Digital Networks Strategy and Ad Sales Discussion August 2007

1. Digital Networks Strategy and Ad Sales Discussion August 2007

2. Traditional TV Networks Grabbing Digital Real Estate Traditional TV Networks • Traditional Networks are expanding into digital • Leveraging assets to create digital versions and new brands • Fully programmed experiences, predominantly long form • Locking up prime placement on Digital MSO’s • Locking up scarce sub fees and MGs from Digital MSO’s DigitalNetworks DigitalMSOs

3. Two Types of Digital MSOs are Emerging Next-Gen / UGV-Driven Aggregators “Traditional” Content Aggregators • Mostly programmed digital networks with established, professionally created content • EPG-like experience, typically organized by genre, and network brands drive navigation • Mostly short form, UGV • Some professional content, but mostly one-off or limited series • Navigation more discovery driven and viral (Comedy vs. Comedy Central) • User-involved (e.g. community posting, voting)

4. Without Digital Networks, SPT Loses Influence and Revenue • SPT content continues to build and benefit other parties’ networks, replicating the current creation-distribution ecosystem • Talent, seeking multi-platform exposure and marketing of productions, turns elsewhere • Opportunity cost to not making library available online Content • Traditional networks aggressively build online & mobile audiences, replicating position & distribution advantage in the digital world • Difficult to secure real estate on digital MSOs for SPT’s a la carte content, with limited spots available in digital MSO tiers • Digital MSOs increasingly dictate business models and product development without SPT input Distribution • Ad dollars shifting from traditional TV to online • By 2011, TV content captures largest share of online ad spending: TV: $568 m Advertising MusicVideo: $447 m News &Sports: $433 m Other: $145 m UGV: $137 m Source: Adams Media Research, 2007

5. Strategy: Create Digital Networks to Address Digital Landscape Why Digital Networks? Generate Revenue Build Assets • Establish 21st century network / distribution assets for SPT • Build foundation for SPTAS to bring-in new partners and expand lines of business • Provide long-term distribution leverage for SPT content • Provide outlets for new content and talent • Capture share of developing revenue streams (IP and mobile) • Unlock and monetize SPT’s vast library • Give SPT seat at table to shape digital products and business models • Create program franchises with follow-on windows (e.g. DVD, Direct to Mobile)

6. Distribution Networks • Limit number and scope of networks to manageable level • Build brands on back of content and partners’ traffic Content Budget • No net investment in digital networks in FY2008 • Breakeven to positive cash flow in year 1 • Minimal incremental headcount • Limited marketing and music clearance allocations • Rely heavily on library • Targeted slate of original programming using high-end and pre-screened talent • Selective music clearance Current Strategy Tailored to Meet Budget Requirements • Distribute and build awareness through partners’ large, built-in audiences before attempting to drive traffic to SPT sites • Multi-platform approach: broadband and mobile

7. Episodes from the heyday of sit-coms • Outrageous shorts and busted pilots • Originals by contemporary comedians Your favorite feature length, contemporary classic films across all major genres: comedy, action, drama, family, sci-fi and cult Classic hard-hitting action TV series and original takes on today’s favorite action movies and stars • Deep action-themed library • SPE relationships with celebrity action stars and film franchises • Key young male action demo also early adopter of digital tech- nology • SPT’s “middle tail” content is hard to find • Deep classic comedy library • Demand for short form, original comedy exploding online Four Networks Will Activate SPT’s Multi-Billion Dollar Library* What: 2 Popular Genres, 2 Popular Formats Favorite retro TV shows told in in 4-6 minute “minisodes” Why: We matched our assets with market demand • SPE’s 3,500+ feature library • Extensive library of much-loved shows • Popular TV format (Turner, USA, AMC, etc.) embraced by audiences but not yet translated to digital • Format appeals to today’s “bite sized” video consumption • Edited to meet the demo’s ironic, camp sensibility *Five including SPT’s investment in FearNet and SPT Mobile’s distribution of FearNet Mobile

8. Digital Networks and Crackle Complete SPT’s Offering • User involvement play • User involvement occurs on and is enabled by Grouper • Library play • Original programming will also appear on Grouper

9. Credence Walker Programming Philosophy Based on 4 Building Blocks SPE Film Library SPT TV Busted Pilots New Access Short-Lived Series Prosumer Acquisition Short & longform Original Production New Shows Star-Driven WTF withPenn Jillette Traffic Creating Branded Ent.

10. The Minisode Network Programming* Currently Playing Coming Soon *Minisode Network cross-programmed with AXN and FunnyBone to drive additional viewing

11. Cup-a-Joe Lunch Crunch Afternoon Snack Drive Thru Open All Night Classic comedy and lighter action films targeting the morning commuter and those viewers looking to ease into their day Re-fuel with a shot of adrenaline through edgier comedy and action movies Out and about with the kids? Drop in and allow the whole family to snack on feel-good films that keep everyone engaged Get wrapped up in other people’s wrenching and gripping lives – a block of classic dramas While others sleep, become engulfed by the endless possibilities contained in our unique cult/sci-fi classics Screening Room Programming Men in Black Men in Black II Ghostbusters My Best Friend’s Wedding Groundhog Day Sleepless in Seattle Tootsie Fools Rush In Manhattan Murder Mystery High School High Multiplicity Blind Date Jury Duty Just One of the Guys Krull Real Genius The Adventures of Baron Munchausen The Freshman The Toy Anaconda As Good As It Gets Close Encounters of the 3rd Kind Air Force One The Fifth Element The Net The Cable Guy Ghostbusters 2 Ultraviolet The Freshman In the Line of Fire Taxi Driver Wild Things Something’s Gotta Give Adaptation Deuce Biglow: European Gigolo Donnie Darko Slackers The Karate Kid Series Annie Baby Geniuses Look Who’s Talking Too Muppets from Space My Girl 2 Short Circuit Groundhog Day Soccer Dog The Indian in the Cupboard The Muppets Take Manhattan Last Action Hero Brian’s Song Fly Away Home Bingo The Adventures of Baron Munchausen High School High Philadelphia The Natural On the Waterfront Laurence of Arabia Awakenings Anatomy of a Murder Gandhi La Bamba The Buddy Holly Story The Remains of the Day A Passage to India My Best Friend’s WeddingSleepless in Seattle Tootsie Manhattan Murder Mystery Easy Rider The Fisher King The Last Picture Show Closer In the Cut Men in Black Men in Black II Ghostbusters Bruce Lee’s Secret Godzilla vs. Destroyer Godzilla vs. Space Godzilla Mothra Rebirth of Mothra The 7th Voyage of Sinbad The Blob The Golden Voyage of Sinbad Starman Black Dragon Journey to the Center of Earth Underworld Evolution The Howling Mary Shelley’s Frankenstein Swept Away Urban Legends

12. FunnyBone Programming Library Original Production & Acquisition WTF with Penn Jillette Hobo Joe & Big Head Gaytown

13. Credence Walker AXN Programming Library Original Production & Acquisition

14. Network Distribution Approach Partners Online Mobile Other Distribution Philosophy D2C Online Mobile • MSOs & IPTV • SCE: PS3, PSP • SEL: Bravia, VAIO • Vertical sites • Originals sites • WAP • Application • Text • Portals / Aggregators • Syndicators • Social Networks • Virtual Worlds • Carriers • Non-Carrier Aggregators

15. Review of Networks to Date • We have only made a limited number of shows available on FunnyBone and AXN • FunnyBone: NewsRadio, Who’s the Boss, Action, Lenore • AXN: Charlie’s Angels, Starsky & Hutch, SWAT, Animated Spider-Man, Astro Boy • Strong placement + limited programming + no brand recognition = limited traffic • Minisodes launch more indicative of go-forward plan • Wide selection of shows • Dedicated marketing support • Broad cross-platform rollout • We are dramatically increasing the number of classic shows available on each network • FunnyBone: Bewitched, Diff’rent Strokes, What’s Happening, Benson, I Dream of Jeannie, Married with Children, Muddling Through, Dana Carvey Show, Great Scott, The Partridge Family, The Tick, Barney Miller, Over the Top, What’s Happening Now • AXN: Fantasy Island, Forever Knight, Hart to Hart, Hex, Police Woman, Sledge Hammer, The Rookies, Kidnapped • We will cross-program Minisodes with FunnyBone and AXN across common outlets in the expanded Minisode launch • We will begin to add original programming to the networks • FunnyBone: WTF Penn, Gaytown, Groundlings • AXN: Action Theater, Afterworld

16. Issues / Topics • Adding dedicated personnel to expand our Networks • All Original Programming now MUST support one of SPT’s Digital Networks • Many Original Programs will be dually located on Networks • WTF Penn on FunnyBone and Crackle • We will have multiple Networks on common distribution outlets • FunnyBone, AXN and Minisodes on AOL / Joost • We will launch direct .com sites for the Networks (minisodenetwork.com will be first) • We will expand the Networks to mobile Source: Adams Media Research, 2007

17. Issues / Topics • What to do with current channels on AOL and Joost? • Sell the SPT Digital Network? • Can we leverage the MInisode launch to sell ads and/or sponsorships across all of the Networks? • Add FunnyBone, etc to overall Crackle packages? • Do we want to let AOL and/or Joost sell until we have more traffic? • Is there a remnant-type deal (e.g., advertising.com) that makes sense? • What can we collectively do to help / expand / improve • Additional IP outlets to discuss • Expanded Minisodes distribution • AOL, Joost, Yahoo, YouTube • GAIA Deal • FunnyBone, AXN, Minisodes and Screening Room (Launching 10/1) • Screening Room on Yahoo! • Inventory that may work? Source: Adams Media Research, 2007

18. Issues / Topics • Mobile Advertising • Current Deal Strategy (e.g., secure rights for future) • Limited current inventory but will become much more significant in near future • Can we include in larger IP packages? • Technologies to support business? • Specific Opportunities • Off deck - Minisodes WAP • Minisodes, FunnyBone and Crackle on Verizon Wireless • Screening Room, Crackle on Cingular • Screening Room, Crackle on Sprint Source: Adams Media Research, 2007

19. Online Partners Partner Rationale Status AXN, FunnyBone Live Minisodes (Q2) Early leader in online video in a content owner-friendly branded environment; heavily-trafficked AXN, FunnyBone Live Minisodes (Q2) Groundbreaking online TV platform with lots of buzz and an ad-friendly business model Minisodes Live Others TBD #3 in video streams, #2 in unique streamers, instant viral “citizen syndication” platform Screening Room and Minisodes in (Q2-Q3) #2 in video streams FunnyBone, AXN, Minisodes Theaters (Q2) Heavily-trafficked virtual world with Chat Cinema functionality Minisodes (Q2) Others TBD #1 in unique video streamers and minutes viewed FunnyBone, AXN, Minisodes (Q3-Q4) Close competitor to Joost with an attractive interface and greater focus on niche, long tail & original programming Heavily-trafficked parent site with growing branded video opportunities and expanding ad networks TBD Opportunistically Portfolio approach to catching the next hot Internet video startups

20. Mobile Partners Partner Rationale Status Most mobile subscribers. Have expressed interest in SPT programming for CV and MediaFLO platforms. Cross-platform opportunity with U-verse. Screening Room (Q2-Q3) Market leading mobile video provider: first to market with V-CAST and MediaFLO and the most video subs. Cross-platform opportunity with FiOS. Minisodes, AXN (Q2-Q3) Current mobile video partner with SPT’s Inside Sony Pictures and Sprint Movies services. Screening Room, MinisodesF(Q3-Q4) Subscriber base open to mix of business models: subscription, transaction and advertiser. Open to differentiated video offerings, especially originals. FQ4 Provider of MediaFLO service cross-carriers, seeking additional network. FQ4 Leading mobile video application provider allows for D2C offering without carrier. TBD

21. Other Partners: Partner Rationale Timing BIVL offering provides direct route for SPT online video offerings to the living room TV Q2-Q3 Differentiate on-demand IPTV content offering. Cross-platform opportunity with Verizon Wireless. Q2-Q3 Q2-Q3 Differentiate on-demand IPTV content offering. Cross-platform opportunity with AT&T Wireless. Playstation installed base large and growing; SCE looking to provide networked video services to users Q3-Q4 Other OEM Partners Opportunistically OEM partners looking to differentiate media-focused hardware with content