Grouper Acquisition Opportunity June 2006

1. Grouper Acquisition Opportunity June 2006 CONFIDENTIAL

2. Agenda • Digital Distribution • Trends and Opportunities • Emerging Threats • Competitor Response • Grouper Acquisition Rationale • Grouper Valuation • Next Steps

3. Rough Storyline (Summary for M. Paull, Will Not Include) • Digital distribution is taking off • Broadband has reached critical mass • Change has historically driven growth in filmed entertainment • Opportunity if we capitalize on this / threat if we don’t • Opportunity • Build direct customer relationships (Internet Bypass) • Diversify types of content SPE offers • Expand distribution to new audiences • Threat • Consumption shifts to non-studio content • Revenues shifting to ad-based models • We have almost all transactional / non-advertising revenue base • Competitors see the opportunity and are capitalizing on it • Acquiring and partnering across business types (promotional, channels, stores, social networks) • Ad-based models are gaining the most traction • If SPE is going to enter we must partner or acquire • Traditionally we have huge gaps in technology • Speed-to-market issues • If we’re going to buy, we must buy now • Valuations going through the roof • Attractive players being pulled off the table • Grouper is the right company to buy • Leading technology • Leading management team • “Right Scale” – small enough to be affordable, large enough to prove viability

4. Executive Summary • Sony Pictures must develop a solution for the digital distribution of our content • Digital delivery of video is reaching critical mass • SPE must address the risks associated with a changing distribution landscape and shift to advertising-supported models • Owning a service for digital delivery enables SPE to: • Diversify revenue streams and position the studio to benefit from growth in ad-supported models • Establish direct relationship with new audiences • Distribute a greater breadth of content, including short-form and user generated • Market dynamics require us to act quickly • Market for online video destinations and technology providers is consolidating • Valuations for potential acquisition candidates are increasing • Acquiring Grouper provides a compelling solution for digital distribution • Accelerate speed to market and builds scale quickly • Address historical challenges in technology development • Secure market-leading management team • Provide platform for future growth

5. Digital Distribution Trends and Opportunities CONFIDENTIAL

6. Broadband Access and Content Availability Are Driving Growth in Digital Video Broadband-enabled U.S. Households (MM) Video Downloads (BN) 18.0 69.6 65.1 58.9 51.0 42.6 33.2 0.28 Source: SG Cowen Research dated June 7, 2005, Morgan Stanley Broadband Update, April 2005

7. Box Video Office /DVD 52% 41% Box Video Office /DVD 27% 7% TV TV 32% 41% Downloadable Video Should Drive Growth in Filmed Entertainment • Models with unique consumer benefits have been consistently adopted by Hollywood • Adoption has often been led by outside entrants and new industry players • Double digit annual growth has doubled the market approximately every 7 years $47Bn $37Bn Evolution of Content Distribution & Revenue Growth of Filmed Entertainment Industry in the US* 100%=$18Bn $9Bn 1995 100%=$4Bn $2Bn 1980 2004 2008e IP Delivery Pay TV/ Subscription VHS/ Rental DVD/ Sell thru New consumer benefits Movies without advertising Consumer controlled viewing Ownership, high quality, additional features Complete library, convenience & control Introduction drivers New cable network entrants Consumer electronics manufacturers Warner Home Video & CE industry Technology Companies * Includes revenue generated by films from major studios across content distribution windows – box office, video (rental, sell thru), television (ppv, pay, network, made for TV), and foreign revenues for each Source: Entertainment Industry Economics Vogel 4th ed., PricewaterhouseCoopers Global Entertainment & Media Outlook 2004-2008.

8. Customer-facing Service SPE SPE-owned Service Broadband ISP PC or TV Evolving Infrastructure Represents an Opportunity to Build Direct Relationship with End-users and Increase Control of Distribution Broadcast Model Production Aggregation Distribution Customer SPE Broadcast Network Local Affiliate Broadcast TV Cable Model SPE Cable Network Cable MSO Cable TV Digital Distribution – Licensing/Syndication SPE Portal Broadband ISP PC or TV

9. Digital Video Delivery Represents an Opportunity to Reach a Younger Demographic Percent of Each Age Group Downloading Video (18-28) (29-40) (41-50) (51-59) (60-69) Source: Pew Internet & American Life Project, December 2005

10. SPE Can Best Reach Younger Demographics with Models that Include Two-way Interactivity and Social Networking Percent of Each Age Group Participating in Online Activity Instant Message Read a Blog (18-28) (29-40) (41-50) (51-59) (60-69) Source: Pew Internet & American Life Project, December 2005

11. Digital Distribution Emerging Threats CONFIDENTIAL

12. Emerging Digital Models Represent Threats to SPE on Multiple Fronts Challenges Facing SPE Changing Consumer Habits • Consumers are shifting time away from studio-produced products and toward games, online, and mobile entertainment New Distribution Channels Shift to Ad-supported models • Digital distribution of all packaged media is lowering barriers to entry for content alternatives and changing inter-channel competition • Ad dollars are shifting toward online, following growth in consumer interest • SPE has limited exposure to ad-supported models, primarily generating revenues on a transactional basis

13. Consumers are Shifting Time Away from Traditional Media Toward Online and Interactive Media • Cable and satellite TV hours rise slightly due to increase in channels, VOD and PPV services • Consumer time spent on broadcast TV may flatten with emerging technologies (a la TiVo) • But the real growth is in Interactive/wireless, home video, internet and games Note: Consumer Internet includes both dial-up and broadband Source: Veronis Suhler Stevenson, Val Morgan, Harris Interactive, L.E.K. Analysis, Jupiter analyst interview, Corporate Development Analysis

14. New Distribution Models are Shifting Consumer Consumption toward “Long-Tail” Titles

15. Studio Content May not Be as Dominant in Emerging Channels Methodology Product Mix of Units Books • Surveyed 6 B&N and Borders stores • Calculated number of SKU’s for a sample of fiction titles • Reviewed 8 to 12 stacks • Counted the number of separate SKU’s • Determined which titles were major (including sub-labels) • Amazon figures are units sold in 2005 (source Wired 2.0 and Bain consumer study) • Publishing analysts from First Research conclude that there is a strong correlation between SKU’s and units sold Niche (All Others) Major (RH, TW, Simon, HC, Pearson) Music • Surveyed 5 Borders and Best Buy stores • Calculated number of SKU’s for a sample of new release and catalog titles • Reviewed 6 to10 stacks • Counted the number of separate SKU’s • Determined which titles were major (including sub-labels) • Digital figures are units sold in 2005 (source Wired 2.0 and Bain consumer study) • Units sold figures for music via traditional stores is being researched through Nielsen Musicscan data Niche (All Others) Major (Uni, War, Sony/BMG, EMI) Home Video • Surveyed 7 WalMart, Best Buy and Target stores • Calculated number of SKU’s for a sample of new release/catalog titles • Reviewed 12 to15 racks • Counted the number of separate SKU’s • Backed-up SKU findings with units sold data from Nielsen VideoScan • Digital figures are units sold in 2005 via Amazon & other online retailers Niche (All Others) Major (7 Majors) Sources: Nielsen Videoscan data, Wired 2.0, Industry Interviews, select store visits across Los Angeles area

16. Ad Market is Changing Significantly as Ad Dollars Following Consumers and Two-way Infrastructure Becomes Available Media spending does not yet reflect consumption Advertising dollars are shifting online to address the current gap 1999 2005

17. SPE Currently Has Limited Ability to Capitalize on the General Growth in Ad Revenues, Particularly in the Online Space Overall ’05 – ’09 Projected CAGR: 10.1% Broadcast ’05 – ’09 Projected CAGR: 4.9% Cable/Sat ’05 – ’09 Projected CAGR: 11.4% Online ’05 – ’09 Projected CAGR: 22.3% 114.9 106.0 95.1 87.6 78.3 71.7 63.2 US $ (Billions) 60.7 57.9 TV & Online Advertising Spend Online %: 12% 10% 12% 13% 16% 18% 21% 23% 25% Source: Veronis Suhler, 2005 Note: Cable/satellite growth expected to be driven by increasing audience share of prime time ratings, ability to target within specific demographic groups, improved sales system; broadcast growth expected to be driven by sustained ratings and ad rates, continued appeal as optimal means to reach large audiences

18. Competitor Response CONFIDENTIAL

19. Competitors Have Seen the Potential for Digital Video Distribution and are Introducing Offerings Across Business Models • Predominantly short video clips that promote the site owner’s content, merchandise, and brand • May include some advertising, and minimal commerce capabilities, but is promotional in nature Promotional Channel Store Social Network • Includes on-demand videos available in programmed micro-channels, on a show-by-show basis, or in a traditional channel lineup • Business model primarily includes advertising, with some upsell to subscription • Aggregates video across content providers for purchase • Uses a range of models including sell-thru, rental, and subscription • Generally consists of short video clips from users of the service • May also provide tools for creating video clips or interacting with video content • Primarily ad-based business models

20. Networks Are Investing Heavily in Online Distribution, Including Over $1BN of Acquisitions by Newscorp Alone Parent Studio Network Online Destinations • ABC.com: ad-supported full episode streaming • ESPN.com: ad-supported streaming and subscriptions • Disneychannelcom: Launching new broadband player today with a dozen free episodes • CBS.com: ad-supported and limited download-to-own • Innertube: ad-supported broadband channel • MTV Overdrive: ad-supported video channel • Acquired iFilm for $49 MM • Invested over $1BN to acquire online properties (IGN, Scout, and Intermix / MySpace) • Now selling episodes of “24” on MySpace • Fox.com: primarily clips and previews • Launching “NBC 360 Digital” with classic comedy and new previews available online • Acquired iVillage for $592MM • Promoting content on YouTube • Launched AOL In2TV, ad-supported classic TV episodes • Acquired Lightningcast to improve video advertising technology • Licensed content through BitTorrent (P2P site) and Guba (social network)

21. Social Networks have Seen the Most Traction Among these Business Models Larger Audiences Smaller Audiences MAKING INTO BAR CHARTS

22. Acquisition Rationale CONFIDENTIAL

23. Summary Acquisition Rationale and Key Target Characteristics Acquisition Rationale • Expand SPE revenue streams and content base • Address limited exposure to ad-supported models • Expand offering to new forms of content (e.g. user generated) • Address gaps in SPE core competencies • Service operation and design • Tool / software development • Consumer data usage • Accelerate market entry • Vehicle for SPE content • Reduce overall cost of entry • Leverage existing base of knowledge in the marketplace • Acquire experienced management team Key Target Characteristics • Characteristics for highest potential acquisition targets include • Small companies with existing consumer offer up-and-running • Offer specifics features to address user-generated content and interactive features • Ownership or direct control of key technology capabilities

24. SPE Target and Competitive Landscape Yahoo Google Quang editing MySpace AOL iTunes High YouTube MTV Overdrive ABC.com CBS.com Fox.com MLB.com Existing Service Penetration Facebook Friendster Metacafe Grouper • Acquire capabilities to build • Focus on complimentary content (e.g. user generated) • Look for proprietary or differentiated technology Brightcove CinemaNow Connect MovieLink Low Veoh Dave.TV Fleapit Gather Maven / The Platform Multimedia Networks Extend Media Low High Technology Capabilities

25. Grouper Acquisition Rationale • Grouper balances strong management and leading technology with reasonable scale • Management team has experience building market leading services • Developed Spinner and sold to AOL • Scale and growth demonstrate credibility without commanding a prohibitive valuation • #2 and fastest growing video community • 4MM unique users visit the site directly each month • 7MM total unique users visit site content (directly and via partner links) • Technology is ahead of larger user generated video sites (e.g., YouTube) • Provides multi-platform download support (iPod, PSP, Mobile Phone) • Portability enabled by proprietary P2P technology • Proprietary desktop software • Represents significant revenue and growth potential as a standalone business • Can be leveraged across SPE digital distribution initiatives

26. Potential for Advertising Revenue • 11MM streams on ABC could equal $x per year • MySpace expected to be generating over $100MM per year • WSJ and other articles re: can barely meet demand for ad-inventory online Quang building

27. Grouper as a Platform for Growth Quang building

28. Valuation To come: 1 page on comps, 1 page on “waterfall” Will show value based “pre-revenue tech comps,” “successful players (MySpace, Yahoo, Google) if we count (a) direct unique users only or (b) direct and embedded CONFIDENTIAL

29. Next Steps To Come CONFIDENTIAL

30. Appendix CONFIDENTIAL

31. Addressable Boxes and 2-way Infrastructure Could Change the Ad Market Significantly How will the $55 billion in untargeted spend respond to the interactive capabilities being rolled out by cable MSO’s?

32. Examples of Online Video Destinations by Category • CBS.com • Fox.com • NBC.com • Sonypictures.com Promotional Channel Store Social Network • ABC.com • Atomfilms • CBS.com / innertube • ESPN.com • iFilm • In2TV • MLB.com • MTV Overdrive • Yahoo • Google • iTunes • Facebook • Friendster • Google • Grouper • Metacafe • MySpace • YouTube • Yahoo Larger Audience • Blinkx • Innertube • Multi-media Networks • Singingfish • CinemaNow • Connect • MovieLink • Dave.TV • Fleapit • Gather • Tag World • Varsity World Smaller Audience

33. Categories for Online Video Technology Providers • Content preparation • Ingestion • Metadata / tagging • Ad insertion • Content delivery • From content owners to aggregators • Onto P2P networks • Content classification and discovery Content Management Interactivity and Social Networking Consumer Tools • Tools and infrastructure for: • Chat • Instant Messaging • Blogs • Ratings • Recommendations • Clickable Video • Video creation • Video editing • Media mixing software (integrate video, photo, audio) • Video publishing (cross-platform) • Personal channel creation • DVD burning

34. Examples of Technology Providers by Category Content Management Interactivity and Social Networking Consumer Tools • Grouper • BrightCove • Maven / The Platform • Veoh Networks • MLB Adanced Media • Roo Media • Grouper • Sonic • Sony Media Software • Veoh Networks More Established • Extend Media • Intent Mediaworks • Kontiki • Redswoosh • Solid State Networks • SyncCast • Tandberg TV • Zetools • Avant Interactive • Intent Mediaworks • Imeem • Kozuru • vMix • Dave.TV (Social Broadcast Network / MyChannels) • Fleapit • Intercasting / Rabble.com • Oddcast • Participatory Culture • Video Publishing on Demand (vpod.tv) • vMix Newer Entrant

35. Key Attributes of Digital Video Services Low Medium High Content Accessibility Anytime, Anywhere Connected Portable 1 Content Value Produced Promotional User-Generated 2 Range of Content Providers Aggregated Company Owned 3 Content Breadth Single Genre Multi Genre 4 Degree of Interactivity Real-Time(e.g., chat, story navigation) On-Demand Ancillary(e.g., blogs and ratings) 5 Business Model(Cost to Consumer) Pay Free Ad-Based 6

36. Promotional Video Websites Overview Attributes • Predominantly consist of short video clips to promote site owner’s content, merchandise, and brand • May include some advertising, and minimal commerce capabilities, but is promotional in nature Low Medium High Content Accessibility Anytime, Anywhere Connected Portable 1 Content Value Produced Promotional User-Generated 2 Range of Content Providers Company Owned Aggregated 3 Content Breadth Single Genre Multi Genre 4 Real-Time(e.g., chat, story navigation) Degree of Interactivity Ancillary(e.g., blogs and ratings) On-Demand 5 Business Model(Cost to Consumer) Free Ad-Based Pay 6

37. Broadband Video Channels Overview Attributes • Includes on-demand videos available in programmed micro-channels, on a show-by-show basis, or in a traditional channel lineup • Business model primarily includes advertising, with upsell to subscription Low Medium High Content Accessibility Anytime, Anywhere Connected Portable 1 Content Value Produced Promotional User-Generated 2 Range of Content Providers Company Owned Aggregated 3 Content Breadth Single Genre Multi Genre 4 Real-Time(e.g., chat, story navigation) Degree of Interactivity Ancillary(e.g., blogs and ratings) On-Demand 5 Business Model(Cost to Consumer) Free Ad-Based Pay 6

38. Video Store (Content Aggregation) Overview Attributes • Aggregates video across content providers for purhcase • Uses a range of models including sell-thru, rental, and subscription Low Medium High Content Accessibility Anytime, Anywhere Connected Portable 1 Content Value Produced Promotional User-Generated 2 Range of Content Providers Company Owned Aggregated 3 Content Breadth Single Genre Multi Genre 4 Real-Time(e.g., chat, story navigation) Degree of Interactivity Ancillary(e.g., blogs and ratings) On-Demand 5 Business Model(Cost to Consumer) Free Ad-Based Pay 6

39. Social Network (User-generated Video Sites) Overview Attributes Low Medium High • Consists of short video clips from users of the service • May also provide tools for creating video clips or interacting with video content • Primarily ad-based business models Content Accessibility Anytime, Anywhere Connected Portable 1 Content Value Produced Promotional User-Generated 2 Range of Content Providers Company Owned Aggregated 3 Content Breadth Single Genre Multi Genre 4 Real-Time(e.g., chat, story navigation) Degree of Interactivity Ancillary(e.g., blogs and ratings) On-Demand 5 Business Model(Cost to Consumer) Free Ad-Based Pay 6

40. Content Accessibility Anytime, Anywhere Connected Portable 1 Content Value Produced Promotional User-Generated 2 Range of Content Providers Aggregated Company Owned 3 Content Breadth Multi Genre Single Genre 4 Degree of Interactivity Ancillary(e.g., blogs and ratings) Real-Time(e.g., chat, story navigation) On-Demand 5 Business Model(Cost to Consumer) Pay Free Ad-Based 6 Potential View of a New SPE Digital Video Service Low Medium High Service At Launch Trend Over Time

41. Unique Users for Online Video Sites Video sites with large audiences are affiliated with established network brands or leading portals Monthly Unique Users (mm) Extend Portal Brands Extend Network Brands Source: Nielsen NetRatings and comScore Media Metrix, May 2006.

42. Unique Users for Online Video Sites While some independent video sites have succeeded, most have failed to build an audience Monthly Unique Users (mm) Source: Nielsen NetRatings and comScore Media Metrix, May 2006.