1. PRIVILEGED AND CONFIDENTIAL
DIVISIONAL UPDATE
Home Entertainment

2. Executive Summary Home Entertainment
Global home entertainment economics continue to be pressured by the worldwide economic recession, changes in the retail landscape, and evolving consumer habits
Medium-term outlook suggests opportunity for some recovery from stabilized consumer revenues and risk from continued shift to lower-margin models
In this period of turbulence, Home Entertainment is pursuing a cohesive set of strategies and operating principles to drive toward the best possible outcome, emphasizing a commercial focus on advancing higher-margin models (digital has risen to 25% of gross profit)
At the same time, Home Entertainment continues to rescale its business to bolster margins through efficiencies and savings
After laying out strategic and operating principles in 2nd bullet, suggest bringing-up ‘topics du jour’ in context of how we’ve actively driven the outcome using analytics and insights
Redbox
Struck an early above-market day/date deal (industry contribution/trx: $0.95; SPHE contribution/trx: $1.10)
Has had minimal cannibalization impact on sell-through window (note: Disney, Iger, and Paramount, Dauman, agree re: cannibalization effect)
Provided a hedge against decline in brick & mortar channel (b&m FY09 Net Rev: $120M -> Redbox FY11 FC2 Net Rev: $110M)
Netflix
Moved from above-market day/date deal to in-line with market 28-day window for > $50M DBO titles
Secured a higher MG so that a greater portion of the overall deal is guaranteed
Has a negative impact on a slate-neutral basis but inevitable as Netflix struck similar deals with all other studios
Blockbuster
Took a lien on BBI’s Canadian assets to secure our credit
Looks like it will enter managed Ch. 11 in early October
Will likely close an additional stores as part of managed Ch. 11
Actively renegotiating deal to be 15-20% below current terms to enable survival – analysis shows that going past 20% is net negative and will hold the line
Anticipate that most BBI consumer trx will shift to Redbox, followed by even split between VOD (favorable to us), Netflix and independent mom&pop rental stores 2

3. The decline in conversion rates appears to be decelerating
Home Entertainment Market U.S. CY2010 Year-End Traditional Physical: Theatrical New Release Sell-Through Dashboard
CY 2010 New Release Conversion of Domestic Box Office to 8-Week Retail POS
(Transactions per Thousand Dollars in DBO, Through December)
Domestic Box Office ($M)
8-Week Box Office Factor
CY ‘06
CY ‘07
CY ‘08
CY ‘09
CY ‘10
YoY % Change:
Domestic Box Office
-3%
-5%
+0%
-0%
Update: through April, cume. Δ -43%
BOF
-1%
-20%
-12%
-7%
Cume. Δ from 2006
-1%
-21%
-31%
-36%
The decline in conversion rates appears to be decelerating
Sources: Nielsen Home Scan; title-level analysis; SPHE Commercial Planning & Innovation
Note: Major studios include Fox, Lionsgate, Paramount, SPHE, Universal, Warner, and Disney (includes distributed lines); box office adjusted for inflation (in 2010 dollars) and 3-D admissions. For titles that have fewer than 26 weeks of POS data as of the end of January 2011, 26-week POS has been projected. 3

4. CY Δ in U.S. Consumer Spending on Home Video
Home Entertainment Market Update U.S. CY2010 Year-End Market Dashboard
CY Δ in U.S. Consumer Spending on Home Video
(Year-On-Year % Change in $US, CY’09 v. CY'10)
Physical
Digital[2]
Sell Through
Rental[1]
Phys.
Total
Sell Through
iVOD
Rental
CST VOD
Rental
Dig.
Total
Total
Market ($B)
10.15
5.85
16.00
0.60
0.16
1.20
1.96
17.96
% of Total
57%
33%
90% 3% 1% 7%
10%
100%
Source: Rentrak, Nielsen VideoScan, Screen Digest/Adams Media Research, SPHE Commercial Planning & Innovation
Note: [1] Physical rental data is NOT inclusive of Digital revenues (whether iVOD, or Cable/ Satellite VOD/PPV). [2] All Digital data from Screen Digest / Adams Media Research [3] Numbers do not add to 100% due to rounding. 4

5. PRIVILEGED AND CONFIDENTIAL
Home Entertainment Market Impact of Business Model Mix
Below trends at a consumer spend level, the underlying business model mix in Home Entertainment creates opportunities and risks for studios
$ Contribution to Studios per Transaction by Business Model (Industry Average)
Digital
Digital
Rental
Sell-Through
(1)
Source: Screen Digest, FutureSource, Morgan Stanley ; SPHE Commercial Planning & Innovation; SPHE Bus Dev & Strategic Planning
Notes: SPHE margins generally in-line with industry averages with exception of Redbox where SPHE margin is ~$1.10 vs. industry kiosk average of $0.95
(1) Brick and mortar (B&M) margin represents a weighted average of traditional DVD and Blu-ray rental margins. Weighting based on number of total domestic 2009 rental units consumed by format (i.e., 95% traditional DVD, 5% Blu-ray) per Morgan Stanley
PRIVILEGED AND CONFIDENTIAL 5 5 5 5

6. Home Entertainment Market Business Model Mix Impact on SPHE
Given its higher margins, digital now represents 26% of SPHE’s gross profits on 18% of net revenues
Percentage of SPHE WW FY12 Budget – Net Revenue vs. Gross Profit by Format
100% ($1,906M)
100% ($1,236M)
($346M)
($322M)
($1,560M)
($914M)
Source: SPHE Finance

7. Home Entertainment Market Update International CY2010 Year-End Market Dashboard
CY Δ in Consumer Spending on Physical Sell-through
(Year-On-Year % Change in $US, CY’09 v. CY'10)
Note: Market data for Digital is limited internationally
Australia
France
Germany
Japan UK
ROW [2]
Total
International Digital (Select Y-o-Y Statistics)
Europe EST & iVOD
Market: +88% to $150M
# of Territories by Service
iTunes: 8 (18 by July ’11)
PSN: 5 (9 by July ’11)
Xbox: 17
Asia/Pac EST & iVOD
Market: +800% to $80M
iTunes: 3
PSN: 2 (6 by Fall ’11)
Xbox: 3
Market ($B) [3]
1.4
1.8
1.8
2.8
3.1
3.9
14.8
% of Total 9%
12%
12%
19%
21%
26%
100%
Sources: Nielsen Home Scan, GfK, OCC, Rentrak, Screen Digest, Oanda.com (for exchange rates), SPHE Commercial Planning & Innovation; Secondary research
[1] MSO VOD inclusive of Commercial Planning & Innovation estimates to account for unavailable Verizon IPTV Q4 data, and assume that Verizon accounts for 7.8% of MSO VOD txns and 8.1% of MSO VOD revenues [2] ROW includes Belgium, Brazil, Canada, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland; Brazil and Norway newly reporting, and therefore only included in Market size figure, not YoY variance figure. [3] Market figures based on $US exchange rates as of December 31, 2010 7

8. Home Entertainment Market Update Global CY2011 April YTD Market Flash
US Physical & Digital Home Entertainment spend down -8% (CYTD through April, ’11 vs. ‘10)
Physical spend down -10%
Rental up +0.8% despite slate’s sharply lower Box Office
Sell-through off -16% as:
New Release Theatrical spend down -29% due to lower BO$ (-25%) and lower-performing home video genre mix
Theatrical Catalog slid -10%; in comparison, SPHE -1.9%
Digital spend up +9%
EST +10%, Internet VOD +31%, Cable VOD +6%
International Physical Retail down -14%

9. Home Entertainment Market Update Trailing 12 Months: Market Events
Key Themes
Examples
Continued strength in consumption ‘at-home’ (transaction growth)
However, consumers continue to face economic pressure (persistent unemployment in key territories, decreased theatrical admissions)
This has resulted in consumers ‘trading down’ from higher-margin sell-through to innovative models with less favorable studio economics (kiosk, subscription)
Shifting Consumer Patterns
Highly intensive retailer-initiated store reconfigurations (e.g., Wal-Mart)
Accelerated retailer conversion from DVD to BD ahead of consumer demand (lower initial productivity, especially in Catalog)
Retailer closures and bankruptcy risk (Movie Gallery, Hollywood Video, Blockbuster)
Retail Landscape Pressures
Continued rise of VOD model offering higher-margin transactional rental
Continued rise of lower-margin kiosk rental model capturing the impulse at a lower-margin (Redbox, NCR)
Continued rise of lower-margin subscription rental model impacting Catalog and TV (Netflix, LOVEFiLM)
Entry of traditional retail into new media (Wal-Mart/Vudu, Best Buy/Cinema Now, etc)
Emerging Business Models
Source: Secondary research 9

10. Traditional Business Optimization Operating Model Enhancements
Home Entertainment Trailing 12 Months: SPHE Responses
Response Areas
Example Responses
First distributor with 3D Blu-ray in the market (Cloudy)
Launched HD-EST on iTunes and PSN
Driving Ultraviolet launch (targeted for Fall 2011 with Bad Teacher)
Testing early EST (2 weeks pre-DVD) as a potential new sell-through model
Increased shift of VOD avails to day/date
Extended international digital footprint from 10 to 19 account territories
New Media
Traditional Business Optimization
Rolled-out domestic DVD inventory reduction strategy to deplete highest-risk inventory
Launched manufacturing on-demand program to monetize deep Catalog
Deployed a new trade promotion management system (Playbook) to drive ROI-based decision-making
Assessing global footprint for opportunities to establish more efficient operating models (e.g., Sony United: Sony Music in Nordics; JVs: Australia; etc.)
Outsourced European retail services group through JV (SRS) with DADC
Assessing domestic outsourcing opportunities (e.g., order-to-cash)
Operating Model Enhancements

11. 12/25/2017
Home Entertainment Responses Highlight: Managing Availability Windows (U.S.)
0 Days
+60 Days
+90 Days
+120 Days
+180 Days
+1 year
Theatrical
Hotel &
Airline
DVD Sell-through and Brick & Mortar Rental 5
Early EST
EST (Non-HBO Studios, incl. SPE)
EST (HBO Studios)
EST (HBO Studios)
Blackout 4
Home
Theater 1
PPV/ VOD
Pay TV
Pay TV
Broadcast 2
Kiosk Rental 3
Subs. Rental 1
Day/Date PPV/VOD: Releasing increasing number of titles day/date (+30% lift)
Kiosk Rental: Maintaining day/date due to above-market deal terms with Redbox
Subscription Rental: Instituted 28-day window on >$50M DBO titles with Netflix
Premium Home Theater: Launched at high-price +60 days (see next page for details)
Early EST: Leading in testing EST product offer at two weeks pre-DVD release 2 3 4 5 11

12. Initial Launch Approach
12/25/2017
Home Entertainment Managing Availability Windows: Premium Home Theater
Rationale Recap
Initial Launch Approach
Earlier window VOD represents incremental high-dollar margin product opportunity with minimal anticipated risk of cannibalization
Measurable lift to VOD product with earlier release (e.g., VOD std. window buy rate @ 2% vs. 3.5%)
Ability to extend awareness created by theatrical marketing campaign
Distribution partners generally put more marketing support behind ‘fresher’ product
By days post-theatrical, 99% of average theatrical gross revenues generated
Formulated as test at exhibitor-friendly window and ultra-premium price point
Windowed at 60 days post-theatrical to minimize cannibalization risk
Priced at $29.95 to ensure that any cannibalization is margin positive
Security considerations limit addressable market to small number of households
Preliminary results suggest product has potential and room for further refinement
SPE tested in U.S. with Just Go With It and Battle:LA via DirectTV (<3MM capable HHs) with limited pre-promo marketing to appease exhibitors
Still monitoring results for any theatrical or home entertainment cannibalization effects
Warners (Hall Pass, Red Riding Hood), Universal (Adjustment Bureau), and Fox (Cedar Rapids) apparently testing same offer with DirectTV 12

13. 12/25/2017
Home Entertainment Managing Availability Windows: Premium Home Theater (cont.)
Next Steps
SPE intends to continue testing current product offer with additional titles (Soul Surfer) but will refrain from testing with any major summer releases
Continue testing current product formulation to enable a meaningful set of results and comparisons
Actively engaging theatrical and retail distribution partners in dialogue to maintain positive relations
Other studios appear to remain committed
Future
In the medium-/long-term, premium home theater will likely continue a gradual roll-out that evolves to include an ownership model
Continued emphasis on proper security restrictions limits growth in number of addressable HHs
Active development of other distribution arrangements with eligible partners (Comcast, Verizon)
Emphasis on ownership model (e.g., coupon to buy, add to Ultraviolet locker) likely next evolutionary step – unlikely to change pricing or windowing given cannibalization/retaliation issues 13

14. Home Entertainment Key Strategies
SPHE pursuing a number of strategies that address the current reality and seek to shape the best possible future
Advance Higher-Margin Models: advance higher-margin distribution models in physical and digital formats to fully exploit the potential of consumer transactions
Manage Product Lifecycle: develop and execute fully-integrated commercial tactics to maximize profitability of our content across its lifecycle including disciplined planning to manage margin dilution from returns, rebates, and inventory
Leverage Strategic Partnerships: fully leverage Sony United and 3rd party partners to bolster product portfolio, extend distribution reach, and drive efficiencies