Project Big Fish: Acquisition Opportunity July 2006

1. Project Big Fish: Acquisition Opportunity July 2006 CONFIDENTIAL

2. Agenda • Executive Summary • Detailed Analysis: Digital Distribution Landscape • Appendix

3. Executive Summary CONFIDENTIAL

4. Executive Summary • Digital distribution is critical to SPE • Digital video distribution is reaching critical mass, changing the distribution landscape and creating new opportunities for Sony Pictures • Other studios are investing heavily to capitalize on these opportunities • Sony Pictures is developing solutions for digital distribution and has three alternatives for market entry • Build an entirely home-grown solution • Partner with technology vendors and online destinations • Acquire for technology, management, and/or user base • An acquisition would best address technology challenges and accelerate speed-to-market by providing a platform • “Big Fish”, a leading destination for user-generated content, is a target which could be a cornerstone for SPE • Acquisition criteria include access to technology, management expertise, content and revenue potential • Potential risks relate to retaining and growing customer base and incorporating commercial content

5. Digital Video Distribution is Reaching Critical Mass • Infrastructure is nearly in place • Roughly 50% broadband penetration of U.S. households • Compression technologies continue to improve • Content owners digitizing libraries • Consumers are engaging with more content, in ways that are unique to a two-way, interactive medium • Over half of Internet users have visited a social networking site • U.S. video downloads exceeded 18 BN in 2005 • Traction is being demonstrated by multiple players, large and small, new and old • Leading online destinations extending brands to video • Traditional networks establishing online presence • Start-up video and social networking sites building large audiences

6. Changing Distribution Landscape and User Behavior Create Opportunities for Sony Pictures • IP-delivery is decreasing control exerted by traditional distribution partners and increasing the importance of two-way communications • Consumer time spent watching cable and network TV forecast to remain roughly flat while time spent with interactive media (online, games, mobile) will grow 10%-30% annually • Unlimited shelf space is increasing the importance of niche content • Major studio content composes 95% of volume for brick-and-mortar retailers but only 80% for online retailers • Advertising is becoming increasingly important in the online space • Online advertising grew 30% in 2005 (compared with 6% for traditional media) • Online advertising expected to reach 25% of the $115 BN domestic advertising market • SPE is creating digital video services to capitalize on these trends and strengthen our position in the market • Increase control of distribution and build direct, two-way relationships with consumers • Broaden base of content to include user generated and short-form • Increase ownership of ad-supported content

7. 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

8. Current Previous Sony’s Efforts to Date Demonstrate the Challenges in Building Core Technology and the Need to Invest Appropriately Sony Efforts to Dates Learning and Implications • Initial efforts were ahead of market appetite; current efforts demonstrate market readiness • Social Networking and User Generated Video sites are effective marketing platforms • “When a Stranger Calls” has 115K friends on MySpace • Success requires a significant investment in marketing and infrastructure • Sony faces challenges in developing differentiated technologies in-house • Acquiring established brands and technology can be more cost efficient • Nanofilms • Chat Cinema • Broadband Channels • Sony Connect • Marketing partnerships • “When a Stranger Calls” on MySpace • Bundling films on digital media • Memory Sticks • Flash Memory • Computer Hard Drives • Screen Blast • SoapCity • iFilm (early investor) • MovieLink

9. Acquired Intermix / MySpace for $580MM • Acquired IGN for $650 MM and Scout for $170MM • Acquired Lightningcast for video advertising technology • Licensing content through BitTorrent and Guba (social network) • Acquired iVillage for $592MM • Promoting new series on YouTube • Acquired iFilm for $49 MM Competitors See Value in User Generated Video Sites and are Investing Heavily in the Space Online Destinations Social Networks Generate Value for Traditional Content Owners • Large audiences provide a legitimate alternative distribution channel • Increasingly supported by advertising revenue • Two-way medium with high degree of interactivity, customer engagement and feedback • Provide opportunities to create popular derivatives of existing properties • Harness users’ creativity to identify and develop new concepts

10. User Generated Content Sites are Attracting Large Audiences Monthly Unique Users (mm) • 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 Social Network Store Channel Promotional • 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 Source: Nielsen NetRatings. Figures as of 6/21/06. * Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 8 million.

11. Strong Management Differentiated Technology Breadth of Complimentary Content Acquisition Targets Must Meet the Following Criteria • Proven track record • Domain expertise Focus on these criteria and reasonable valuation to: • Accelerate time-to-market • Decrease cost of entry • Gain access to new content • Create potential for growth in advertising revenue • Service operation and design • Tools / software development • Consumer data usage • Large and growing base of user-generated content

12. SPE Target and Competitive Landscape (Monthly Unique Users in millions) Yahoo (105.5) Google (97.2) AOL (72.0) MySpace (51.4) iTunes (20.5) High (> 3mm) YouTube (20.1) MLB.com (9.3) FOX.com (8.5) ABC.com (8.0) Facebook (7.7) CBS.com (5.4) MTV Overdrive (4.4) iFilm (3.2) Existing Service Penetration Grouper* (2.8) AddictingClips (1.7) Metacafe (1.6) Connect (1.2) Guba (0.9) Friendster (0.8) vidiLife (0.7) Low (< 3mm) MovieLink (0.6) Roo Media (0.6) vSocial (0.5) Dailymotion (0.4) Brightcove (0.2) CinemaNow (0.3) vimeo (0.4) Veoh (0.1) Revver (0.1) Blinkx (0.01) VideoEgg (NA) Low High Technology Capabilities • Source: Nielsen NetRatings. Figures as of 6/21/06. • Grouper unique user numbers as provided by company. Number of unique users represents US base of direct and embedded. Worldwide unique users total approximately 8 million.

13. Service Summary Technology Differentiators Current Status Partners and Affiliates Big Fish Company Overview • Multi-platform Video Network dedicated to watching, sharing, and creating user generated video • #2 independent video community (Hitwise May report) • Video distribution technology enables video portability to multiple devices (iPod, PSP, mobile phones) • Proprietary software client with P2P file sharing • Supports all major video formats and encodes to Flash Video 8, WMV9, MP4 • Desktop video creation technology featuring video editor, video optimizer, webcam recorder, miniDV transfers and client-side Video • Plug-and-play rich video functionality on partner sites that enable users to watch, search, upload and share video • Affiliate agreements with MTV, Friendster, Buy.com, Everyone’s Connected, Logitech, and Pure Digital • Launched beta version of site and attracted 7MM global UU’s (2.8MM US) • Pre-revenue; developing version 3 of the service • Received $5.25MM funding to date • Received a competitive acquisition bid and provided valuation guidance of $50MM • Currently employees 28full-time

14. Big Fish Service Highlights Watch Share Create • Easy upload of user videos • Add video comments to video from other users • One click publishing to other sites, including MySpace • Import address from MSN, Hotmail, and Yahoo to create email groups • P2P client enables download of original, high quality files (not just streams) • Home page with “video wall” of user generated content; 80% click-through • Content can be discovered through: • Rotation in video wall • Search • Channels • Ability to download content to multiple devices in appropiate format • iPod • PSP • Real-time recording and upload from web cams and mobile phones • Proprietary client with easy-to-use editing tools • Select video • Select photos and tracking / panning effects • Select music

15. Big Fish Management Team • Josh Felser, CEO & Co-founder • President & Co-founder Spinner (Sold to AOL for $320M); GM AOL’s music brands; Business development at News Corp • Dave Samuel, President & Co-founder • CEO and Co-founder Spinner; VP Technology AOL, MIT • Aviv Eyal, CTO & Co-founder • CTO and Co-founder Friskit; Lead engineer Microsoft Multimedia • Mike Sitrin, VP Revenue & Co-founder • Director Marketing and Commerce AOL, Director of Sales Spinner • Jonathan Shambroom, VP Product • VP Product Jumpstart, Director Product: Evite (Sold to IAC), When.com (Sold to AOL), PF.Magic (Sold to Learning Co)

16. Big Fish Performance Against Competitors Technology Content Management MonthlyUniqueUsers (mm) Quality of Content Community Connections P2P Client Ease of Use Features Strength of Leadership • Strong, experienced team 2.8 • Unknown 1.7 • Unknown 0.4 • Weak team 0.9 • Strong (but captive to Viacom) 3.2 • Unknown 1.6 • Unknown 0.1 • Average 0.1 • Unknown NA • Unknown 0.7 • Unknown 0.4 • Unknown 0.5 • Young, limited experience 20.1

17. Technology As A Platform for Growth SPE Ad Sales Opportunities Complementary to Connect Cross-Sony Opportunities for Big Fish • Connect service primarily acts as a digital store, aggregating commercial content for Sony devices • Big Fish expands service capabilities, adding user-generated content and distributing across all device types • Big Fish technology built to support ad-based and transactional business models • Big Fish can expand to become the lead brand for Sony’s broadband channels or support additional channels with new brands • Big Fish has positioned itself to meet the high demand for online video advertising (supports ad insertion in both streamed and downloaded content) • SPE ad sales team could sell ad space

18. Risks and Mitigation Risks Mitigation • Customer retention / increased competition • Differentiated technology provides a better user experience than competitors • Leverage strategic partners for growth (less dependent on “fads” in user taste) • Lack of interest by advertisers • Big Fish struck first deal with MTV • AOL and Google report sold-out ad inventory • Inability to offer commercial content • Ensure SPE appropriately programs content for the channel • Create new, more interactive content for the Big Fish • Integration challenges • Structure incentives for acquired management • Allow new management to retain decision-making authority

19. Valuation Based on Multiple of Unique Users for Comparable Companies • Based on Big Fish’s current 2.8MM US unique users and based on multiples in comparable transactions, initial valuation guidance includes a discount for the company’s pre-revenue status

20. Valuation Based on Venture Funding of Comparable Companies • Venture funding in this space has also been extremely active, and can provide an implied valuation range considering the percentage of the company given (ranging from 10% to 40%)

21. 6/26 6/27 6/28 6/29 6/30 7/3 7/4 7/5 7/6 7/7 7/10 7/11 7/12 7/13 7/14 7/17 7/18 7/19 7/20 7/21 Process Timeline Activities/Worksteps Timeline • Acquisition Rationale • Review drafts with Calkins and Carey • Present to Feingold • Present to Lynton and Hendler • Present to SCA (Wiesenthal and Kanagawa) • Due Diligence • Analyze due diligence materials • Meet with Company • Finalize acquisition valuation • Deal Memorandum to SCA and Tokyo • Submit non-binding term sheet • Initial feedback on status of bids • Tokyo approval to negotiate binding terms • Initiate negotiations of binding terms

22. Detailed Analysis Digital Distribution Landscape CONFIDENTIAL

23. 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

24. 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.

25. 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

26. 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

27. 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

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

29. 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

30. 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

31. 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

32. Appendix CONFIDENTIAL

33. Digital Video Offerings Can be Divided into Four Main Categories • 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

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. Video Store (Content Aggregation) Overview Attributes • Aggregates video across content providers for purchase • 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

41. 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