1. CONFIDENTIAL Grouper Acquisition Opportunity July 2006

2. page 2 Agenda Acquisition Highlights Executive Summary Detailed Analysis –Grouper Detail –Trends in Digital Distribution –Digital Video Service Categorization

3. CONFIDENTIAL ACQUISITION HIGHLIGHTS

4. page 4 Grouper Acquisition Highlights Cornerstone to a full range of digital video services Vehicle for marketing and distributing existing studio content online Differentiated technology Undervalued relative to competitors in the space Addresses a core demographic Broadens base of content to new forms Opportunity to participate in growth of online advertising Platform for further experimentation based on direct customer information

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 place ads based on a wide range of 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 (3.0 MM US) 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 could accelerate time-to-market and be a cornerstone for a full bouquet of 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 –Increase control of distribution and build direct, two-way relationships with consumers –Broaden base of content to include user generated and short-form –Increase ownership of ad-supported content –Build an additional avenue for distribution and marketing of TV and Film product

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, $64MMin 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 8 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 $49 MM Acquired Intermix / MySpace for $580MM Acquired IGN for $650 MM 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 Own a marketing platform to supplement SPE current online ad spend

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 8 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 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

20. page 20 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

21. page 21 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  Management forecast for profitability level may be aggressive  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  Management forecast for profitability level may be aggressive

22. page 22 Grouper Actual Monthly Performance Year-to-Date (1) 1.May to June unique user decrease due to change in Yahoo! search engine algorithm

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 DETAILED ANALYSIS: Grouper Detail

27. page 27 Grouper Features As Compared to Competitors

28. page 28 Grouper Features As Compared to Competitors

29. page 29 Grouper Traffic Statistics

30. page 30 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 has been a recent dip in Grouper.com traffic, which is primarily the result of overloaded servers and a Yahoo! search engine algorithm change The change by Yahoo!, though negative in the short term, will not have any lasting affect It was never intended that Grouper would rely on any single third party for a significant portion of its traffic and the Company believes the reduction of Yahoo!’s significance was inevitable

31. CONFIDENTIAL DETAILED ANALYSIS: Trends in Digital Distribution

32. page 32 Broadband Access and Content Availability Are Driving Growth in Digital Video Source: SG Cowen Research dated June 7, 2005, Morgan Stanley Broadband Update, April 2005 30%38%46%52%57%61% 33.2 42.6 51.0 58.9 69.6 65.1 Broadband-enabled U.S. Households (MM)Video Downloads (BN) 0.28 18.0

33. page 33 Downloadable Video Should Drive Growth in Filmed Entertainment Pay TV/ SubscriptionVHS/ RentalDVD/ Sell thru Evolution of Content Distribution & Revenue Growth of Filmed Entertainment Industry in the US* New consumer benefits Introduction drivers Movies without advertising Consumer controlled viewing Ownership, high quality, additional features New cable network entrants Consumer electronics manufacturers Warner Home Video & CE industry 100%=$4Bn 100%=$18Bn Complete library, convenience & control Technology Companies IP Delivery $37Bn $47Bn 2004 2008e $2Bn $9Bn Video /DVD 7% TV 41% Box Office 52% Video /DVD 41% TV 32% Box Office 27% Source: Entertainment Industry Economics Vogel 4 th ed., PricewaterhouseCoopers Global Entertainment & Media Outlook 2004-2008. Models with unique consumer benefits have been consistently adopted by Hollywood Adoption has often been led by outside entrants and new industry players Double digit annual growth has doubled the market approximately every 7 years 1995 1980 * Includes revenue generated by films from major studios across content distribution windows – box office, video (rental, sell thru), television (ppv, pay, network, made for TV), and foreign revenues for each

34. page 34 Digital Video Delivery Represents an Opportunity to Reach a Younger Demographic Source: Pew Internet & American Life Project, December 2005 Percent of Each Age Group Downloading Video (18-28)(29-40)(41-50)(51-59)(60-69)

35. page 35 SPE Can Best Reach Younger Demographics with Models that Include Two-way Interactivity and Social Networking Source: Pew Internet & American Life Project, December 2005 Percent of Each Age Group Participating in Online Activity (18-28)(29-40)(41-50)(51-59)(60-69) Instant MessageRead a Blog

36. page 36 Consumers are Shifting Time Away from Traditional Media Toward Online and Interactive Media Note: Consumer Internet includes both dial-up and broadband Source: Veronis Suhler Stevenson, Val Morgan, Harris Interactive, L.E.K. Analysis, Jupiter analyst interview, Corporate Development Analysis Cable and satellite TV hours rise slightly due to increase in channels, VOD and PPV services Consumer time spent on broadcast TV may flatten with emerging technologies (a la TiVo) But the real growth is in Interactive/wireless, home video, internet and games

37. page 37 New Distribution Models are Shifting Consumer Consumption toward “Long-Tail” Titles

38. page 38 Studio Content May not Be as Dominant in Emerging Channels Sources: Nielsen Videoscan data, Wired 2.0, Industry Interviews, select store visits across Los Angeles area Product Mix of Units Books Music Home Video  Surveyed 6 B&N and Borders stores  Calculated number of SKU’s for a sample of fiction titles  Reviewed 8 to 12 stacks  Counted the number of separate SKU’s  Determined which titles were major (including sub-labels)  Amazon figures are units sold in 2005 (source Wired 2.0 and Bain consumer study)  Publishing analysts from First Research conclude that there is a strong correlation between SKU’s and units sold Methodology Niche (All Others) Major (RH, TW, Simon, HC, Pearson) Niche (All Others) Major (Uni, War, Sony/BMG, EMI) Niche (All Others) Major (7 Majors)  Surveyed 5 Borders and Best Buy stores  Calculated number of SKU’s for a sample of new release and catalog titles  Reviewed 6 to10 stacks  Counted the number of separate SKU’s  Determined which titles were major (including sub-labels)  Digital figures are units sold in 2005 (source Wired 2.0 and Bain consumer study)  Units sold figures for music via traditional stores is being researched through Nielsen Musicscan data  Surveyed 7 WalMart, Best Buy and Target stores  Calculated number of SKU’s for a sample of new release/catalog titles  Reviewed 12 to15 racks  Counted the number of separate SKU’s  Backed-up SKU findings with units sold data from Nielsen VideoScan  Digital figures are units sold in 2005 via Amazon & other online retailers

39. page 39 Media spending does not yet reflect consumption Advertising dollars are shifting online to address the current gap 2003-’05 US Advertising CAGR Contribution to Growth Television: TV Stations1.5%2% Cable Networks15.6%19% Cable MSOs8.1%3% CBS Net, FOX Net5.8%9% Total Television7.0%34% Magazines8.9%5% Newspapers3.4%11% Radio0.2%0% Outdoor7.1%5% Online50.4%45% Total8.4%100% SUMMARY Traditional Media5.1%55% Online50.4%45% Total8.4%100% Ad Market is Changing Significantly as Ad Dollars Follow Consumers and Two-way Infrastructure Becomes Available 1999 2005

40. page 40 Online Advertising is Forecast to Reach 25% of $115BN Domestic Market US $ (Billions) Overall ’05 – ’09 Projected CAGR: 10.1% Broadcast ’05 – ’09 Projected CAGR: 4.9% Cable/Sat ’05 – ’09 Projected CAGR: 11.4% Online ’05 – ’09 Projected CAGR: 22.3% TV & Online Advertising Spend Source: Veronis Suhler, 2005 Note: Cable/satellite growth expected to be driven by increasing audience share of prime time ratings, ability to target within specific demographic groups, improved sales system; broadcast growth expected to be driven by sustained ratings and ad rates, continued appeal as optimal means to reach large audiences Online %:12%10%12%13%16%18%21%23%25% 57.9 60.7 63.2 71.7 78.3 87.6 95.1 106.0 114.9

41. CONFIDENTIAL DETAILED ANALYSIS: Digital Video Service Categorization

42. page 42 Digital Video Offerings Can be Divided into Four Main Categories PromotionalChannelStore Social Network 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 Includes on-demand videos available in programmed micro- channels, on a show- by-show basis, or in a traditional channel lineup Business model primarily includes advertising, with some upsell to subscription Aggregates video across content providers for purchase Uses a range of models including sell-thru, rental, and subscription Generally consists of short video clips from users of the service May also provide tools for creating video clips or interacting with video content Primarily ad-based business models

43. page 43 Key Attributes of Digital Video Services Content Accessibility 1 LowMediumHigh Content Value 2 Range of Content Providers 3 Content Breadth 4 Degree of Interactivity 5 ConnectedPortable Anytime, Anywhere PromotionalUser-Generated Produced Company Owned Aggregated Single GenreMulti Genre On-DemandAncillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-Based Pay

44. page 44 Promotional Video Websites Overview Attributes Predominantly consist of short video clips to promote site owner’s content, merchandise, and brand May include some advertising, and minimal commerce capabilities, but is promotional in nature Content Breadth 4 Single GenreMulti Genre LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-BasedPay

45. page 45 Content Breadth 4 Single GenreMulti Genre Broadband Video Channels Overview Attributes LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Includes on-demand videos available in programmed micro-channels, on a show- by-show basis, or in a traditional channel lineup Business model primarily includes advertising, with upsell to subscription Business Model (Cost to Consumer) 6 FreeAd-BasedPay

46. page 46 Video Store (Content Aggregation) Overview Attributes Aggregates video across content providers for purchase Uses a range of models including sell-thru, rental, and subscription Content Breadth 4 Single GenreMulti Genre LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-BasedPay

47. page 47 Social Network (User-generated Video Sites) Overview Attributes Consists of short video clips from users of the service May also provide tools for creating video clips or interacting with video content Primarily ad-based business models Content Breadth 4 Single GenreMulti Genre LowMediumHigh Content Accessibility 1 ConnectedPortable Anytime, Anywhere Content Value 2 PromotionalUser-Generated Produced Range of Content Providers 3 Company OwnedAggregated Degree of Interactivity 5 On-Demand Ancillary (e.g., blogs and ratings) Real-Time (e.g., chat, story navigation) Business Model (Cost to Consumer) 6 FreeAd-BasedPay