1. CONFIDENTIAL Key Trends, Issues, and Opportunities for SPE’s Mid-Range Plan August 27, 2010

2. page 1 Entertainment Industry Megatrends (1 of 2) In the next five years, digital technologies will accelerate as a means of accessing all forms of entertainment and media –Worldwide broadband households are projected to increase at a 7% CAGR from 487.2MM in 2009 to 677.1MM in 2014 1 –Proliferation of technologies for viewing video digitally Worldwide 3G-enabled smartphone shipments are expected to grow at a 50% CAGR from 131MM units in 2009 to 656MM units in 2013 2 Worldwide households with connected game consoles are expected to grow at a 14% CAGR from 94.8MM in 2010 to 160.7MM in 2014 3 Worldwide connected TV 3 households are projected to grow at a 51% CAGR from 49.7MM in 2010 to 255.8MM in 2014 Changing Consumption Patterns Accelerating Pace of Digital Access Increasing consumption of filmed entertainment –B.O. admissions and ticket prices grew through 2009; future revenue growth expected to be primarily from ticket price increases, including premium for 3D –HE total transactions were up through 2009 as customers adopted new business models and accessed content through new platforms However, consumers are increasingly driven by convenience. Low-margin rental models evolved to meet this need, capturing much of the increased demand –Kiosk and subscription rentals are projected to continue to grow, accounting for 52% of the US consumer rental spending in 2013 4 Global video piracy is still strong and is expected to increase, driven in part by rising broadband penetration Source:1 ScreenDigest 2 Morgan Stanley, "The Mobile Internet Report," December 15, 2009 3 Parks Associates, Connected TV figure does not include digital video players, connected game consoles or connected Blu-ray players 4 SPE Home Entertainment

3. page 2 Entertainment Industry Megatrends (2 of 2) Physical retailers are converging with digital offerings (Wal-mart/Vudu, Best-Buy/CinemaNow, Amazon) –Retailers evaluating how to coordinate between physical and digital to ensure smooth migration for consumers while maximizing profitability Pure “rentailers” like Hollywood Video, Movie Gallery and Blockbuster have entered or are facing bankruptcy and studios are losing shelf space Emerging Markets Retail Partners Emerging markets will see the fastest growth in media spend, but cannot be handled with a uniform approach –Spending on M&E: Latin America 8.8%, Asia Pacific 6.4% CAGR (’10-’14) vs. North America 3.9% and Europe/Middle East 4.6% 1 –Not all markets work well for media: China’s media spend is forecast to grow at 12%, but piracy concerns, quotas, and poor retention for Western content results in limited profit opportunity 1 –India, by contrast, is showing rapid growth, including TV subscription revenue forecast to grow at 12.3% CAGR through 2014 1 Source:1 PricewaterhouseCoopers, Global entertainment and media outlook: 2010-2014