Worldwide Theatrical Marketing and Distribution 2014 MRP - Strategy July 17, 2014

Agenda Marketing Initiatives Media Basics Research International Structure Overhead

2014 MRP Strategy Marketing Initiatives

Initiated aggressive media budget management to curtail budget inflation Leveraging “earned media” opportunities by adding hashtag to all TV spots/clips – digital integration Utilize YouTube premium ad offering in light of its consistent top digital source of awareness Leverage Facebook’s “timeline” to drive video views and increased engagement rates for our films We lead the industry in leveraging our talents’ social media following, such as Channing Tatum and Kevin Hart on Twitter Sony now ranks the lowest in per film average in total media points utilizing the cheapest mix of television (i.e. lowest prime and highest cable) and aggressive digital Conducted first media cost and quality audit with Ebiquity to evaluate UM’s buying performance Used audit results to challenge UM to further cut media budgets 5% without affecting points/delivery $18 million savings goal for FY15 based on the above Cut commissions/bonuses with UM by over $2 million per year by initiating overhead cuts and renegotiating new 3-year deal

Implemented several cost saving initiatives to cut Basics spending: Digital Marketing Eliminated spend with Sony Pictures Interactive (SPI), saving over $10 million per year Creative Advertising Torch Creative – Established in-house creative editing facility, primarily for versioning, minor revisions and event/corporate reels. Estimated savings are $ million per year Reviewing entire Creative Process from campaign start through production to optimize favorable impact on costs, including outside creative agency spend, reduction of revisions and rush charges, and other workflow pain-points Reviewing TV spot creation and finishing process to ensure that only spots that will air are finished Creative Production Renegotiation of several vendor deals, including TV spot finishing, TV Spot distribution, trailer elements and finishing, and adaptive print creative generates savings of almost $5 million Publicity Pursuing premiere sponsors Formalized vendor agreements and rate cards in several areas of Publicity, including promotional items, regional agencies, PA tours, grooming, junkets and screening e-tickets to save over $4 million Summer of Sony – Reviewed the costs and related media value of the annual Summer of Sony event in Cancun, compared to that of holding separate junkets/tours per film across multiple international territories. The Cost savings/cost avoidance associated with holding just the one event is estimated at almost $4 million

Various Basics initiatives have driven average Basics down significantly in the last few years Examples of current versus prior Basics’ spending: Recent Title Basics (in millions) Basics (in millions)Prior Comp Title 22 Jump Street$9,100$9,80021 Jump Street Sex Tape$8,600$8,700Bad Teacher This is the End$8,000$10,700Pineapple Express Wedding Ringer$5,000$5,900About Last Night Grown Ups 2$10,300$11,200Grown Ups Chappie$10,000$11,100Elysium Average$8,500$9,567 * All recent titles also have a higher DBO than the prior comp film

Utilizing research more than ever in order to: Ensure the right film mix Consider sequel potential/pit-falls Optimize release dates Test trailers against competition in release window Conducted worldwide “Mind of the Movie-goer” research study to better understand the movie-going consumer, what they respond to and what motivates them to attend our films.

2014 MRP Strategy International Structure

Sony has aggressively closed offices and/or pursued joint ventures and sub- distribution deals to maximize international overhead We have almost the fewest owned/solo offices at 12, compared to Paramount’s 11 on the low end and BVI’s 22 on the high end Our JV arrangements with BVI continue to be advantageous and enable us to keep costs lower than Fox or Warner Bros, who have only 2-5 JVs to our 7 Sony’s 19 solo/JV office count is the lowest of any studio. Warner Bros is next with 22 and Universal the most at 30. Office Structure by Studio

Owned Offices Most studios still independent in these major markets, except as noted in blue

Joint Venture Offices Sony has the most JVs in this market mix (with BVI)

Owned Office & Sub-Distribute for a Major (see Green) Sony generates revenue from these sub-distribution deals that covers at least 50%, and potentially over 100%, of our overhead costs

No office: Sub-Distributed by a major (red are owned offices/JVs of competitors) Sony has closed several offices (see *) and shifted to a sub-distribution deal with a major All other studios have several owned offices or JVs here

No office: Sub-Distributed by a Local (red are owned offices/JVs of competitors) Most studios use local distributors in these markets Sony is only major without at least one owned or JV office on this list

2014 MRP Strategy Overhead

From FY09-FY15, Worldwide Theatrical Marketing and Distribution has eliminated over 121 headcount and reduced overhead costs over $45M (24%), as follows: 2014 MRP Strategy Overhead HeadcountCostComments FY0951$5.9Closed Sweden office; various territory cuts, SPR & Marketing cuts FY Closed Russia supervisory office; Garel, Foley, FY1266.2Closed Italy office; Russell, Goldstein, Zucker FY13/ Closed Dallas, Holland and Argentina offices; new sub deals in Brazil, Scandi, and Benelux; restructure H.O. uplift and A/R depts; Amos, Loper, Mannheim, Lightbourn FY Closed Portugal and Dallas offices; restructured A/R dept; reduced Consumer Products dept; eliminated Research, Special Events and Int’l Media senior executive positions, among others Total121.5$45.424% cost reduction versus FY09