1. DRAFT Sony Pictures Entertainment and SNEI: Differentiating Sony Entertainment Networks November 18, 2011

2. DRAFT page 1 Our goal is to take advantage of Sony’s common ownership of entertainment and network platform assets to differentiate Sony from competitors in the digital network entertainment space We’ve agreed on key points of differentiation We recommend further investment in a programmed video service including originals to drive usage We recommend addressing technical constraints in Sony hardware to facilitate differentiated business models We’ve agreed on “low hanging fruit” opportunities to drive traffic After reviewing prioritization in this forum, we should pursue key initiatives on a more formal, project management basis with clearly defined work-streams and milestones Executive Summary

3. DRAFT page 2 We seek to better differentiate SEN, drive brand awareness and attract customers through: –Programming: a carefully selected base of content that is regularly updated and targets the right demographic –Exclusive content: original or exclusively licensed –Earlier access to content vs. competing services –Low barrier to adoption: include content that is free and encourages initial trial –Ease-of-use: differentiated user interface with powerful easy search functionality that cuts across: Content type: video, music, games Business models: purchase, rental, ad supported / free –Increased marketing reach across Sony platforms Agreed Desired Points of Differentiation SPE and SNEI have identified a range of opportunities to drive these points of differentiation

4. DRAFT page 3 Strategies and Initiatives for Achieving Differentiation StrategyInitiatives Take advantage of SPE programming and production expertise to drive traffic; business model should be free-to-consumer: –Customer acquisition: free-to-consumer offering has the lowest barrier to adoption and attracts the most customers –Cross-selling / monetization: new and newly engaged customers for free service will be cross-sold paid services and Sony hardware –Budgetary consideration / competition: free-to-consumer services are still viewed as compelling with <$100MM of content; users count on paid services like Netflix having $1-2BN of content Crackle Plus Take advantage of Sony devices’ unique characteristics: –Updatable: in many cases cable and satellite STBs are not –Secure: can feasibly implement security protocols faster than some competitors –"4 screen“: can reach consumers anywhere they seek entertainment –TV connected: more often connected to TVs in the living room than pure play services –3D: supports playback of 3D content –Gracenote and new user-interface (UI): provides a unique capability to search across multiple content types and business models Unique Transactional Models Leverage zero incremental cost marketing and content assets to drive traffic“Low Hanging Fruit”

5. DRAFT page 4 Crackle Plus: Fund and launch Crackle Plus as a service exclusively available to Sony customers with an estimated annual investment of ~$75MM –Service highlights: Premium and differentiated from broader Crackle service Ad-supported / free-to-consumer to attract largest audience License exclusive film and TV avails (i.e., recent and library titles) Develop slate of original content: “TV quality” series U.S.-only launch with later international expansion –Investment recouped through and helps support: SEN revenues: uplift in paid services (i.e., Video Unlimited, Music Unlimited, PSN Plus subs) SPE revenues: ad revenues and ancillary sales of originals Hardware revenues: incremental hardware sales Overall Sony / SEN spending on branding initiatives Initial Categorization of Projects (1 of 2)

6. DRAFT page 5 Unique Transactional Models: Launch transactional models that offer early content, greater ease of use for consumers and leverages SEN’s strengths relative to cable and satellite –SEN as exclusive over-the-top provider for PVOD –SEN to offer early EST –PSN as the only game console compatible with UltraViolet “Low Hanging Fruit”: Leverage SPE marketing and existing base of content –SEN branding / messaging on all SPE platforms (i.e., theatrical, home entertainment, TV) –Early / exclusive access to red band / extended trailers and DVD extras –Exclusive access to 3D versions of SPT shows –Regular Discount Programs for VOD and EST Initial Categorization of Projects (2 of 2)

7. DRAFT page 6 Today: –Review projects in more detail –Discuss broad parameters for projects requiring Corporate funding, including Crackle Plus –Discuss technical priorities for transactional models Ongoing: –SPE and SNEI coordination to execute against overall project plan (on next page) Quarterly update meetings with: –Corporate: Howard Stringer, Kaz Hirai –SNEI Lead: Tim Schaaff –SNEI Team: Shawn Layden, Mike Aragon –SPE Leads: Michael Lynton, Steve Mosko, David Bishop [Discuss] –SPE Team: Corporate: Jim Underwood Crackle Plus: Andy Kaplan, Eric Berger Transactional: Jason Spivak “Low Hanging Fruit”: [Confirming] Recommended Process Going Forward

8. DRAFT

9. Sony already owns a premium content network, among only a handful in the market Top ad-supported channel on key television platforms (Top 5 channel on Bravia, Blu-ray, and Roku) Mobile downloads in line with major networks, e.g. comparable to HBO Go Triple the audience of HuluPlus on connected devices Recognized alternative to Hulu, Netflix, and Amazon: “People who’ve traded in pricey cable subscriptions for online alternatives like Netflix, Crackle, and Hulu have been a hot topic recently. —“25 Ways to Watch Movies and TV Online,” PC Mag “A host of sites, including Hulu.com, Crackle.com and Xfinity, offer free movies and TV shows streamable to your computer or TV.” —“Not Netflix: Better Sites for Movie Bargains,” Wall Street Journal “Crackle leads the way for free online movie content for a second week in a row. Hulu, et al, you better step up your game.” —“The Best Movies to Watch this Weekend,” CBS Interactive Crackle as a Platform to Leverage page 8

10. DRAFT Video experiences optimized for the Sony networked device audience Free service creates largest user base and “out of the box” premium content experience Integrated upsell to PSN, PlayStation Plus, Video/Music unlimited (no 3 rd party services can do this) Highly curated experience run by experts who Program target audiences worldwide Premium TV caliber original series to differentiate the network page 9

11. DRAFT Curated Film and TV Content Original Shows Music and Live Events Inside Looks The service Offers a selection of premium movies with exclusive content and TV quality original series Behind the scenes, movie and pilot premiers, new game releases, and coverage of most relevant pop culture gatherings (e.g., Comic-Con, E3, SxSW) –Cost: $2MM for video coverage Live concerts, music festivals, unplugged sessions with artists, “secret” shows –Cost: $3MM to for video streaming and licensing Two TV caliber series (22 eps) annually that leverage existing and related IP (e.g., God of War) or build new IP for the company Differentiated and premium series to attract and engage consumers on a regular basis –Cost: $30MM per series for each season Leverage short avails of 2-3 year old movies in the Network window (free TV only) to have continuous current and driver titles Pick up select shows in syndication window –Cost: $10-20MM to license more content for variety and volume Programmed Service page 10

12. DRAFT Actions on Crackle Plus……Drives Actions on SEN Search: Gracenote drives discovery of paid content Watch Spider-man as an ad- supported movie option Watch a sneak peek of the upcoming film Watch episode from prior seasons of Community Search also recommends: –Similar films for purchase or rental –Sign-up for PlayStation Plus to get Spider-man game content –Buy Spider-man Shattered Dimensions –Listen to the soundtrack on Music Unlimited –Purchase recent TV episodes View original series Watch “God of War” the series on Crackle Promotion spots encourage exploration on SEN –Buy the game –Sign-up for PlayStation Plus View a collectionExplore themes tied to: –Game content (e.g., “Assassins,” “Heroes” etc.) –Music content (e.g., celebrity playlists) –For sale / rental titles included in collection –See related games on PlayStation Plus –Explore the artist on Music Unlimited Watch a concertColdplay concertAdd Coldplay to your Music Unlimited favorites page 11 Deep Product Integration Drives Up-sell

13. DRAFT Sony already owns a premium content network, among only a handful in the market An Out-of-the-Box Premium Video Experience, exclusive to Sony Devices Newer, high-quality, more movies Premium TV Caliber original series Exclusive TV syndication window HD video delivery Fully integrated products driving up-sell to other SNE services (transactional movie, games, video / music subscriptions) Branded exclusively to Sony A light version of the Network that provides network and marketing scale Smaller selection of movies No or second window original series Older, library TV Standard Def video delivery Marketing driver back to Sony from high-traffic platforms Keeps brand in competitive / mindshare space with Netflix, Hulu, Amazon, etc. Crackle Plus, Exclusive to Sony page 12

14. DRAFT page 13 Preliminary Timeline: Crackle Plus Service with Original Content

15. Unique Transactional Models

16. DRAFT Premium VOD Overview Differentiation Cost Issues to Address Provide SEN users with VOD offering in the premium window (e.g., ~60 days post theatrical release – will vary by market) –Assumed deemed retail price of $20-$30 –Single view –For a limited time, exclusive vis-à-vis OTT-only providers (i.e., iTunes, Xbox, Amazon, VUDU), but no exclusivity vis-a-vis cable/satellite providers (i.e., DirecTV, Comcast, SKY), even if such providers offer OTT services –Number of eligible titles to be determined page 15 During the period of exclusivity: Only non-cable/satellite service offering PVOD Ability to message a “digital exclusive” Limited, per transaction cost only; not a major investment –80% SPHE share per transaction –Implementation of watermarking technology would have costs associated Overall launch strategy and timing under review by SPE management –SNEI to have first OTT opportunity when strategy and timing is determined Water marking technology (i.e., Verance/Civolution) and additional content protection measures would be required Exclusivity applicable to a limited number of titles Pending SPHE legal review; product not available in all markets Note: overall PVOD launch strategy and timing under review by SPE management DRAFT: SUBJECT TO FURTHER REVIEW

17. DRAFT Premium EST page 16 Overview Differentiation Cost Provide SEN users with an EST offering in the premium window (e.g., ~60 days post theatrical release; will vary by market) –Assumed deemed retail price of $25 or $30 –Exclusive vis-à-vis all EST providers for a limited time –Number of eligible titles to be determined During period of exclusivity: Only retailer offering EST in the theatrical window Ability to message “exclusive EST” product Provides a clear and compelling path to UltraViolet (UV) as a first mover (see UV offer) Limited, per transaction cost only; not a major investment –80% per transaction share to SPHE –Implementation of watermarking technology would have costs associated Issues to Address Overall launch strategy and timing under review by SPE management –SNEI to have first opportunity when strategy and timing are determined Pending SPHE legal review; product not available in all markets, potential costs associated with de-valuation of existing VOD/EST licenses Water marking technology (i.e., Verance/Civolution) and additional content protection measures would be required Exclusivity applicable to a limited number of titles Note: overall premium EST launch strategy and timing under review by SPE management DRAFT: SUBJECT TO FURTHER REVIEW

18. DRAFT UltraViolet (UV) page 17 Overview Differentiation Cost Issues to Address Provide SEN users with UV EST storefront which includes SPHE’s full EST catalog –Wholesale prices discounted vis-à-vis traditional EST –Joint marketing programs First mover advantage with ability to become go-to destination in living room for UV accessed through game consoles, connected TVs and connected Blu-ray players Leverage UV growth to drive SNEI adoption: –In the next few months, millions of physical units with UV tokens will be sold and consumers will seek ways to access purchases in the UV cloud –Consumers will also be able and looking to convert their existing collections (i.e., millions of discs) into UV lockers; SNEI can become the preferred destination for locker conversions with a PS3 sitting next to DVD/Blu-ray collections Creates stronger relationship with customers as they grow accustomed accessing the video they already have through UV locker access via Sony devices Per transaction UV fulfillment costs borne by SNEI or passed on to consumer –SPHE discounts wholesale prices in an effort to help SNEI offset such costs Some UV licensing costs expected, depending on role played by SNEI in UV ecosystem Hardware implementation of UV protocols Integration with UV coordinator DRAFT: SUBJECT TO FURTHER REVIEW

19. DRAFT page 18 Preliminary Timeline: Unique Transactional Models

20. “Low Hanging Fruit”

21. DRAFT Leverage SPE Theatrical, Home Entertainment, Television Marketing Overview Differentiation Cost Issues to Address Integrate SEN brand messaging into relevant SPE marketing assets where possible –Theatrical: one-sheets, field promotions, in-film digital billboards, promotion of PSN or SEN- specific tasks in films’ Alternative Reality Games –Home Entertainment: DVD/Blu-Ray inserts/packaging, sizzle/spot on head of product, sizzle/spot features on BD Live –Television: In addition to off-air promotions, the Networks Group has committed media across channels On-air: SNE TV spots to air worldwide, SNE display and video messages to be featured on channel websites Off-air: Sony Times Square billboard, Sony Spotlight newsletter, Sony Facebook page, Sony Twitter handle, Sony Cierge newsletter –Cross-Divisional: Website (i.e., sonypictures.com) Increases awareness of SEN relative to its competition Little to no incremental cost Work closely with SNEI to develop appropriate branding, messaging and phasing for each avail page 20

22. DRAFT Red Band, Extended Trailers and DVD Extras Overview Differentiation Cost Issues to Address Provide SEN users with additional content –Launch exclusive versions of a subset of trailers on SEN first: Red band Longer versions of trailers –Feature value-added content such as outtakes, behind the scenes, cast profiles –Prior to release of DVDs, make a subset of DVD extras exclusively available on SEN, subject to content restrictions and 3 rd party deals that can vary by title –Ensure SEN achieves parity with 3 rd party vendors (e.g., when a trailer is first launched on Yahoo! the trailer is also available on SEN) Provides a regular flow of exclusive content that can be easily promoted Little to no incremental cost SNEI to check with legal on ability to show red band trailers Secure content to the network (e.g., prevent upload of red band trailers to competing outlets such as YouTube) page 21

23. DRAFT Exclusive Access to 3D Versions of SPT Shows Overview Differentiation Cost Issues to Address Provide SEN users with exclusive access to 3D versions of their favorite TV shows –Film selected episodes of broadcast or cable network shows in 3D which will be featured exclusively on SEN Current shows that fit SEN demo include Happy Endings, Community, Rules of Engagement, Breaking Bad, Franklin and Bash, Justified, Pretend Time with Nick Swardson and Boondocks 2D versions air on original partner network Network partner promotes availability of 3D version exclusively on SEN Provides a regular flow of exclusive content that can be easily promoted Emphasizes SEN’s unique 3D capabilities and helps drive further 3D hardware sales Incremental production cost of $100K – $200K per episode for existing TV series, subject to Director and DP that accept SPT guidance on equipment and workflow TBD fee to buy-back exclusivity from the Network for an estimated 25%-50% of the license fee for the nonexclusive episodes Confirm broadcast or cable network will allow 3D version to be distributed off-network on an exclusive basis Requires identifying shows that both address the demo and have Director/DP support page 22

24. DRAFT Regular Discount Programs for VOD and EST page 23 Overview Differentiation Cost Issues to Address Provide SEN users with regular (i.e., weekly/monthly) programs featuring discounted EST and VOD titles EST: focus on new release product VOD: focus on premium catalog product –Discounts to be funded by SPHE –Titles to be identified on a mutual and periodic basis –Stunts to be programmed around genres/seasons/events/holidays When possible, discounts only available to SNEI for the duration of the applicable program Should be viewed as a complement to other licensing programs Title eligibility to be discussed on a market-by-market basis Limited cost, per transaction only; not a major investment DRAFT: SUBJECT TO FURTHER REVIEW

25. DRAFT page 24 Preliminary Timeline: “Low Hanging Fruit”