Digital Services & Distribution Update July 8, 2008 Confidential

1. Digital Services & Distribution Update July 8, 2008 Confidential

2. [Sean to provide] Executive Summary

3. Digital Licensing

4. Market Update The digital consumption of movies and TV continues to grow and gain consumer acceptance • iTunes successfully launched movies on VOD (Jan) and DST (May) • Averaging upwards of 70k transactions per day • Increasing consumption of SVOD service • Roku box sold out at retail • Significant increase in viewership • Verizon FiOS has 1.3MM subscribers • Increasing download speeds to 50 Mbps • Outperforms iTunes VOD [transactions] • Launching soon (7/18)

5. Create new distribution outlets for SPE content across platforms and devices Build a broad distribution network with all major digital players Manage all business models: EST, VOD, SVOD Drive incremental, high-margin revenues for all SPE product Develop new markets and business models through innovation Identify and execute on new content delivery methods (e.g., bundling w/ PS3, Viao) Create new features to enhance the experience and grow sales (e.g., digital copy) Find new ways to reach consumers (e.g., virtual theaters in Gaia) Maximize value of assets through merchandising and operational efficiencies Work directly with partners to promote SPE content and secure valuable real estate [Need language from Joe] Licensing Philosophy

6. We have made more content available across more partners than any other studio Over 600 movie titles available to-date (1,000 by end of year) All next day TV and broadest library TV offering in the market 21 online and mobile licensing partners…and growing We are out-merchandising the competition Securing featured placement and promotional inventory on all leading sites Running weekly programs with each of our digital partners Generating disproportionate market share relative to DVD Forecasting $42MM in licensing revenues in FY09 iTunes currently generating $300k per week…and growing Netflix forecasted to generate $6MM in FY09 (pre-renewal) SPT Performance Content Partners

7. Mobile Entertainment

8. Large and expanding domestic subscriber base Currently 230MM subs (compared to 246MM TV viewers ages 12+) Mobile video adoption increasing with significant growth potential Expected to increase from 9MM domestic subs to 24MM by 2010 Mobile game market continues to expand Monthly downloads estimated to hit 134MM in next three years Domestic revenues forecasted to increase 130% to $1.7BN by 2011 Handsets are rapidly evolving into entertainment devices Increasing memory (8GB = 20 hours of video) Improved experience (3” screens, video out to TV, stereo Bluetooth Better access to content (full internet browser w/ Wi-Fi) Market Update Source: Gartner, 2007

9. Mobile Entertainment Philosophy Full Suite of Mobile Content Products Comprehensive Marketing and Distribution Footprint + Personalization Carriers Mobile Video Mobile Games Direct to Consumer Handsets SMSInteractivity MobileApplications Aggregators

10. We are now the #5 mobile game publisher in the US SPE leads all studios; only pure plays with 3x the product are ahead of us Won “Game of the Year” each of the last 2 years (Ratchet & Clank and God of War) Expanding video service to become a true Mobile Entertainment company Launched video on all video-capable US carriers PIX selected as 1 of only 10 channels on MediaFLO Launching new services and creating new mobile business models Continues global memory card leadership position with [x] programs in [y] territories Sprint PPV is our 3rd largest VOD customer (users avg 72 mins / day) 1st to launch an off-deck ad-supported video service (Minisodes on Sprint) Forecasting revenues of $19.6MM in FY09 Includes nearly $8MM in global memory cards SPT Performance

11. Digital Video Networks

12. By every measure, consumption of online video is growing 130MM streamers generated 11BN streams in April (up 30% YOY) Average time spent per month increased from 150 to 227 minutes over past 12 months Long-form content has seen the greatest growth, particularly among target demo 39% of video viewers (A18-25) watch TV shows regularly online; 25% watch movies Hulu generated 87MM streams in May Increased investment in original short-form content More studios are producing scripted series for the web (e.g., ABC’s Stage 9) Quality of talent and production values are rising (e.g., Seth McFarland, Afterworld) While search dominates, online video advertising gaining traction Forecasted to exceed $7BN by 2012 CPMs and sell-out rates continue to increase Lack of standards across sites presents challenges to major advertisers Market Update Sources: comScore, 2008; Frank M. Magid Associates, 2008; Forrester Research, 2007;

13. Distribution Philosophy Digital Networks Partners • Crackle is the hub of our distribution network • Digital originals debut on Crackle • Deeper, richer & more robust user experience • Community features • Interaction w/ content producers • Search and discovery tools • We own premium digital shelf space and ad inventory on all major distribution outlets • We program and control our content across partners and platforms • We syndicate the Crackle environment and, wherever possible, the Crackle player • Over 40online and mobile implementations SPT Vault

14. Past Challenges Opportunities Crackle Traffic Domestic Streams (MM) • Writer’s strike delayed production of new content • Prolonged departure of founders affected mgmt & operations • UMG lawsuit (now settled) prevented full integration with SPE • Re-launching marketing efforts to drive additional traffic • Site update helping users focus on higher-value, monetizable content • Digital studio content becoming available for distribution • Overall digital networks streams are dramatically increasing month-over-month

15. The Crackle Network June ’08 Streams (000s) 29% monthly CAGR since March * Total domestic onsite Crackle streams (11,646) less C-Spot (416) and Minisodes (1,053) on Crackle

16. Crackle Financials EBIT ($MM) Revenue ($MM)

17. The Crackle Network

18. Crackle is being repositioned as an online TV network with smart, irreverent, scripted shows that feature the stars of today and tomorrow Crackle will target the 25-35 year-old male, media enthusiast Crackle.com will provide a deeper, richer community experience with the best Web 2.0 features The Crackle Network extends to all high traffic destinations where digital consumers live Crackle Overview

19. 4 Tier Content Strategy Examples Tier Description • Angel of Death • Boom Studios • Quentin Tarantino • High production value, talent-driven vehicles with significant revenues in ancillary markets Blockbuster • Dating Brad Garrett • Jason Alexander • Barry Sonnenfeld • Original series for studio-level talent (actors, producers) Stars of Today • Owen Benjamin • Michael Jai White • Sebastian Foucan • Shows from online “stars” witha proven audience Stars of Tomorrow • Men-in-Black • Ghostbusters • 3 Stooges • Leverage SPT’s deep TV and film assets Library Building off a base of existing successful shows (e.g., Buried Alive)

20. Release Plan Ultimate [WSJ Article] New Media Blockbuster Model (Angel of Death) • Premiering on Crackle with an exclusive first run • Wide ad-supported digital distribution across partners and platforms • DVD and DST release • Exploiting domestic TV window • International TV and digital distribution Planning to replicate model 4-6 times per year

21. Programming as a true network, not a website 4 seasons showcasing the best content Original series in three genres (comedy, action, and reality) New episodes debut daily, giving viewers multiple reasons to come back 7 new episodes per day New episodes from different shows each day (M-F) At least one blockbuster per season Premium content (TV and movies) programmed specifically for theCrackle audience Programming Strategy

22. Already Posted Anchor Show Crackle Summer ’08 Season (6/16/08)

23. Crackle Winter ’09 Season (12/15/08) Anchor Show

24. Crackle 4.0 • Show focused discovery (highlight content that appeals to core demo) • Incorporates additional ad inventory Continuous UI improvements with the best Web 2.0 features

25. Reorganization

26. We continue to execute against our budget philosophy Negotiated exit of two founders Consolidated content production and distribution in Culver City Programming Crackle as a network Distributing content from Crackle across partners and platforms Updating / improving website and user experience Reorganizing to improve operational performance Create a centralized management structure and reporting lines Unify all HC under one roof in Culver City Better leverage studio resources (talent, marketing, ad sales, etc) Eliminate duplicate positions Outsource non-core technology Re-Org Overview

27. Targeting internal announcement date of July [xx] Transitioning all Crackle positions to Culver City Reduce overall digital headcount by 9 people Personnel critical to the transition offered stay bonuses Technology to be transitioned over next 2-3 months Focus on keep site fully operational during transition Targeting to be complete transition to Culver City by October Planning to outsource non core technology services to Connect [name] Exploring options for exiting Sausalito office lease New HC to ramp up over the next 4 months and be added to expanded space in Building J at the Culver Studios Transition Summary & Key Assumptions

28. Headcount Variance (preliminary)