Digital Services and Distribution FY2008 Budget February 12,

Digital Services and Distribution FY2008 Budget February 12,

Digital Services and Distribution FY2008 Budget February 12, 2007 PRIVILEGED AND CONFIDENTIAL DRAFT Agenda 02/02/20 Executive Summary Digital Distribution Mobile Entertainment Digital Services / Grouper Consolidated P&L PRIVILEGED AND CONFIDENTIAL page 2 Digital Distribution Landscape Content Traditional Studio Content Programming DRAFT Business Models Distribution / Services Partners A la carte DST IP Original Short-form Branded Channels Prosumer Owned IPVOD Mobile SVOD

Mobile User Generated Video 02/02/20 Ad-supported on-demand PRIVILEGED AND CONFIDENTIAL page 3 Competition is Increasing as Demand for Digital Distribution Continues to Grow DRAFT 2007 represented a dramatic increase in digital delivery of premium content Studios aggressively licensing content for distribution through third party web-sites Competitors acquiring (e.g., MySpace) and launching (e.g., ABC.com, NBC.com, CBS.com, CBS Innertube) dedicated online services Studios demonstrating interest in experimenting with new business models, including debuting television shows directly online Mobile distribution is becoming more mainstream and relevant to consumers Increased access to 3G handsets Carriers seeking video content to attract and retain customers As short-form, viral video reaches a mass audience competition continues to increase Youtube plans to share revenue with users increases competition for quality content Studio investing in social networks (MySpace) and UGV sites (Atom Films) VH1 announced amateur music video competition 02/02/20 PRIVILEGED AND CONFIDENTIAL page 4 DRAFT Support for Sony United Launched in 2007 In Progress for 2008 Memory Card bundles with SPHE games and films Digital Imaging Grouper on PSP Integration of Grouper for online video sharing Memory Stick Entertainment Pack Licensing content for digital delivery to the PlayStation 3 Grouper Service integrated with IP-enabled Bravia

Early discussions for digital delivery of films day-and-date with DVD All US VAIOs shipping with SPE Movies 02/02/20 PRIVILEGED AND CONFIDENTIAL page 5 2007 Success Established Foundation for Growth DRAFT Established a strong foundation in FY2007 Launched multiple new business models for digital distribution Launched mobile video Significantly expanded distribution partnerships across internet services, mobile carriers, and hardware partnerships Acquired and integrated Grouper to increase exposure to short-form adsupported content Created and launched first branded cross-platform channels Positioned for significant growth in FY2008 Add [X] distribution partners in 2008 Double distribution revenue from $16.7MM in FY07 to $39.9MMin FY08 Broaden digital content offering, including acquired and produced content Increase number of branded digital channels and expand distribution Further grow Grouper through differentiated content and service offer; begin monetizing audience 02/02/20 PRIVILEGED AND CONFIDENTIAL page 6 Digital Services and Distribution Revenue Overview DRAFT Revenue ($MM) $60 $50.6 $50.5 Total $50 $40 Millions ($) $32 $30 $40 Digital Distribution $11

Grouper $24.5 $16.7 $20 $21 $10 $0 DD Op Income Grouper - EBIT Total 02/02/20 $17 $19 $3 '07 Budget '07 Forecast '08 MRP '08 Budget $9.8 ($10.0) $8.3 ($10.0) $12.5 ($10.0) $19.2 ($22.8) ($0.2) ($1.7) $2.5 ($3.6) PRIVILEGED AND CONFIDENTIAL Before contribution After special items page 7 DRAFT Digital Distribution (IP & Mobile) Summary P&L P&L ($000s) '07 Budget '07 Forecast

Total Revenue $21,150 $16,674 ($4,476) $32,000 $39,925 $7,925 Total COGS ($4,190) ($2,184) $2,006 ($9,835) ($6,890) $2,945 Gross Profit $16,960 $14,490 ($2,470) $22,165 $33,035 $10,870 Total Operating Expenses ($7,210) ($6,175) $1,035 ($9,680) ($13,810) ($4,130) 34% 37% 30% 35% Operating Income $9,750

$8,315 ($1,435) $12,485 $19,225 $6,740 Less: Contribution ($13,640) ($11,650) $1,990 ($18,735) ($27,750) ($9,015) ($3,890) ($3,335) $555 ($6,250) ($8,525) ($2,275) OpEx as a % of Revenue EBIT Headcount 02/02/20 13 24 Variance 11 PRIVILEGED AND CONFIDENTIAL '08 MRP 31 '08 Budget 39 Variance 8 page 8 DRAFT

Agenda 02/02/20 Executive Summary Digital Distribution Mobile Entertainment Digital Services / Grouper Consolidated P&L PRIVILEGED AND CONFIDENTIAL page 9 Success in FY07 Established Foundation for Growth in 2008 FY07: $4MM Updated #s Launched a wide range of business models and across X total partners Broad Launch of Digital Sell-through $2.5M Expanded Digital Rental $0.75M Expanded Digital Subscription $1.5M Launched Ad Supported Channels $0.1M 02/02/20 DRAFT FY08: $18MM Expand to X accounts and grow revenue base with existing partners PRIVILEGED AND CONFIDENTIAL page 10 Key FY07 Successes DRAFT

Established and launched new business models Launched download to own business Launched cross-platform digital channels Expanded distribution relationships Deals with Amazon, Wal-Mart, Movielink, CinemaNOW, AOL, Clickstar, GUBA, AT&T, Best Buy, and NetFlix Supported cross-Sony digital entertainment initiatives Launched first secure digital content program for the PSP Content bundling relationships with VAIO and Sony Ericsson Established end-to-end operational processes with SPHE, SPT, WPF and DigiPol to operate these emgerging digital busiensses 02/02/20 PRIVILEGED AND CONFIDENTIAL page 11 2007 DST Experience Demonstrated Demand for a Wide Range of Studio Content DRAFT Top 10 DST Titles Made 305 feature film titles available in the marketplace to date (most of any studio) 1. The Da Vinci Code 2. Click 3. Talladega Nights Business to date is largely new release driven, but there is demonstrated demand for long tail product 4. Underworld Evolution 5. Ultraviolet 6. RV 7. Silent Hill All titles in the program have been purchased by end consumers 02/02/20 PRIVILEGED AND CONFIDENTIAL 8. The Covenant 9. Monster House 10. Memoirs of a Geisha page 12 FY08 Digital Sell-Through/IP-VOD Strategy DRAFT Aggressively build on the existing distribution network Strike partnerships across the complete spectrum of traditional and on-line players Significant opportunity for incremental revenue in an Apple deal Expand partners to include: Starz, Apple, Microsoft, Best Buy, Transworld, Target Expand the overall content offering Broaden selection of film and TV product Introduce the most compelling short-form/original content into the offering Plan to launch DST of TV product by the end of the year

Continue to lead the market in innovating the digital product offering and usage models Continue to operate an industry leading digital organization End to end asset delivery and digital operations Create innovative marketing and promotional programs Grow the business from $5.8M in FY07 to $19.7M in FY08 02/02/20 PRIVILEGED AND CONFIDENTIAL page 13 FY08 Digital Channel Strategy DRAFT Continue to expand SPEs digital channel offering, including Comedy (Funnybone) - Whos The Boss, Newsradio Action (AXN) - SWAT, Charlies Angels Kids (Bounce) - Jackie Chan, Animated MIB, International Programming (World Channel) Anime (Animax) - Samurai X Movies on Demand (Now Playing/Hollywood Hits) Minisodes Best of Grouper Introduce additional film and television properties into the channels as well as a blend of original programming and interactive features Establish relationships with 3rd party content holders to improve channel offerings Nelvana for Bounce (e.g., Rescue Heroes, Rolie Polie Olie, Babar) Ban Dai for Animax (e.g., Gundam) Aggressively expand channel distribution to high-traffic destinations across platforms Grow revenues from $0.1M in FY08 to $4.0M in FY08 02/02/20 PRIVILEGED AND CONFIDENTIAL page 14 DRAFT IP Distribution Revenue Overview Revenue ($MM) $20 Total $18.10 Licensing $14.0 $15 Millions ($) $19.7 $10 $11.50 $5.0 $5.8

$5 $5.00 $5.69 $3 $0 '07 Budget 02/02/20 '07 Forecast '08 MRP PRIVILEGED AND CONFIDENTIAL $2 Advertising / Sponsor '08 Budget page 15 DRAFT IP Distribution Summary P&L P&L ($000s) '07 Budget '07 Forecast $5,000 $5,787 $787 $14,000 $19,675 $5,675 Total COGS ($1,790) ($1,071) $719 ($2,100) ($1,950) $150 Gross Profit $3,210 $4,716 $1,506

$11,900 $17,725 $5,825 Website / Technology Sales & Marketing G&A ($1,815) ($300) ($1,760) ($1,738) ($150) ($1,408) $77 $150 $352 ($1,455) ($1,000) ($2,160) ($2,560) ($1,465) ($4,075) ($1,105) ($465) ($1,915) Total Operating Expenses ($3,875) ($3,296) $579 ($4,615) ($8,100) ($3,485) 78% 57% 33% 41% Operating Income ($665) $1,420 $2,085 $7,285 $9,625

$2,340 Less: Contribution ($2,037) ($2,811) ($774) ($9,445) ($13,950) ($4,505) EBIT ($2,702) ($1,391) $1,311 ($2,160) ($4,325) ($2,165) Total Revenue OpEx as a % of Revenue Headcount 02/02/20 11 11 Variance - PRIVILEGED AND CONFIDENTIAL '08 MRP 14 '08 Budget 24 Variance 10 page 16 DRAFT Agenda 02/02/20

Executive Summary Digital Distribution Mobile Entertainment Digital Services / Grouper Consolidated P&L PRIVILEGED AND CONFIDENTIAL page 17 Sony Pictures Mobile Entertainment - Overview Full Suite of Mobile Content Products + Comprehensive Marketing and Distribution Footprint Personalization Mobile Video Mobile Applications 02/02/20 Carriers Mobile Games Direct to Consumer SMS Interactivity PRIVILEGED AND CONFIDENTIAL Handsets Aggregators page 18 Games in FY07: new approach proving successful Significantly higher unitsales-per-game were extracted by: Tighter carrier

relationships Strategic handset porting and ops management Targeted marketing and product rollout Smarter product selection 02/02/20 Case I: Re-Launch Effort made to drive new sales of popular PlayStation title Porting, placement and marketing drove re-launch Sales now exceeding original title launch not typical in the games industry Ratchet and Clank Case II: Re-Fresh Top-selling mobile brand grew 12% after distribution of a new version of the game (note: not launched on Sprint to date) More strategic handset porting, mixed with securing better deck placement Case III: New Game Launch First new title release in nearly 12 months Strategically planned around movie release Strategic handset porting, secured deck placement and marketing Sales exceeding Jeopardy, previous number 2 title for MEG Re-launch 18,000 16,000 Units Sold Despite having as many games in the market in FY 07, MEG managed to grow the business in terms of total monthly unit sales 14,000 12,000 10,000 8,000 6,000 April May J une J uly Aug

Sept Oct Nov Dec Wheel of Fortune 07 Re-fresh 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 April May J une J uly Aug Sept Oct Nov Dec James Bond: Casino Royale Launch 30,000 25,000 20,000 15,000 10,000 5,000 PRIVILEGED AND CONFIDENTIAL April May J une J uly Aug Sept Oct Nov Dec page 19

Mobile Games in FY 08: more games, more distribution Launch New Games (current slate) FEB MAR Grow Distribution for Catalog (carriers, handset, online) Casino Royale 1. Fishn Tunes MAR FOR 3. SnoopUPDATE Dogg Cruisin APR 4. Spider-Man 3 Action MAY JUNE JULY 08 Strategy 02/02/20 Wheel of Fortune 2007 2. JEOPARDY! 2007 FULL SLATE 5. God Of War 6. Spider-Man 3 Puzzle Ghostbusters Ratchet & Clank Q*Bert Balloon Breaker Elevator Action Snoop Dogg Boxing 7. Jump That Car Launch 1 new game per month; strategically manage the portfolio/roadmap Aggressively optimize carrier deck placement Expand existing Motorola and Sony Ericsson embed programs, and land new OEM deals Utilize consumer product marketing approach Strike relationship with leading publisher (e.g., Glu) to secure game pipeline Grow revenue from $7.1M to 1$12.5M in FY 08 PRIVILEGED AND CONFIDENTIAL page 20 Launch of mobile video services in FY 07 are foundation for 08 Sony Sneak Peeks Promotional channel featuring clips from theatrical, television, PlayStation, FearNet and mobile games Currently at 350k streams / month on Sprint and Verizon increased

programming leading to 20% growth month over month PPV Movies Sony Pictures is now distributing full-length movies over the air on mobile carriers video services Movie Channel (launching in March) Sprint Movies offers pay-per-view service with DVD features: pause, skip forward and back and resume Offer 7 movies at a time Negotiating with other carriers for distribution Add Memory Cards Sony Pictures Exclusives In Theatres Coming to Theatres On DVD Coming to DVD Game Previews FearNet PlayStation The only linear looping movie channel within Sprints Basic + tier of video Update logos Two looping channels with four classic movies on each channel - movies include comedy, action and drama One movie on each channel refreshed weekly Optimizes library value by utilizing unused inventory on a spot basis 02/02/20 PRIVILEGED AND CONFIDENTIAL page 21 Premium Video Services Will be Launched in FY 08 into Carriers Basic tiers Extend Channel Brands to Mobile SPT Channels Conformed with logos on Channel Page using a range of business models Fee-per-sub Ad Supported Transactional

08 Strategy 02/02/20 and consumer experiences Linear streaming On-demand Sell-through Concentrate on biggest video distributors (in order)- Sprint, Verizon, Cingular Launch quality video services in a range of genres, with a breadth of business models, addressing a variety of consumer experiences Aggressively optimize deck placement and marketing tactics PRIVILEGED CONFIDENTIAL Draft off marketing for AND IP-video and other mobile products where possible page 22 A comprehensive distribution footprint was secured in FY 07; an increased footprint in 08 will grow sales 07: Grew relationships, marketing and tech ops capabilities with partners Carriers Handsets Aggregators D to - C 08 Strategy Carriers: Continue to focus aggressively on top 3 players in the market, push T-Mobile and Alltel for growth, and add additional strategic players (e.g., Virgin) 02/02/20 Handsets: Continue to push on embed deals with Motorola; secure deals with Nokia and Sony Ericsson Online Aggregators: Increase reach by licensing to a select group of top online retailers PRIVILEGED AND CONFIDENTIAL Direct-to-Consumer: Establish direct-do-consumer distribution leveraging applications and web page 23 Mobile Distribution -- Revenue Overview Revenue ($MM) $19.3 $20 $19.3

$3 $7.8 Total Licensing, D2C & Personalization $4 $15 $4 $7.8 Millions ($) $1 $10 $14 $11 $7 Games $7 $5 $5 $3 $4 $4 '07 Forecast '08 MRP '08 Budget Retail / Online Product $0 '07 Budget 02/02/20 PRIVILEGED AND CONFIDENTIAL page 24 Mobile Distribution Summary P&L P&L ($000s) '07 Budget '07 Forecast Total Revenue

$16,150 $10,887 ($5,263) $18,000 $20,250 $2,250 Total COGS ($2,400) ($1,113) $1,287 ($7,735) ($4,940) $2,795 Gross Profit $13,750 $9,774 ($3,976) $10,265 $15,310 $5,045 Website / Technology Sales & Marketing G&A ($125) ($835) ($2,195) ($111) ($656) ($2,112) $14 $179 $83 ($200) ($1,645) ($3,220) ($600) ($2,000) ($3,110) ($400) ($355) $110

Total Operating Expenses ($3,155) ($2,879) $276 ($5,065) ($5,710) ($645) 20% 26% 28% 28% Operating Income $10,595 $6,895 ($3,700) $5,200 $9,600 $4,400 Less: Contribution ($11,603) ($8,839) $2,764 ($9,290) ($13,800) ($4,510) ($1,008) ($1,944) ($4,090) ($4,200) ($110) OpEx as a % of Revenue EBIT 13 Variance

($936) Headcount 13 - 02/02/20 PRIVILEGED AND CONFIDENTIAL '08 MRP 17 '08 Budget 15 Variance (2) page 25 Digital Distribution and Mobile: Requested Increase in Headcount DRAFT Headcount Reconciliation Fiscal Year 2008 Budget Forecast End of FY07 Transfer from within ODE Transfer from Other SPE FY 2008 Budgeted Additions Digital Distribution Mobile Entertainment Executive 11 13 4 2 (2) - 1 2 11 3 1 24

15 7 Total 28 - 3 15 46 Request and Justification Digital Distribution VP Digital Distribution Account Management Deal Fullfillment Marketing Manager Mobile Director Mobile Video Manager Product Development Submissions Coordinator Executive Vice President 02/02/20 1 2 7 1 11 1 1 1 3 1 Striking partnerships to broaden distribution network Fulfilling distribution deals Supporting growth in mobile video channels Providing increased management across businesses PRIVILEGED AND CONFIDENTIAL page 26 DRAFT Agenda 02/02/20 Executive Summary Digital Distribution

Mobile Entertainment Digital Services / Grouper Consolidated P&L PRIVILEGED AND CONFIDENTIAL page 27 Recent Progress and FY08 Focus Areas DRAFT Successful integration in 2007 positions us for differentiation, growth, and monetization in 2008 FY07 Established Foundation FY08 Grow and Monetize (Grouper 3.0) Successful integration with Sony Pictures Attract and invest in differentiated content Retain and grow initial user base Create a compelling, channel-based viewing experience Support Sony United by integrating with other divisions 02/02/20 Market and distribute the service Expand and monetize the user base PRIVILEGED AND CONFIDENTIAL page 28 Addressed Early Integration Challenges in FY07 DRAFT Addressed disruption caused by litigation to ensure continued growth Disable Grouper client and downloads as a precaution Although growth was dampened, Grouper has grown 40% since acquisition Delayed launch of revenues to remain competitive and solidify customer base Key competitors, including YouTube, waiting to roll-out advertising Launching advertisements in conjunction with differentiated, Grouper 3.0 service Business strategy builds on lessons learned in FY07 Launching Grouper 3.0 to differentiate service and ensure continued user growth Increasing proportion of domestic traffic; more easily monetized Increasing proportion of on-site traffic; drives greater usage and ad inventory

Expanding revenue models to include sponsorships 02/02/20 PRIVILEGED AND CONFIDENTIAL page 29 FY07: Integrated Grouper and Grew User Base Integrated Across Sony SPE content offerings through ScreenBites DVD promotion for Seinfeld Season 7 Contests for SPE theatrical releases Grouper branding integrated into PSP Integration with IP-enabled Bravia 9.0 Expanded User Base Grew users 40% to 9MM Grew daily video streams 1.6MM Monthly Unique Users (millions) 10 9 8 7 7.8 1.4 1.2 6 4 1.6 6.4 6.0 5.3 5 0.6 0.4 2 1.9 2.5 3.0 0 PRIVILEGED AND CONFIDENTIAL 0.2 0

October 02/02/20 1 0.8 4.5 3 1 1.8 Daily Streams (millions) Integrated with SPE DRAFT November December page 30 DRAFT Grouper 3.0 Vision Establish Grouper as a recognized and trusted brand for semi-professional and viral videos Distribute through a broad, multi-platform syndication network including the web, cell phones, and portable devices Execution Offer best-of-breed programmed, editorialized, channel-based viewing Create a pathway to fame to attract the best content creators Make it simple for content creators to publish to any site Supplement user-uploaded videos with Grouper-produced content and acquired content Provide a superior online video experience including the best content guide and high-quality video playback Launching LaunchingGrouper Grouper3.0 3.0in inJune June2007 2007 02/02/20 PRIVILEGED AND CONFIDENTIAL page 31 DRAFT Grouper 3.0 Content Strategy Create and Attract Content

Identify and Invest in Differentiated Content Program Channel-based Programming Grouper Produced Content Tier 1 Prosumer Content Editorial staff identify and acquire / license best videos Tier 2 General UGV Staff leverages Grouper-developed technology and user ratings to identify popular content Provide Incentives to Attract Content Creators Identify Differentiated Content, Acquire a Subset 02/02/20 PRIVILEGED AND CONFIDENTIAL Tier 3 Create a Compelling Viewing Experience page 32 Provide Incentives to Attract Content Creators DRAFT Example of Path to Recognition Provide incentives for content creators to share their content The Line-Up (Stand-up Comedy Channel) Offer a path to recognition for each channel Include both online and offline rewards Content Featured in Best of Show Featured Content (Views, Ratings, Editorial) Ability to easily publish to any site, including the content creators own site 02/02/20

All Content Uploaded to Channel PRIVILEGED AND CONFIDENTIAL Guest Host on Best of Show 15 minute spot at the Laugh Factory page 33 DRAFT Invest in Differentiated Content Acquired Produced Original Production Short-form higher quality production content Shows developed for specific channels Mix of in-house (60%) and commissioned 3rd party shows (40%) Prosumer General UGV Quality UGV content with an established online audience Grouper will acquire or license for a fixed fee or revenue share on an exclusive basis Opportunistic acquisition of content with low production value but proven audience appeal Small Collections Fixed fee paid for exclusive distribution rights Investing Investing$5.2MM $5.2MMto toproduce produce450 450short shortepisodes episodesand andacquire

acquireroughly roughly5,000 5,000videos videos 02/02/20 PRIVILEGED AND CONFIDENTIAL page 34 DRAFT Program on a Channel Basis Tier Content Focus Sample Channel Concepts Branded channels focused on well-defined genres with depth of content and originally produced shows Quick Laugh All Access Election 2008 Project X Tier 2 Broader content categories with breadth of user-uploaded content and hand-picked featured videos Sexy Travel Citizen Journalist How-To Tier 3 General UGV, with featured content largely based on user ratings and input Pets & Animals Car Culture Video Games Family Friendly Tier 1 Instant Karma

Holiday / Events Dont Try at Home Trends / Lifestyle Action Sports Blog! Colleges Spirituality Digital Ghetto Launch LaunchGrouper Grouper3.0 3.0with with5-6 5-6Channels Channelsin inJune June 10 Channels Live by End of Fiscal Year 10 Channels Live by End of Fiscal Year 02/02/20 PRIVILEGED AND CONFIDENTIAL page 35 DRAFT Product Roadmap Q4 FY07 Q1 FY08 Q2 FY08 Q3 FY08 2.5 Launch 3.0 Launch Continuous playlists Re-branding Talent show Mobile sharing 2.0

Multi file upload New content strategy implemented Web-based groups Hardware integration Enhanced external player New home page Advertising 1-click to new distribution partners Syndicate Grouper to network partners Channel home pages with shows 02/02/20 Pathway to recognition in place Multi-site publishing My Channel Enhanced external player with ads and sponsor support Family filter Recommendation engine Web-based IM integration Update advertising technology Cameras PCs Devices Client re-launch Geo sharing Mobile sharing 1.0 Sony Ericsson syndication Updated advertising techonology PRIVILEGED AND CONFIDENTIAL page 36 Extending Audience Reach Through Marketing and Distribution DRAFT Attract New Users through Marketing Online Marketing Project X Prizes Leverage SPE

Cross-Sony Support Extend Reach through 3rd Party Distribution Partners Social networks 02/02/20 Online portals Verticals PRIVILEGED AND CONFIDENTIAL Hardware / Embed deals page 37 DRAFT Revenue Strategy Advertising and sponsorships forecast to deliver $10.6MM in FY08 revenue Advertising AdvertisingRevenue Revenue Video Interstitials Run-of-Site video advertising inventory (max ad ratio 1:3 videos) Banners 1 banner per page; 2 impressions per stream Sponsored Search / UIV Ad placement against sponsored terms paid on a per click basis Channel-Based Channel-BasedSponsorship Sponsorship Revenue Revenue Video Interstitials Project X Sponsor receives dedicated portion of video interstitial inventory w/ companion rich media ad at a premium CPM Competitions within the 9 Project X sub-channels Advertiser pays fees for persistent branding, enticements, and sponsored downloads from a channel Branded Channels Custom Channels dedicated to a single brand (i.e. Mini Cooper channel)

12 total in FY08 at average price of $27k each Domestic and Intl banner and domestic video interstitial inventory sold at a discount 02/02/20 Talent-based sponsorships Other Remnant $4 MM Non-Channel-Based Non-Channel-Based Sponsorship SponsorshipRevenue Revenue $2.8 MM PRIVILEGED AND CONFIDENTIAL $3.8 MM page 38 DRAFT Growth in Audience & Traffic Growing Growingthe thedomestic, domestic,on-site on-siteuser userbase baseincreases increasesuser useractivity, activity,generates generates additional inventory, and ultimately drives more revenue additional inventory, and ultimately drives more revenue Domestic / Intl Mix On-Site / Off-Site Mix MRP 30 30 26MM 26MM 25 10.4

20 MRP 10.4 15 5 0 10 9MM 9.9 6.2 3.4 Dec '06 8.6 6.5 02/02/20 20 Q2 Q3 10 9MM 10.4 10.9 6.3 3.3 Dec '06 International UU % Domestic 12.1 15 5 Q4 13.0 MRP 0 Q1 Domestic UU 34% 11.9 15.6

Unique Users (MM) Unique Users (MM) 25 10 MRP 6.1 7.7 Q1 Q2 On-Site UU 60% PRIVILEGED AND CONFIDENTIAL 30% 10.2 Q3 13.0 Q4 Off-Site UU % On-Site 50% page 39 DRAFT Audience Benchmarks Ending EndingFY08 FY08Domestic DomesticOn-Site On-SiteUUs UUs are areReasonable Reasonablevis--vis vis--visCompetitors Competitors MySpace 55 YouTube 38 Break 9.8

Heavy 7.8 Grouper FY08 Budget 7.8 American Idol 4-5 (1) Addicting Clips / Atom Films 3.0 (2) iFilm 2.3 eBaums World 3.2 (1) At peak months of April and May (2) Combined 1.8MM Addicting Clips & 2.2MM Atom Films 02/02/20 PRIVILEGED AND CONFIDENTIAL page 40 DRAFT Grouper Revenue Overview Revenue ($MM) $20 $19.0 $15 Millions ($) $10.6 $10 $19 $4 $5 $0.03 Non Channel-Based Sponsorship $2

Channel-Based Sponsorship $4 Advertising $3.0 $3 Total $0 '07 Budget 02/02/20 '07 Forecast '08 MRP PRIVILEGED AND CONFIDENTIAL '08 Budget page 41 DRAFT Grouper Summary P&L P&L ($000s) '07 Budget '07 Forecast $3,000 $31 ($3,031) $18,598 $10,604 ($7,994) Total COGS ($2,989) ($1,500) $1,489 ($8,185) ($9,009) ($824) Gross Profit $11 ($1,469)

($1,480) $10,413 $1,595 ($8,818) ($8,345) ($7,567) ($19,538) ($26,935) ($7,397) 278% N.M. 105% 254% ($1,666) ($963) $703 ($949) ($820) ($10,000) ($10,000) $0 ($10,074) ($26,160) ($16,086) $3,286 $3,286 ($22,874) ($12,800) Total Revenue Total Operating Expenses OpEx as a % of Revenue Deal Amortization EBIT Before Special Items Special Items EBIT Headcount Grouper Project X

Ad Sales / Collections Total 02/02/20 $0 ($10,000) 52 52 $0 ($10,000) Variance $778 $0 $0 '08 MRP $0 ($10,074) 49 (3) 62 2 2 51 1 PRIVILEGED AND CONFIDENTIAL '08 Budget Variance $129 5 70 10 5 8 10 - 67 85 18 page 42 DRAFT

Headcount / Org Chart 4 End of FY08 End of FY08 Grouper 70 Grouper 70 Project 10 ProjectXX 10 32 Sales Sales/ /Collections Collections Total Total 55 85 85 MRP MRP 67 67 Total Headcount End of FY08 General Mgmt Engineering & Development J. Felser & D. Samuel Co Presidents A. Eyal CTO C. Amen-Kroeger VP, Engineering Content T. Liano VP, Programming 15 Products J. Shambroon VP, Prod/Marktg 12 Customer / Acct Management M. Sitrin

VP, Partnerships 4 S. Gensler Dir, Biz Dev 3 TBD 10 Business Development Project X Ad Sales SPT 5 85 02/02/20 PRIVILEGED AND CONFIDENTIAL Requesting Requesting18 18 Incremental Headcount Incremental Headcount vs. MRP vs. MRP Grouper Grouper Content 77 Content Product 11 Product Project ProjectXX Talent TalentMgmt Mgmt Judge Staff Judge Staff Programming Programming Total Total 44 44 22 18 18 page 43 DRAFT Agenda

02/02/20 Executive Summary Digital Distribution Mobile Entertainment Digital Services / Grouper Consolidated P&L PRIVILEGED AND CONFIDENTIAL page 44 DRAFT Digital Services and Distribution Consolidated P&L P&L ($000s) '07 Budget '07 Forecast Total Revenue $24,150 $16,705 ($7,445) $50,598 $50,529 ($69) Total COGS ($7,179) ($3,684) $3,495 ($18,020) ($15,899) $2,121 Gross Profit $16,971

$13,021 ($3,950) $32,578 $34,630 $2,052 ($16,445) ($15,153) $1,292 ($30,993) ($46,046) ($15,053) 68% 91% 61% 91% Deal Amortization ($1,666) ($963) ($949) ($820) Operating Income ($1,140) ($3,095) ($1,955) $636 ($12,236) ($12,872) Less: Contribution ($13,640) ($11,650) $1,990 ($18,735) ($27,750) ($9,015)

EBIT Before Special Items ($14,780) ($14,745) $35 ($18,099) ($39,986) ($21,887) $0 $0 $0 $0 $3,286 $3,286 ($36,700) ($18,601) Total Operating Expenses OpEx as a % of Revenue Special Items EBIT Headcount Grouper ODE Mobile Total 02/02/20 ($14,780) 52 11 13 76 ($14,745) 51 11 13 75 Variance $703 $35 (1) (1) PRIVILEGED AND CONFIDENTIAL

'08 MRP ($18,099) 67 14 17 98 '08 Budget 85 24 15 124 Variance $129 18 10 (2) 26 page 45 DRAFT EBIT Reconciliation Grouper Grouper Digital Distribution EBIT Per MRP Increased Revenue Reduction in COGS Increased OPEX Increased Op Inc Increaesd Contribution ($6,250) EBIT Per MRP Decreased Revenue Increased Investment in Content Increased G&A Decreased Bandwidth Impairment of Assets Minority Interest Other $7,925 $2,945 ($4,130) $6,740 Variance Before Legal ($9,015) Legal EBIT Per Budget ($8,525)

Combined EBIT 02/02/20 EBIT Per Budget ($10,077) ($7,994) ($2,756) ($4,994) ($3,023) ($1,000) $5,886 $2,684 ($21,274) ($1,600) ($22,874) ($31,399) PRIVILEGED AND CONFIDENTIAL page 46

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