1. CONFIDENTIAL Grouper Acquisition Opportunity Presentation for GEC August 16, 2006 Draft v.14

2. page 1 Executive Summary SPE has tremendous opportunity through digital distribution and ad-supported online content –Consumer time and advertising revenues are shifting online, threatening the ability for our core businesses to achieve growth and margin objectives –Online infrastructure is nearly in place, with digital content at the outset of its growth curve –SPE competitors are investing heavily, and filling a gap between studio content and user generated content At $65MM, a Grouper acquisition would accelerate entry into ad-supported content and could become a platform for other digital services online –Grouper is the optimal acquisition target for SPE, due to its experienced management, market-leading technology and demonstrated traction with users –Price in-line with comps and at a discount to recent competitor acquisitions –Price does not require SPE to pay premium for users, which will be acquired via SPE marketing clout –Service will be further enhanced by SPE content, marketing and ad sales capabilities

3. page 2 Digital Transition Will Increasingly Challenge SPE’s Businesses Sales increasingly cross-platform Budgets shifting away from traditional outlets “Grass roots” campaigns increasingly prevalent –Character campaigns on social networks –Viral distribution of ad messages Market less forgiving of average to poor titles New forms of content competing for consumers’ time and money Traditional distribution channels’ economics under attack, pressuring studio margins Theatrical Marketing Content Distribution Economics Advertising Sales Achieving and exceeding SPE revenue growth and margin targets will increasingly require entry into adjacent businesses

4. page 3 Competitors Are Investing in User Generated Video User Generated Video Creates Value for Traditional Content Owners User Generated Video Creates 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 Acquired Intermix / MySpace for $580MM Acquired IGN for $650MM and Scout for $170MM $900MM search advertising deal with Google 7/18/2005 9/09/2005 8/07/2006 Acquired Lightningcast for online video ad insertion technology Launched free video portal with content from A&E, MTV, Warner 5/18/2006 Acquired iVillage for $592MM Promoting new series on YouTube 3/06/2006 6/27/2006 Acquired iFilm for $49MM Agreed to distribute MTV content over Google’s AdSense network Announced pending acquisition of Atom Entertainment for $200MM (includes Addicting Clips) 10/13/2005 8/07/2006 8/09/2006 8/1/2006

5. page 4 Grouper Stands-out Among Acquisition Candidates Viable acquisition candidates limited to at least 1MM unique users to demonstrate potential scalability of operations 2.4 30.5 Target U.S. Unique Users (MM) Acquisition Considerations Prohibitive valuation (rumored to be seeking over $1BN) Technology weaker than Grouper Owned by Viacom 1.7 Viacom acquisition pending as part of Atom Entertainment deal 2.6 Secured $15MM in funding July 1, 2006 Believed to be off the market 3.0 Performs well against acquisition criteria –Strong management –Differentiated technology –Demonstrated traction

6. page 5 Grouper Overview Service Summary SPE’s acquisition would include total consideration of $65MM –$52.5MM at closing –$12.5MM tied to performance metrics (revenue, streams, employee retention) Company is pre-revenue, received $5.1MM funding to date We were informed that Grouper received a competitive acquisition bid of at least $50MM Entered into exclusive negotiations with SPE through 8/18/2006 Multi-platform Video Distribution Network focused on watching, sharing, and creating user generated video Experienced management team Syndicates video to other sites through one-click posting (MySpace, Friendster, Everyone’s Connected, WordPress, Blogger) Leverages P2P software client; increases video quality; decreases delivery costs Enables video portability to multiple devices (iPod, PSP) Widely distributes easy-to-use video editing tools (Proprietary client, Instant upload from cameras, camcorders, and webcams) Ad-filtering tools target ads based on content tags Differentiators Funding and Deal Status Demonstrated Traction #2 independent video community (Hitwise May report), with 7MM global unique users/month (3MM US) Reaches a young demographic that is 58% male Over 112,000 uploaded videos programmed across multiple genre-based channels (1) Investors include DAG Ventures and T-Online Venture Fund

7. page 6 Grouper Would Provide Opportunities for SPE and Sony Could help address needs for complementary services –Enable users of Sony cameras and camcorders increased interactivity with content –Provides initial base of unprotected content for PSP and Walkman Potentially complementary to existing service efforts –PSBG eyeVi initiative selected Grouper to develop its service prototype –Expands Connect’s service capabilities by adding user-generated content Grouper technology built to support ad-based and transactional business models Management team has required expertise Brand has demonstrated traction and strong growth potential Platform for SPE to market and distribute studio content online Enhance SPE’s existing advertising revenues Build software capabilities Address core business challenges in meeting growth objectives Standalone Business Growth Opportunity Traditional SPE Business Opportunity Could Provide Value to Sony Devices Could Provide Value to Sony Devices

8. page 7 Grouper Service Highlights Watch Home page with “video wall” of user generated content; 80% click-through Share Create Share with users Post videos to personal pages on other sites Easy-to-use downloadable tools for creating and editing videos Differentiated from YouTube and Other Competitors Competes with YouTube

9. page 8 Grouper Service Highlights: Watch Videos 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)

10. page 9 Grouper Service Highlights: Share Videos Easy upload of user videos One click publishing to other sites E-mail to friends in users’ MSN, Hotmail, and Yahoo accounts P2P client enables download of original, high quality files Add video comments

11. page 10 Grouper Service Highlights: Create Videos Real-time recording and upload from web cams Proprietary client with easy-to-use editing tools –Select video –Select photos and tracking / panning effects –Select music

12. page 11 Comparable Company Analysis Supports a $80-$110MM Valuation Recent Fundings Recent Acquisitions Analysis excludes Viacom’s August 9 acquisition of Atom Films for $200MM

13. page 12 SPE Projections – Base Case (lower than Management Case) (1)EBIT reflects operating profit less estimated amortization of technology/software assets totaling $20MM over 7 years. Initial estimate requires third party review for final figures. Assumes transaction close at 9/30/2006. (2)4 year discounted pre-tax cash flow analysis (2006-2009) performed with a discount rate of 16.5% (in-line with SPE’s normal rate); terminal EBIT multiple of 8.0x. (3)Total consideration includes $52.5m at closing; $12.5m contingent on performance and paid over the course of 2007 through 2009. (4)Deepwater mark represents cumulative cash position.

14. page 13 Risks and Mitigation MitigationRisks Customer retention / increased competitionDifferentiated technology provides a better user experience than competitors Syndicate content to other sites (less dependent on “fads” in user taste) 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 Potential for infringing or indecent content on site Grouper has procedures to remove inappropriate or infringing content Grouper has a policy of banning users and / or terminating accounts of users who post such content Separate branding from Sony

15. page 14 Ensuring a Managed Grouper Integration within Sony Defined SPE Point Reporting and Cross-Sony Liaison Designated SPE senior manager with full operating authority (hire/fire) and to act as liaison with Tim Schaaff between Grouper and other Sony divisions –Manage Grouper’s 3 year development plan to defined performance targets –Work jointly with Tim directly to identify software linkages where appropriate –Coordinate implementation of cross-Sony opportunities –Collaborate within SPE to prioritize new opportunities –Help Grouper management to develop inter-Sony relationships as necessary Coordination with Tim Schaaff and within SPE Divisions Close working relationship between Tim Schaaff and Grouper engineering team/CEO to coordinate SEL development opportunities and overall agenda Tim to help manage interface to SEL and Tokyo to help ensure Grouper succeeds Monthly or as needed meetings with defined business unit team members (VP level) to identify and implement specific opportunities, eg - Theatrical Marketing, SPHE, SPT, SPD Senior SPE management meets quarterly to review progress and resolve issues Cross-Sony involvement carefully managed during initial start-up phase

16. page 15 Grouper Acquisition: Summary Provides entry into an adjacent media business at a compelling valuation Represents a compelling standalone business opportunity Provides SPE opportunity from the growth of online advertising Establishes direct, interactive relationships between SPE and consumers Provides upside opportunity as Grouper leverages SPE’s content and advertising sales, and SPE’s traditional businesses work with Grouper Offers potential support for other Sony businesses and additional digital services

17. CONFIDENTIAL Appendix

18. page 17 Grouper Acquisition Highlights Moves SPE into growing area of ad-supported user generated content and enables SPE to participate in the growth of online advertising –Online advertising growing 22% annually to reach $28BN in 2009 Differentiated technology and more expansive management vision than competition Demonstrated traction with users in a core demographic Inexpensive relative to competitors’ acquisitions of video content websites Compelling as a standalone business Complements current SPE efforts to market and distribute content online Potential to become a platform for additional services and Sony hardware, including international expansion (e.g., eyeVi) Accomplished management team –Previously developed Spinner, a Sony Music investment, which was sold to AOL for $320 MM in 1999

19. 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)

20. page 19 User-generated Content Risks There are risks associated with publishing user-posted content -- for example, it can violate another's copyright or trademark or be inappropriate or defamatory Damages associated with these risks can be reduced to a certain extent by quickly taking down infringing, trademarked, inappropriate or defamatory content after learning about them Damages associated with these risks can also be mitigated to a certain extent under the Digital Millennium Copyright Act of 1998 ("DMCA") if certain notice and "takedown" policies are implemented and under the Communications Decency Act ("CDA") Grouper has implemented policies and procedures designed to mitigate damages associated with these risks under the DMCA and the CDA Grouper bans users and/or terminates the accounts of users who post infringing or inappropriate content

21. page 20 Consumer Time is Shifting Online and Driving Growth in Internet Advertising 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

22. page 21 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% Consumer Time is Shifting Online and Drove 50% Annual Growth in Online Ad Spending Over the Last Three Years 1999 2005

23. page 22 Early Market Results Support Grouper’s Revenue Model Grouper will derive advertising revenue through three distinct business models –In-stream video ads –Banners and ad-words on the Grouper.com website –Sponsored searches The market has demonstrated a willingness to pay premium CPMs for streaming video ads –Independent analysts and Sony experience support online video CPMs of $20 to $30 (1) –Online video CPMs are now in-line with traditional TV CPMs and expected to benefit from the overall growth in online advertising –Grouper model assumes video CPMs ranging from $12 to $16 Recent deals validate the overall potential for advertising associated with user generated video and social networking sites –Google / MySpace / Newscorp – Google will pay Fox Interactive Media $900M in advertising revenue from 2007 through 2010 in exchange for the right to provide search services to MySpace and other Fox Interactive sites –Google / MTV – MTV struck a deal with Google to include music videos in Google’s “AdSense” network –Studios / MySpace – Major studios are paying MySpace for the ability to create user profiles in support of upcoming theatrical releases –Google has already closed initial deals with MTV (1)Josh Bernoff, Forrester Research; Allie Savarino, SVP World of Worldwide Marketing, Unicast; Jeff Lanctot, VP of Media Buying, Avenue A Razorfish.

24. page 23 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 Portal PC, TV or Device Broadband ISP SPE Customer-facing Service SPE-owned Service PC, TV or Device Broadband ISP SPE

25. page 24 User Generated VideoStoreChannelPromotional User Generated Video is Growing Quickly and Attracting the Largest Audiences for Digital Video Content Offers access to a wide variety of user posted content Allows users to browse content or search in genre-based channels Provides interactivity between users 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) Grouper* Source: Nielsen NetRatings. Figures as of 8/10/06. * 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.

26. page 25 Number of Videos in the Category Millions Thousands Millions Dozens Studios and User Generated Video Partnerships Fill a Gap in Current Content Offerings Studios “Professional” User Generated Video Sites “Consumer” Number of People Viewing Current Gap “ Prosumer” Studio / UGC Partnership  Increase distribution for near-professional quality user generated videos  Broaden base of Studio content and increase ability to target  Increase distribution for near-professional quality user generated videos  Broaden base of Studio content and increase ability to target

27. page 26 SPE Target and Competitive Landscape Technology Capabilities LowHigh Low (< 3mm) High (> 3mm) Existing Service Penetration Google (95.3) Yahoo (106.6) AOL (74.5) YouTube (30.5) MySpace (54.1) Grouper* (3.0) Brightcove (0.2) Veoh (1.0) MLB.com (10.5) Facebook (8.5) Connect (0.8) iTunes (22.0) (Monthly Unique Users in millions) Source: Nielsen NetRatings. Figures as of 8/10/06. 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 (2.6) Friendster (1.1) AddictingClips (1.7) iFilm (2.4) Revver (0.5) Dailymotion (0.5) vidiLife (1.2) VideoEgg (0.03) vimeo (0.3) MovieLink (0.5) CinemaNow (0.4) vSocial (0.5) Guba (1.0) Roo Media (0.5) MSN (95.6) ABC.com (8.3) MTV Overdrive (4.7) FOX.com (3.2) NBC.com (4.6) CBS.com (4.2)

28. page 27 Upside Through Sony Pictures Ownership Existing content library and new releases Developed short form content, potentially for mash-ups Talent relationships and events Basis for building community and UGC experience SPE websites SPT promotional spots on-air Linkage to theatrical marketing campaigns Content * * July 13, 2006 survey showed 33% of UGC users would be more interested in UGC sites with inclusion of studio content, only 15% were less interested. Survey commissioned by SPE and conducted by J. Rost Associates LLC. Marketing Reach Advertising Sales Corporate Infrastructure SPT ad sales force and relationships Existing ad volume for leverage and cross-platform sales Corporate functions (e.g. – human resources, accounting) Business processes Business relationships and third-party service providers

29. page 28 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

30. page 29 Executive Summary Industry Transition to Digital Distribution Grouper Overview Financials and Valuation Risks and Mitigation SPE Integration Agenda