1. ATTORNEY / CLIENT PRIVILEGED Confidential Draft Starz / Netflix Considerations FOR SONY INTERNAL USE ONLY December 1, 2008

2. Attorney / Client Privileged and Confidential 1 Executive Summary We have made progress towards an extension and a framework for Starz’ approach to internet SOD By delaying the XBOX launch to December 15, we delayed our need to file a TRO until December 12. Our goal is to close a deal beforehand The terms currently being discussed would: –Extend the output deal through 2016 (currently expires in 2013) –Adjust rate card while retaining an annual bonus; generating $160MM-$225MM in annual revenue during the extension –Introduce title caps; but maintain flexibility with regard to slate / title mix –Provide additional benefits (extend PPV/VOD to 72 hours, decrease EST price floor in Pay 2) –Address internet SOD, requiring premium pricing and branding with some financial upside opportunity for SPE

3. Attorney / Client Privileged and Confidential 2 Overall Deal Parameters Extension 3 year extension Extends beyond current deal, which expires 2013 Provides Sony security of Pay TV deal through 2016 Value Annual value in 2014-2016 of $160MM - $225MM Above market Specific annual fees depend on slate $40MM bonus + 35% rate reduction translates to a roughly 30% decrease in annual revenues Above Market Deal Terms 50 title cap $40MM annual bonus 2014-2016 All studios have title caps; ours would be the highest and is distinct from a cap on absolute dollar fees Sony maintains the only studio bonus in the industry Other Benefits 72 hour PPV/VOD viewing Reduce Pay 2 EST Floor to $3.50 Increases Sony value in pre-PayTV windows Internet SOD Premium pricing / access Premium branding Modest incremental fees Structure is in the spirit of traditional Pay TV flat fee model; but provides clear definition for “Pay TV on the internet” Potential additional upside for Sony Concessions Volume cap 12.5% reduction in rate card 2012 -- 2013 Expand Pay 1 window (market is 18 months) Cap on titles and near-term reduction are non-negotiable for Starz Terms Comments

4. Attorney / Client Privileged and Confidential 3 Projected Annual Revenues for Extension (2014 – 2016) $160 $224 Footnotes: 1)Fees from output deal only. Comments Compares to last 3 years average under current deal of $230MM (1) –$182.6MM fees –$47.5MM bonus

5. Attorney / Client Privileged and Confidential 4 Starz will Remain a Premium Branded Service Today, Starz is bundled with premium TV services from Cable, Satellite and IPTV providers –Packages with Starz are priced approximately 40% above entry-level prices –Starz brand is generally called-out as one of the main value drivers of the upgraded package –Premium marketing approach has led to Starz reaching 17MM cable / satellite / fiber households The method for making Starz available digitally will be subject to a similar approach –Packages that include Starz would be above entry-level broadband or subject to a $7.99 a la carte charge  For broadband providers, “above entry level” means one tier above the lowest broadband offer  For websites, “above entry level” means bundled with a $13.99 monthly subscription –Starz brand would be specifically called-out as one of the main value drivers of the upgraded package –To ensure Starz Play remains a premium offering, Starz would accept a limit of 30MM subscribers tethered to broadband access / web services (e.g., subs tethered to Verizon DSL service and web services like Netflix, Amazon, Hulu, Facebook, and ESPN.com) –There is no cap on Starz Play subscribers tethered to a TV service (e.g., basic cable/cable broadband, satellite/DSL bundled with satellite, IPTV/broadband from IPTV providers) or websites that transition to offer services comparable to traditional TV

6. Attorney / Client Privileged and Confidential 5 Pricing Starz as a Premium Service Area Basic Package Est. Current Basic Price Least Expensive Package with Starz Est. Lowest Price with Starz Est. Minimum Add-on Cost for Bundles w/Starz Premium Over Basic Price Cable TV (Comcast) “Enhanced Cable” $38.98 “On Demand Silver” $55.95$16.9744% Satellite TV (DirecTV) “Family Package” $29.99 “Choice Extra” $34.99 -- $57.99 (2) $5-$2817%-93% DSL (Verizon) (1) “Starter Plan” 1 Mbps $19.99 “Power Plan” 3Mbps $29.99$1050% Websites (on top of broadband) Lowest Cost 1Mbps Broadband $19.99 DSL Plus $7.99 ALC or bundle with $13.99 website subscription $27.98 -- $33.98 $7.99-$13.9940%-70% Footnotes: 1)Structured as 1 tier above the 1MB package. 2)Note, $34.99 is for first 12 months only.

7. Attorney / Client Privileged and Confidential 6 Subscribers included in Caps and Rate Card Total Digital Subscriber CapSubscribers Subject to Rate Card Cable Satellite IPTV (Fios) All other digital delivery subscribers (including DSL bundle) are subject to 30MM Cap Excluded Included Excluded Included Cable Satellite IPTV (Fios) DSL Open internet on a service that feels like cable All other digital delivery (Amazon, Facebook, Hulu) subscribers are subject to a per-sub rate card

8. Attorney / Client Privileged and Confidential 7 Digital Rate Card Proposal Starz Proposal: –$2.0MM per year over the next 3 years for the Netflix deal –Per sub fee on all “included” subs –Incremental fees are structured as follows: –Cap of $14.6MM per year Sample Potential Economics Footnotes: 1)Deals completed or near completion. Netflix subs do not count towards rate card until after 3 year settlement. 2)Currently in discussions with Starz. 3)Not yet in discussions with Starz. 4)Estimated internet enabled TiVo (2 nd and 3 rd generation) boxes.

9. Attorney / Client Privileged and Confidential 8 APPENDIX

10. Attorney / Client Privileged and Confidential 9 Timeline of Current and Proposed Windows Theatrical Release DVD / VOD Day & Date PPV / VOD Standard 12 months from theaters (10 months) Key: Existing (Under Discussion) 8 months from VOD – facilitates early window (3½ months; only with home theater modification) 6 months from DVD (4½ months) 6 months from PPV (3½ months) Home Theater 4 weeks Pay 1Triggers Pay 1 Window: 15 Mos. + 30d Black Period (18 months) Early Window/ VOD