mid range plan fiscal years 2009 – 2012 october 2008 confidential

Mid Range PlanFiscal Years 2009 – 2012

October 2008

CONFIDENTIAL

2

1. Executive Summary

2. Core Programs

3. Programming

4. Digital Networks & Digital Studio

5. Distribution & Licensing

6. Equity Investments

7. SPHE & SPTI Contribution to SPT Product

8. Ad Sales

9. Summary

10. Appendix

3

• Expand FEARnet into a linear network

• Create new, targeted shows on GSN and integrate skill-based gaming

• Explore HD as an entry point for a broader Sony linear network

• Use the successful launch of Dr. Oz to become official distributor of all future Harpo shows

• Seek extension of Starz deal

• Distribute additional product through our digital distribution network

• Create excitement and support for Crackle throughout SPE

• Build Crackle.com into an online entertainment destination and attractive outlet for advertisers

• Integrate Crackle into overall studio and leverage marketing and content resources

• Expand existing base of managed network distribution partners

• Grow our reality / format business through Embassy Row, 2waytraffic, and other producers

• Develop new shows in partnership with Harpo Productions

• Continue to invest in top-tier talent to produce premium content

Core Programs

• Adjust timing of broadcast sale of Seinfeld due to challenging local station economics

• Create efficiencies and cost controls for soaps by moving to the lot and using new technology

• Secure renewals for WOF / Jeopardy! and introduce new brand extensions

• Aggressively pursue Jay Leno to continue to build our syndication business

Programming

Digital Networks

Equity Investments

Distribution & Licensing

Ad Sales

• Aggressively build our digital ad sales business with Crackle as the foundation

• Continue to pursue third party representation and acquisition of complementary businesses

• Leverage our content and ad sales assets to build a cross-platform Sony ad network

Executive Summary

4

EBIT Revenue

$197 $191$173

$188 $192

$165

$240

$15 $21

$26

$30 $32

$32

$36

$19

$0

$50

$100

$150

$200

$250

SPT GSN/FEARnet Challenge

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

($ in MM)

$1,561

$1,258$1,299

$1,259$1,246$1,202

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

($ in MM)

$211 $211$218 $218

$224

$197

$276

NOTE: Traditional television excluding Digital Networks, Digital Studio, and Crackle

SPT Financial Summary

$1,266$25

5

Digital Financial Summary

Profit Before Contribution Revenue($ in MM)

EBIT After Contribution($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

($ in MM)

$24 $27

$60

$33

$88

$59

$148

$0

$50

$100

$150

$200

$250

($15)

($9)

($20)

($16)($20)

($27)

($32)($36)

($32)($28)

($24)($20)

($16)($12)

($8)($4)

$0

$218

$137$147

$95$111$76$68

$0

$50

$100

$150

$200

$250

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

6

From all sources of Domestic TV, Internet, and Mobile revenue

Est. MPG/WW Acq. Profit $281 $347 $343 $436

$936$1,063 $1,089 $1,177 $1,108 $1,080

$1,298

$441$441

$536$493

$514 $558

$633

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

SPT/Other MPG/WW Acq.($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

NOTE: Before Seinfeld producer share

$1,377$1,504

$1,625 $1,670 $1,622 $1,638

$1,931

($ in MM)

SPT Total Revenue

7

Net G&A Expenses & Headcount

FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12

SPT

Q2/MRP $52 $55 $57 $60 233 233 233 233

Budget/Prior $52 $54 $56 -- 233 224 226 --

Variance $0 ($1) ($1) -- 0 (9) (7) --

Crackle

Q2/MRP $6 (a) $5 $5 $6 25 28 30 31

Budget/Prior $8 $11 $16 -- 36 58 68 --

Variance $2 $6 $11 -- 11 30 38 --

Digital

Q2/MRP $13 (b) $15 $16 $17 54 63 67 70

Budget/Prior $13 (b) $14 $15 -- 50 53 55 --

Variance $0 ($1) ($1) -- (4) (10) (12) --

Total

Q2/MRP $71 $75 $78 $83 312 324 330 334

Budget/Prior $73 $79 $87 -- 319 335 349 --

Variance $2 $4 $9 -- 7 11 19 --

Embassy Row

Q2/MRP $3 $7 $7 $7 27 28 28 28

Budget/Prior $4 $0 $0 -- 27 0 0 --

Variance $1 ($7) ($7) -- 0 (28) (28) --

Net G&A Headcount

(a) Crackle FY09 Q2 Forecast excludes $2mm restructuring costs and includes the first 6 months of overhead costs of the 11 layoffs.(b) Digital FY09 Q2 Forecast and Budget excludes $2mm legal costs related to Crackle-UMG settlement

8


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

9

Core Programs Strategy

• Adjust timing of Seinfeld sale to approach broadcast partners under more favorable market conditions

• Cultivate next generation of fans with digital / interactive offerings

• Explore opportunities to move both shows to the Sony lot

• Leverage digital technologies to produce daytime programming more efficiently

• Secure station renewals and look to take back international distribution rights

• Launch new mobile applications console games, and digital extensions to increase interactivity and drive viewership

• Aggressively pursue Jay Leno to significantly expand our syndicated programming

CoreProgram

s

10

“Seinfeld”

• Despite ad sales inventory being priced among highest in syndication, expect gradual ratings erosion

• 3rd cycle cleared in 99% HH, guaranteed double run in 86%• North American DVD sales through FY08: $363MM since inception• Projected North American DVD sales: FY09: $12MM, FY10: $5MM, FY11: $3MM,

FY12: $2MM• FY10 assumes 4th cycle renewals with same stations for $500k per episode• FY11 assumes 4th cycle new sales of $500k per episode

MRP Assumptions

Strategy

• Closed 3rd cycle cable renewal with Turner in March ‘08

• Approaching Fox, Tribune, CBS/Viacom, and new media outlets for 4th cycle broadcast renewal

• Launching cross country college tour and creating digital assets to connect the brand to a new generation of viewers

• In near term, holding back DST, VOD, and ad-supported to improve station renewals; over longer term looking to exploit digital windows, including

- Releasing all 9 seasons on DST over two years starting as early as FY10

- Launching ad-supported with community features one year after initial DST

- Expanded ad-supported and SVOD in later years

- Revenues not assumed in MRP

EBIT

$20 $18$15 $16 $14

$17$13

$2$3

$1$2

$1

$1

$19

$17

$36

$18

$1

$0

$10

$20

$30

$40

$50

$60

Ad/Promo DVD License Fee

($ in MM)

FY09

Q2/BDGT.FY10

MRP/PRIORFY11

MRP/PRIORFY12MRP

$22

$40

$33

$54

$33

$19

$13

11

“The Young & the Restless” and “Days of our Lives”

EBITOverall• Create operational efficiencies and lower overall production costs

– Move shows to the lot to improve coordination and cost control– Integrate new digital production technology / equipment

• Work closely with SPTI to secure renewals and key sales

Days of Our Lives• Close three-year license fee agreement with NBC by end of CY08• Upgrade show to Hi-Def and improve overall production quality

The Young & The Restless• Close CBS renewal by mid 2009• Continue nationwide talent search to generate publicity and boost

ratings in key markets• Build on success of online magazine Restlesstyle.com by incorporating

advertising / merchandising• Shoot on location in international markets to grow local audiences

Days of Our Lives:• Show renewed through March 2012• License fees decrease from $60MM to $40MM and costs decrease by equivalent

amount

The Young &The Restless:• Show renewed through August 2012• License fees decrease by 15% (from $100MM to $85MM) and costs decrease by

equivalent percentage• International TV Ultimate sales hold constant

Strategy

MRP Assumptions$26 $25 $24 $26

$23 $25 $23

$18$17

$12

$14

$11

$13

$11

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Y&R Days

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

($ in MM)

$44$42

$36

$40

$34

$38

$34

12

“Wheel of Fortune” and “Jeopardy!”

• Wheel of Fortune CPM/ratings assumed at previously targeted levels to hold consistent profit margins• Production costs assumed to decrease from 08/09 to 09/10 then flat thereafter• Jeopardy! experiencing strong CPM/ratings and increased international license fees• Contractual licenses through 11/12• Recoupment of IGT interest in FY12 of $15M revenue

MRP Assumptions

StrategyOverall• Wheel of Fortune celebrating its 5000th episode• Jeopardy! celebrating its 25th year in syndication• Both will be fully distributed in Canada under new 4-year deal• WOF was the #3 most watched show over the summer (Adults +18) and

Jeopardy! was #7 of all shows on TV• Working to shift int’l distribution rights from KingWorld to 2waytrafficWheel of Fortune • Continue to use brand integrations for prizing, promotions, and

production support• Launch new game element (One Million Dollar Bonus Round) and home

viewing prizes to further engage audience and keep show fresh• Introduce new cross-platform games, including WOF on PS3, World

Winner skill-based online game, and WOF “Road Trip” on mobileJeopardy! • Introduce new show elements highlighting 25th season, including

anniversary sweepstakes and new features and vignettes• Tape first ever TV show live from the floor of CES in 2009• Launch new PS3 game, World Winner skill-based game, and new Rock

& Roll Jeopardy! mobile game• Distribute new AirPlay mobile application (Play Jeopardy! Live) enabling

viewers to play real-time

EBIT

$63 $60 $59 $59 $60 $60$70

$34 $36 $32$36 $32

$36$38

$0

$20

$40

$60

$80

$100

$120

$140

Wheel of Fortune Jeopardy!

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

($ in MM)

$101$94 $95

$91$96

$92

$106

13


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

14

Overview of SPT Programming

Drama Comedy

Reality & Games Animation

Syndication

Long Form Digital

• Maintain portfolio approach to domestic development

• Leverage international demand and distribution to

sell shows globallyDaytime

Georgia O’Keefe

15

TV Market Dynamics and SPT Initiatives

Trends Initiatives

• Reality is growing as a percentage of domestic primetime programming

• International demand for reality continues to grow

• Exploit SPE assets (library, 2waytraffic, and ER) to develop game and reality formats

• Expand relationships with non-fiction executive producers and production companies

• Comedies continue to have high off network syndication value

• However, comedy makes up a decreasing percentage of broadcast network lineups

• Maintain stable of top-tier writers, show-runners, and production entities

• Build on SPT’s successful comedy brand to launch new cable and broadcast series

• Local syndication markets looking for established brands, proven talent, and top-tier producers

• Help ensure that Dr. Oz is a success in order to secure rights to future Harpo product

• One-hour dramas dominate domestic primetime with 56% of total programming hours and have strong international demand

• Continue to invest in dramas on cable and broadcast and get additional shows on air

• Remain selective in pursuing projects and leverage int’l markets to source / develop shows for the US

• Digital quickly becoming a legitimate outlet for established talent

• Expand overall deals into Digital Programming to help grow Crackle

• Use Crackle as a place to test and launch new shows

• Deficits are facing increasing pressure as production costs are generally rising faster than license fees

• Focus on managing production costs and seek tax credits and other offsets

16

SPT’s Current Program Lineup

Days of Our Lives

Lost in the 80’s (pilot)

Young & The RestlessRules of Engagement

Stone Cold: Thin Ice (MOW)Stone Cold: No Remorse (MOW)

Untitled Mitch Hurwitz (pilot)The Cru (pilot)

All Star Mr. & Mrs. (pilot)

The UnusualsMayflower (mini)

Peter Pan (MOWi)Shark Tank (pilot)

Maid in Manhattan (pilot)

‘Til Death

Sit Down Shut Up

Lalola / Eva Adams (pilot)

Wheel of FortuneJeopardy!

Dr. OzJudge Hatchett

Judge David YoungJudge Karen

10 Items or LessMy Boys

Dave Caplan Project (pilot)Gifted Hands (mow)Time Heals (pilot)

Breaking BadThe ShieldRescue MeDamages

The Conversation (pilot)

Boondocks

The Gong Show

Gay Robot (presentation)

Dating Game (pilot)Newlywed Game (pilot)

The Empire (pilot)Spectacular Spider-Man

Dragon Tales

Syndication

The BeastUntitled Matthew Perry /

Peter Tolan (pilot)

Drop Dead Diva (pilot)Living Proof (MOW)

The 10th Circle (MOW)Sex & Lies in Sin City (MOW)

Flirting with Forty (MOW)The Wronged Man (MOW)

Georgia O’Keefe (MOW)

17

2008/2009 Scripted Development Snapshot

Writer/Producer Current In Development End Date

Tantamount Sit Down, Shut Up

Ab Fab Lost in the 80’s

Untitled Mitch Hurwtiz Project

06/14/10

Michael Davies N/A The Dating Game The Newlywed Game American Bandstand

All-Star Mr. & Mrs. Take the Money and Run

01/01/09

Happy Madison Rules of Engagement

Gong Show

Gay Robot Joe Dirt

Untitled Adam Goldberg Project

08/07/11

Timberman/Beverly Productions

N/A Untitled Steinfelds Project Becky Mode

Untitled Wallace & Wolfe Project

06/08/09

Barry Sonnenfeld N/A Los Simuladores The Kingdom

Things a Man Should Never Do Past 30

03/31/09

Neal Moritz N/A Untitled Dave Caplan Project

Vantage Point 02/06/10

Fanfare(Jamie Tarses)

My Boys Time Heals Eva Adams 05/03/10

18

SPT Alternative Programming Strategy

Sony Assets

Embassy Row

3rd Party

Producer Relationships

• Harness the power of Sony assets to create shows with brand value

– Refresh and re-launch proven game shows from SPT’s extensive TV library

– Create new reality formats from film and TV properties

– Source international formats for domestic production from 2waytraffic

• Acquire Embassy Row

– Expand on ER’s extensive development pipeline

– Leverage Michael Davies’ international credibility to re-launch library product

– Add professionals on the ground in int’l markets to acquire new formats

• Acquire 3rd party formats for domestic and international production and distribution

– Seek global rights (format and distribution) to feed 2waytraffic pipeline

• Expand network of domestic producer partnership

– Invest $7MM per year (pre-recoupment) in additional overall deals Target 2-3 overall reality deals

19

2008/2009 Snapshot of Alternative Programming

• Hogs & Heifers • Your Kid is an Idiot

• The Empire • World’s Strongest Celebrity

• National Bible Championships • Take the Money and Run

• Don’t Forget Your Toothbrush • All Star Mr. & Mrs.

• Shark Tank (Mark Burnett) • Harmony Wars (Deb Newmyer)

• American Bandstand (Dick Clark) • WARdrobe (Kristi Kaylor)

• Love’s Roulette (Kalissa Miller) • Super Market (Scott Sternberg)

Sony Assets

Embassy Row

3rd Party

Producer Relationships

• Alison Grodner • Mike Fleiss

• Jay Bienstock • Nigel Lythgoe

• Gong Show (Happy Madison) • Pursuit of Happyness (Will Smith)

• Newlywed Game (Michael Davies) • Power of 10 (Michael Davies)

• Dating Game (Michael Davies) • Gretchen Wilson project (Sony Music)

• Family Baggage (Eric Tannenbaum)

20

DigitalExtensions

DigitalExtensions

The Power of a Format-Based Show

• Station license fees generated approximately 70% of total revenue

• Brand integrations provide prizing, promotions, and production support

• Reruns on cable / GSN

• Currently licensed in 15 territories for broadcast (including new distribution deal in Canada)

• Formatted in 22 countries

• Generated $80MM in international licensing and format revenues for the past 5 seasons

• Online casual, console, portable, and PC games drive revenues and promote viewership

• Launching PlayStation 3 and online skill-based game in FY09

• Currently #3 mobile game in US with new title (WOF Road Trip) launching this year

• Slot machine license (IGT) generated $340MM lifetime to date

• Rights also licensed for terminal-based state lotteries, board games, and various merchandise

OtherOther

InternationalSales

InternationalSales

LinearProgram

LinearProgram

WOF demonstrates the international and cross-platform potential for game show formats

21

21

24 2424

0

5

10

15

20

25

FY09 FY10 FY11 FY12

(# of Term Deals)

Overall Term Deal Financials

NOTE: Assumes 3 non-scripted deals for $7MM gross in FY10 through FY12, with expected recoupment resulting in net expense of $5M-$3M

# of Term Deals

($17)($18)

($14)

($19)

($0)

($5)

($10)

($15)

($20)

($25)

FY09 FY10 FY11 FY12

($ in MM)

Net Cost Per Year

22

SPT Production Assumptions

Network: DAYS OF OUR LIVES / THE YOUNG & THE RESTLESS continue throughout plan RULES OF ENGAGEMENT and ‘TIL DEATH continue throughout the plan (6 seasons) SIT DOWN, SHUT UP continues throughout the plan (4 seasons) THE UNUSUALS continues throughout the plan (4 seasons) 7 pilots in 09/10 and 9 pilots per season thereafter, resulting in 3 series per year One new series succeeds: 10/11 TBD Drama

Cable: RESCUE ME is ordered for a 6th season THE BOONDOCKS continues throughout the plan (5 seasons) DAMAGES and BREAKING BAD continue throughout the plan (5 seasons) MY BOYS continues throughout the plan (6 seasons) 5 pilots per year, resulting in 2 series per year One drama series succeeds in FY10

First-Run Syndication: WHEEL OF FORTUNE and JEOPARDY! continue throughout plan JUDGE KAREN and DAVID YOUNG continue throughout the plan (4 seasons and 5 seasons, respectively) DR. OZ launches in 09/10 and continues throughout the plan (3 seasons) TBD HARPO SYNDICATION launches in 10/11 and continues throughout the plan (2 seasons)

Non-Scripted: 5 non-scripted cable series and 2 non-scripted broadcast network series across FY10 to FY12

MOW: 9 movies and 1 miniseries per year

23

Programming – New Series Investment & Development

($28)

($42)($34) ($36)

($26)

($26)

($26) ($26)

($18)

($18)

($19)($20)($3)

($2)($5)

($8)

($0)

($20)

($40)

($60)

($80)

($100)

($120)

FY09 FY10 FY11 FY12

($ in MM)Pilot/Series Investment Scripted Development Allocated Overhead Non-Scripted

($84)

($94)

($84)

($75)

Budget/Prior MRP ($79)

Variance $4

($95)

$1

($95)

$11

24


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

25

Overview of Crackle.com

Content &Experience

Grow Audience

Drive Value

• Take advantage of studio talent and production resources to create compelling original programming

• Make Crackle the digital outlet for all forms of SPE content, including films, TV, clips, trailers, and exclusives

• Enable users to interact with content in unique ways that are unavailable elsewhere on the web

• Increase revenue by offering advertisers high quality content, an engaged audience, and unique opportunities to sponsor content

• Provide a unique promotional outlet for studio content

• Tap into studio’s marketing strength to promote site through multi-platform campaigns

• Exploit digital distribution network to broadly syndicate Crackle across the web and mobile partners

Crackle leverages the studio’s strengths in content, programming, and marketing to provide an engaging online entertainment experience for males 18-34

26

Crackle Content Strategy

Film

TV

Short-FormTV

Exclusives

Digital Originals

Vault

• Streaming premieres• Behind the scenes• HD Trailers

• High quality series and daily shows that define the voice of the network

• High production value, talent-driven vehicles with significant revenues in ancillary markets (e.g., Angel of Death and Quentin Tarantino’s Video Village)

• Anchor shows from studio-level talent (e.g., Dating Brad Garrett)

• Shows from emerging talent with a proven audience (e.g., Owen Benjamin)

Take advantage of all of the studio’s content and production resources to create a robust, high-quality online video offering

27

Example Programming Schedule: Winter ’08/09 Season

Content Monday Tuesday Wednesday Thursday Friday

Originals

Series The Hustler The GroundlingsOwen Benjamin

PresentsAnytime:

(Unscripted)Star-ving: David

Faustino

Dailies

Rocketboom

Penn Says

Joke Woman

Rocketboom

Penn Says

Joke Woman

Rocketboom

Penn Says

Joke Woman

Rocketboom

Penn Says

Joke Woman

Rocketboom

Penn Says

Joke Woman

Mid-Season Movie Event

Angel Of Death – February

CatalogPrior season episodes of Crackle originals

(e.g., Hot Hot Los Angeles, The Roadents, Gay Town)

Film (PIX)Selection of SPE titles programmed specifically for the Crackle Audience(e.g., Go, Seven Years in Tibet, The Quick and the Dead, Donnie Brasco)

TV (SPT Vault)Classic action series and TV sitcoms

(e.g., Married with Children, News Radio, Party of Five, The Tick)

Short-Form TV (Minisodes)All your favorite TV shows, only shorter

(e.g., Facts of Life, VIP, Charlie’s Angels, T.J. Hooker)

Combines TV scheduling with the on-demand aspects of the web

28

Crackle Experience

• Re-launching Q1 CY09

• Revising “look and feel” to simplify the user experience and make it easier to find content

• Building community features that promote engagement around specific properties

• Introducing immersive experiences around SPE movies

Crackle.com Today Planned Improvements

29

The Crackle Network

Partners

• 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 40 online and mobile implementations

Managed Network

Vault

Crackle.com

Broadly distribute across partners and platforms to

build scale

Drive users back to site for deeper experience, additional content

discovery, and greater monetization

30

Managed Network Footprint

• Over 40 implementations to date with 16 online and mobile partners

• Expanding to include all scale players and more high growth sites

Vault

Tie

r I

In-P

roce

ss

Tie

r II

Exi

stin

g

31

Traffic Forecasts

(MM)Aug ‘08 Actuals

FY09 FY10 FY11 FY12

Streams

Crackle.com (1) 13.2 180 547 866 1,455

Managed Networks (2) 24.7 221 344 605 333

Total Streams 37.9 401 891 1,471 1,788

Unique Users

Domestic 10.3 8 12 14 16

International 1.4 2.0 5.5 4.2 7.3

Total 11.7 10 17.5 18.2 23.3

(1) Crackle.com includes domestic and international streams

(2) Managed Networks include Crackle, PIX, Minisodes, and Vault off-site

Full Year Totals

March; Onsite

32

Crackle Financial Summary

EBIT Revenue

($ in MM) ($ in MM)

$25

$16

$12

$4

$50

$12

$31

$0

$10

$20

$30

$40

$50

$60

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

$0

($3)($4)

($12)

$10

($7)

$0

($15)

($10)

($5)

$0

$5

$10

$15

33

Digital Studio Production Assumptions

Multiple-Revenue Premium Shows

• 4 to 6 premium digital short-form series per year

– Also to be released on DVD and TV windows

– Average production cost of $1MM

• FY09 productions

– Angel of Death (greenlighted): Starring Zoë Bell, pre-production Sept ’08

– Video Village (in negotiation): Based on the life of, and narrated by, Quentin Tarantino

• Revenue and cost will be contributed from other SPE divisions: SPHE, SPTI, and SPT

Online-Distribution Shows

• 15 to 20 digital short-form series per year

• Average production costs of $200k per series

All series to have first-month exclusive window on Crackle before broad distribution to other online partners (e.g., YouTube, Hulu, MySpace, etc.)

34

($2)

($4)($5)

($6)

($3)($2)

$0

($6)

($5)

($4)

($3)

($2)

($1)

$0

$1

Digital Studio Financials

Profit Before Contribution

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

($ in MM)Revenue

$14

$10$9

$1

$3

$2 $2

$0

$2

$4

$6

$8

$10

$12

$14

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

35


2. Core Programs

3. Programming

4. Digital Networks & Digital Distribution




8. Ad Sales

9. Summary

10. Appendix

36

Distribution Strategy Overview

• Leverage “all rights under one roof” to create additional revenue opportunities through new assets, rights, and windows

• Launch Dr. Oz as the anchor for our first run syndication business and grow partnership to include all future Harpo shows

• Secure additional double runs and upgraded time slots for our court shows

• Use marketing and new product offerings (HD, early windows) to grow demand for VOD and improve economics

• Negotiate new Starz Pay TV deal to extend our above-market relationship

• Expand footprint of digital product and partners; continue to outperform our competition in merchandising and operations

37

World-Class Execution

• Established systematic approach to maximizing value of assets across windows and partners

– Evaluate each right separately to determine best use / windowing

– Enabled negotiations of both digital and linear rights for third cycle cable sale for Seinfeld

– Created comprehensive cable sales template that addresses SPT’s digital offering and policies

• Institutionalizing approach of managing “all rights under one roof”

– Developing backend platform (Ventana) to accommodate planning and management of avails

– Launching dual windows, early / HD VOD, and digital extensions to drive revenue

• Applying approach to an expanding base of content

– Off broadcast (Rules of Engagement, ‘Til Death)

– Off cable (Rescue Me, Damages, My Boys)

– 1st run (Judge Karen Mills)

– Internet developed shows (Angel of Death)

– Library product online and on mobile (Monty Python, Who’s the Boss?)

– Third party acquisitions (Just for Laughs)

– New library strategies (Minisode network, Cinemactive)

38

Distribution Sales – Total Licensing Revenue

SPT will generate $699 million in total current and library revenue for SPE

$649$730

$789$853

$747 $723$846

$50

$49

$76$49

$105$70

$162

$0

$200

$400

$600

$800

$1,000

TV Digital($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

$699

$779

$865 $902$852

$793

$1,008

39

TV Syndication

Market Dynamic MRP Initiatives

• While national ad sales growth is flat, local advertising is struggling

• Local station market is challenged with stations generally decreasing license fees

• To succeed, new shows need to be established brands

• Transition to digital (Feb ’09) opening up additional programming opportunities

• Stations looking to build websites and create new revenue opportunities through sponsorable, streaming content

• Launch Dr. Oz in Fall ’09 as the cornerstone of our first run syndication business

– Sell market-by-market to maximize show value (best timeslot, station, etc)

– Partner with stations to create a Dr. Oz network (combining linear, digital, and physical reach)

– Already cleared in 50% of the country, including 16 of the top 20 markets

• Build off recent successes of court shows and secure additional double runs and upgraded timeslots in key markets

• Provide local stations with non-exclusive streaming rights (with inventory hold backs)

• Leverage digital transition as opportunity to increase library sales

40

Harpo / Dr. Oz

MRP Assumptions

Strategy

• SPT has entered into a distribution relationship with Harpo, one of the most successful independent producers in TV history

• Dr. Oz will be the first Harpo show distributed by SPT

– Show launch will leverage the power of the Oprah platform to build awareness and grow audience

– Complemented by an immersive online experience

• Dr. Oz will serve as a foundation for a deeper partnership that has the potential to redefine SPT’s first run syndication business

– Provides access to top talent and shows through MRP time horizon

– Gets us in business with top affiliates

• Dr. Oz launches in 09/10 and continues throughout the plan

• TBD Harpo launches in 10/11 and continues throughout the plan

EBIT

($1)

$8

$2

$10

$3

$12

($1)

$9

$10

($5)

$0

$5

$10

$15

$20

$25

$30

Dr. Oz TBD Harpo

$19

$22

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP/PRIOR

$7

41

TV Syndication – Revenues

$115

$227

$253$242

$204

$305

$154

$0

$50

$100

$150

$200

$250

$300

$350

FY09 FY10 FY11 FY12

Q2/MRP Budget/Prior MRP($ in MM)

NOTE: Includes off-net and first-run

42

Free TV / Basic Cable


• Library product faces challenges

– Networks are more selective in what library product they buy due to increased appetite for original programming

– Our library continues to age

– Increasing number of viewing opportunities in earlier windows limits ability to maintain value in Free TV

• Network audiences continue to fragment

– Continued growth in the number of cable platforms and original programming

– Increased competition from emerging digital platforms and new entertainment options

• To remain competitive, networks seeking new digital assets, rights, and windows

• Continue to aggressively sell theatrical releases and library product

– Sell King of Queens in second cable cycle

– Use showcase packages to drive demand

– Extend client base to include smaller cable networks (e.g., G4, ESPN) by offering tailored products

• Use additional windows, assets, and rights to enhance offering and create new sales opportunities

– Sell to multiple cable nets in same window (e.g., “The Jeffersons” on TV Land and BET)

– Create new digital assets (e.g., Minisodes) to complement linear programs

– Sell streaming rights to existing episodes and make simultaneously available on multiple platforms

– Develop modern extensions of older library assets to monetize on emerging platforms (Cinemactive)

43

Free TV / Basic Cable – Revenues

$231

$210

$159

$213$212 $218

$145

$0

$50

$100

$150

$200

$250

FY09 FY10 FY11 FY12


44

TV Pay Per View / Video On Demand


• PPV / VOD market expected to grow at 17% CAGR through 2012 to $4.3BN (a)

• Cable VOD continues to dominate earnings

• Satellite competes with cable with push/pull VOD and HD

• Cable and satellite are enhancing VOD offerings; IPVOD putting pressure on cable network fees

• Cable networks aggressively expanding into VOD space (including internet and mobile) as add-on product (as pay networks have done with SVOD)

• On-demand rights management increasingly important for studios to optimize among TV and new media clients

• Drive views with major partners through marketing initiatives

• Maximize views with non-exclusive licensing and promotion across TV and new media

• Exploit demand for 1080i and 1080p HD content and explore day/date and early windows opportunities to improve pricing and copy protection

• Implement rights management strategies across all platforms / windows and in cooperation with Theatrical and Home Video

(a) SNL Kagan, 2007; excludes adult content and events

45

TV Pay Per View / Video on Demand – Revenue

$67

$76

$61

$75$73$69

$83

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

FY09 FY10 FY11 FY12


46

Pay TV Strategy


• Paramount & Showtime recently terminated output deal over steep decline in renewal offer

• Paramount’s new Pay TV joint venture (MGM, Lionsgate, and Viacom) has yet to secure distribution

– In near term, major titles do not have Pay TV window

• HBO, Starz, and Showtime are buying individual titles on the open market for a fraction of market Pay TV rate

• All players are investing in original content, diverting money from acquisitions to production

– Showtime enjoying recent success– Starz trying to define brand– HBO struggling to replace Sopranos

• HBO, Starz, and Showtime seeking cross-platform rights as a differentiator and to help secure carriage

• Starz to remain our primary output partner through MRP time horizon

– Recently exercised the option; deal will now expire December 31, 2013

• Negotiating with Starz for a new extension through 2016, key terms include

– Rate card for 2014-2016– Annual cap on titles– Cross platform rights

• Overall market conditions support renewal– Rate card in an extension would remain

above market– Secures renewal in advance of an expected

decline in overall Pay TV license fees– Proposed cap exceeds our historical and

anticipated output– Starz in litigation with other major studio

partner, increasing our leverage– Opportunity to use digital rights to improve

negotiating position

47

Pay TV Revenues

$237

$275 $274

$315

$240$260

$342

$0

$50

$100

$150

$200

$250

$300

$350

$400

FY09 FY10 FY11 FY12


48

SPT Library

Revenue EBIT

$57 $65 $74 $76

$73$43

$40 $40

$47

$34 $26 $20

$179

$144 $142 $138$2$2$2

$2

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

FY09 FY10 FY11 FY12

($ in MM)

SPTI SPT SPHE SPT Digital/Merch

Budget/Prior MRP

Variance

$161

$18

$154

($10)

$153

($11)

• Coordinating with other SPE divisions to identify additional opportunities to sell SPT Library product• Initiating discussions with new partners to expand distribution of library product (e.g., Shout! Factory)• The Nanny available in FY09 and no similar series available throughout MRP

Budget/Prior MRP

Variance

$66

($2)

$68

($11)

$69

($11)

$60$58$57

$64

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

FY09 FY10 FY11 FY12

($ in MM)

49

TV Library Sales Targets by Market

• 3 year annual average of $99MM in FY09-FY11, and $101MM in FY10-FY12

• 4 year annual average of $98MM

$81 $87 $85 $85

$7

$23

$8 $8$2

$2

$2 $2

$0

$20

$40

$60

$80

$100

$120

$140

FY09 FY10 FY11 FY12

($ in MM) Free/Basic Pay TV PPV/VOD

$90

In-House $44MM

$112

$95 $95

NOTE: Excludes King of Queens second cycle cable renewal

50

TV and Digital Library Revenue by Division

$70 $62$40 $33 $37 $37 $38

$65 $75

$72$66

$68 $63$78

$33 $35

$22

$17$21

$17

$22

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200 TV MPG WW Acquired Product/Other

In-House $138MM

In-House $41MM In-House

$30MM In-House $27MM

NOTE: (1) Before net present value adjustment (2) SPT estimates for WW Acquired Product based on uncertain slate information (3) Excludes King of Queens second cycle cable renewal

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

$168 $172

$134

$116$126

$117

$138

51

TV and Digital Library Revenue by Market

$112 $104

$73$62 $70 $63 $70

$19$17

$14$14 $5

$6$5

$19$22

$21$20 $22

$21$19

$18 $29

$26

$20$29

$27

$44

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200 Free/Basic PPV/VOD Pay TV Digital Platforms

In-House $138MM

In-House $41MM

In-House $30MM In-House

$27MM

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

$168 $172

$134

$116$126

$117

$138

NOTE: Before net present value adjustment

52

Distribution Sales – FY10 Slate

SPT will generate over $450 million in TV sales from the FY10 slate

Title PPV Pay TV Free TV

UGLY TRUTH 3,100 11,000 8,750

ANGELS AND DEMONS 5,300 20,000 17,500

YEAR ONE 6,200 16,920 17,500

2012 5,300 20,000 26,250

JULIE JULIA 3,420 10,060 6,190

TAKING OF PELHAM 1-2-3 3,100 17,130 11,250

TBD #1 - COMEDY 3,720 12,210 9,050

TBD #2 - COMEDY 2,170 8,840 5,280

BROOKS COMEDY 5,580 15,490 13,580

TBD #4 - ROMCOM 5,580 15,490 13,580

TBD #5 - DRAMA 1,900 10,860 5,390

Total Columbia 45,370 157,998 134,320


ARMORED 1,620 7,550 4,500

STEP FATHER 1,925 8,650 4,375

TBD #1 - DRAMA (PHENOM) 2,280 8,510 4,150

MARDI GRAS 1,860 7,550 5,250

TBD #2 - ACTION (BONE DEEP) 3,100 7,550 3,880

Total Screen Gems 10,785 39,810 22,155


ADORATION 140 900 230

12 20 100 100

RED SORGHUM - - 50

O'HORTEN 40 290 100

LORNA'S SILENCE - 290 100

UNTITLED NICOLE HOLOFCENER PROJECT - 600 380

SUGAR 140 - 450

PARIS 36 - 1,000 230

BROKEN EMBRACES - 2,120 300

TBD#6-2010 90 600 190

TBD#7-2010 60 380 150

TBD#9-2010 320 1,900 200

TBD#10-2010 150 1,000 230

TBD#11-2010 30 190 100

TBD#12-2010 30 190 100

TBD#15-2010 60 380 150

TBD#16-2010 60 380 130

TBD#18-2010 30 190 100

TBD#19-2010 60 380 150

Total Sony Pictures Classics 1,230 10,890 3,440

INTERNATIONAL MOTION PICTURE PRODUCTIONTitle PPV Pay TV Free TV

Damned United - 380 230

UK #1 2010 300 1,000 500

Total International Motion Picture Production 300 1,380 730

SONY PICTURES ANIIMATIONTitle PPV Pay TV Free TV

CLOUDY WITH A CHANCE OF MEATBALLS 2,160 14,310 6,030

Total Sony Pictures Animation 2,160 14,310 6,030

NOTE: Film slate assumptions still in process

53

Digital Licensing


• Digital pure plays offer a more compelling experience than service from traditional retailers

– Apple continues to dominate digital licensing

– Verizon, Sprint, and Netflix are growing

– Brick and mortar retailers (e.g., Wal-Mart, Best Buy) are not competitive online

• Technologies that create new viewing experiences are also gaining traction

– Netflix Roku box sold out at retail

– Connected consoles (PS3, Xbox) are increasingly being used for video

– Apple TV is gaining popularity

• Data on DST / VOD mix is limited, but has skewed toward DST to date

– With same titles available on DST and VOD, roughly 65% of units have been DST

– Mix may shift toward VOD as services migrate to set-top-box devices

• Continue to expand overall content offering across business models and platforms

– Renew Netflix SVOD agreement

– Broaden selection of film and TV product available on VOD and DST basis

– Continue to find new ways to reach consumers on emerging platforms and devices

• Maximize value of assets through merchandising, operations, and windowing

– Work directly with partners to promote SPE content and secure valuable real estate

– Leverage operational efficiencies to improve title and partner performance

– Coordinate closely with SPT distribution team to maximize value of windows (e.g., HD day/date and early window VOD)

54

Digital Licensing Financial Summary

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

$154

$99

$72

$46

$60

$45$41

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Revenue

$162

$105

$76

$50

$70

$49 $49

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP


55

Mobile Games & Video

Market Dynamic MRP Initiatives• Overall market is large and expanding

– 280MM domestic subs (vs. 246MM TV viewers ages 12+)

• Mobile video adoption increasing with significant growth potential

– Expected to increase from 17MM domestic consumers in 2008 to 26MM by 2010

• Mobile game market continues to expand– Mobile game consumers expected to increase

from 35MM to 44MM by 2011– Domestic revenues forecasted to increase from

$1.0BN to $1.3BN in 2011

• Handsets are rapidly evolving into entertainment devices

– Increased memory (16GB = 40 hours of video)– Better access to content (full Internet browser,

Wi-Fi, 3G) – Greatly improved user experience, led by

iPhone (3” screens, video out to TV, stereo Bluetooth)

• Continuing to lead in game publishing

– Continue to steal market share with superior product and operations; SPT now #5 in 2Q08

– Refine product offering to support bigger brands; WOF now the #3 game in 2Q08 (#13 in 2Q07)

– Leverage distribution to start representing third party product

• Expanding video service to become a true Mobile Entertainment company

– Monetize feature film library through pay-per-view, subscription, licensing and memory cards

– Drive Crackle’s evolution into a leading mobile video service

• Launching new platforms and creating new mobile business models

– Customize and enhance our game offerings for the iPhone platform and SmartPhones

– Innovate with new interactive mobile gaming experiences, such as JEOPARDY! Live (AirPlay)

– Create new “off-deck,” D2C video networks with dynamic ad-serving capabilities

56

Mobile Games & Personalization Financial Summary

Profit Before Contribution Revenue

$8

$10$9

$10$11

$8$8

$0

$2

$4

$6

$8

$10

$12

FY09 FY10 FY11 FY12

($ in MM)Q2/MRP Budget/Prior MRP

$13

$14

$13

$15

$16

$14

$12

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

FY09 FY10 FY11 FY12

($ in MM)

MRP Budget/Prior MRP

NOTE: Profit before Contribution excludes WPF porting costs

57


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

58

GSN Summary

Challenges

Improvements

CompanyPlans

Next Stepsfor SPT

• Strengthen programming with the introduction of new shows to drive ratings and better control IP

• Add more general rate advertisers and build scale in online advertising

• New executive management team in place (recently hired new head of programming)• Close coordination with FUN Games has transformed GSN Digital into a profitable growth

platform for the channel• Preparing to launch network re-brand, targeting core female audience in early November• Used interaction and participation (e.g., GSN Live, Bingo America) to improve viewer

engagement and provide differentiated product for advertisers

• Negotiate valuation / structure for combining GSN with FUN Games

• Continue coordination with FUN Games; build properties that support a cross-platform business model (networks, online, radio)

• Continue investment in original programming

• Refresh aging fringe and prime strips with contemporary acquired programming to increase ratings and support original series launches

• Drive scale into online advertising sales via creation of a vertical ad games network (via acquisition and/or rep deals)

• Increase affiliate distribution and minimize migrations through pricing and marketing initiatives

59

FEARnet Summary

Challenges

Initiatives

Cable VODRatings

Web Ratings

• America’s #1 horror site

• Average unique users for 2Q08 up 226% over 2Q07

• Unique users hit a historic high in July 2008 (700k), up 250% from July 2007

• FEARnet.com ranked as one of the top 15 movie sites by PCMagazine.com

• VOD / broadband model is not viable long-term without a linear channel

– Limits potential viewers, ad opportunities, and distributors capable of VOD

• Need to increase ad sales across all platforms

• Dynamic ad insertion required to maximize revenues

• Continue to exploit FEARnet’s recent move to LA to improve coordination

• Launch FEARnet linear with DirecTV investment as the critical first step

• Ensure Comcast also launches linear version

• Significantly expand ad sales

– Expand inventory through linear channels

– Need Comcast to provide leadership in dynamic ad insertion

• Comcast’s #1 VOD provider for Free Movies

• 5 of the top 10 free movie titles on Comcast in 2008 are FEARnet titles

• 2Q08 VOD views increased 50% over 2Q07 (averaging 10MM views per month)

• Currently in 30MM homes; adding Time Warner in August

60

HD Channel Opportunity

• Near-term demand for HD has re-opened window for carriage of new networks

– Increased capacity through new satellites and services (e.g., IPTV)

– HD content being used as a differentiator among service providers

– Limited window as more SDTV will become HDTV

• Although HD could serve as an entry point, the opportunity lies in evolving to a true “Sony Entertainment Television Network”

– Leverage the strength of “Sony” as the brand for HD

– Build on our expertise in original content, ad sales, and our large film and TV library

– Share programming with our digital assets, including Crackle and eventually PSN

• We are evaluating three potential methods of entry

– “Build” strategy: Use library to secure carriage and minimize investment; new channel on-par with MGM HD

– “Partner” strategy: Invest in a smaller HD player (e.g., HD Net); use the Sony brand and library to reinvigorate and grow the channel

– “Buy” strategy: Acquire a sizable channel; better define channel voice and grow audience by leveraging all Sony assets

61

Game Show Network Financial Summary

SPT Share of Net Income SPT Share of Dividends/(Funding)

$31

$27

$20

$31

$35

$31

$26

$0

$5

$10

$15

$20

$25

$30

$35

$40

($ in MM)

$20 $20

$18

$0

$18 $18$18

$0

$5

$10

$15

$20

$25

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

62

FEARnet Financial Summary

SPT Share of Net Loss/Income SPT Share of Cash Funding

($6)

($1)

$1 $1

($1)

$1

($6)

($7)

($6)

($5)

($4)

($3)

($2)

($1)

$0

$1

$2

($ in MM)

($6)

($2)

$0 $0

($2)

$0

($6)

($7)

($6)

($5)

($4)

($3)

($2)

($1)

$0

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

63


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

64

SPHE Contribution to SPT Product

Revenue Net Contribution

Budget/Prior MRP

Variance

$108

$11

$95

($15)

$82

($14)

• MRP reflects declining demand for TV Library product on DVD; securing additional distribution partners that focus on library product (e.g., Shout! Factory)

• MRP assumes limited ($500k - $1MM) Blu-ray sales for TV library

Budget/Prior MRP

Variance

$48

$12

$43

($5)

$35

($2)

$47$34

$26 $20

$12

$5$3

$2

$60

$41

$39

$32

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY09 FY10 FY11 FY12

($ in MM)

Library Seinfeld Current

$27

$15$10 $8

$2

$1

$1$1

$31

$22

$22

$17

$0

$10

$20

$30

$40

$50

$60

$70

FY09 FY10 FY11 FY12

($ in MM)

Library Seinfeld Current

$119

$80

$68

$54

$60

$38

$33

$26

Note: Net Contribution excludes DAC/WPF costs associated with the releases

65

SPTI Contribution to SPT Product

Revenue Net Contribution

$164 $182$201 $219

$65

$74$76

$221

$247

$275$295

$57

$0

$50

$100

$150

$200

$250

$300

$350

FY09 FY10 FY11 FY12

($ in MM)

Current Library

Budget/Prior MRP

Variance

$237

($16)

$229

$18

$236

$39

$42 $42 $44$52

$45$51

$52$80

$87

$95

$104

$38

$0

$60

$120

FY09 FY10 FY11 FY12

($ in MM)

Current Library

Budget/Prior MRP

Variance

$71

$9

$79

$8

$83

$12

Note: Net Contribution includes PV and ultimate-based cost of sales, and excludes DAC/WPF costs

66


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

67

Expanding SPT’s Advertising Footprint

Syndication :10 SpotCable /

SatelliteDigital / Mobile

PlayStationSony

Network

Current Business Lines Emerging Opportunities

SonyElectronics

Direct Response

68

Traditional Advertising Market Overview

All Other50%

TV37%

Online & Mobile

13%

$48 $47 $50 $49 $54

$29 $30$31 $32

$35

0

20

40

60

80

100

2008 2009 2010 2011 2012

($ in BN) Broadcast Cable

2008 Ad Market Forecasted to be $205BN (1)

Growth in TV Advertising (1)

• Growth in TV advertising expected to remain relatively flat through 2012 (4% CAGR)

- Syndication generally more resistant to DVR erosion

• Increases in upfront CPMs offset declining inventory

• 08/09 upfront was solid, but scatter market could be showing signs of weakness

(1) PWC, 2008 (excludes direct mail)

• Effective use of C3 ratings and Nielsen Fusion data to demonstrate effectiveness of SPT shows

• Explore acquisitions to expand advertising footprint (e.g., World Link)

• Expand third party representation

• Maximize interest in Dr. Oz in advance of up-fronts with product integrations and sponsorships

• Identify ways for traditional and digital ad sales teams to collaborate on cross-platform buys

Marketplace Dynamics MRP Initiatives

$76 $76$81 $82

$89

69

Digital Advertising Market Overview

$19 $20 $24 $26 $28

$7$9

$10

$12

$1.4$1.9

$2.8$3.9

$4.9

$11

0

10

20

30

40

50

2008 2009 2010 2011 2012

($ in BN)All Other Online Video & Display Mobile

Growth in Online & Mobile Advertising (1)

(1) PWC, 2008 (excludes direct mail)

• Online video and display ad market forecasted to grow at 40% CAGR over next 4 years to $12BN

- Content owners sharing revenue with portals

• Online video proven to be complement and not a substitute to traditional TV

• Majority of online ad dollars being spent with branded content on traditional network sites (e.g., “Lost” on ABC.com or “The Office” on Hulu)

- Advertisers challenged to create new ad units

• Continue penetration of blue chip advertiser base

• Expand and scale back office to support an increasing range of partners and platforms

• Secure additional 3rd party rep opportunities, including FEARnet

• Leverage growth in emerging platforms through PSN and building a cross-Sony network

• Grow product integration for digital and traditional

• Help make Crackle a desired outlet for advertisers

All Other50%

TV37%

Online & Mobile

13%

2008 Ad Market Forecasted to be $205BN (1)

Marketplace Dynamics MRP Initiatives

$25$29

$33$37

$40

70

Sony Network

Ad SalesContent

Devices / Platforms Opportunity

Challenge

Assets

“90% of all Sony devices will have wireless capability by 2010.”

- Sir Howard Stringer, June ‘08

• SPE lacks a unified backend and standardized ad units that can provide targeted reach across platforms and content

• Premium TV, movies, music, and digital content

• Large, scalable ad sales organization with expertise selling across platforms

• Relationships with blue chip advertisers

SONY NETWORK

Leverage strengths in devices, content, and ad sales to create multi-platform Sony network

71

Additional Growth Opportunities

3rd Party Representation Acquisitions

• Third party representation continues to be core to SPTAS’ overall growth strategy

- Diversifies portfolio beyond SPT content

- Expands inventory and cash-flow footprint

- Leverages existing sales force and advertiser relationships

• We are currently pursuing representation of several emerging opportunities

- New linear networks (RTL, Starz Retroplex)

- Direct Response (World Link, sports nets)

- PlayStation (PSN, PS Home)

• However, growth through 3rd parties is limited

- Narrow window of opportunity to represent networks (can’t be too small or too big)

- SPT does not participate in the upside that it helps to create

• SPTAS is looking to complement its current growth strategy through acquisitions

- Similar benefits to 3rd party business plus it enables SPT to build and retain enterprise value

• Exploring opportunities to acquire a direct response company (e.g., World Link)

- Provides new type of inventory to hedge against ad market fluctuations

- Creates entry point for broader network relationships

- Enhances 2waytraffic pipeline

• Supporting SPT’s initiative to acquire or partner on an HD linear network

- Gives SPT dedicated inventory

- Delivers immediate scale to business

72

TV Advertising Sales Net Revenue

$232$253 $256

$217$224

$255

$298

$0

$50

$100

$150

$200

$250

$300

$350

FY09 FY10 FY11 FY12

($ in MM) Q2/MRP Budget/Prior MRP

NOTE: Includes KingWorld

73

Digital Ad Sales

$4$12

$8

$31

$13

$50

$19$1

$2

$4

$2

$9

$3

$2

$2

$2

$2

$2

$2

$1

$2

$0

$10

$20

$30

$40

$50

$60

$70Crackle Digital Networks 3rd Party

($ in MM)

FY09Q2/BDGT.

FY10MRP/PRIOR

FY11MRP/PRIOR

FY12MRP

$7

$15

$11

$37

$17

$61

$24

• Crackle includes global onsite/offsite ad revenue, not including licensing and integrated sponsorships• Digital Networks/Studio revenue excludes revenue share from Crackle

74


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

75

• Extend partnership with Harpo to become official distributor of all their shows

• Grow reality / format business through Embassy Row acquisition, 2waytraffic pipeline, and overall deals with leading producers

• Leverage success in comedy and one-hour dramas to launch new broadcast and cable series

• Continue to pursue third party ad sales representation and acquisitions of complementary businesses

• Explore HD as an entry point for a linear “Sony Entertainment Television Network”

• Build a cross-platform Sony network leveraging our content and ad sales assets

• Take advantage of studio talent and production resources to create compelling digital programming for Crackle

ImproveEconomics

• Create new windows, assets, and rights to drive sales for theatrical and library product

• Use production efficiencies and digital extensions to maximize contribution from core assets

• Grow demand for VOD and increase revenues and margins through new product offerings (e.g., day-and-date and HD)

Reinvest in Higher Margin and/or Growth

Businesses

Explore New Opportunities

Summary of SPT Initiatives

76


2. Core Programs

3. Programming





8. Ad Sales

9. Summary

10. Appendix

77

SPT – Major Contributions to Earnings

($ in MM) FY09 FY10 FY11 FY12

Wheel Of Fortune 63$ 53% 59$ 52% 60$ 51% 70$ 53%Jeopardy! 38 47% 36 45% 36 46% 36 45%Library 64 36% 57 39% 58 41% 60 43%Seinfeld Fee 22 100% 16 100% 15 100% 13 100%Seinfeld Station Renewals - n/a 17 100% 18 100% n/a n/aThe Young & The Restless 26 18% 24 18% 23 18% 23 18%Days of Our Lives 18 20% 12 17% 11 16% 11 16%ENCORE Bonus 47 100% 47 100% 47 100% 48 100%King of Queens 15 19% 5 13% 5 18% 6 20%The Shield 4 19% (1) -15% (1) -16% (0) -63%Rescue Me 12 22% 13 14% (1) -4% (1) -19%'Til Death 10 25% 9 24% 19 30% 32 25%Rules of Engagement n/a n/a 4 18% 4 16% 13 15%The Unusuals n/a n/a n/a n/a 5 9% 11 16%Damages 1 3% 5 14% 3 7% 7 11%Breaking Bad 2 8% 1 2% 2 5% 5 11%My Boys n/a n/a 1 14% 2 13% 4 16%Boondocks n/a n/a n/a n/a n/a n/a 9 23%Sit Down Shut Up n/a n/a n/a n/a 1 3% 9 26%Dr. Oz n/a n/a 8 17% 10 14% 12 14%TBD Harpo Syndication - n/a n/a 9 19% 10 13%Net G & A (52) (55) (57) (60) Embassy Row Net G & A (3) (7) (7) (7) Embassy Row 3 61% 5 58% 7 61% 10 67%Earnings Challenge - 19 76% - - New Series Investment (75) (94) (84) (84) All Other Products 1 1% 11 10% 9 12% 7 10%

Subtotal 197 16% 191 15% 192 15% 240 15%GSN 20 27 31 35 FEARnet (6) (1) 1 1

Total 211$ 18% 218$ 17% 224$ 17% 276$ 18%

78

SPT – Earnings Comparison (Year vs. Year)

($ in MM) FY09 to FY10 FY10 to FY11 FY11 to FY12

EBIT 211$ 218$ 224$

Rescue Me 1 (13) -

Rules of Engagement & 'Til Death 3 9 23

Sit Down Shut Up & The Unusuals - 6 14

Dr. Oz 8 2 2

TBD Harpo - 9 1

Boondocks - - 9

Seinfeld - 4th cycle sale, lower ad sales and lower HE contribution 12 (1) (20)

GSN / FEARnet Performance 12 5 4

Earnings Challenge 19 (19) -

Embassy Row (3) 3 2

Wheel of Fortune / Jeopardy! - Decreased international & merchandising ultimates (6) 1 10

The Young & The Restless / Days of Our Lives - Delay of profit recognition (7) (2) -

King of Queens (10) 1 -

New Series Investments - Primarily volume of deficit episodes (22) 10 -

All Others, Net - (5) 7

Total Variance 7 6 52

EBIT 218$ 224$ 276$

79

SPT – Earnings Comparison (FY09 vs. FY12)

($ in MM)EBIT FY 2009 211$

Embassy Row 2

Wheel of Fortune & Jeopardy! 5

TBD Harpo 10

The Unusuals 11

Dr. Oz 12

Boondocks, Damages & My Boys 19

GSN / FEARnet Performance 21

Rules of Engagement, 'Til Death & Sit Down Shut Up 44

The Shield (5)

Seinfeld (9)

King of Queens (9)

The Young & the Restless and Days of Our Lives (9)

New Series Investments (9)

Rescue Me (13)

All Others, Net (5)

Total Variance 65

EBIT FY 2012 276$

80

SPT – Earnings Comparison (Plan vs. Plan)

($ in MM) FY09 FY10 FY11

Budget / PY MRP 211$ 218$ 197$

Rescue Me 1 6 (2)

The Young & the Restless and Days of Our Lives 1 (4) (4)

My Boys 1 1 (7)

Embassy Row (not in prior year MRP) 3 (2) -

New Series Investments 4 1 11

Wheel of Fortune & Jeopardy! 8 4 4

'Til Death vs. Canterbury's Law 10 9 9

Rules of Engagement - 4 (5)

Sit Down Shut Up & The Unusuals - - 6

Dr. Oz vs. The Nine - 5 7

TBD Harpo - - 9

King of Queens (1) (1) (1)

Library - Primarily lower HE & SPTI contributions (2) (11) (12)

GSN / FEARnet Performance (6) (4) -

Earnings Challenge - 8 -

Seinfeld - 4th cycle sale & lower HE contribution (18) (21) 14

All Others, Net (1) 5 (2)

Total Variance - - 27

Q2 / CY MRP 211$ 218$ 224$

81

SPT – Major Contributions to Revenue


Wheel Of Fortune 118$ 115$ 116$ 131$ Jeopardy! 81 79 79 79 Library 179 144 142 138 Seinfeld Fee 22 16 15 13 Seinfeld Station Renewals - 17 18 - The Young & The Restless 140 134 128 128 Days of Our Lives 89 69 69 69 ENCORE Bonus 47 47 47 48 King of Queens 77 37 30 28 The Shield 22 5 4 1 Rescue Me 53 88 18 6 'Til Death 41 40 63 127 Rules of Engagement n/a 21 22 90 The Unusuals n/a n/a 57 68 Damages 32 36 38 59 Breaking Bad 29 35 36 43 My Boys n/a 11 16 27 Boondocks n/a n/a n/a 39 Sit Down Shut Up n/a n/a 38 35 Dr. Oz n/a 44 73 81 TBD Harpo Syndication - - 47 73 Embassy Row 5 8 12 15 Revenue Challenge - 25 - - New Series Investment 149 215 157 190 All Other Products 117 81 76 74

Subtotal 1,202 1,266 1,299 1,561

GSN - - - - FEARnet - - - -

Total 1,202$ 1,266$ 1,299$ 1,561$

82

SPT – Summary Financials


Initial Market Licenses 500$ 580$ 593$ 676$ Off Network Licenses 102 153 136 170 Ad and Promo Sales 224 217 255 298 Co-Distributor Share and Other 35 56 34 52 Domestic Pay TV/VOD - SPT Product 51 50 48 48 Free TV/Cable-MPG/HE/SPTI Product 154 170 131 136 Pay TV/VOD-MPG/HE/SPTI Product 241 292 283 339 Crackle 8 8 13 19

SPT Generated Gross Revenue 1,314$ 1,526$ 1,493$ 1,739$

Producer Share (66) (130) (126) (48) SPTI Contribution - Library 57 65 74 76 SPTI Contribution - Current 164 182 201 219 SPHE Contribution - Library 47 34 26 20 SPHE Contribution - Current 72 46 42 34 CP/SPD Contribution 17 13 15 15 Contribution to Crackle (8) (8) (13) (19) Contribution to Other SPE Divisions (395) (462) (414) (475)

Total SPT Product Net Revenue 1,202$ 1,266$ 1,299$ 1,561$

COGS (911) (982) (1,018) (1,202) Marketing & Promotion (37) (31) (25) (51) G&A (55) (62) (64) (67) Other (2) - - - GSN 20 27 31 35 FEARnet (6) (1) 1 1

Total EBIT 211$ 218$ 224$ 276$

Operating Margin 18% 17% 17% 18%

Budget/Prior MRP 211$ 218$ 197$ Variance 0$ -$ 27$

83

Digital – Summary Financials

($ in thousands) FY2012

FY09Q2 FCST

FY09BUDGET

Variance Current MRP Prior MRP Variance Current MRP Prior MRP Variance Current MRP

RevenueDigital & Mobile Networks (Ad Sales & Licensing) 1,791$ 2,748$ (957)$ 2,525$ 9,720$ (7,195)$ 3,072$ 19,449$ (16,377)$ 3,936$ Memory Cards 9,814 2,000 7,814 3,000 3,000 - 2,000 4,000 (2,000) 2,000 Mobile Games 13,004 11,905 1,099 13,523 11,864 1,659 14,995 12,469 2,526 15,797 Personalization Product 448 312 136 500 883 (383) 500 1,079 (579) 500 Digital Sell-Thru 23,265 26,804 (3,539) 52,153 21,944 30,209 77,628 30,485 47,143 127,677 Digital Rental/Subscription 13,332 17,432 (4,100) 18,894 14,944 3,950 22,925 16,109 6,816 29,363 Revenue Share (from Crackle) 276 1,550 (1,274) 2,030 - 2,030 4,276 - 4,276 7,544 Bundling, Digital Copy & Other 2,075 1,003 1,072 1,100 1,500 (400) 1,200 3,000 (1,800) 1,500 GROSS REVENUE 64,004 63,754 250 93,725 63,855 29,870 126,596 86,591 40,005 188,317

CONTRIBUTED REVENUES 556 - 556 5,380 - 5,380 3,945 - 3,945 4,716

GROSS & CONTRI. REVENUE 64,560 63,754 806 99,105 63,855 35,250 130,541 86,591 43,950 193,033

COST OF REVENUESMobile Game Production (711) (847) 136 (725) (1,002) 277 (800) (1,159) 359 (800) Mobile Game Porting/QA Testing Costs* (1,353) (1,192) (161) (874) (693) (181) (973) (700) (273) (1,466) Original Video Production/Acquistions (5,956) (5,956) 0 (7,200) (4,500) (2,700) (8,100) (7,000) (1,100) (9,000) Outside Participation/License Fees (392) (274) (119) (679) (552) (127) (880) (844) (36) (782) Memory Cards/Personalization Costs (131) (104) (27) (175) (110) (65) (175) (117) (58) (175) Other Distribution Costs (957) (880) (77) (2,183) (1,169) (1,014) (2,276) (1,970) (306) (2,647) TOTAL COST OF REVENUES (9,500) (9,253) (248) (11,836) (8,026) (3,810) (13,205) (11,790) (1,415) (14,870)

CONTRIBUTED COGS (174) - (174) (1,622) - (1,622) (1,605) - (1,605) (1,967)

TOTAL & CONTRIBUTED COGS (9,675) (9,253) (422) (13,458) (8,026) (5,432) (14,810) (11,790) (3,020) (16,838) - - - - - - - - - -

GROSS PROFIT 54,886 54,502 384 85,647 55,829 29,818 115,731 74,801 40,930 176,195

OPERATING EXPENSESWebsite/Technology (2,292) (2,749) 458 (2,630) (3,750) 1,120 (3,515) (5,409) 1,894 (4,350) Sales and Marketing (2,401) (2,500) 99 (3,800) (5,000) 1,200 (4,800) (6,000) 1,200 (6,000)

CONTRIBUTED OP. EXPENSE (104) - (104) (666) - (666) (625) - (625) (737)

TOTAL & CONTRIBUTED OP. EXPENSE (4,797) (5,249) 453 (7,096) (8,750) 1,654 (8,940) (11,409) 2,469 (11,087)

General and Administrative (14,167) (15,281) 1,114 (14,614) (13,732) (882) (16,099) (14,736) (1,363) (17,301)

TOTAL OPERATING EXPENSES (18,965) (20,530) 1,567 (21,710) (22,482) 772 (25,038) (26,145) 1,107 (28,388)

OPERATING INCOME BEFORE CONTRIBUTION 35,921 33,971 1,948 63,938 33,347 30,591 90,693 48,656 42,037 147,807

Less: Contribution Out (55,721) (54,538) (1,183) (80,337) (49,746) (30,591) (107,993) (67,656) (40,337) (163,607) SOE/SPD 1,266 2,291 (1,025) 689 577 112 389 544 (155) 502 SPT 10,350 8,104 2,246 9,945 6,622 3,323 12,390 9,153 3,237 12,428 MPG/HE/SPTI* 44,105 44,143 (38) 69,703 42,547 27,156 95,213 57,959 37,254 150,678

OPERATING INCOME (19,800) (20,570) 769 (16,400) (16,400) (0) (17,300) (19,000) 1,700 (15,800)

EBIT (19,800)$ (20,570)$ 769$ (16,400)$ (16,400)$ (0)$ (17,300)$ (19,000)$ 1,700$ (15,800)$

* Prior MRP FY10 and FY11 restated for WPF porting costs

FY2009 FY2010 FY2011

84

Digital – Earnings Comparison FY09 vs. FY12

(in thousands) EBIT Before Contribution

Retained EBIT

EBIT FY09 35,921$ (19,800)$

Digital Licensing and Digital Networks 108,171 (932) (a)

Digital Studio 5,366 5,421

Mobile Games/Personalization 1,482 2,645

G&A - primarily 16 headcount growth (3,133) (3,133)

Total Variance 111,886 4,000

EBIT FY12 147,807$ (15,800)$

(a) DVD Digital copy service revenue not assumed in FY10 & forward

85

Digital – Earnings Comparison to Prior MRP

(in thousands)


Retained Profit


Retained Profit


Retained Profit


Retained Profit

FY09 Budget / Prior MRP 33,971$ (20,570)$ 31,347$ (16,400)$ 46,656$ (19,000)$

Digital Licensing businessApple iTunes not assumed in prior MRP 36,100 - 55,500 - Microsoft not assumed in prior MRP 6,900 - 10,000 - Decrease in EST/VOD revenue due to performance, 1,829 820 (15,790) 643 (28,444) 982 launch delay, or partners that did not launch

Digital Studio business (1,004) (1,004) 768 768 1,972 1,972

Mobile Games/Personalization business 1,350 (495) 1,659 204 2,526 (44) WPF porting costs assumed to originate from SPT in prior MRP 1,820 - 1,727 -

G&A - primarily due to HC growth (+9, +4, +3) 1,114 1,114 (882) (882) (1,363) (1,363)

All Other (1,339) 334 2,016 (733) 2,119 153

Sub-Total 1,950 769 32,591 (0) 44,037 1,700

FY09 Q2 / Current MRP 35,921$ (19,800)$ 63,938$ (16,400)$ 90,693$ (17,300)$ 147,807$ (15,800)$

FY10 FY11 FY12FY09

86

Crackle – Summary Financials

(in thousands) FY 2012

Q2 FCST Budget Variance MRP Prior MRP Variance MRP Prior MRP Variance MRP

REVENUEAdvertising/Sponsorships 3,500$ 12,000$ (8,500)$ 9,076$ 31,000$ (21,924)$ 15,354$ 50,000$ (34,646)$ 23,740$ FIFA (video platform revenue) - - 3,250 3,250 1,000 1,000 1,000 TOTAL NET REVENUE 3,500 12,000 (8,500) 12,326 31,000 (18,674) 16,354 50,000 (33,646) 24,740

COST OF REVENUESContent Development - - - - (7,000) 7,000 - (10,000) 10,000 - Revenue Share (244) (2,031) 1,787 (2,030) (1,200) (830) (4,276) (1,800) (2,476) (7,952) Bandwidth (1,175) (1,336) 161 (999) (1,939) 940 (1,215) (3,309) 2,094 (1,329) Ad Serving Fees (76) (400) 324 (241) (1,309) 1,068 (388) (2,566) 2,178 (509) TOTAL COST OF REVENUES (1,495) (3,767) 2,272 (3,270) (11,448) 8,178 (5,878) (17,675) 11,797 (9,790)

EXPENSESWebsite/Technology

Streaming/Traffic (297) (360) 63 (272) (480) 209 (272) (600) 329 (272) Depreciation (1,682) (1,335) (347) (1,245) (1,612) 367 (1,245) (1,007) (238) (1,245) Amortization of Intangibles (816) (816) - (816) (816) - (816) (816) - (340)

Sub-Total Website/Technology (2,795) (2,511) (284) (2,333) (2,908) 576 (2,333) (2,423) 91 (1,857)

Sales and Marketing (3,514) (3,800) 286 (4,894) (3,000) (1,894) (5,486) (3,000) (2,486) (6,790)

General and Administrative (7,495) (8,402) 907 (5,580) (11,100) 5,520 (5,607) (16,521) 10,914 (5,943)

TOTAL EXPENSES (13,805) (14,713) 908 (12,807) (19,508) 6,701 (13,426) (21,944) 8,518 (14,590)

EBIT (11,800)$ (6,480)$ (5,320)$ (3,750)$ 44$ (3,794)$ (2,950)$ 10,381$ (13,331)$ 360$

FY 2011FY 2010FY 2009

87

Risks and Opportunities

Probability EBIT Cash Flow

– Netflix deal renewal (180 titles at $50k/title); Est. 50% GP Moderate 4.5$ -

– Seinfeld on itunes Moderate +TBD +TBD

– Less pilots / Unusuals Moderate 3.0 +TBD

– Successful production of the full season of The Beast Moderate 3.0 -

– DirecTV buy in / FEARnet capital call Moderate 2.0 -

– Decreased bad debt allowance for stations Moderate 1.0 -

– MOW sales ultimates Moderate 1.0 -

– Fun / World Winner acquisition Moderate ? -TBD

– UMG litigation insurance recovery lost Moderate (5.0) -

TOTAL RISKS & OPPORTUNITIES 9.5$ -$

mid range plan fiscal years 2009 – 2012 october 2008 confidential

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