Hancock Early Window Strategy May 2008

1 Executive Summary SPT has been asked to participate in an early window VOD test, making Hancock available exclusively on Sony Bravia TVs through the BIVL service This test provides SPT with an opportunity to achieve two goals –Support a Sony United initiative to generate market awareness for Bravia/BIVL –Establish market terms that support SPT’s efforts to launch an early window VOD offering with cable, MSO, and DBS partners We recommend moving forward with the test based on the following terms –Deemed Price: [$14.99] – [is $14.99 High Enough?] –Viewing Period: 24 hour rental (streaming) –Availability: 4 weeks prior to DVD/Blu-ray street date –Length of window: 2 weeks –Split: The greater of [83%] of the deemed price or actual retail price –Infrastructure: Sony to host and manage e-commerce (as required)

2 Marketplace Offerings PricingFormatModelSplit $ to Service Provider $3.99Standard DefStandard VOD60/40$1.60 $4.99High DefStandard VOD70/30$1.50 $4.99Standard DefDay-and-Date VOD70/30$1.50 $8.49High DefDay-and-Date VOD70/30$2.55 $14.99High DefEarly Window 83/17 *$2.55 = Proposed pricing and split, no deals currently in place * Implied split based on $14.99 price point Goal to hold $ value to service provider consistent regardless of price

3 Pricing Early window HD should clearly be at a premium to the proposed $8.49 HD day-and-date offering Appropriate price for early window HD has been under debate –Oliver Wyman analysis suggests $14.99 is optimal –Proposed Spider-Man 3 on PS3 was discussed at $29.99 Coupon Due to Starz deal, coupon can not create an effectively free offer Coupon strategy will likely be used by partners in equivalent test; therefore Hancock test will set precedent We recommend no coupon as it confuses the message of a premium offering at $14.99 Wholesale SEL would pay SPE on the same terms as MSOs and DBS partners Greater of 83% of the deemed or actual retail price is consistent with the $ value retained by service providers in the HD day-and-date window ($2.55 at $14.99 price point) Pricing, Coupons, and Wholesale for Hancock Test

4 Overall Recommendations for Early VOD Window ParameterRecommendation Rationale Deemed Price[$14.99]  [see previous] Discounting Consumers must pay minimum value [$TBD]; SPT to have approval rights over coupons / promotions  A completely “free” via a coupon or other promotion would conflict with Starz deal Viewing Period24 Hours  Viewing period longer than 24 hours would conflict with Starz deal Availability 4 weeks, prior to DVD/ Blu-ray window  Price and HD format are the primary drivers of consumer interest  Timing is less of a driver and 4 weeks early appears to be sufficient to generate interest and drive demand Duration2 Weeks  Retain ability to lengthen window  Allows for blackout period before DVD/Blu-ray release window Split Greater of [83%] of the deemed or actual price  Maintain same $ split for distributor as HD day-and-date window Timing Distributor to announce availability no earlier than +60 days from theatrical  Earlier announcement could affect box office Under existing contracts, cable / MSO / DBS partners have a matching right for an “equivalent” early window test Terms for the Bravia / BIVL test will set a market precedent and therefore must support SPT’s long-term interests with respect to a early VOD window Terms must not also trigger existing Starz or other deals

5 Hancock Windows JulAugSeptOctNovDecJanFebMarAprMayJun Standard Hancock Windows Theatrical Release 7/2 Hotel 10/1  4/11 Home Ent. 11/11 Residential 12/26  4/11 Starz (through 8/10/2010) 5/11  FX (starts 10/11/2010 – 10/10/2015) Early Hancock VOD Window VOD on BIVL (2 wks) 10/14 10/28 Starz Window 5/11  Proposed Early VOD to run for 2-week period between Oct 14-28, 2008 – VOD must be dark for the two weeks immediately preceding HE release (11/11/08) Early VOD window does not affect Starz as long as it starts later than 9/11/08 – Starz is the early of 6 months from HE release date or 8 months from VOD

6 Other Issues Messaging Release needs to clearly identify Hancock / BIVL as a test SPT needs the opportunity to contact its cable / MSO / DBS partners in advance of release in order to minimize any potential backlash At SPE’s discretion, the test may be announced prior to the black-out period that extends 60 days from theatrical release Release can not mention the name of any 3 rd party backend provider for hosting / e-commerce, if necessary (e.g., Amazon) Back End E-commerce requirements need to be settled based on final payment / coupon strategy Need to determine how (or if) no analog out requirement would affect matching right [Others]