CONFIDENTIAL Digital Services and Distribution Acquisition Strategy DRAFT v3

page 1 Executive Summary SPE committed to digital services to help address challenges with core businesses –Accelerates revenue growth through participation in online advertising –Offers higher margins than traditional business lines Grouper provides a solid foundation, but recent market events now suggest that incremental investment will be required –Grouper offers technology, infrastructure, management, and initial traction with customers –Consolidation is raising the threshold for minimum audience size and content offering –Online video syndicators are building networks of loyal advertisers and distribution partners DSD would like to move ahead to evaluate leading targets, with deal proposal targeted before the end of the calendar year –Break ($75MM- $125MM) and Heavy ($150MM - $200MM) own high quality content and attract large audiences in a key demographic –Roo ($50MM - $100MM) combines a large base of aggregated content, syndication partners, and monetization

page 2 Grouper Provides a Solid Foundation, But Requires Time and Resources to Achieve Stated Goals Content Audience Functionality Small base of UGVOriginal digital content Licensed content Prosumer content Film and Television GrouperSPE1 st Year Development Demonstrated traction with targeted audience Leverage SPE marketing and promotions Build distribution network N/A Differentiated user experience Robust infrastructure Enhance feature set Improve embedded player N/A

page 3 Market Leaders Consolidating to Capture Audience Deeper Offerings Inception Tipping Point Consolidation Multiple market entrants grow at similar rates Market Dynamic Minimum Requirements to Compete Areas of Differentiation Examples (2004 – 2005)(Early 2006)(Late ’06 / Early ‘07)(Late ’07 / Early ‘08) Content and features on-par with competitors Limited differentiation Dozens of pure-play UGV sites struggle to reach a million unique users Leaders break-out from the pack Single compelling characteristic Unique piece of content Ease-of-use YouTube explodes with “Lazy Sundays” MySpace users flock to improved community features Leaders invest to expand audience and address priority content segments Large audience Large content base Content that appeals to high-value customer segments Google/YouTube Yahoo/JumpCut/Bix Viacom/Atom NewsCorp/MySpace Leaders add niche content and features for heavy users Supplement broad offering with depth in specific verticals Growing audience for niche offerings –Askaninja –Loneleygirl Large audience Brand known for an area of expertise

page 4 Market Evolution Raises Minimum Success Requirements and Requires Accelerated Execution Google’s acquisition of YouTube raised the bar for minimum base of content and users required to succeed Ongoing investments by new media (Yahoo!) and traditional media competitors (Viacom, NewsCorp) increases competition for content and audience Sites like Break and Heavy are building a large base of targeted, high-quality content are building leading brands and capturing audience Aggregators / syndicators like BrightCove and Roo are licensing content and building relationships with advertisers Other larger opportunities, like PhotoBucket, could bring value to Sony more broadly but would require additional commitment and coordination

page 5 Content Audience Functionality SPE Response to Market Evolution Must Address Increased Competition for Content and Audience Market Inception Develop or License Acquire Prioritize services that pair owned content with large high value audience Avoid sites with audience but no differentiated content Wide range of sites, little content focus Multiple sites growing in lock-step, no critical mass Limited functionality Media companies pair studio content with UGV sites (Viacom/Atom; NewsCorp/MySpace) Sites with large base of owned content capture high value demographics (Break, Heavy) Functionality is increasing but is not the primary draw Acquisitions raise the bar for minimum audience size (Google/YouTube) Market Consolidation Recommended SPE Response

page 6 Functionality + Audience PhotoBucket (12.0) Six Apart (10.4) Image Shack (9.3) Xanga (5.5) Reunion (4.7) MetaCafe (3.1) Digg (2.1) Putfile (1.4) Friendster (1.0) Content + Audience Roo Media (5.8) BrightCove (N/A) Break.com (3.3) eBaum’s World (3.0) Bolt.com (2.9) Heavy.com (2.7) May be Prohibitive Content College Humor (0.9) JibJab (0.6) Broadband Sports (0.1) RocketBoom(0.04) Revision3 (0.02) Channel 101 (0.02) Content + Functionality Pure Video (0.9) Castpost (0.2) Now Public (0.09) Bix (0.08) Blip.tv (0.06) Dave.tv (N/A) Functionality Meetup (0.7) Piczo (0.5) Text America (0.5) Imeem (0.2) VideoEgg (0.2) eyeSpot (0.2) MotionBox (0.2) Famster (N/A) Competitive Landscape and Acquisition Candidates Tier 1 Candidates Tier 2 Candidates Audience Putfile (1.4) DailyMotion (0.8) vMix (0.8) vidiLife (0.8) ManiaTV (0.6) Revver (0.5) Vimeo (0.5) Note: Numbers represent monthly unique users per Nielsen Net Ratings; may under represent audience for some sites, but provides a consistent methodology for comparison purposes

page 7 Leader with male youth, ages Owns a large base of compelling content Strong advertiser relationships 3.3MM$75MM-$125MM Based on early guidance from Montgomery Large, syndicated audience Relationships with content providers, advertisers, and web site partners 5.8MM$50MM - $100MM Public but thinly traded, will want a premium Audience skews toward males age Owns all content including mix of video, animation, and games 2.7MM$150 - $200MM Description Valuation Range Users (1) Company Leading Acquisition Candidates (1)Monthly Unique Users per Nielsen Net Ratings except for Roo (2)Roo audience estimate is of unique streamers per ComScore Tier 1 May be Cost Prohibitive Hosts photos and videos, enables publishing to sites like MySpace and Blogger 12.0MM$250-$450MM Based on rough guidance from Jeffries Content aggregation and distribution (competes with Roo) Strong content/advertiser relationships N/A$230 - $255 Guidance is for venture round, acquisition price may be higher Viable acquisition candidates combine content and an attractive audience at valuations below $150MM Priority Potential Cross-Sony Opportunity

page 8 Next Steps Initiate conversations with Tier 1 acquisition candidates Analyze and value acquisition targets Reconvene in two weeks to discuss potential acquisition offers

CONFIDENTIAL APPENDIX A Additional Strategy Pages

page 10 Approach to Specific Service Features Content Audience Functionality Grouper In-place Build / Grouper Small base of UGV content Original, low cost short-form Prosumer content/services SPE TV library, clips, minisodes Break / Heavy Owned content for male youth Roo Aggregated, topical content Licensors Licensed premium, niche video to fill out portfolio Buy Phase 1 Growth Mid-sized audience Skews toward males, Embedded player P2P sharing Downloadable video editor Web cam upload 1 click publishing DoubleClick Ad insertion Audible Magic Filtering TBD Search Partner Licensors Niche audiences through content licenses Break / Heavy Large on-site audience Roo Audience through syndication Expand embedded player Mobile uploads / downloads Online editor Branded channel template On-site audience (aspiring content creators) Syndicate to 3 rd party sites with embedded player Roo Ad insertion Syndication Real-time content ingestion

page 11 Content Pureplay Audience Pureplay Content With Audience Acquisition Priorities Description Valuations Speed Priority Moderate Targeted / niche content with small audience Moderate Content with large audience in high-value demographics Fast Gain critical mass quickly Slow Requires multiple acquisitions HighMediumLow Expensive Sites with audience but no differentiated content Slow Requires content and deals to supplement

page 12 Potential Cross-Sony Approach to UGC Services Store & Publish Online VideoSocial Networking / Communities LeaderOthers Sony Approach LeaderOthers Sony Approach LeaderOthers Sony Approach Acquire to reach scale; continue to build on Grouper Enhance Grouper embedded player; form syndication partnerships with leading sites Potential Cross-Sony opportunity to acquire leading player (e.g., PhotoBucket); integrate with Sony digital cameras and handi-cams

CONFIDENTIAL APPENDIX B Profiles for Tier 1 Acquisition Targets

page 14 Break.com Content Offering Online entertainment network and community powered by traditional user-generated content Content base skews heavily toward year old male- oriented humor, sports and other categories Majority of the content is original and created by users specifically for Break.com (Break owns much of its content. Takes an exclusive license to content it doesn’t own) Pays $250/ video for videos it wants to feature, incentivizing users to create high-quality videos Partnerships Strategic Profile Established in 1998 as, a video-sharing site Purchased in May 2004 by Keith Richman, co-founder of Billpoint 100% owned by Richman and a few business partners – has never taken any venture financing Generate revenue through custom advertising deals, PPC content plugs, banners and text links Based in Beverly Hills, CA with 33 employees Leverages AdBrite to sell its banner and text ads Established partnerhsip with Amp’d Mobile in Nov to distribute videos through mobile, charging $2.99/ month for unlimited access User Metrics Web page views (MM) Time/ person (min.) Internal Break.com sources estimate uniques of approx 14.7MM. Unique Users (MM) Note: estimated to generate ~100MM streams/ month Source: Nielsen//NetRating used for page view, time data, AdBrite; BambiBlogs.com; Break.com; Multichannel News; Amp’d Mobile; PureVideo; ComScore Video Matrix

page 15 Break.com Advertising: Banner ads – no pre-rolls or text Content User-generated Share it with friends (via ) Embed & blog it Interactivity: Promote to home page Rate It Recommend Comment

page 16 ROO Group Business Overview Content (100+ Partners)Sites Advertisers Entertainment News Lifestyle and Family 200+ Partner Sites Owned and Managed Ingestion EngineAd Network and InsertionProgram ChannelsVideo Player Licensing fees, payment-per-stream and ad revenue share

page 17 ROO Group, Inc. (NASDAQ: RGRP) Technology and Service Overview Core Services provided include: ROO Video Solutions - Customized video solutions for specific customers or industry segments; platform accommodates video broadcast over the Internet and to emerging technologies such as wireless devices and set top boxes ROO Syndication of Licensed Video Content - Provides a turnkey, global solution for customers to incorporate licensed, topical, programmed video channels into their web sites Current customers for this service include Verizon in the United States, Bulldog Broadband in the United Kingdom and News Interactive a subsidiary of News Corp ROO’s Online Advertising Network - Through syndication clients, ROO has developed a network of web sites across which the company can sell advertising inventory Advertising includes traditional banner ads and television- style 15 second and 30 second commercials, which can be programmed to play before and after video clips that are targeted toward advertisers' chosen demographic Syndication clients receive a percentage of the advertising revenue generated on their websites Recent advertisers include Microsoft, Apple, Honda, Hyundai, Target, Proctor & Gamble and Pfizer

page 18 ROO Group Video Stream Comparison Roo Group Inc.5,

page 19 Heavy.com Content Offering Broadband entertainment network focused on providing high- quality content Content base skews toward year old male-oriented humor and racy categories Takes full and exclusive ownership of a range of content (mix of video, animation, and games) created by Heavy and/or its partners, e.g., NBC delivered through distinct channels Generates revenue through banner ads, pre-rolls, and branded production, e.g., Burger King videos Partnerships Strategic Profile Established in 1999 as a P2P digital content sharing site by Simon Asaad & David Carson Polaris venture capital holds a 25% stake in Heavy; Polaris lead a $10MM round in January 2006 Expected to generate ~$20MM adv. revenues in 2006, a 300% increase over 2005 Ad sales and marketing conducted internally Based in New York, NY with 20 employees Recently announced partnership with TiVo to provide content for TiVo’s VoD service Established partnership with Verizon Wireless in April 2006 and created a channel on V-Cast subscription mobile offering Parnter with Sony PSP, video iPod, and Virgin Mobile to distribute non-wireless mobile content User Metrics Web page views (MM) Time/ person (min.) Unique Users (MM) Note: estimated to generate 80-90MM streams/ month Source: Nielsen//NetRating used for page view, time data, Heavy.com; Multichannel News; PureVideo; ComScore Video Matrix; paidContent.org; FT.com; VCMike’s Blog

page 20 Heavy.com Advertising: Banner ads Pre-rolls Content sharing: Heavy/ partner produced channels Share it with friends (via ) Blog it Interactivity: Rate It Comment