Turbo-Charging Network Services: Xbox Live Anywhere, Bada TV, and Cloud-Based TV Models

1. Turbo-charge Plan Steering Committee Update June 6/7th , 2010

2. THE GAME IS ON…RECENT BUZZ ON NETWORK SERVICES Xbox Live Anywhere: ‘3 Screen, 1 Cloud’ Aggregator's Aggregator  bada TV to take on Google & Sony “Cloud based, subscription TV model…alternative to Cable? Disappointed with progress, Microsoft “axes executives behind Xbox”…re-boosting its strategy? “Significant budget allocation to the bada OSproject … determined to be a major competitor to both Google TV and Apple.” “Wooing developers to create content and software for televisions…ultimately work with its mobile platform, bada” “Apple TV will retail for $99” “$30 a month to watch TV via iTunes” “Apple is moving away from the model of local storage, and will be focusing on cloud-based storage” “Robbie Bach (Head of Games Division) pushed out…our mobile efforts aren't keeping pacewith other new trends” Sources: Forbes, Independent, The Korean Herald, Smarthouse, Engadget

3. KEY DECISIONS TO TURBOCHARGE EXECUTION • Agree on service plan hypotheses and what to test in customer survey? (e.g., What do we need to turbo-charge to make Network Services a growth pillar for Sony)? • Key headlines or value propositions • “Your place for ‘SPORTS” • “Best of cable with better price point” • Specific exclusive content to differentiate from others • “Exclusive Sony original programming” • Discuss speed of execution, prioritization of resources/budget allocation. --Decision to be as early as possible for fast execution (incl. pilot scope) • Content aggregation • Device coverage and integration to support network services • Others • Next steps

4. TURBOCHARGE SERVICE HEADLINES TO BE TESTED ‘Best of Internet’ 1. “Your place for SPORTS” 2. “Best of Cable” • All ‘must have’ sports available • Some popular sports / niche sports highlights/lives are ONLY available here • Sony original programming for popular sports (e.g., mix martial arts) • ‘Cable Lite’ (40-50 channels) for better price and better experience (VOD/Live/Linear) • Premium cable subscription (a la carte) Build “Your Own” subscription, nothing more, nothing less 3. Tailored “Sony” Original Entertainment Packages To Meet Your Needs (based on customer segment / demographics) • INTERACTIVES service provided by Sony • Original game shows, Education /Health & Wellness • Exclusive offering from SPE/SME library • Anime/concerts/early releases of SPE films • Tailored entertainment packaging from SPE library • Movies/dramas selected for YOU – by target segment

5. Highlights 1. Your Place for Sports WE ARE CURRENTLY NEGOTIATING KEY SPORTS CONTENT…NEED TO CONSIDER FURTHER COVERAGE/EXCLUSIVITY TO PURSUE Level of Exclusivity Exclusive for any media Exclusive for online Exclusive for non-PC connected devices Exclusive to competitor brands Exclusive for game consoles Non-exclusive (Bounty model) Tier 1 Sports In pipeline of SPE negotiations Level of Traffic Tier 2 Sports Tennis Original MMA themedprogram JV w/ Tap out Others In pipeline of negotiated by SNEI Cricket

6. 2. ‘BUILD YOUR OWN CABLE PACKAGE’ WE ARE BUILDING OUR ‘CABLE LITE’ SERVICE IN A PHASED APPROACH… ENGINEERING RESOURCES MAY BE NEEDED TO ACCELERATE LAUNCH TIMING FY2011 2H FY2010 July FY2010 2H VOD ‘Best of cable’ Selective Content (VOD of some cable shows) (VOD and/or Live /Linear of Premium Cable – ‘A la Carte ) (Live /Linear of All Cable Content ‘Best of Cable’) In negotiation to launch FOX/NBC/Disney 40-50 channels as ‘Cable Lite’ offering In negotiation to launch ‘Hulu PLUS’ in FY10 July In negotiation to launch selective premium cable channels live/linear online in FY10 2H onwards Needs more than 12 months under current engineer capacity

7. 3. SONY ORIGINAL ENTERTAINMENT PACKAGE SONY EXCLUSIVES INCLUDING ORIGINAL PRODUCTIONS AND TAILORED ‘SONY’ PACKAGES BY CUSTOMER SEGMENT TO DRIVE FURTHER REVENUE Young Gamer Pack Family Pack New Interactive Entertainment Experience Produced by Sony Health& Wellness Education Original Game Shows Sony Exclusive (Exclusively Distributed via Sony Network Services only (including Early ReleaseA)) Petit Prince 3D Anime Iron man Anime Wolverine Anime Seinfeld Original Packaging from Sony Library

8. Key decision point SPEED OF TURBO PLAN VIDEO SUBSCRIPTION: KEY DISCUSSION POINTS Pilot Full launch FY2011 FY2010 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Mar Contents/Services Your Place for Sports Must haves Featured hot sports Mix martial arts: Further exclusivity? + Original production? Hard to find any where else Turbo-charge other sports acquisition? Build Your Own cable Turbo-charged Cable Lite? Tailored Sony Original Entertainment Packages Young gamer Original Game shows? Family Education? Male Health& wellness? Female PS3 Devices Vaio (Media Go pre installed) PSP (Remote play needed for streaming)? Net box (Need engineering capacity)? IPTV small screen (Need engineering capacity)? Android TV? Smartphones? Marketing Marketing hook device (Net box, IPTV small screen for low price with NW bundling)? Consistent marketing message on target devices (Features NW service w/ device?) All content package Integrated marketing? Co-marketing w/Game or music subscription package? Co-marketing with SCE? Co-marketing w/ SPE/SME ?

9. Illustrative - For Discussion Purposes Only POPULAR SPORTS CONTENTS/ ONLINE AVAILABILITY Some deal done/Planned to negotiate by SNEI Not in scope yet # of fans*1 (attend more than one time a month) Baseball (8.6M) College Football (6.4M) College Basketball (4.2M) More than 3mil Soccer (3.3M) Pro Football (4.6M) Pro Basketball (3.9M) Ice Hockey (2.5M) Golf (2.4M) NASCAR (2.1M) Bowling (1.8M) Pro Wrestling (1.3M) 1 mil- 3mil Tennis (1.4M) Horse Racing (1.3M) Boxing (1.1M) Running Track &Field Motorcycle Racing (1.0M) Martial Arts Swimming Rugby Action Sports Hunting Equestrian Events (0.9M) Rodeo (0.9M) Fishing Tournament (0.9M) Figure Skating (0.6M) Less than 1 mil Cricket Lacrosse Pro Beach Volleyball (0.4M) Volley ball Can be a first mover to lock in, but require technical resource investment to make them online PF eligible Only archive available on line Live streaming service available Hard to find online Source: Mediamark Research & Intelligence 2008 Note1: Population represents adults who attend these sporting events one or more times a month; (some estimated based on relative no. of website)

10. KEY DECISIONS TO BE MADE FOR ‘TURBOCHARGE’ EXECUTION Key Considerations Key Decision Points • ROI & time to market judgment for cost for exclusivity/production acceleration • Priority & time to market judgment to allocate further engineering resources • ROI & priority judgment for budget& resource allocation • Proper talent assignment and strategic direction decision • Further or other exclusive sports needed? • Accelerate our ‘Cable Lite’ offering timing from FY11 2H to earlier? • More exclusive offering from SPE/SME library? Or accelerate developing interactive original programs? • Accelerate other Services/Apps strategy? • What should we turbo-charge/ prioritize to make strong NW service? • - Headline? • Coverage? • Exclusivity vs. aggregation? • Others? • How should we turbo charge key devices support NW service? • Upgrade Server? • Upgrade Client? • Engineering resource allocation needed for client/PF changes • Accelerate BIVL platform/device (core TV/BD) capability for turbo-charged video service? • SW development needed to accommodate NW service (currently not on the SW roadmap) • Accelerate Android TV/BD support for NW service instead? • Engineering resources needed for client/PF changes • Marketing budget and execution capacity (esp. SEL/direct channel) to be secured • Should we make bold NW/device marketing by strong device subsidies (vs. Apple TV)? • - Net box at $50? • - IPTV small screen with lower price? • Should we make an integrated marketing among game/music/video service for pilot? • Turbocharge marketing integration • What are we marketing? NW or devices? Or Both? • How to make consistent message? • Clarify common key concepts/headlines? • Co-market game/video bundle for PS3? • Co-market music/video bundle for Vaio?

11. NEXT STEPS • Contents/Services ROI Verification • Customer Survey • 3rd Party Discussion • Technical Readiness Assessment and Required Resources to Execute • Client Feasibility (device processing power, decoding, UI) • BIVL PF/Device Upgrade • Android TV • Smartphones • Other Iconic NPSG Devices • Server/PF scalability (PSN/Qriocity) • Codec / DRM • Streaming/ delivery • Billing / reporting • Feasible Pilot Marketing Plan Development • Business Case/Economics Model Development • Governance Model, Organization and Staffing

12. APPENDIX

13. Not in 24 hrs OUR PROPOSAL FOR TURBO CHARGING NW SERVICE Only place to find all you need for ‘SPORTS’ ‘Base of cable of better price points’ Stronger value proposition Exclusive content acquisition only for ‘THE SWEET SPOTS’ ‘Sony originals’ to create sustainable competitive advantage More sustainability Launch tangible pilot service in US in FY10 2H Ensure early success

14. ‘ONE STOP SHOP FOR ALL SPORTS ‘AND ‘BEST OF CABLE WITH BETTER PRICE’ COULD BE COMPELLING VALUE PROPOSITION FOR CUSTOMERS Sports and news are the most frequently checked video contents on internet

15. Illustrative - For Discussion Purposes Only • ALL YOU NEED FOR SPORTS • COVERAGE; POPULAR SPORTS CONTENTS/ ONLINE AVAILABILITY Some deal done/Planned to negotiate by SNEI Not in scope yet # of fans*1 (attend more than one time a month) Baseball (8.6M) College Football (6.4M) College Basketball (4.2M) More than 3mil Soccer (3.3M) Pro Football (4.6M) Pro Basketball (3.9M) Ice Hockey (2.5M) Golf (2.4M) NASCAR (2.1M) Bowling (1.8M) Pro Wrestling (1.3M) 1 mil- 3mil Tennis (1.4M) Horse Racing (1.3M) Boxing (1.1M) Running Track &Field Motorcycle Racing (1.0M) Martial Arts Swimming Rugby Action Sports Hunting Equestrian Events (0.9M) Rodeo (0.9M) Fishing Tournament (0.9M) Figure Skating (0.6M) Less than 1 mil Cricket Lacrosse Pro Beach Volleyball (0.4M) Volley ball Can be a first mover to lock in, but require technical resource investment to make them online PF eligible Only archive available on line Live streaming service available Hard to find online Source: Mediamark Research & Intelligence 2008 Note1: Population represents adults who attend these sporting events one or more times a month; (some estimated based on relative no. of website)

16. 1. ALL YOU NEED FOR SPORTSEXCLUSIVITY: BSKYB SECURED PREMIER LEAGUE SOCCER TO DRIVE SUBSCRIPTIONS News Corp’s BSkyB Uses Exclusive Content to Drive Subscriptions and Device Purchases More than 60% of Premier League fans subscribing to Sky Sports say Premier League football was the primary reason to subscribe* £191 Million Value of first Premier League TV deal in 1992–1997 (60 matches per season) £1.6 Billion Value of 2010–2013 Premier League TV deal in 1992 (115 matches per season) Subscribers (Millions) 10 9.5 Million Exclusive Premier League Deal 5 0 1988 1992 1996 2000 2004 2008 Sky, which has drawn over 9 million customers (more than 1 in 3 homes in U.K. & Ireland), relies heavily on major sports coverage like football and movies for winning and keeping subscribers Sources: Sky Corporation website, BBC News, EU Research on BskyB

17. 1. ALL YOU NEED FOR SPORTS EXCLUSIVITY- UFC LIVE MATCHES COULD DRIVE SIZABLE TRAFFIC Top-ten pay-per view events of 2009 Boxing • 2.4 million pay-per-view buys May 2007 bout between Oscar De La Hoya vs. Floyd Mayweather ($54.95 per view in the U.S.) • 1.05 million pay-per view buys Floyd Mayweather’s fight with Juan Manuel Marquez ($49.95 per view in the U.S.) • 1.25 million pay-per-view buys Manny Pacquiao’s fight with Miguel Cotto which didn't feature an American fighter and sold for $54.95 in the U.S. ($5 more than Mayweather-Marquez) Buys • UFC 100: Brock Lesnar vs. Frank Mir 1.6 million • Boxing: Manny Pacquiao vs. Miguel Cotto, 1.3 million • Boxing: Mayweather vs. Marquez, 1.1 million • UFC 94: Georges St. Pierre vs. B.J. Penn 920,000 • UFC 101: Penn vs. Silva vs. Griffin, 850,000 • Boxing: Manny Pacquiao vs. Ricky Hatton 825,000 • UFC 107: B.J. Penn vs. Diego Sanchez 650,000 • UFC 97: Silva vs. Liddell vs. Mauricio Rua 650,000 • UFC 98: Machida vs. Hughes vs. Matt Serra 635,000 • Wrestling: WWE WrestleMania 25 582,000 Sources: Yahoo! Sports

18. 2. ‘Build your own package ‘ RESEARCHE INDICATES THAT US CUSTOMERS ARE MOVING TO ONLINE VIDEO BY CANCELLING CABLE Customer segment • Customers are looking for • Better price with only channels you need • Better user experience (i.e. always accessible to the contents you want, both Live/Linear +VOD)

19. SCOPE OF PILOT SERVICE IN FY10 2H Areas to seek for Strong Exclusiveness Free access service VOD (Baseline) Free contents- Traliers etc Featuring HOT sports – Special subscription for ‘Exclusive matches’ + ‘Sony original programs’ 1.‘ ALL YOU NEED FOR SPORTS’ ・・・・ Soccer (FIFA/UEFA) Mixed Martial Arts (UFC/Tapout ) Motor Sports ‘Must Haves’- Subscription to premium 3rd party service (a la carte) ・・・・ MLB NBA NHL ESPN3 NFL Tennis ‘Hard to find anywhere else’ – Exclusive VOD (or subscription) BMX/Motocross Skate Track & Field Surf Cricket 2.‘Best of your cable with your selection Cable Lite- Top rated cable 40-50 channels (FOX/ NBC/Disney) Hulu plus ・・・・ Starz Showtime HBO EPIX Young gamer package Family package Male package Female package Family package Sony Originals/Exclusive entertainment 3. ‘Sony original entertainment package- JUST for you’ Original Game Shows – Pressure points, Current TV Original Drama – Craclke drama Original Anime – Iron Man, Wolverine Exclusive Sony Music Concert (3D concerts, etc) Education for adults Education for Kids Health & Welleness Game related program ‘Movies for you’ - Segment target picks from SPE archives + Acquired Indy films For young gamers For Family For Male For Female ‘Dramas for you’ – Segment target picks from SPE dramas For young gamers For Family For Male For Female

20. HOW WE MAKE DECISIONS ; CUSTOMER SURVEY & FURTHER DISCUSSIONS WITH 3rd PARTY WILL PROVIDE SOLID FACTS FOR CONTENT/SERVICE JUDGMENT What should be our priority headline for the service? Expected questions to be answered by customer survey result • Which headline move customers most? Sports? Cable Lite? Different by segment? • Do ‘Sports’ & ‘Cable Lite’ services drive enough customers to subscribe our original entertainment pack? What should we accelerate ? Sports right coverage? Cable Lite launch? • What specific contents/service generate most traffic and revenues? • Is our current sport service enough to make customers’ traction? If not, what should we cover further to make ourselves ‘special’ for sports? • Is our ‘Cable Lite’ offering plan compelling? Should we accelerate the launch timing if that is the case? What is the must haves/priority among potential ‘exclusive’ contents to invest? • What is the most appealing, ROI optimal exclusive contents among our potential turbo-plan list ? (Trafficgenerators? Revenue enhancer?) • Mix martial arts (UFC/Tapout)? • Original game shows? Health&Wellnes? • Exclusive Sony library contents like Sienfield? How can we make feasible & sustainable service model? • What is the optimal bundle/pricing for segment based package to maximize our wallet share? • How can we minimize upfront investment/minimum gurantee? What can we do as a negotiation tactics?

21. 1. ALL YOU NEED FOR SPORTS ‘SONY ORIGINAL PROGRAM ON HOT SPORTS’ SPE STARTED DISCUSSION ON MIX MARTIAL ARTS ORIGINAL PRODUCTION VIA JOINT VENURE WITH ‘TAPOUT’ What is TAP OUT? • Reality television series that focuses on the world of mixed martial arts. • The series follows employees of the TapouT clothing and gear line, as they travel around the country in search of promising MMA fighters to develop and possibly sponsor. • Each episode follows the training and development of one fighter, culminating in a fight at a professional MMA event.

22. TARGET DEVICE FOR PILOT (FY10 2H) WILL BE RESTRICTED TO PS3, VAIO UNLESS WE URGENTLY ADD ENGINEERINC CAPACITY FOR OTHER DEVICES TO ACCOMMODATE VIDEO SUBSCRIPTION/STREAMING SERVICE

23. PRELIMINARY SERVICE OFFERING IDEA Areas to seek for Strong Exclusiveness Free access service VOD (Baseline) Free contents- Traliers etc Featuring HOT sports – Special subscription for ‘Exclusive matches’ + ‘Sony original programs’ 1.‘ABSOLUTE PLACE TO GO FOR SPORTS’ ・・・・ Soccer (FIFA/UEFA) Mixed Martial Arts (UFC/Tapout etc) Motor Sports ‘Must Haves’- Subscription to premium 3rd party service (a la carte) ・・・・ MLB Tennis NHL NFL ESPN3 ‘Hard to find anywhere else’ – Exclusive VOD (or subscription) BMX/Motocross Skate Track & Field Surf Cricket 2.‘BUILD YOUR OWN CABLE PACKAGE’ Cable Lite- Top rated cable 40-50 channels (FOX/ NBC/Disney) Hulu plus Netflix ・・・・ Starz Showtime HBO EPIX Young gamer package Family package Male package Female package Family package Sony Originals/Exclusive entertainment 3. ‘Sony original entertainment package- JUST for you’ Original Game Shows – Pressure points, Current TV Original Drama – Craclke drama, Spin off dramas of SPE movies etc Original Anime – Iron Man, etc. Exclusive Sony Music Concert (3D concerts, etc) Education for adults Education for Kids Health & Welleness Game related program ‘Movies for you’ - Segment target picks from SPE archives + Acquired Indy films For young gamers For Family For Male For Female ‘Dramas for you’ – Segment target picks from SPE dramas For young gamers For Family For Male For Female

24. 1. ALL YOU NEED FOR SPORTS EXCLUSIVITY: YOUTUBE’S IPL CRICKET STREAMS NEAR 50 MILLION VIEWS Exclusive Content Examples Key Impact • YouTube’s IPL channel has over 49.5 million views, exceeding the company’s internal expectations of 10 million views over the course of the tournament. • Viewers from 200 countries have watched the streams. • India has the most views overall; coming in second is the United States — YouTube had expected that spot to go to the UK or Australia, where cricket gets far more attention Google’s two-year deal with the Indian Premier League gives the Google-owned YouTube the exclusive rights to stream IPL matches online* *Note: When the IPL deal was first signed it granted YouTube live streaming rights for every country except for the United States, where matches have been posted fifteen minutes after they ended. However, YouTube is streaming both the semi-finals and finals live Sources: UK Guardinan, Techcrunch

25. Sony Corporation Internal Use Only Significant investments and a longer term outlook are required to build a successful distribution business Estimated Investment1 $250-$350M $200-$300M $500M+ Service Break Even Year Year 3 N/A Year 5 1st 3 Year Device CAGR2 184% TBD3 130% Estimated 2007 Revenue $250M (1st Year) March 2008 Launch $2B (5th Year) • “Microsoft’s $1B Bet on Xbox Network”, NyTimes; Providence investment of $100M, Yahoo! News • Goldman Sachs April 2007 Report (MSFT); Credit Suisse (Apple) May 2006 • Actively seeking device partners for direct-to-TV distribution