SONY Online Content Discussion March 2010

DRAFT page 1 Executive Summary Type and volume of content selected may vary depending on our goals for a service –Hardware focus – seek content and/or viewing experience that differentiates our hardware and drives new purchases –Service / network focus -- seek content that provides existing Sony hardware owners a compelling addition to (or alternative to) Cable / Broadcast Nets, Netflix, Hulu, and cable VOD Although $1-$2BN of content would not provide the range of content available through cable service or broadcast TV, it would eclipse the spend of current online pure-plays –To provide a full range of channels, MSOs spend $7-$8BN in affiliate fees –Broadcast networks spend roughly $3BN on programming –Cable network programming spend varies widely (from tens of millions to several billion) –Hulu and Netflix Streaming are spending an estimated $100 to $225MM on content In the near-term, Sony should allocate spending across a mix of approaches to provide a compelling experience –License existing content (e.g., films, sports, TV series) –Commission compelling originals as HBO, Fox, and AMC have done to build their brands Costs to a nascent digital network may be nearly twice as much as for established networks as producers may be less likely to bear a deficit –Offer content under new on-demand models (e.g. early window)

DRAFT page 2 Programming Spend by Provider ($ MM) Subscription TV Providers Basic Cable / Regional Sports Networks Affiliate Fees Source: SNL Kagan, SEC filings, Wall Street research, SPE Corporate Development research (1) Represents LTM programming expenses for US and Latin America as of 9/30/09. Source: SEC filings (2) Represents LTM programming expenses as of 12/31/09. Source: SEC filings (3) Represents content owner revenue share for Between 70% and 75% of total ad revenues are taken by content providers. Source: SNL Kagan (4) Streaming content acquisition costs for 2009 only. Source: Wedbush Morgan analyst report. (1) (2) Broadcast / Leading Cable Networks Premium Cable Net. Online Affiliate Fees Content Provider Revenue Share License Fees for Streamed Content License Fees for Programming incl Originals (3) (4)

DRAFT page 3 Source: SNL Kagan, Company filings, Wall Street research, SPE Corporate Development research (1) Annual figures. Fox paid $4.27BN for a 6 year NFL deal; TNT paid $2.2BN for a 6 year NBA deal. Four years of BCCI Cricket world-wide rights went for $430MM (2) Assumes $2.6MM total spend on 22 episodes (3) Assumes $2.1MM total spend on 15 episodes. TV Series Prog. Costs BCCI Cricket (1) Broadcast Network Rights for a Major Sport Cable Network Rights for a Major Sport International Sports Rights Broadcast Network-Quality TV Programming TV Sports Broadcast Rights Broadcast Series Cable Series Cable Network-Quality TV Programming (2) Cost to License Selected Properties for a Single Year ($ MM) (3)

DRAFT page 4 Source: SEC filings, SPE Corporate Development research, Wall Street analyst reports Online Subscription TV Provider Marketing Expenses ($ MM) Basic Cable Network 23% % of Programming Expenses 34% 22%