1. CONFIDENTIAL Grouper Acquisition Opportunity July 2006

2. page 2 Agenda Acquisition Highlights Executive Summary Appendix

3. CONFIDENTIAL ACQUISITION HIGHLIGHTS

4. page 4 Grouper Acquisition Highlights Moves SPE into growing area of ad-supported user generated content Differentiated technology Demonstrated traction with users in a core demographic Undervalued relative to competitors in the space Complements current SPE efforts to market and distribute content online Compelling as a standalone business Potential to become a platform for additional digital video services

5. page 5 Grouper Overview Service Summary Company is pre-revenue, received $5.1MM funding to date Ownership is divided 40% management, 45% institutions (1), 12% employee options, 3% friends and families Received a competitive acquisition bid of at least $50MM Multi-platform Video Network dedicated to watching, sharing, and creating user generated video Enables video portability to multiple devices (iPod, PSP) Attracts users from other sites through one-click posting (MySpace, Friendster, Everyone’s Connected, WordPress, Blogger) Widely distributes easy-to-use video editing tools (Proprietary client, Instant upload from webcams and mobile phones) Ad-filtering tools target ads based on content tags Leverages P2P software client; increases video quality; decreases delivery costs Differentiators Funding and Deal Status Demonstrated Traction #2 independent video community (Hitwise May report) Launched beta version of site and attracted 7MM global UU’s (3MM US) Reaches a young demographic that is 58% male Over 60,000 uploaded videos programmed across 18 channels (1) Investors include Accela LLC, Applegreen Capital, DAG Ventures, and T-Online Venture Fund

6. CONFIDENTIAL EXECUTIVE SUMMARY

7. page 7 Executive Summary SPE is faced with tremendous opportunity through digital distribution –Infrastructure for digital delivery is now in place –Consumer time and advertising revenues are shifting online, creating risks for our existing base of business –Direct-to-consumer digital service creates an opportunity to expand in new areas Digital distribution service efforts to-date have been loosely coordinated and would benefit from an acquisition to accelerate deployment –Numerous efforts currently in-process –Studio competitors are investing heavily –Window may be limited for a reasonably priced acquisition At $60-$70MM, a Grouper acquisition would accelerate entry into ad-supported content and could become a platform for other digital services –Grouper would provide experienced management, market-leading technology, content, and demonstrated traction with users –Potential price in-line with comps and at a discount to recent acquisitions

8. page 8 Digital Video Distribution is Becoming Mainstream Infrastructure is nearly in place –Roughly 50% broadband penetration of U.S. households –Compression technologies continue to improve –Content owners digitizing libraries Consumers are engaging with more content, in ways that are unique to a two-way, interactive medium –Over half of Internet users have visited a social networking site –U.S. video downloads exceeded 18 billion in 2005 Traction is being demonstrated by multiple players, large and small, new and old –Leading online destinations extending brands to video –Traditional networks establishing online presence –Start-up video and social networking sites building large audiences

9. page 9 Changing Distribution Landscape and User Behavior Create Opportunities for Sony Pictures IP-delivery is decreasing traditional distribution partners’ control and increasing the importance of two-way communications –Time spent watching cable and network TV forecast to remain flat while time spent with interactive media (online, games, mobile) will grow 10%-30% annually Advertising is becoming increasingly important in the online space –Online advertising grew 30% in 2005 (compared with 6% for traditional media) –Online advertising expected to reach 25% of the $115 BN domestic advertising market Unlimited shelf space is increasing the importance of niche content –Major studio content composes 95% of volume for brick-and-mortar retailers but only 80% for online retailers SPE is creating digital video services to capitalize on these trends –Broaden base of content to include user generated and short-form –Increase ownership of ad-supported content –Increase control of distribution and build direct, two-way relationships with consumers –Supplement $64MM (1) spent marketing films on third party websites (1) Estimated FY07 budget for online marketing in support of theatrical releases.

10. page 10 Evolving Infrastructure Represents an Opportunity to Build Direct Relationships with End-users and Increase Control of Distribution Broadcast Model Cable Model Digital Distribution – Licensing/Syndication Broadcast Network Broadcast TVLocal Affiliate ProductionCustomerDistributionAggregation SPE Cable Network Cable TVCable MSOSPE PortalPC or TV Broadband ISP SPE Customer-facing Service SPE-owned Service PC or TV Broadband ISP SPE

11. page 11 Expansion of Sony’s Digital Distribution Strategy Expansion of StrategySony Efforts to Date Nanofilms Chat Cinema Broadband Channels Sony Connect MovieLink Bundling films on digital media –Memory Sticks –Flash Memory –Computer Hard Drives Marketing new releases online –$36MM in FY06 spend, $64MM in FY07 Early digital distribution efforts depended on home-grown technology and focused on sell-through and subscription services Current efforts expand SPE’s digital distribution efforts to address: –Social networks and increased interactivity –Short-form and user generated content –Ad-supported revenue models Current efforts increasingly leverage third-party technology Screen Blast SoapCity iFilm (early investor) Current Previous

12. page 12 Social NetworkStoreChannelPromotional Source: Nielsen NetRatings. Figures as of 6/21/06. * Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 7 million. Provide interactivity between users Increasingly dependent on user-generated video Primarily advertising based revenues Aggregates video across content providers for purchase Uses a range of models including sell-thru, rental, and subscription On-demand videos in programmed micro-channels or on a show-by- show basis, Business model primarily includes advertising, with some upsell to subscription Predominantly short video clips that promote the site owner’s content, merchandise, and brand May include some advertising, and minimal commerce capabilities, but is promotional in nature Monthly Unique Users (mm) Social Networks are Growing Quickly and Attracting the Largest Audiences for Digital Video Content

13. page 13 Competitors Are Investing in Social Networks and Consolidating the Space Acquired iFilm for $49MM Acquired Intermix / MySpace for $580MM Acquired IGN for $650MM and Scout for $170MM Acquired iVillage for $592MM Promoting new series on YouTube Acquired Lightningcast for online video ad insertion technology Licensing content through BitTorrent and Guba (social network) Social Networks Generate Value for Traditional Content Owners Social Networks Generate Value for Traditional Content Owners  Attracting large audiences and creating legitimate alternative distribution channels  Offering user-generated video and driving advertising revenue  Two-way medium with high degree of interactivity, customer engagement and feedback  Provide opportunities to create derivatives of existing properties  Harness users’ creativity to identify and develop new concepts  Attracting large audiences and creating legitimate alternative distribution channels  Offering user-generated video and driving advertising revenue  Two-way medium with high degree of interactivity, customer engagement and feedback  Provide opportunities to create derivatives of existing properties  Harness users’ creativity to identify and develop new concepts

14. page 14 SPE Should Acquire to Address Historical Challenges in Digital Distribution Acquisition BenefitsHistorical Challenges and Implications Sony faces challenges in developing differentiated technologies in-house Early services demonstrated the difficulty of attracting large audiences to new brands Success requires a significant investment in marketing and infrastructure Acquiring established brands and technology can be more cost efficient and faster Accelerate time-to-market by providing: –Differentiated technology –Traction with customers –Management with domain expertise Decrease cost of entry Gain access to new content

15. page 15 Acquisition Targets Must Meet the Following Criteria Proven track record and domain expertise Strong Management Service operation and design Tools / software development Consumer data usage Differentiated Technology Large and growing base of user-generated content Breadth of Complementary Content Sufficient traction with customers to validate interest and potential for growth Pay for skill not scale Demonstrated Customer Traction

16. page 16 SPE Target and Competitive Landscape Technology Capabilities LowHigh Low (< 3mm) High (> 3mm) Existing Service Penetration Google (97.2) Yahoo (105.5) AOL (72.0) YouTube (20.1) MySpace (51.4) Grouper* (3.0) Brightcove (0.2) Veoh (0.1) FOX.com (8.5) ABC.com (8.0) MLB.com (9.3) Facebook (7.7) Connect (1.2) iTunes (20.5) CBS.com (5.4) MTV Overdrive (4.4) (Monthly Unique Users in millions) Source: Nielsen NetRatings. Figures as of 6/21/06. Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 7 million. Blinkx (0.01) Metacafe (1.9) Friendster (0.8) AddictingClips (1.7) iFilm (3.2) Revver (0.1) Dailymotion (0.4) vidiLife (0.7) VideoEgg (NA) vimeo (0.4) MovieLink (0.6) CinemaNow (0.3) vSocial (0.5) Guba (0.9) Roo Media (0.6)

17. page 17 Grouper Service Highlights Watch Home page with “video wall” of user generated content; 80% click-through Content can be discovered through: –Rotation in video wall –Search –Channels Ability to download content to multiple devices (iPod, PSP) Share Create Easy upload of user videos One click publishing to other sites Import address from MSN, Hotmail, and Yahoo to create email groups P2P client enables download of original, high quality files Add video comments Real-time recording and upload from web cams and mobile phones Proprietary client with easy-to-use editing tools –Select video –Select photos and tracking / panning effects –Select music Differentiated from YouTube and Other Competitors Competes with YouTube

18. page 18 Grouper Management Team Josh Felser, CEO & Co-founder –President & Co-founder Spinner (Sold to AOL for $320M); GM AOL’s music brands; Business development at News Corp Dave Samuel, President & Co-founder –CEO and Co-founder Spinner; VP Technology AOL, MIT Aviv Eyal, CTO & Co-founder –CTO and Co-founder Friskit; Lead engineer Microsoft Multimedia Mike Sitrin, VP Revenue & Co-founder –Director Marketing and Commerce AOL, Director of Sales Spinner Jonathan Shambroom, VP Product –VP Product Jumpstart, Director Product: Evite (Sold to IAC), When.com (Sold to AOL), PF.Magic (Sold to Learning Co)

19. page 19 Grouper Reaches a Younger Demographic (% of Total Unique Users) Somewhat Younger than Users of High-Traffic Sites Significantly Younger than SonyPictures.com * Based on average of April and May data from Media Metrics (1) Heavy users include those that generate and post video content to Grouper site Roughly Comparable in Age to YouTube Users Grouper’s Heavy Users (1) Younger than MySpace < 1.0

20. page 20 Grouper Performance Against Competitors Ease of Use Community Connections Features Quality of Content P2P Client Technology Content Management Strength of Leadership Monthly Unique Users (mm) 3.0 1.7 0.4 0.9 3.2 1.6 NA 0.1 0.7 0.4 0.5 20.1 Strong, experienced team Unknown Weak team Strong (but captive to Viacom) Unknown Average Unknown Young, limited experience

21. page 21 Cross-Sony Opportunities for Grouper Personal Solutions Business Group is considering Grouper as a strategic partner for its eyeVi content service in Japan Platform could expand Connect’s service capabilities, by adding user-generated content and distributing across all device types Grouper technology built to support ad-based and transactional business models; can expand to become a broadband channel Management team has domain expertise required for user generated video and ad-based models Brand has demonstrated traction and strong growth potential Grouper has positioned itself to meet the high demand for online video advertising (supports ad insertion in both streamed and downloaded content) SPE ad sales team could sell ad space Cornerstone for Digital Strategy SPE Ad Sales Opportunities Complementary to Other Sony Services

22. page 22 Grouper Management Projections Considerations  2006 EBIT impact of $5MM appears realistic  $5MM full year EBIT investment compares to $3MM current run-rate  Doubling current burn rate due to increased staff  2008 and 2009 expected to be profitable but margins may be aggressive  Assumes low bandwidth costs due to P2P  Assumes low marketing costs due to viral growth  2006 EBIT impact of $5MM appears realistic  $5MM full year EBIT investment compares to $3MM current run-rate  Doubling current burn rate due to increased staff  2008 and 2009 expected to be profitable but margins may be aggressive  Assumes low bandwidth costs due to P2P  Assumes low marketing costs due to viral growth

23. page 23 Risks and Mitigation MitigationRisks Customer retention / increased competitionDifferentiated technology provides a better user experience than competitors Leverage strategic partners for growth (less dependent on “fads” in user taste) Lack of interest in commercial content by user base Management projections not heavily dependent on commercial content Ensure SPE tailors programming for the audience Integration challengesStructure incentives for acquired management Allow new management to retain decision-making authority Lack of interest by advertisersGrouper’s first deal is in place with MTV AOL and Google report sold-out ad inventory

24. page 24 Comparable Company Analysis Supports a $70-$100MM Valuation

25. page 25 Grouper Process Submit non-binding term sheet to Grouper Initial feedback on status of bids Initiate negotiations of binding terms Grouper Process Submit non-binding term sheet to Grouper Initial feedback on status of bids Initiate negotiations of binding terms SPE Due Diligence Analyze due diligence materials Meet with Company Finalize acquisition valuation SPE Due Diligence Analyze due diligence materials Meet with Company Finalize acquisition valuation Process Timeline Activities/Worksteps Timeline Internal Approval Review drafts with Calkins and Carey Present to Feingold Present to Lynton and Hendler Present to SCA (Wiesenthal and Kanagawa) Tokyo Approval to Negotiate Internal Approval Review drafts with Calkins and Carey Present to Feingold Present to Lynton and Hendler Present to SCA (Wiesenthal and Kanagawa) Tokyo Approval to Negotiate 6/26 6/27 6/28 6/29 6/30 7/3 7/4 7/5 7/6 7/7 7/10 7/11 7/12 7/13 7/14 7/17 7/18 7/19 7/20 7/21

26. CONFIDENTIAL APPENDIX

27. page 27 Grouper Traffic Statistics

28. page 28 Grouper Source of User Traffic Note: Source of traffic reflects only Grouper.com traffic and excludes embedded uniques. When looking at total Grouper traffic Yahoo! sources 34% and 7% the weeks of 4/9 and 6/11, respectively. There was a dip in Grouper.com traffic from May (7.0MM global uniques) to June (6.4MM global uniques), primarily as a result of Yahoo! search engine algorithm change In June, Grouper replaced traffic lost from Yahoo! The change by Yahoo!, though negative in the short term, is not expected to have an effect The entire service is being migrated to a new set of servers (to be complete by mid-July)

29. page 29 Grouper Features As Compared to Competitors

30. page 30 Grouper Features As Compared to Competitors

31. page 31 Grouper Actual Monthly Performance Year-to-Date (1) (1) May to June unique user decrease due to change in Yahoo! search engine algorithm.