration of $65MM –$52.5MM at closing –$12.5MM tied to performance metrics (revenue, streams, employee retention) Company is pre-revenue, received $5.1MM funding to date Has received a competitive acquisition bid of at least $50MM Entered into exclusive negotiations with SPE through 8/18/2006 Multi-platform Video Network dedicated to watching, sharing, and creating user generated video Leverages P2P software client; increases video quality; decreases delivery costs Enables video portability to multiple devices (iPod, PSP) Attracts users from other sites through one-click posting (MySpace, Friendster, Everyone’s Connected, WordPress, Blogger) Widely distributes easy-to-use video editing tools (Proprietary client, Instant upload from cameras, camcorders, webcams and mobile phones) Ad-filtering tools target ads based on content tags Differentiators Funding and Deal Status Demonstrated Traction #2 independent video community (Hitwise May report), with 7MM global unique users/month (3MM US) Reaches a young demographic that is 58% male Over 60,000 uploaded videos programmed across 18 channels (1) Investors include Accela LLC, Applegreen Capital, DAG Ventures, and T-Online Venture Fund

page 2 Grouper Acquisition Highlights Moves SPE into growing area of ad-supported user generated content, to participate in the growth (22% CAGR through 2009) of ad spending online Differentiated technology and more expansive management vision than competition Demonstrated traction with users in a core demographic Inexpensive relative to competitors’ acquisitions of social networking sites Compelling as a standalone business Complements current SPE efforts to market and distribute content online Potential to become a platform for additional services and Sony hardware, including international expansion (e.g., eyeVi) Very sharp management team –Previously developed Spinner, a Sony Music investment, which was sold to AOL for $320 MM in 1999

page 3 Grouper Would Provide Opportunities for SPE and Sony Could help address needs for complementary services –Enable users of Sony cameras and camcorders increased interactivity with content –Provides initial base of unprotected content for PSP and Walkman Potentially complementary to existing service efforts –PSBG eyeVi initiative selected Grouper to develop its service prototype –Expands Connect’s service capabilities by adding user-generated content Grouper technology built to support ad-based and transactional business models Management team has required expertise Brand has demonstrated traction and strong growth potential Platform for SPE to market, distribute and launch broadband channels Enhance SPE’s existing advertising revenues Build software capabilities Address core business challenges in meeting growth objectives Standalone Business Growth Opportunity Traditional SPE Business Opportunity Could Provide Value to Sony Devices Could Provide Value to Sony Devices

page 4 Executive Summary SPE is faced with tremendous opportunity through digital distribution and ad-supported online content –Consumer time and advertising revenues are shifting online, threatening the ability for our core businesses to achieve growth and margin objectives –Online infrastructure is nearly in place, with digital content at the outset of its growth curve –SPE competitors are investing heavily, and filling a gap between studio content and user generated content At $65MM, a Grouper acquisition would accelerate entry into ad-supported content and could become a platform for other digital services across Sony –Grouper is the optimal acquisition target for SPE, due to its experienced management, market-leading technology and demonstrated traction with users –Price in-line with comps and at a discount to recent competitor acquisitions –Price does not require SPE to pay premium for users, which will be acquired via SPE marketing clout

page 5 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% Consumer Time is Shifting Online and Drove 50% Annual Growth in Online Ad Spending Over the Last Three Years

page 6 Digital Transition Will Increasingly Challenge SPE’s Businesses Sales increasingly cross-platform Budgets shifting away from traditional outlets “Grass roots” campaigns increasingly prevalent –Character campaigns on social networks –Viral distribution of ad messages Market less forgiving of average to poor titles New forms of content competing for consumers’ time and money Traditional distribution channels’ economics under attack, pressuring studio margins Talent increasingly empowered with information and alternatives Theatrical Marketing Content Distribution Economics Advertising Sales Achieving and exceeding SPE revenue growth and margin targets will increasingly require entry into adjacent businesses

page 7 Evolving Infrastructure Represents an Opportunity to Build Direct Relationships 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 Portal PC, TV or Device Broadband ISP SPE Customer-facing Service SPE-owned Service PC, TV or Device Broadband ISP SPE

page 8 Social NetworkStoreChannelPromotional Source: Nielsen NetRatings. Figures as of 6/21/06. * Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 7 million. Provide interactivity between users Increasingly dependent on user-generated video Primarily advertising based revenues Aggregates video across content providers for purchase Uses a range of models including sell-thru, rental, and subscription On-demand videos in programmed micro-channels or on a show-by- show basis Business model primarily includes advertising Predominantly short video clips promoting studio content May include some advertising, and minimal commerce capabilities Monthly Unique Users (mm) Social Networks are Growing Quickly and Attracting the Largest Audiences for Digital Video Content

page 9 Competitors Are Investing in Social Networks Acquired iFilm for $49MM Acquired Intermix / MySpace for $580MM Acquired IGN for $650MM and Scout for $170MM Acquired iVillage for $592MM Promoting new series on YouTube Acquired Lightningcast for online video ad insertion technology Licensing content through BitTorrent and Guba (social network) Social Networks Generate Value for Traditional Content Owners Social Networks Generate Value for Traditional Content Owners  Attracting large audiences and creating legitimate alternative distribution channels  Offering user-generated video and driving advertising revenue  Two-way medium with high degree of interactivity, customer engagement and feedback  Provide opportunities to create derivatives of existing properties  Harness users’ creativity to identify and develop new concepts  Attracting large audiences and creating legitimate alternative distribution channels  Offering user-generated video and driving advertising revenue  Two-way medium with high degree of interactivity, customer engagement and feedback  Provide opportunities to create derivatives of existing properties  Harness users’ creativity to identify and develop new concepts

page 10 Number of Videos in the Category Millions Thousands Millions Dozens Studios and Social Network Partnerships Fill a Gap in Current Content Offerings Studios “Professional” User Generated Video Sites “Consumer” Number of People Viewing The Opportunity “ Prosumer” Studio / UGC Partnership  Increase distribution for near-professional quality user generated videos  Broaden base of Studio content and increase ability to target  Increase distribution for near-professional quality user generated videos  Broaden base of Studio content and increase ability to target

page 11 SPE Target and Competitive Landscape Technology Capabilities LowHigh Low (< 3mm) High (> 3mm) Existing Service Penetration Google (97.2) Yahoo (105.5) AOL (72.0) YouTube (20.1) MySpace (51.4) Grouper* (3.0) Brightcove (0.2) Veoh (0.1) FOX.com (8.5) ABC.com (8.0) MLB.com (9.3) Facebook (7.7) Connect (1.2) iTunes (20.5) CBS.com (5.4) MTV Overdrive (4.4) (Monthly Unique Users in millions) Source: Nielsen NetRatings. Figures as of 6/21/06. * Grouper US unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 7.5 million. Blinkx (0.01) Metacafe (1.9) Friendster (0.8) AddictingClips (1.7) iFilm (3.2) Revver (0.1) Dailymotion (0.4) vidiLife (0.7) VideoEgg (NA) vimeo (0.4) MovieLink (0.6) CinemaNow (0.3) vSocial (0.5) Guba (0.9) Roo Media (0.6) MSN (96.1)

page 12 Grouper Stands-out Among Acquisition Candidates Viable acquisition candidates limited to at least 1MM unique users to demonstrate potential scalability of operations Target U.S. Unique Users (MM) Acquisition Considerations Prohibitive valuation (rumored to be seeking over $1BN) Technology weaker than Grouper Owned by Viacom 1.7 Lags Grouper in user adoption Less robust technology (no P2P) Potentially viable second choice to Grouper 1.9 Secured $15MM in funding July 1, 2006 Believed to be off the market 7.7 Prohibitive valuation (rumored to have rejected $750MM offer) 3.0 Performs well against acquisition criteria –Strong management –Differentiated technology –Demonstrated traction

page 13 Grouper Service Highlights Watch Home page with “video wall” of user generated content; 80% click-through Share Create Share with users Post videos to personal pages on other sites Easy-to-use downloadable tools for creating and editing videos Differentiated from YouTube and Other Competitors Competes with YouTube

page 14 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 Ability to download content to multiple devices (iPod, PSP)

page 15 Grouper Service Highlights: Share Videos Easy upload of user videos One click publishing to other sites to friends in users’ MSN, Hotmail, and Yahoo accounts P2P client enables download of original, high quality files Add video comments

page 16 Grouper Service Highlights: Create Videos Real-time recording and upload from web cams and mobile phones Proprietary client with easy-to-use editing tools –Select video –Select photos and tracking / panning effects –Select music

page 17 Grouper Management Team Josh Felser, CEO & Co-founder –President & Co-founder Spinner (Sold to AOL for $320M); GM AOL’s music brands; Business development at News Corp Dave Samuel, President & Co-founder –CEO and Co-founder Spinner; VP Technology AOL, MIT Aviv Eyal, CTO & Co-founder –CTO and Co-founder Friskit; Lead engineer Microsoft Multimedia Mike Sitrin, VP Revenue & Co-founder –Director Marketing and Commerce AOL, Director of Sales Spinner Jonathan Shambroom, VP Product –VP Product Jumpstart, Director Product: Evite (Sold to IAC), When.com (Sold to AOL), PF.Magic (Sold to Learning Co)

page 18 Comparable Company Analysis Supports a $80-$110MM Valuation Recent Fundings Recent Acquisitions

page 19 SPE Projections – Base Case (1)EBIT reflects operating profit less estimated amortization of technology/software assets totaling $20MM over 7 years. Initial estimate requires third party review for final figures. Assumes transaction close at 9/30/2006. (2)4 year discounted pre-tax cash flow analysis ( ) performed with a discount rate of 16.5% (in-line with SPE’s normal rate); terminal EBIT multiple of 8.0x. (3)Total consideration includes $52.5m at closing; $12.5m contingent on performance and paid over the course of 2007 and (4)Deepwater mark represents cumulative cash position.

page 20 Internet Advertising is Forecast to Grow 22% Annually through 2009 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%

page 21 Market Data Provides Support for Grouper’s Revenue Model Grouper will derive advertising revenue through three distinct business models –In-stream video ads –Banners and ad-words on the Grouper.com website –Sponsored searches The market has demonstrated a willingness to pay premium CPMs for streaming video ads –Independent analysts and Sony experience support online video CPMs of $20 to $30 (1) –Online video CPMs are now in-line with traditional TV CPMs and expected to benefit from the overall growth in online advertising –Grouper model assumes video CPMs ranging from $15 to $30 Recent deals validate the overall potential for advertising associated with user generate video and social networking sites –Google / MySpace / Newscorp – Google will pay Fox Interactive Media $900M in advertising revenue from 2007 through 2010 in exchange for the right to provide search services to MySpace –Google / MTV – MTV struck a deal with Google to include music videos in Google’s “AdSense” network –Studios / MySpace – Major studios are paying MySpace for the ability to create user profiles in support of upcoming theatrical releases (1)Josh Bernoff, Forrester Research; Allie Savarino, SVP World of Worldwide Marketing, Unicast; Jeff Lanctot, VP of Media Buying, Avenue A Razorfish.

page 22 Risks and Mitigation MitigationRisks Customer retention / increased competitionDifferentiated technology provides a better user experience than competitors Leverage strategic partners for growth and content (less dependent on “fads” in user taste) Integration challengesStructure incentives for acquired management Allow new management to retain decision- making authority Lack of interest by advertisersGrouper’s first deal is in place with MTV AOL and Google report sold-out ad inventory

page 23 Upside Through Sony Pictures’ Ownership Grouper would leverage SPE’s ad sales force Grouper would gain access to SPE’s existing marketing outlets, increasing ability to advertise across platforms Grouper would expand its content base with promotional content from SPE SPE would gain a lower cost promotional vehicle relative to current online marketing partners Grouper would increase user interest by adding Studio content (1) –33% of users would be more interested in the site –52% would be neither more or less interested in the site –15% would be less interested in the site SPE would retain higher margins by selling content through a wholly owned distribution platform Addition of Studio Content on a Promotional Basis Addition of Studio Content on a Promotional Basis Potential Addition of Studio Content on a Sell-through Basis Potential Addition of Studio Content on a Sell-through Basis Leverage SPE Advertising Sales Leverage SPE Advertising Sales (1) Source: Survey commissioned by SPE and conducted by J. Rost Associates LLC, July 13, 2006

page 24 Ensuring a Managed Grouper Integration within Sony Defined SPE Point Reporting and Cross-Sony Liaison Designated SPE senior manager with full operating authority (hire/fire) and to act as liaison with Tim Schaaff between Grouper and other Sony divisions –Manage Grouper’s 3 year development plan to defined performance targets –Work jointly with Tim directly to identify software linkages where appropriate –Coordinate implementation of cross-Sony opportunities –Collaborate within SPE to prioritize new opportunities –Help Grouper management to develop inter-Sony relationships as necessary Coordination with Tim Schaaff and within SPE Divisions Close working relationship between Tim Schaaff and Grouper engineering team/CEO to coordinate SEL development opportunities and overall agenda Tim to help manage interface to SEL and Tokyo to help ensure Grouper succeeds Monthly or as needed meetings with defined business unit team members (VP level) to identify and implement specific opportunities, eg - Theatrical Marketing, SPHE, SPT, SPD Senior SPE management meets quarterly to review progress and resolve issues Cross-Sony involvement carefully managed during initial start-up phase

page 25 Grouper Acquisition: Key Takeaways Provides access to an adjacent area of media at a compelling valuation Increases SPE exposure to the growing area of online advertising Establishes direct, interactive relationships between SPE and consumers Represents a compelling standalone business opportunity as Grouper generates advertising revenue Provides upside opportunity as Grouper leverages SPE’s content and advertising sales Has potential to expand to support other Sony businesses and additional digital services from SPE