CONFIDENTIAL Grouper Acquisition Opportunity Presentation for GEC August 16, 2006 Draft v.15

page 1 Executive Summary SPE has 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 online –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 –Service will be further enhanced by SPE content, marketing and ad sales capabilities

page 2 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 Theatrical Marketing Content Distribution Economics Advertising Sales Achieving and exceeding SPE revenue growth and margin targets will increasingly require entry into adjacent businesses

page 3 Competitors Are Investing in User Generated Video User Generated Video Creates Value for Traditional Content Owners User Generated Video Creates 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 Acquired Intermix / MySpace for $580MM Acquired IGN for $650MM and Scout for $170MM $900MM search advertising deal with Google 7/18/2005 9/09/2005 8/07/2006 Acquired Lightningcast for online video ad insertion technology Launched free video portal with content from A&E, MTV, Warner 5/18/2006 Acquired iVillage for $592MM Promoting new series on YouTube 3/06/2006 6/27/2006 Acquired iFilm for $49MM Agreed to distribute MTV content over Google’s AdSense network Announced pending acquisition of Atom Entertainment for $200MM (includes Addicting Clips) 10/13/2005 8/07/2006 8/09/2006 8/1/2006

page 4 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 Viacom acquisition pending as part of Atom Entertainment deal 2.6 Secured $15MM in funding July 1, 2006 Believed to be off the market 3.0 Performs well against acquisition criteria –Strong management –Differentiated technology –Demonstrated traction

page 5 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 We were informed that Grouper received a competitive acquisition bid of at least $50MM Entered into exclusive negotiations with SPE through 8/18/2006 Multi-platform Video Distribution Network focused on watching, sharing, and creating user generated video Experienced management team Syndicates video to other sites through one-click posting (MySpace, Friendster, Everyone’s Connected, WordPress, Blogger) Leverages P2P software client; increases video quality; decreases delivery costs Enables video portability to multiple devices (iPod, PSP) Widely distributes easy-to-use video editing tools (Proprietary client, Instant upload from cameras, camcorders, and webcams) 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 112,000 uploaded videos programmed across multiple genre-based channels (1) Investors include DAG Ventures and T-Online Venture Fund

page 6 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 Addresses the growing area of ad-supported user-generated content and enables SPE to participate in the growth of online advertising Management team has required expertise Brand has demonstrated traction and strong growth potential Platform for SPE to market and distribute studio content online Leverages SPE’s ad sales relationships and provides cross-platform ad inventory 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 7 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 8 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 9 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 10 Grouper Service Highlights: Create Videos Real-time recording and upload from web cams Proprietary client with easy-to-use editing tools –Select video –Select photos and tracking / panning effects –Select music

page 11 Comparable Company Analysis Supports a $80-$110MM Valuation Recent Fundings Recent Acquisitions Analysis excludes Viacom’s August 9 acquisition of Atom Films for $200MM

page 12 SPE Projections – Base Case (lower than Management 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 through (4)Deepwater mark represents cumulative cash position.

page 13 Risks and Mitigation MitigationRisks Customer retention / increased competitionDifferentiated technology provides a better user experience than competitors Syndicate content to other sites (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 Potential for infringing or indecent content on site Grouper has procedures to remove inappropriate or infringing content Grouper has a policy of banning users and / or terminating accounts of users who post such content Separate branding from Sony

page 14 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 15 Grouper Acquisition: Summary Provides entry into an adjacent media business at a compelling valuation Represents a compelling standalone business opportunity Provides SPE opportunity from the growth of online advertising Establishes direct, interactive relationships between SPE and consumers Provides upside opportunity as Grouper leverages SPE’s content and advertising sales, and SPE’s traditional businesses work with Grouper Offers potential support for other Sony businesses and additional digital services