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

4. page 3 Impact on Entertainment Economics and Industry Responses (1 of 2) Declining home entertainment market driven by shift from higher-margin sell-through to lower margin kiosk and subscription rental –New release sell-through box office factor is 39% below 2006 peak 2 –Rental transactions are roughly flat, but margins down with shift to kiosk and subscription –Catalog revenues are declining at a concerning rate Home Entertainment: Experimentation w/ New Models Home Entertainment: Impact on Economics Studios seek to sustain higher-margin physical models where possible, emphasizing Blu-ray and using superior functionality and bundles as drivers Studios nurturing emerging digital transactional models (EST, VOD) – achieving high growth rates but off a small base Studios are emphasizing higher margins within emerging models –Experimenting with windowing strategies, including day-and-date VOD and early windows –Segmenting product by window to limit cannibalization of higher-margin product Continued Importance of Physical Revenues Despite faster growth in digital revenues, traditional/physical revenue streams will remain significantly larger for the next five years Source:1 Screen Digest, August 2010. Digital includes “VOD/PPV” (total on-demand movie consumer revenues) and “On-line” (transactional movie retail and rental download/subscription consumer revenues) 2 Nielsen Home Scan, title-level analysis; box office adjusted for inflation and 3D admissions

5. page 4 Impact on Entertainment Economics and Industry Responses (2 of 2) TV Revenues Film Production 3rd party film financing sources are demanding improved economics under attractive terms, less capital is available Franchises remain critical drivers of studio profits and must be maximized across all revenue streams Studios are increasingly focused on tight cost management. However talent costs, production budgets, and marketing have not dropped sufficiently Networks Network revenues are expected to see continued growth –Subscriber revenue has proven recession-proof –Key ad markets are rebounding Competition is increasing to roll-out channels worldwide, but numerous opportunities still exist to launch new networks Distribution New digital players in the U.S. (e.g., Hulu, Netflix) are acquiring content in the premium subscription window, creating additional customers for SPE Broadcast and cable partners are seeking expanded digital and cross-platform rights to remain competitive with emerging competitors Production U.S. demand for dramas (procedurals) and comedies (including single camera) is on the rise; non-scripted is still in-demand but only a few series break-out International production is rapidly consolidating but opportunities still remain

6. Secure and fully exploit franchise films –Potential franchises in Girl with the Dragon Tattoo, Smurfs, Karate Kid, 21 Jump Street –Re-establish/continue to exploit existing franchises in Spider-Man, Men in Black, Ghostbusters, Ghost Rider, Dan Brown films, Resident Evil, Underworld Continue to reduce talent costs –Talent compensation structures are shifting from first dollar to post-breakeven deals Emphasize films with international potential –Action, family and franchise films (e.g. Girl with the Dragon Tattoo, Men in Black 3, Smurfs) Continue to pursue attractive financing options and deal structures Prioritize investment in higher margin films page 5 SPE-specific Issues and Initiatives (1 of 3) Pursue opportunities to generate cash with a goal of becoming cash flow positive Increase margins and overall operating income to exceed $500 mil in FY13 and FY14 Film Economics Overall Economics

7. page 6 SPE-specific Issues and Initiatives (2 of 3) Home Entertainment Physical Continue to grow Blu-ray segment by promoting new product features (3D, BD- Live, digital copy) and adjacent initiatives (DVD2BLU, MOD) Implement rigorous commercial planning approach to maximize the profit potential of each title – from manufacturing strategy to retail execution Restructure organization to be more flexible and responsive to changes in the market, including CPG-like customer channel alignment Digital Lead physical customers in transition to digital business model (Amazon, Wal- Mart/Vudu, Best Buy/Cinema Now) – be the ‘category captain’ for digital Develop product features that make ownership model more attractive for consumers (Ultraviolet, short-form apps, e-fulfillment, digital extras, playlists) Continue to experiment with release windows (day/date VOD, early windows) to drive higher-margin transactions

8. page 7 SPE-specific Issues and Initiatives (3 of 3) Additional Growth Opportunities Pursue growth opportunities in 3D across entire business (theatrical releases, Blu-ray releases, television networks, and technology) Leverage Sony United collaboration opportunities Networks Continue to invest in television networks internationally, including channels in India and other emerging markets Continue to invest in U.S. channels and increase U.S. channels contribution Competition is increasing and cost of content is rising Production Increase television production presence in highly strategic markets including UK and expand to emerging territories Expand number of television shows in syndication in the U.S. Create a pipeline of scripted and nonscripted “hits” Distribution Expand SPT's distribution presence in selected emerging markets (Middle East, Africa, Hungary, Central and Easter Europe) and key markets (Netherlands and Scandanavia) Capitalize on new buyers and platforms (e.g., SVOD) and accelerate international VOD and Pay TV windows Television

9. page 8 Opportunities for Sony to Facilitate SPE Growth Launch a robust content service across all Sony devices –License existing SPE content to benefit devices –Provide a platform for launching new film and TV content Ensure Sony hardware supports digital rights locker models, including Ultraviolet, that will help grow higher margin EST model Include HDMI cables with all devices to support digitally secure offerings in earlier windows (e.g. premium home theater) Leverage Sony playback device and connected device installed base to support growth in Blu-ray and electronic sell-through products –Joint promotions across product lines (e.g., PS3/BD ad campaign, 3D TV/3D BD spot in circulars, etc) –Content services that develop advanced sell-through specific features (digital extras, exclusives, etc) Continued commitment of capital to enable ongoing investment in international networks, a key driver of the business' growth