Digital Services and Distribution Acquisition Strategy

1. Digital Services and Distribution Acquisition Strategy DRAFT CONFIDENTIAL

2. Executive Summary • Grouper provides a strong foundation for SPE’s digital services • Demonstrated traction with users through differentiated content and functionality • Positioned to benefit from SPE content and marketing muscle • Prepared to monetize audience through SPT ad sales team • Market consolidation requires SPE to accelerate execution of its digital services strategy • Consolidation is raising the threshold for minimum audience size • Leading brands are being established for large, high-value audience segments • Online video syndicators are building networks of loyal advertisers and distribution partners • Targeted acquisitions are needed to expand on SPE’s current digital assets and respond to continued market evolution • Break and Heavy are leading brands with large audiences in attractive demographics • Roo is a leading online syndicator with large audience and strong advertising relationships

3. SPE’s Current Digital Service Assets Provide a Platform for Growth • Grouper acquisition served as the cornerstone for SPE digital service technologies • Differentiated technology and functionality for users to watch, share, and create online video • Ability to reach a targeted audience with a small base of content • Technology lends itself to viral distribution • SPE’s assets are being used to strengthen Grouper’s offering and expand audience • Grouper is leveraging SPT ad sales team and migrating offline partners online • Studio content is being repurposed for online use (e.g., ScreenBites) • Additional, critical components are slated to be developed over the next year • Licensing third party content • Developing original content through the SPT Internet Productions Group • Leveraging SPE promotional capabilities to increase awareness • Licensing ad insertion technologies

4. SPE’s Digital Services Strategy Requires Further Integration of Grouper and Ongoing Technical Development Grouper SPE 1st Year Development Content • Small base of UGV • Film and Television • Original digital content • Licensed content • Prosumer content Audience (On-Site) • Demonstrated traction with targeted audience • N/A • Leverage SPE marketing and promotions Audience (Syndicated) • Initial traction with key partners (Friendster) • N/A • Build distribution network • Partner with content verticals Advertising Relationships • No major advertisers • SPT ad sales team and offline advertisers • Harness offline partners • Expand to new advertisers Functionality • Strong and differentiated (P2P, one-click publish) • N/A • Enhance feature set • Improve embedded player Ad Serving Technology • N/A • N/A • License from third party (e.g., DoubleClick)

5. Market Consolidation Limits the Window for Success and Requires Acceleration through Acquisitions • Market consolidation has accelerated, dictating a new set of minimum success requirements • Acquisitions increase the minimum base of content and users required to attract audience • Leaders in high-value demographics are emerging and establishing recognized brands • Third-party distribution / syndication is proving viable and critical to overall ad inventory • Advertisers are transitioning online and choosing preferred partners • Focused acquisitions would allow SPE to accelerate execution of our digital services strategy • Services whose content reaches a large, well-defined, high value audience • Services that lend themselves to broad distribution / syndication • Companies with a large and loyal base of advertisers • Acquisitions must be complementary to SPE/Grouper’s current offering and go-forward roadmap • Offer content that fits with “G Studios” original content vision and third party content partners • Provide an additional venue to showcase Grouper “prosumer” content • Leverage Grouper for advanced functionality, including P2P distribution

6. Market Leaders Consolidating to Expand Brand and Capture Audience Deeper Offerings Inception Consolidation Tipping Point (2004 – 2005) (Early 2006) (Late ’06 / Early ‘07) (Late ’07 / Early ‘08) • Leaders invest to expand audience and address priority content segments Market Dynamic • Multiple market entrants grow at similar rates • Leaders break-out from the pack • Leaders add niche content and features for heavy users • Large audience • Large content base • Relationships with advertisers • Large audience • Brand known for an area of expertise Minimum Requirements to Compete • Content and features on-par with competitors • Single compelling characteristic • Content that appeals to high-value customer segments • Site syndication Areas of Differentiation • Limited differentiation • Unique piece of content • Ease-of-use • Supplement broad offering with depth in specific verticals • Google/YouTube • Yahoo/JumpCut/Bix • Viacom/Atom • NewsCorp/MySpace Examples • Dozens of pure-play UGV sites struggle to reach a million unique users • YouTube explodes with “Lazy Sundays” • MySpace users flock to improved community features • Growing audience for niche offerings • Askaninja • Loneleygirl

7. SPE Acquisition Strategy Must Address Increased Competition for Content, Audience, and Advertising Partnerships Market Inception Market Consolidation Content • Wide range of sites, little content focus • Media companies buying UGV sites (Viacom/Atom) • New brands capture high value demographics (Break, Heavy) Audience (On-Site) • Multiple sites growing in lock-step, no critical mass • Acquisitions raise the bar for minimum audience size (Google/YouTube) Acquisition Opportunities Audience (Syndicated) • Growth based on direct visitors to sites • Syndicators become top 10 servers of video (Roo) Advertising Relationships • Advertising lags growth in online usage • Google/ YouTube pairs #1 UGV site with #1 ad network Functionality • Limited functionality • Functionality is increasing but is not the primary draw Develop/License Ad Serving Technology • Sites generally lack ad infrastructure • Credible third party technologies emerging License

8. Acquisition Priorities Content Large, High-Value Audience Audience Syndicated Content Niche Audience On-site • Content with established audience • Advertising partnerships in-place • Companies that syndicate video to partners • Bundle video with advertising • Targeted content or functionality • Sites with audience but no differentiated content Description Valuations Moderate Attractive Moderate Expensive Fast Gain traction quickly Fast Gain traction quickly Slow Requires multiple acquisitions Slow Requires content deals to supplement Speed 1st 2nd Low Priority

9. Competitive Landscape and Acquisition Candidates Content with Large High-Value Audience Break.com (3.3) eBaum’s World (3.0) Bolt.com (2.9) Heavy.com (2.7) Tier 1 Candidates May be Prohibitive Audience (Syndicated) Roo Media (5.8) Brightcove (N/A) Veoh (N/A) AOL / FeedRoom (N/A) Content (Niche) College Humor (0.9) JibJab (0.6) Broadband Sports (0.1) RocketBoom(0.04) Revision3 (0.02) Channel 101 (0.02) Tier 2 Candidates Audience (On-site) DailyMotion (0.8) vidiLife (0.8) Functionality + Audience PhotoBucket (12.0) Six Apart (10.4) Image Shack (9.3) Xanga (5.5) Reunion (4.7) MetaCafe (3.1) Digg (2.1) Putfile (1.4) Friendster (1.0) Functionality Meetup (0.7) Piczo (0.5) Text America (0.5) Imeem (0.2) VideoEgg (0.2) eyeSpot (0.2) MotionBox (0.2) Famster (N/A) Content + Functionality Pure Video (0.9) Castpost (0.2) Now Public (0.09) Bix (0.08) Blip.tv (0.06) Dave.tv (N/A)

10. Leading Acquisition Candidates Viable acquisition candidates combine content, attractive audience, and strong advertising relationships at valuations below $150MM Company Description Users(1) Valuation Range Priority Tier 1 May be Prohibitive Potential Cross-Sony Opportunity • Monthly Unique Users per Nielsen Net Ratings except for Roo • Roo audience estimate is of unique streamers per ComScore

11. Next Steps • DSD lead discussions with Tier 1 acquisition candidates • Break.com: Currently in discussions as part of formal sale process • Heavy: Scheduling first meeting • Roo: Scheduling first meeting • Corporate Development explore opportunities to collaborate with other Sony businesses on larger scale deals • PhotoBucket • BrightCove • Provide regular status updates to Michael Lynton

12. APPENDIX Profiles for Tier 1 Candidates CONFIDENTIAL

13. Break.com Strategic Profile User Metrics • Established in 1998 as Big-Boys.com, a video-sharing site • Purchased in May 2004 by Keith Richman, co-founder of Billpoint, and changed name to Break.com • 100% owned by Richman and a few business partners – has never taken any venture financing • Generate revenue through custom advertising deals, PPC content plugs, banners and text links • Based in Beverly Hills, CA with 33 employees Unique Users (MM) Note: estimated to generate ~100MM streams/ month Web page views (MM) 141.2 189.2 135.4 Content Offering Time/ person(min.) 16.1 21.5 15.3 • Online entertainment network and community powered by traditional user-generated content • Content base skews heavily toward 15-35 year old male-oriented humor, sports and racy categories • Majority of the content is original and created by users specifically for Break.com (Break owns much of its content. Takes an exclusive license to uploaded content it doesn’t own) • Pays $250/ video for videos it wants to feature, incentivizing users to create high-quality videos (est. to spend ~$250K/ month buying user videos) Internal Break.com sources estimate uniques of approx 14.7MM. Partnerships • Leverages AdBrite to sell its banner and text ads • Established partnerhsip with Amp’d Mobile in Nov. 2005 to distribute videos through mobile, charging $2.99/ month for unlimited access Source: Nielsen//NetRating used for page view, time data, AdBrite; BambiBlogs.com; Break.com; Multichannel News; Amp’d Mobile; PureVideo; ComScore Video Matrix

14. Break.com Content • User-generated • Share it with friends (viae-mail) • Embed & blog it Advertising: • Banner ads – no pre-rolls or text Interactivity: • Promote to home page • Rate It • Recommend • Comment

15. ROO Group, Inc. (NASDAQ: RGRP) Technology and Service Overview • Core Services provided include: • ROO Video Solutions - Customized video solutions for specific customers or industry segments; platform has been designed to be flexible in accommodating various opportunities for activating video for broadcast over the Internet and accommodating emerging technologies such as wireless devices (i.e., mobile phones and PDAs) and set top boxes • ROO Syndication of Licensed Video Content - Provide a turnkey solution for customers located throughout the world to activate licensed topical video content on their web sites; • Current customers for this service include Verizon in the United States, Bulldog Broadband in the United Kingdom and News Interactive a subsidiary of News Corp • ROO’s Online Advertising Network - Through syndication clients, ROO has developed a network of web sites across which the company can sell advertising inventory • The advertising includes traditional banner ads and television-style 15 second and 30 second commercials, which can be programmed to play before and after topical video clips that are most likely to be viewed by the advertisers' chosen demographic • Syndication clients can receive a percentage of the advertising revenue generated on their websites • Recent advertisers utilizing in-stream advertising have included Microsoft, Apple, Honda, Hyundai, Target, Proctor & Gamble and Pfizer

16. Content Partners Advertisers Sites Ingestion Engine Video Player Program Channels Ad Network and Insertion ROO Group Business Overview Entertainment Owned and Managed Partners Licensing fees, payment-per-stream and ad revenue share Lifestyle and Family News

17. ROO Group Video Stream Comparison

18. Heavy.com Strategic Profile User Metrics • Established in 1999 as a P2P digital content sharing site by Simon Asaad & David Carson • Polaris venture capital holds a 25% stake in Heavy; Polaris lead a $10MM round in January 2006 • Expected to generate ~$20MM adv. revenues in 2006, a 300% increase over 2005 (recently valued at ~$200MM – source: paidContent.org) • Ad sales and marketing conducted internally • Based in New York, NY with 20 employees Unique Users (MM) Note: estimated to generate 80-90MM streams/ month Web page views (MM) 9.3 10.4 6.6 Time/ person(min.) 1.5 1.2 1.0 Content Offering • Broadband entertainment network focused on providing high-quality content • Content base skews toward 18-34 year old male-oriented humor and racy categories • Takes full and exclusive ownership of a range of content (mix of video, animation, and games) created by Heavy and/or its partners, e.g., NBC delivered through distinct channels • Generates revenue through banner ads, pre-rolls, and branded production, e.g., Burger King videos Partnerships • Recently announced partnership with TiVo to provide content for TiVo’s VoD service • Established partnership with Verizon Wireless in April 2006 and created a channel on V-Cast subscription mobile offering • Parnter with Sony PSP, video iPod, and Virgin Mobile to distribute non-wireless mobile content Source: Nielsen//NetRating used for page view, time data, Heavy.com; Multichannel News; PureVideo; ComScore Video Matrix; paidContent.org; FT.com; VCMike’s Blog

19. Heavy.com Advertising: • Banner ads • Pre-rolls Interactivity: • Rate It • Comment Content sharing: • Heavy/ partner produced channels • Share it with friends (via e-mail) • Blog it