Sony Pictures Entertainment and Sony Network Entertainment:

1. Sony Pictures Entertainment and Sony Network Entertainment: Strengthening and Differentiating the Sony Entertainment Network November 18, 2011

2. Executive Summary 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’ve agreed on “low hanging fruit” opportunities to drive traffic, several of which are currently in progress We recommend launching a programmed video service including exclusive originals to drive usage We recommend addressing technical constraints in Sony hardware to facilitate differentiated business models, including exclusive and early access 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

3. Agreed Desired Points of Differentiation 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 and exclusively licensed (both from SPE and 3rd parties) 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 Leveraging SPE’s creative experience and talent in marketing to this demographic SPE and SNEI have identified a range of opportunities to drive these points of differentiation

4. Strategies and Initiatives for Achieving Differentiation 3

5. High-level Summary of Initiatives “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 Free to consumer originals and exclusives: service with content exclusively available to Sony customers on a free basis with an estimated annual content investment of ~$75MM Service highlights: Deeply integrated with and driving up-sell to SEN’s paid services 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 Initial 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 benefits to Sony / SEN brands 4

6. Free to Consumer Programming Highlights The service offers a selection of premium movies with exclusive content and TV quality original series • Behind the scenes, movie and pilot premieres, new game releases, and coverage of most relevant pop culture gatherings (e.g., Comic-Con, E3, SxSW) • Cost: $2MM for video coverage Inside Looks Music and Live Events • Live concerts, music festivals, unplugged sessions with artists, “secret” shows • Cost: $3MM for video streaming and licensing • Two TV caliber series annually that leverage existing and related IP (e.g., PlayStation games) 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 Original Shows • 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 Curated Film and TV Content 5

7. High-level Summary of Initiatives (Continued) 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 premium EST (during period of exclusivity, only retailer offering EST in the theatrical window) First-mover advantage for SEN and Sony Hardware to provide users with a cloud-based solution through UltraViolet 6

8. Recommended Process Going Forward Today: Review progress to-date on joint projects Discuss broad parameters for projects requiring shared investment, including originals Discuss technical priorities for transactional models, including CPSG support for UltraViolet Ongoing: SPE and SNEI coordination to execute against overall project plan Next meeting in January, with detailed review of plan for initiatives requiring shared investment Regular 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 SPE Team: Corporate Development: Jim Underwood Sony Pictures Technologies: Chris Cookson Crackle Plus: Andy Kaplan, Eric Berger Transactional: John Calkins, Jason Spivak 7

9. plus

10. Crackle as a Platform to Leverage 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 • Significantly broader audience reach as a free service than several paid services, including Hulu+ and Amazon Prime • 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 9

11. plus 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 3rd 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 10

12. Deep Product Integration Drives Up-Sell 11

13. Crackle Plus, Exclusive to Sony Sony already owns a premium content network, among only a handful in the market plus • 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 SEN 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. 12

14. Early and Exclusive Access through Unique Transactional Models

15. Premium EST • Note: overall premium EST launch strategy and timing under review by SPE management • 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 by territory to be determined Overview • 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) Differentiation • Limited, per transaction cost only; not a major investment • 80% per transaction share to SPHE • Costs to implement watermarking technology and other content protection measures Cost • Overall launch strategy and timing under review by SPE management • SNEI to have first opportunity when strategy and timing are determined • Subject to legal review; some product not available in all markets and potential reduction in license fees under existing VOD/EST licenses triggered by grant of early window • Watermarking technology (i.e., Verance/Civolution) and additional content protection measures would be required • Exclusivity available for a limited number of titles Issues to Address 14

16. Premium VOD • Note: overall PVOD launch strategy and timing under review by SPE management • 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 by territory to be determined Overview • During the period of exclusivity: • Only non-cable/satellite service offering PVOD • Ability to message a “digital exclusive” Differentiation • Limited, per transaction cost only; not a major investment • 80% SPHE share per transaction • Costs to implement watermarking technology and other content protection measures Cost • Overall launch strategy and timing under review by SPE management • SNEI to have first OTT opportunity when strategy and timing is determined • Watermarking technology (i.e., Verance/Civolution) and additional content protection measures would be required • Exclusivity available for a limited number of titles • Subject to legal review; some product not available in all markets Issues to Address 15

17. UltraViolet (UV) • Provide SEN users with UV EST storefront which includes SPHE’s full EST catalog • Wholesale prices for UV EST retailers discounted vis-à-vis traditional EST retailers to offset additional UV costs • Joint marketing programs Overview • 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 SEN 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 look to convert their existing collections (i.e., millions of discs) into UV lockers; SEN 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 to accessing the video they already have through UV locker access via Sony devices Differentiation • Per transaction UV fulfillment costs borne by SNEI or passed on to consumer • SPHE discounts UV wholesale prices in an effort to help SEN and other UV retailers offset such costs • Some UV licensing costs expected, depending on role played by SNEI in UV ecosystem Cost • Hardware implementation of UV protocols • Integration with UV coordinator • Subject to legal review Issues to Address 16

18. “Low Hanging Fruit”

19. Leverage SPE Theatrical, Home Entertainment, TelevisionMarketing • 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: SEN TV spots to air worldwide, SEN 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) Overview Differentiation • Increases awareness of SEN relative to its competition Cost • Little to no incremental cost • Work closely with SNEI to develop appropriate branding, messaging and phasing for each avail • Subject to legal review • 3rd party marketing approvals Issues to Address 18

20. Red Band, Extended Trailers and DVD Extras • 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 3rd party deals that can vary by title • Ensure SEN achieves parity with 3rd party vendors (e.g., when a trailer is first launched on Yahoo! the trailer is also available on SEN) Overview Differentiation • Provides a regular flow of exclusive content that can be easily promoted Cost • Little to no incremental cost • Subject to SNEI legal review of ability to show red band trailers and to SPE review of legal issues • Secure content to the network (e.g., prevent user upload of red band trailers to competing outlets such as YouTube) Issues to Address 19

21. Exclusive Access to 3D Versions of SPT Shows • 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 Overview • 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 Differentiation • 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 Cost • 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 • Subject to legal review Issues to Address 20

22. Regular Discount Programs for VOD and EST • 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 • Titles to be identified on a mutual and periodic basis • Stunts to be programmed around genres/seasons/events/holidays Overview • When possible, discounts only available to SEN for the duration of the applicable program • Should be viewed as a complement to other licensing programs Differentiation • Limited cost, per transaction only; not a major investment Cost Issues to Address • Title eligibility to be discussed on a market-by-market basis • Subject to legal review 21

23. Appendix: Strategic Considerations for Video Services Subscription Video-on-Demand (SVOD) and Ad-supported Video-on-Demand (AVOD)

24. SVOD and AVOD: Strategic Considerations (1 of 2) • Previous discussions have evaluated the launch of a programmed video service as a standalone profit driver, key considerations include: • Investment in content and programming required to compete with leading services • Number of customers likely to be acquired • Revenue per customer • Ongoing relationship with customers • If a service is intended to be a standalone profit driver, the SVOD vs. AVOD decision depends partly on appetite for investment and risk • SVOD can be a high risk, high reward proposition • Significant investment in content required given heavy investment by many competitors • Harder to secure customers for paid service • But SVOD offers the potential for higher revenue per customer (e.g. ~ $10/month of subscription revenue) and an ongoing relationship • AVOD can be a lower risk model, but with lower revenue per customer • Success is possible at a lower level of investment; despite numerous competitors, investment in exclusive content for AVOD services has been more modest • Easier to secure customers for AVOD services • But revenue per customer is lower (e.g., ~$0.03 of ad revenue per view), and programming expertise is required to keep customers coming back 23

25. SVOD and AVOD: Strategic Considerations (2 of 2) • Sony’s existing revenue-generating services and connected device footprint give us the opportunity to evaluate the SVOD vs. AVOD decision differently • If a programmed video service is viewed as a customer acquisition tool for other revenue generating services and hardware sales, strategic considerations change • Strategic considerations include: • Creating a compelling and competitive content offering with a reasonable investment • Acquiring the greatest number of customers for the service • Providing those customers with a reason to return on a regular basis • Monetize by cross-selling these customers on paid services (i.e., Music Unlimited, Video Unlimited, PlayStation Plus) and hardware • AVOD’s characteristics better satisfy these strategic considerations: • Lower investment in content is required to be competitive • Free-to-consumer positioning makes it easier to acquire customers • A well-programmed service provides a reason for customers to return on a regular basis • Service can be deeply integrated into other paid offerings, encouraging cross-selling and co-promotion 24

26. Despite Netflix’s highly publicized subscriber numbers, standalone SVOD services have attracted fewer customers than AVOD services “Bundled SVOD” Standalone SVOD AVOD • Includes “streaming only” customers and customers that subscribe to both streaming and physical rental per Q3 investor letter, released 10/11. • Source: Piper Jaffray research, 2011. • Source: Hulu Management Blog as of 10/5/11. • Source: Comscore Videometrix, 10/11. 25

27. And Competition for SVOD Services is Increasing… …but similar lessons are playing out again TV Everywhere • Source: Time Warner Q2 earnings call as of 8/3/11. • Source: Industry reports as of 8/12/11. 26

28. SVOD and AVOD: Content Investment • While the ability to attract customers to standalone SVOD services at $10 per month is still being tested, the required content investment in these services remains high: SVOD • By contrast, AVOD services initially drove significant viewership with little to no content cost. Investment is increasing, but still well below investment in SVOD AVOD • Source: company filings dated 2/18/11. • Source: company filings and press releases. Note: Specific valuation for Lovefilm not publicly disclosed. • Source: Piper Jaffray, 2011. • Source: Hulu Management Blog as of 4/4/11. 27