Opportunities to Differentiate Sony’s Network Services

1. Opportunities to Differentiate Sony’s Network Services October 18, 2011

2. competitive snapshot /digital entertainment services prevailing digital entertainment services are not highly differentiated; most offer similar content and are available on many of the same devices • this is the figure for Amazon Prime. Amazon Instant Video only provides a SKU count of 100,000 • Note: figures may include clips in film count

3. competitive snapshot /digital music services among the prevailing digital music services, the differentiator is access model and user experience rather than content 3

4. opportunities for differentiation / • Sony has a unique opportunity to differentiate its services: • other service providers: • face the challenge of integrating with multiple third party electronics manufacturers • must license content that is freely available to all competitors from the major film studios and music companies • meanwhile Sony can differentiate its services by: • tightly integrating its services with its devices in order to provide the best user experience • offering unique, high quality experiences on a consistent basis that are only available to Sony customers

5. opportunities for differentiation /leading edge services optimized for Sony’s products an example of a leading edge service Sony is uniquely positioned to provide: • tablets and mobile devices are becoming the “steering wheel” of the living room • when combined with a connected TV, a tablet becomes the living room’s CPU, user interface, and connection to the consumers’ cloud-based services. A consumer can create an over-the-top experience without an expensive TV • Apple’s AirPlay, a proprietary wireless protocol, enables digital services accessed on the iPad or iPhone to be beamed to unconnected, inexpensive TVs tethered to Apple TV set top boxes with the touch of a button if Sony makes changes to the rights embedded on digital copies of its films within Sony Entertainment Network, it can create the same interaction between connected TVs and tablets, without requiring the user to purchase a separate set-top box, by using existing DLNA technology 5

6. examples of differentiation and innovation /experimentation with film distribution windows Nov 2011 Nov 2008 Dec 2009 April 2011 • Available to BRAVIA owners one month before DVD release • Streamed directly to the TV • $24.95 for a 24-hour rental (free to new BRAVIA owners) • First multi-channel TV provider to offer premium VOD titles • Available on cable, rather than directly to TV or PS3 • Available 2 months after theatrical debut for 2 weeks • $29.99 for 48-hour rental • Sony Pictures, Warner Brothers, Universal Pictures, 20th Century Fox participating • Available via VOD three weeks after theatrical debut Nov. 4 • Available in two test markets: Atlanta and Portland (~500K subscribers) • $60 for rental • Test canceled due to pressure from studio after theatrical exhibitors threatened to not play film • First time a major film available for streaming before DVD/Blu-ray • Streamed directly to the TV • Available to BRAVIA owners one month before DVD release • $9.99 for 24-hour rental (users also sent a Blu-ray copy) 6

7. recent examples of differentiation and innovation /experimentation with distribution and original content April 2011 Paramount premiered Jackass 3.5 globally on Joost.com via weekly installments prior to the release of the full-length feature on VOD, download-to-own, DVD, and TV June 2011 Activision announced that it had engaged “Hollywood talent” to develop a linear web series inspired by “Call of Duty” that will be released exclusively to subscribers of Activision’s “Call of Duty Elite” service September 2011 Fox premiered the first episode of its new show, “New Girl”, on iTunes, Hulu, and Fox.com 2 weeks before its Sept 20 broadcast debut 7

8. opportunities for differentiation /unique content experiences exclusive to Sony customers • unique content experiences are: • content that is available nowhere else • content that is available earlier than elsewhere • enhanced content: content that has more than you would have gotten elsewhere 8

9. opportunities for differentiation /unique content experiences exclusive to Sony customers • examples of possible unique content experiences include: • Leverage SPT team (including Networks teams / Crackle teams) for programming expertise • SPE to create exclusive original content for Sony Networks • Carry SPT networks on SNEI services • PlayStation as the exclusive game console to retail Sony UltraViolet titles • Some exclusivity amongst over-the-top players for re-launch of PVOD, including a sell-through component • A subscription club where every member has the ability to stream one new release prior to DVD each month (may requires a significant investment given Starz rights) • A subscription X-Factor club where members would have exclusive access to intra-episode footage of contestants, judges, performances, and auditions as well as free MP3 downloads of weekly artist performances • Offer exclusive live streaming of certain Sony Music artists’ concerts or other performances on a monthly basis • Create highly immersive and social second-screen content that would be available exclusively on Sony tablets, and would use Automatic Content Recognition to synch to Sony TV shows, films, and music • Work with the Academy of Motion Picture Arts and Sciences to allow the public to stream certain Oscar nominees during awards season to build excitement for films and the Oscar race 9 9