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Grouper Acquisition Opportunity June 2006 CONFIDENTIAL Grouper Acquisition Opportunity June 2006 CONFIDENTIAL

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

Rough Storyline (Summary for M. Paull, Will Not Include) • • • Digital distribution 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 3

Executive Summary • Sony Pictures must develop a solution for the digital distribution of 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 4

Digital Distribution Trends and Opportunities CONFIDENTIAL Digital Distribution Trends and Opportunities CONFIDENTIAL

Broadband Access and Content Availability Are Driving Growth in Digital Video Broadband-enabled U. S. 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 30% 38% 46% 52% 57% 61% Source: SG Cowen Research dated June 7, 2005, Morgan Stanley Broadband Update, April 2005 6

Downloadable Video Should Drive Growth in Filmed Entertainment • Models with unique consumer benefits 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 $47 Bn $37 Bn Evolution of Content Distribution & Revenue Growth of Filmed Entertainment Industry in the US* 100%=$18 Bn Box Office 52% TV 41% $2 Bn Video /DVD 41% Box Office 27% Video /DVD 7% TV 32% $9 Bn 1995 100%=$4 Bn 1980 2004 2008 e Pay TV/ Subscription VHS/ Rental DVD/ Sell thru IP Delivery 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 4 th ed. , Pricewaterhouse. Coopers Global Entertainment & Media Outlook 2004 -2008. 7

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

Digital Video Delivery Represents an Opportunity to Reach a Younger Demographic Percent of Each 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 9

SPE Can Best Reach Younger Demographics with Models that Include Two-way Interactivity and Social 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 (18 -28) (29 -40) Read a Blog (41 -50) (51 -59) (60 -69) Source: Pew Internet & American Life Project, December 2005 10

Digital Distribution Emerging Threats CONFIDENTIAL Digital Distribution Emerging Threats CONFIDENTIAL

Emerging Digital Models Represent Threats to SPE on Multiple Fronts Challenges Facing SPE Changing 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 • Digital distribution of all packaged media is lowering barriers to entry for content alternatives and changing inter-channel competition Shift to Ad-supported models • Ad dollars are shifting toward online, following growth in consumer interest • SPE has limited exposure to adsupported models, primarily generating revenues on a transactional basis 12

Consumers are Shifting Time Away from Traditional Media Toward Online and Interactive Media • 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 Ti. Vo) 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 13

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

Studio Content May not Be as Dominant in Emerging Channels Product Mix of Units Studio Content May not Be as Dominant in Emerging Channels Product Mix of Units Methodology Books Niche (All Others) Major (RH, TW, Simon, HC, Pearson) 4 Surveyed 6 B&N and Borders stores 4 Calculated number of SKU’s for a sample of fiction titles 4 Reviewed 8 to 12 stacks 4 Counted the number of separate SKU’s 4 Determined which titles were major (including sub-labels) 4 Amazon figures are units sold in 2005 (source Wired 2. 0 and Bain consumer study) 4 Publishing analysts from First Research conclude that there is a strong correlation between SKU’s and units sold Music 4 Surveyed 5 Borders and Best Buy stores 4 Calculated number of SKU’s for a sample of new release and catalog Niche (All Others) Major (Uni, War, Sony/BMG, EMI) titles 4 Reviewed 6 to 10 stacks 4 Counted the number of separate SKU’s 4 Determined which titles were major (including sub-labels) 4 Digital figures are units sold in 2005 (source Wired 2. 0 and Bain consumer study) 4 Units sold figures for music via traditional stores is being researched through Nielsen Musicscan data Home Video Niche (All Others) Major (7 Majors) 4 Surveyed 7 Wal. Mart, Best Buy and Target stores 4 Calculated number of SKU’s for a sample of new release/catalog titles 4 Reviewed 12 to 15 racks 4 Counted the number of separate SKU’s 4 Backed-up SKU findings with units sold data from Nielsen Video. Scan 4 Digital figures are units sold in 2005 via Amazon & other online retailers Sources: Nielsen Videoscan data, Wired 2. 0, Industry Interviews, select store visits across Los Angeles area 15

Ad Market is Changing Significantly as Ad Dollars Following Consumers and Two-way Infrastructure Becomes Ad Market is Changing Significantly as Ad Dollars Following Consumers and Two-way Infrastructure Becomes Available Media spending does not yet reflect consumption 1999 Advertising dollars are shifting online to address the current gap 2003 -’ 05 US Advertising Contribution to Growth CAGR Television: TV Stations 2% Cable Networks 15. 6% 19% Cable MSOs 8. 1% 3% CBS Net, FOX Net 5. 8% 9% Total Television 7. 0% 34% Magazines 8. 9% 5% Newspapers 2005 1. 5% 3. 4% 11% Radio 0. 2% 0% Outdoor 7. 1% 5% Online 50. 4% 45% Total 8. 4% 100% Traditional Media 5. 1% 55% Online 50. 4% 45% Total 8. 4% 100% SUMMARY 16

SPE Currently Has Limited Ability to Capitalize on the General Growth in Ad Revenues, 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% 106. 0 87. 6 US $ (Billions) TV & Online Advertising Spend 114. 9 71. 7 57. 9 Online %: 60. 7 10% 12% 78. 3 63. 2 12% 95. 1 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 17

Competitor Response CONFIDENTIAL Competitor Response CONFIDENTIAL

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

Networks Are Investing Heavily in Online Distribution, Including Over $1 BN of Acquisitions by Networks Are Investing Heavily in Online Distribution, Including Over $1 BN 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 i. Film for $49 MM • Invested over $1 BN to acquire online properties (IGN, Scout, and Intermix / My. Space) • Now selling episodes of “ 24” on My. Space • Fox. com: primarily clips and previews • Launching “NBC 360 Digital” with classic comedy and new previews available online • Acquired i. Village for $592 MM • Promoting content on You. Tube • Launched AOL In 2 TV, ad-supported classic TV episodes • Acquired Lightningcast to improve video advertising technology • Licensed content through Bit. Torrent (P 2 P site) and Guba (social network) 20

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

Acquisition Rationale CONFIDENTIAL Acquisition Rationale CONFIDENTIAL

Summary Acquisition Rationale and Key Target Characteristics Acquisition Rationale • Expand SPE revenue streams 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 23

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

Grouper Acquisition Rationale • Grouper balances strong management and leading technology with reasonable scale 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 – 4 MM unique users visit the site directly each month – 7 MM total unique users visit site content (directly and via partner links) • Technology is ahead of larger user generated video sites (e. g. , You. Tube) – Provides multi-platform download support (i. Pod, PSP, Mobile Phone) – Portability enabled by proprietary P 2 P technology – Proprietary desktop software • Represents significant revenue and growth potential as a standalone business • Can be leveraged across SPE digital distribution initiatives 25

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

Grouper as a Platform for Growth Quang building 27 Grouper as a Platform for Growth Quang building 27

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

Next Steps To Come CONFIDENTIAL Next Steps To Come CONFIDENTIAL

Appendix CONFIDENTIAL Appendix CONFIDENTIAL

Addressable Boxes and 2 -way Infrastructure Could Change the Ad Market Significantly How will 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? 31

Examples of Online Video Destinations by Category Promotional Larger Audience Smaller Audience • • Examples of Online Video Destinations by Category Promotional Larger Audience Smaller Audience • • CBS. com Fox. com NBC. com Sonypictures. com Channel • • • ABC. com Atomfilms CBS. com / innertube ESPN. com i. Film In 2 TV MLB. com MTV Overdrive Yahoo • Blinkx • Innertube • Multi-media Networks • Singingfish Social Network Store • Google • i. Tunes • • Facebook Friendster Google Grouper Metacafe My. Space You. Tube Yahoo • Cinema. Now • Connect • Movie. Link • • • Dave. TV Fleapit Gather Tag World Varsity World 32

Categories for Online Video Technology Providers Content Management Interactivity and Social Networking • Content Categories for Online Video Technology Providers Content Management Interactivity and Social Networking • Content preparation – Ingestion – Metadata / tagging – Ad insertion • Tools and infrastructure for: – Chat – Instant Messaging – Blogs – Ratings – Recommendations – Clickable Video • Content delivery – From content owners to aggregators – Onto P 2 P networks Consumer Tools • Video creation • Video editing • Media mixing software (integrate video, photo, audio) • Video publishing (cross-platform) • Personal channel creation • DVD burning • Content classification and discovery 33

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

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

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

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

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

Social Network (User-generated Video Sites) Overview Attributes Low • • • Consists of short Social Network (User-generated Video Sites) Overview Attributes Low • • • 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 1 2 3 4 5 6 Connected Medium Portable High Anytime, Anywhere Content Accessibility Promotional User-Generated Produced Content Value Company Owned Aggregated Single Genre Range of Content Providers Multi Genre Content Breadth On-Demand Degree of Interactivity Business Model (Cost to Consumer) Free Ancillary (e. g. , blogs and ratings) Ad-Based Real-Time (e. g. , chat, story navigation) Pay 39

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

Unique Users for Online Video Sites Video sites with large audiences are affiliated with 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 Source: Nielsen Net. Ratings and com. Score Media Metrix, May 2006 Extend Network Brands . 41

Unique Users for Online Video Sites While some independent video sites have succeeded, most 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 Net. Ratings and com. Score Media Metrix, May 2006 . 42