Sony Pictures Technologies – FY13 Three Year Plan Review

Agenda Page

I. Group Overview

. Group Mission & Prime Objectives ……..………………………………………………………………… . SP Tech Showcases: Distribution Backbone, WPF Supply Chain, DECE, Colorworks .……………….… . SP Tech Genesis and Functional Organizational Chart ……………….…………………………………… . Departmental Overviews – Core Functions, Financials & Key Facts/Achievements: . Colorworks ………………………………………………………………………………………… . Digital Media Group ………………………………………………………………………………. . Technology Development …………………………………………………………………………. . WPF – Asset Management ………………………………………………………………………… . WPF – Global Logistics …………………………………………………………………………… . WPF – Client Operations ………………………………………………………………………….. . Digital Policy Group ………………………………………………………………………………. . Corporate Alliances ……………………………………………………………………………….. . 3D Tech Center …………………………………………………………………………………….

II. Three Year Plan

. SP Tech EBIT Improvement (Revenue Enhancement & Cost Reduction) Actions .………………………. . Proposed New Functional Org Chart ……………………………………………………………………… . Three Year Plan Headcount Roll ………………………………………………………………………….. . Other Strategic Opportunities & Considerations …..……………………………………………………….

V. Appendix

. FY13 Budget Data ………………………………………………………………………………………….. . SP Technologies Organization Charts ……………………………………………………………………… . DMG Usage Chart …………………………………………………………………………………………. . Territory Account Growth …………………………………………………………………………………..

SPE Confidential 1 2

SP Tech Group Overview Sony Pictures Technologies – FY13 Three Year Plan Review

Mission & Prime Objectives

Mission Statement:

Serve as the company’s operating technology center-of-excellence to identify, advise, develop and implement technologies that:

. Enable the most creative, efficient and cost effective means of producing and distributing film and television product . Ensure the preservation of our most valuable created assets for long-term exploitation . Leverage synergies with Sony Electronics to enhance Sony Pictures capabilities and to improve competitiveness of both companies . Protect our products and markets from the threat of piracy

We’ve realized these core objectives for the benefit of SPE in many ways – some of the higher impact initiatives that showcase SP Technologies contributions include the Distribution Backbone, WFP manufacturing savings, DECE and Colorworks Production Support ……

SPE Confidential 3 Sony Pictures Technologies – FY13 Three Year Plan Review

SP Tech Showcase: Distribution Backbone

The Challenge: . Digital technologies have transformed the creation, distribution and consumption of entertainment media. Yet, because media companies lack a seamless digital infrastructure, physical media and manual workflows still proliferate throughout the supply chain . The increased volume of file-based media deliveries necessitates the need for an automated workflow ‒ SPE business will deliver approximately 80K file-based media assets to our customers this year. That number is expected to grow to 180K by FY15 (60K related to Ultraviolet) ‒ To deliver these 180K files would cost approximately $35M existing 3rd-party offerings, even taking into consideration the downward pressure on rates . The costs of supplying the sustained increased volume through traditional methods would have been cost prohibitive and the existing vendors have proven unreliable in providing a scalable, low cost solution for servicing our needs

The Solution: . In partnership with Sony DADC, the Distribution Backbone was developed to meet the industry challenges and ensure a cost-contained model for distribution ‒ After FY16, the cost of using the DBB will drop by $2.6M as the build costs will be completely amortized

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SP Tech Showcase: Distribution Backbone

The Results: . 80% of WPF deliveries are currently file-based . SPE is on track to utilize the DBB for 35% of deliveries this year and that will grow to near 100% within 2 years . The DBB’s ability to meet the shrinking timelines and increased volumes has helped SPT and SPHE fulfill the ever-increasing demand for SPE product around the world . Using the DBB, the cost for delivering 180K files in FY15 will be approximately $11M, saving the company $43M in costs over the next two years!

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SP Tech Showcase: WPF Supply Chain Savings

The Challenge:

. WPF supports a continually evolving set of requirements by the lines of business and has been consolidating SPE-wide spend with vendors for post-production services . The increases in volume and types of requests serviced by WPF requires a consistent evaluation of costs and cost-containment policies . Technological advances in the industry have created opportunities for a savvy buyers to dictate workflows and drive cost savings . By managing a consolidated supply chain and workflows, WPF is uniquely qualified to apply industry and technological expertise to identify potential time and cost saving opportunities

The Solution: . WPF partners with SPE Procurement to develop aggressive global RFP strategies to leverage consolidated volume and spend to achieve the best possible service, throughput and rates . Since FY10, WPF and Procurement have undertaken over 20 RFPs . RFPs are regularly renegotiated on a 1, 2 or 3 year cycle. On average, each RFP takes 2 to 5 months and are conducted on a global basis

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SP Tech Showcase: WPF Supply Chain Savings

The Results: . Of the 20 RFPS, 16 have resulted in annual savings of at least $1M . Based on actual volumes, the cumulative savings to the title owner since FY10 has been $57M

Manufacturing Spend RFP Savings (in $ millions) $150.0M 19% $125.0M 17% $17.0 $57.0 $100.0M 15% $75.0M 13% $16.0 $50.0M 11% $25.0M 9% $15.0 $0.0M 7% FY10 FY11 FY12 FY13 $10.0

Actual Spend Total w/o RFP Savings FY10 FY11 FY12 FY13 TOTAL Percent Savings Annual Savings Cumulative Savings

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SP Tech Showcase: Digital Entertainment Content Ecosystem

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SP Tech Showcase: Colorworks – Production Support

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SP Technologies Genesis

. Sony Pictures Technologies was formed in 2009 and was primarily created from existing operations / assets around SPE . As a consolidated entity, SPTech is able to provide improved vision, strategy and service to all areas of SPE while optimizing resources and reducing costs Department Former Alignment Original Dept. Head Current Dept. Head New Media &Technical Strategy Legal Mitch Singer Mitch Singer Corporate Alliances Corporate Operations Toshino Yuhaku Toshino Yuhaku Business Affairs SPT Don Loughery Don Loughery Advanced Technology Imageworks George Joblove Spencer Stephens Digital Cinema Motion Picture Group Al Barton Eliminated Blu-Print SPHE Don Eklund Eliminated Digital Media Group IT Ben Masek Ben Masek WPF Corporate Operations Jeff Hargleroad Eliminated

. From the original organization, SPTech Operations and WPF have eliminated 11 senior management positions and added only 4, resulting in a annual net savings of $3.3M (salary, fringe & bonus).

SPTech Operations Staffing Changes (VP and above) WPF Staffing Changes (VP and above) Eliminations Additions Eliminations Additions George Joblove Spencer Stephens Jeff Hargleroad Ryan Kido Don Eklund Scot Barbour Richard Berger Tim Wright (promo to VP) Peter Ward

Al Barton Rich DeRosa

Tony Beswick 10 SPE Confidential Nina Louie

Kerri Wilson

Ken Bartlett Sony Pictures Technologies – FY13 Three Year Plan Review

Chris Cookson, President SP Technologies Current Functional Org Executive Oversight • Production & Post Production Technology Vision and Strategy Chart • Administration of SP Technologies Division • Content Preservation and Distribution • Digital Strategy and Policy Development • Application Development Studio • Sony Product Technology Strategy Alignment • Technology Partnerships / Business Affairs Services ( Gary Martin)

Mitch Singer Charlie Falcetti Executive Vice President Executive Vice President Digital Policy Group Production Services (Studio Ops, Sound, Colorworks) • Digital Licensing Policy and Strategy • Digital Intermediate Services • Digital Entertainment Content Ecosystem (DECE) • Trailer Finishing • Worldwide Anti-Piracy / Content Protection • TV Finishing • Content Protection Technology Evaluation • Creative Editorial Services • Asset Restoration Services • VFX / Cosmetic Fixes • Theatrical & HE Deliverables Spencer Stevens Executive Vice President Technology Development Ben Masek Senior Vice President • Digital Media Technology Evaluation and Development • Format Standards Leadership Digital Media Group • Studio-wide Technology Initiatives • Digital Asset Management • Digital Workflow Automation • Video Streaming & Transcoding • Forensic Watermarking & Content Fingerprinting Toshino Yuhaku • Digital Media Research & Development Senior Vice President Corporate Alliances

• Inter-Company Coordination and Communications Terri Davies, • Sony Corp Strategy Alignment Executive Vice President • Project Management WPF Client Operations

• Manage Content Preparation and Fulfillment • Supply Chain Management Grover Crisp • Metadata Procurement, Creation & Maintenance Executive Vice President • Content Protection WPF Asset Management • Quality Control • Asset Restoration & Preservation • Supply Chain Management • New Release & Catalog Mastering • Asset Storage and Global Logistics SPE Confidential 11 Sony Pictures Technologies – FY13 Three Year Plan Review Colorworks

Core Functions Key Facts & Achievements

 Digital Intermediate/Color Grading Services  Digital Intermediates – Colorworks core business is the final color correction of high resolution data; supervised by Directors and Cinematographers, with 46 feature titles completed and  TV Finishing Services 6 underway. Some key titles include, The Amazing Spiderman & Total Recall, Hotel T, Cloudy with a Chance of Meatballs, SALT, and Smurfs 1 & 2. Best examples of our integrated Studio services  Creative Editorial Services are The Amazing Spiderman & Total Recall. Spiderman utilized simultaneous 2-D and 3-D color correction theaters while Sound mixing next door, maximizing available time for the filmmakers.  VFX/ Cosmetic Fixes Services Total Recall Sound mixed during the day and color corrected at night for 27 straight days to help meet the release date.  Trailer Finishing Services  TV Finishing - Working closely with SPT to further support color finishing work for network, cable and MOWs with three years of continued growth. 2011: 2 shows, 2012: 6 shows, 2013: 10  Restoration Services shows.

  Theatrical DCP Creation Creative Editorial - Successfully integrated Editorial into the Colorworks family and continued to broaden and provide quality theatrical and television services to multiple users throughout SPE.  Home Entertainment Versioning  VFX/Cosmetic Fixes - 150% growth in the last 2 years, offering a cost effect solution for last minute cosmetic and VFX fixes during the final stages of picture finishing. Colorworks is working with the feature post department to begin End Credits creation to streamline the process and lower costs.  Trailer Finishing - Worked closely with marketing to in-source this service from a third party vendor. Originally projected savings were in excess of $500,000. The volume of services have Financial Summary increased annually and will exceed $1,000,000 savings to SPE this year. Expanding into TV Spots that will drive further savings to SPE  FY13 Budget: Revenue – $28.9M  Restoration - Colorworks is the industry leader in 4K restoration, delivering the 50th anniversary ● EBIT – of Lawrence of Arabia and the 35th anniversary of Taxi Driver. Notable third party projects included $5.9M The Leopard for Fox/Film Foundation, The Spy who Loved Me for MGM, and Rosemary’s Baby for Criterion Collection.  FY13 Budget Headcount: 53  Theatrical DCP Creation - Colorworks creates the digital cinema masters and all film elements for worldwide release along with text-less materials for the foreign language release.

 Home Entertainment Versioning - Creation of all Home Entertainment deliverables through a separate color correction pass supervised by the director and/or Director of Photography, SPE Confidential engineered for display technology. 12

Sony Pictures Technologies – FY13 Three Year Plan Review Colorworks – Technology

Core Functions Key Facts & Achievements

 Establishes and maintains the technical  Colorworks, and more specifically the Colorworks technology infrastructure at Colorworks’ facilities on the team, establish standards of post-production methods for studio lot. maintaining the highest level of quality throughout the post-  Works with film makers and TV production production process. to develop content creation workflows.  Works with post production executives to  Working closely with Columbia, Screen Gems, SPA, SPI, provide technical expertise from camera SPTech, PPF, WPF, Asset Management, DMG, DMC and other selection to post-production technology groups, the Colorworks engineers help to establish technical decisions workflows at the studio for the benefit of all involved.  Participates in camera tests on behalf of the  studio and the film makers in order to help Colorworks has, by utilizing the expertise of a technical staff that ensure an efficient workflow. has over 100 years of combined post-production and production  Works with PMC and Sound to develop experience, partnered with the other post-production companies efficient workflows for collaborative sharing at the studio to establish technologies that benefit the studio at of production content. large; namely 4k and higher resolution post-production, Digital Cinema, the Production Backbone, high-quality YCM archives, the ACES colorspace, digital master archives and the Interoperable Master Format (IMF).

SPE Confidential 13 Sony Pictures Technologies – FY13 Three Year Plan Review Colorworks – Technology

Core Functions Key Facts & Achievements

 Works with WPF to develop newer methods  The Colorworks engineers also work with industry organizations and streamline current methods of handling, like the American Society of Cinematographers (ASC), Society of processing and delivering content. Motion Picture and Television Engineers (SMPTE), the Academy  Works with industry groups and standards of Motion Picture Arts and Sciences (AMPAS), Digital Cinema organizations to develop technologies that benefit SPE and the industry at large. Initiatives (DCI), as well as Sony electronics and other technology vendors to help implement standards on behalf of the  Helps Asset Management to develop specs and standards for post-production processes. studio and the industry at large.  Helps SPTech to develop advanced  Working closely with Sony Pictures Technologies, the technologies to help our industry. Colorworks engineering staff helps to develop and test various  Collaborates with Sony Corp, Sony emerging technologies, such as Digital Cinema, 3D, high frame- Electronics and other Sony organizations as rate 3D, 4K to the home, that eventually help the studio to create needed to achieve technical goals and establish new workflows. more compelling content.  Colorworks’ engineers are collaborating with many of the groups on the lot to help create the digital studio of the future, so that SPE can maintain a leadership position, while helping to lower costs through the application of technology.  This includes new 4k workflows for theatrical and HE distribution, as well as establishing new methods of mastering within the organization to help pave the way to the future.

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Digital Media Group

Core Functions Key Facts & Achievements

 Digital Asset Management  The estimated cost avoidance for SPE due to implemented DMG  Digital Archive solutions for FY13 is $10.5M  Content Management System  Generated nearly $400K in revenue by licensing EAGL  High Speed Digital Transfers (Entertainment Assets Global Library) to Sony Computer  Digital Workflow Automation Entertainment and Sony DADC  Video Streaming  The volume of digital assets managed by DMG continues to  Video Transcoding double year-over-year (see transfer volume slide in Appendix)  Forensic Watermarking  Content Fingerprinting  Implemented an integrated tape library storage solution to  Digital Rights Management significantly reduce DMG operating costs  Studio Screeners – Digital & Physical  Actively pursuing ISO 27001 certification  Digital Media Research and Development  New 4K watermarking of content which will be provided with Financial Summary the new Sony 4K 84” flat screen televisions  Implemented automated digital workflow solution for  FY13 Budget: $1.1M * international digital distribution of Theatrical and Home  FY13 Budget Headcount: 17 Entertainment spots eliminating the creation and distribution of * $4.2M in operating costs offset by service charge-backs to SPE LOBs and other Sony Entities physical elements – annual savings over $4M  Rolled out new secure Digital Screeners application with support for tablets

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Technology Development (1 of 2)

Core Functions Key Facts & Achievements

 Center-of-excellence for a broad range of  Developing new workflows for feature production using digital cameras, technology relevant to SPE’s business. provided on-set expertise on this workflow to About Last Night allowing  Provide business units with technology to Screen Gems to shoot faster and without D.I.T. improve processes from camera to screen.  Developing and deploying Content Finishing Platform for better title version  Provide hands-on expertise in new management in collaboration with PMC, WPF, SPTI. technology to feature and TV productions.  Content protection and usage rules for over 200 Home Entertainment and  Develop new production workflows television deals in partnership with Digipol.  Provide and review content protection and  Content protection and usage rules schedules for over 40 IFE non-theatrical usage rule schedules for licensing deals. and FilmBank deals, instituted contractual protection requirements in non-  Technical expertise for anti-piracy, theatrical deals, and driving industry standards for IFE content protection as government affairs and litigation. industry expands from in-seat to passenger owned devices.  Participate in the development of next  Specifying and promoting next generation enhanced content protection generation content formats. appropriate for high value 4k and early window offerings. (Our 4k activities reach well beyond Sony’s F1 project). Financial Summary  On-going contribution to the SPTI EMEA Media Center project.  Developed very cost-effective workflow for 3D production allowing  FY13 Budget: $1.7M* productions to shoot on 2D schedules and with small increment in budget in  FY13 Budget Headcount: 11 conjunction with 3DTC. * $700K in operating costs offset by service charge-backs to Sony Corp.  Provided on-set expertise in 3D workflow for productions including Screen Gems’ Battle of the Year and SPT’s newly acquired Left Bank’s production Little Crackers to great success. Done in conjunction with 3DTC.

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Technology Development (2 of 2)

Core Functions Key Facts & Achievements

 Pursuing SPE interests in Ultraviolet  Contributed to industry discussions to make 4k more attractive to consumers technical group, Common File Format enhancement of color and dynamic range (e.g. definition in dark areas of the completed. picture)  Further the development of systems and  Ongoing participation in Ultraviolet and other industry Interactivity WGs. standards for content protection, delivery and  consumer offerings. Participation in BDA next generation Blu-ray working group.  Participate in studio activities to improve the  Conducted in-house, and participated in production, camera and lens tests consumer experience and maximize value of (After Earth, No Good Deed, White House Down, etc). SPE content to the consumer.  Trained over 300 DPs, directors and crew on the new F65 digital camera  Engage in technology related activities with used on Columbia’s After Earth, and Screen Gems’ No Good Deed and other studios and industry bodies to further About Last Night. SPE’s agenda.  French regulatory investigation that could make content protection on Blu- ray discs meaningless.  Technical consultation for Government Affairs in a variety of EU Commission actions that could, for example, remove our ability to enter into licenses for a particular territory within Europe  Working with anti-piracy and litigation to drive our agenda with search engines such as Google.  Negotiated with Fox to ensure consistency between Crackle’s and channels’ content protection and Fox’s contractual requirements.  Project managed the technical component of the Sony F1 project, working to resolve differences between Sony’s approach and our expectations of industry requirements for 4k. SPE Confidential 17 Sony Pictures Technologies – FY13 Three Year Plan Review

WPF – Asset Management

Core Functions Key Facts & Achievements

 New Feature Mastering: Create masters for all Post  Increased restoration/preservation/mastering of titles to a full 4k Workflow from 2-4 titles Theatrical Markets per year to 100 by end of FY14  Foreign Language Mastering: Create masters for all  The volume of data archived this year is 80% increase over 2011-2012. This is the result of Post Theatrical Markets for 19 Languages/Territories more comprehensive data acquisition, the transition of production from 2K to 4K and  Create Assets to service library titles internationally increase in elements (i.e., multiple versions, 3D data) to be archived. for Itunes, Netflix, VOD, PPV & Free TV markets  Reduction in costs in data archive expenditures through cost analysis and asset retention  Research, identify and create masters for LOB review including Home Entertainment (EST, MOD, BD, UV, etc), Non-Theatrical, Repertory, Television Sales, etc  15 – 20 Studio new release features each year, for which Asset Management creates the for Domestic and International Clients servicing masters for all lines of business- including formatting and Quality Assurance of HD masters, home theater and extended version audio mixes, and localized versions for  Manage preservation policies and procedures of territories; as well as archiving the component pieces for these versions. Sony’s >3 Million videotape, audio, film, and file elements and records in “GOLD” database inventory  Data Integrity - Create and update records for servicing elements in “Gold” data base – more system than 5,000 updates per year  Identify titles or assets needing upgrade (High  Support Home Entertainment diversification via MOD (120 titles a year, since 2010) and Definition) to maximize sales opportunities sublicensing (300 titles in 2011-2012) , with additional 1,000 titles over next 3 years throughout business lines  Communication and support across business lines to increase digital file production and decrease manufacturing costs Financial Summary  reduced number of audio M+E conforms due to revamp of the dubbing workflow for a 60% cost savings (24K).  FY13 Overhead Budget: $2.0M  Manage the digital archive – titles produced digitally since 2004, establish and institute long-  FY13 Manufacturing Budget: $27.1M term data preservation policies  FY13 Budget Headcount: 17*  Maintain the integrity of the physical and digital assets through collection and archiving of * Includes WPF Management new titles and establishing protocols for servicing which protects the quality and value in distribution channels

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WPF – Global Logistics (Inwood)

Core Functions Key Facts & Achievements

 Asset Management Protection and  Responsible for Protection and Preservation of $662M of Corporate Assets Preservation  Stewards of in excess of 3M media assets, 250K Blu-ray and 320K Digital text  Oversee maintenance of 3M+ assets across assets multiple storage locations, Inwood primary  Distributed 1M advertising and publicity materials supporting SPE Marketing  Supply Chain Logistics, Distribution and efforts across all BU’s Inventory Management  Support SPT EU & APAC digital on-boarding efforts by managing product  Client Relations and Customer Service reverse logistics, degaussing and client Cineshare screener delivery  Project Management  Collaborated with SPT and PMC to internalize SPT Marketing Library  Process Improvement Digitization Project  Data Compliance Management  Internalized SPC DCP trailer duplication and distribution to achieve $260K annual savings  Application of Corporate and Government Standards and Regulations  Saved SPE $129K by internalized editing of syndicated TV series masters  Initiated proactive vinegar assessment of 60kKprimary elements and collaborative plan with Asset Management to triage affected units to increase their preservation Financial Summary  Implemented import procedure across BU’s to adhere to US Customs ISF filing and protect against Government penalties  FY13 Overhead Budget: $4.6M*  Manage $10M of Global Transportation and TSA Certified Cargo Screening  FY13 Manufacturing Budget: $11.7M** Facilities  FY13 Budget Headcount: 52 * Excludes storage costs of $1.8M ** Includes freight

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WPF – Client Operations

Core Functions Key Facts & Achievements In support of all SPE Divisions (SPR, SPHE & SPT): WPF Client Ops has managed increased volume, rapid transition from physical to file based workflows  Provides supply chain & fulfillment including license plus accelerated timelines while reducing costs: negotiation, research, cost analysis & order, delivery & tracking of all materials  File Volume increase since FY10: SPHE Digital +286%, SPT +93%  Digital supply chain manages on-boarding of file-based  Trailers: due to One Sony release events, increased regional demands & EST/VOD requirements, WPF clients, new technology evaluation & implementation, has supported a 443% volume increase since FY10 preparation of core media assets including picture, audio,  subtitles & CC for digital distribution Airline/TV Editorial: since FY10, Editorial has experienced +76% growth due to increased cuts required by multiple clients  Vendor & cost management to aggressively leverage consolidated SPE volume & spend to procure best service  Digital Supply Chain: supported SPHE & SPT growth in EST & VOD by deployment of a 3 year & market rates strategy to implement & manage organizational & process change to transition from physical to file  Manages metadata procurement, creation & maintenance in based distribution GPMS & GOLD including development of new metadata  Distribution Backbone: To support transition from physical to file, WPF successfully launched DBB in schemas 2012. DBB is currently deployed for all SPHE Digital fulfillment & SPT Digital is in transition with  Manages Feature & TV editorial for Airlines & TV expected completion by FY14. By end of FY13, 79% of all WPF file volume to be through DBB including talent, legal & client approvals  Cumulative RFP strategy since FY10 resulted in overall $57M savings based on budgeted volumes eg:  Manages centralized evaluation & mastering of Theatrical reduced Barter Syndication costs by 79% over 3 years; reduced Encoding costs by 80% over the last & HE trailers & new TV Eps & MOWs for downstream 12 months, reduced Tape Duplication by 25% distribution  Non-theatrical language dubbing: reduced timelines by average 33% and costs by average 8%  Manages non-theatrical language dubbing & subtitling, repurposes existing language assets for downstream  Accelerated Next Day TV – successfully implemented secure, timely delivery of new TV product for distribution next day exhibition to various worldwide clients  Local SPT acquisition mastering & post production  Ultraviolet: supporting SPHE Ultraviolet initiative by managing EIDR registration (23k titles),design & implementation of the digital supply chain for CFF rollout Financial Summary  SPHE Joint Ventures: supported SPHE JVs by managing creation of 25k 3rd party titles in GPMS in  FY13 Overhead Budget: $9.8M less than 9 months  FY13 Manufacturing Budget: $101.0M  FCC Closed Caption regulation – successfully implemented process to support new regulation for Internet exhibition  FY13 Budget Headcount: 88*  * Includes WPF Management Support of annual SPE events: eg: SPT May Screenings, Regional Sales meetings & Academy & Guild award screener distribution  Organisation:70% of WPF CO Management have been promoted from within. WPF CO utilizes DISC, SPE Confidential MBTI & Emergenetics & are fully invested in staff development & growth 20 Sony Pictures Technologies – FY13 Three Year Plan Review

Digital Policy Group (1 of 2)

Core Functions Key Facts & Achievements

 Establish digital policy across all SPE Business  Negotiated and closed over 200 complex SPHE and SPT distribution deals Units on a worldwide basis covering different usage rules and content protection for early window, VOD,  Approve all SPE distribution deals on a SVOD, EST, pay TV, free and basic TV, AVOD, and Internet streaming, in worldwide basis coordination with the Technology Development Group.  Key SPE lobbyist for copy protection initiatives  Modified digital policy as required based on new technologies and user in both government and the entertainment experiences. Implemented procedures and policies across all SPE business industry units to protect SPE’s intellectual property in all SPE distribution deals  Maintain legal, regulatory, technical and contractual foundation supporting the Digital  Closed the royalty deal with HDBaseT that begins generating royalties paid Millennium Copyright Act to SPE in 2013. Anticipated royalty of $30K in 2013 increasing to $100K in  Develop copy protection standards for new 2014. Has potential for over $1M in royalties in 4-5 years. digital formats  Serves on the Board of Directors on HDBT, Verance, MovieLabs, DVD CCA, Entertainment Technology Center, and HQME, all focused on protecting Sony Pictures intellectual property and driving SPE’s digital strategy.  Conducted primary research in Kansas City designed to establish a baseline of media consumption and piracy levels prior to the launch of Google Fiber. Financial Summary This research will form the basis of Copyright policy around broadband deployment in the US.  FY13 Budget: $1.4M   FY13 Budget Headcount: 4 National Academics: Appointed to a Committee on the Board of Science Technology And Economic Policy to draft and publish a report on the Impact of Copyright Policy on Innovation in the Digital Era.

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Digital Policy Group (2 of 2)

Core Functions Key Facts & Achievements

 Review and analyze disruptive trends 3 to 5  Raised over $8M in outside financing and, after 4 years in development, years out and develop new business models launched Ultraviolet, the new industry cloud service for digital distribution.  Review new technologies to protect Sony  Collaborating with the National Venture Capitalist Association (NVCA) to Pictures Intellectual Property find common ground in connection with supporting legislation to protect  Content Protection & Anti-Piracy intellectual property.  Represent SPE in Industry initiates and  Working with the Information Technology Industry Council (ITIC), an consortiums advocacy and policy organization for IT companies, to bridge the gap  Ultraviolet between content and technology and effectively advocate policy to protect  Identify New Revenue Generating Royalty intellectual property. Opportunities  Identifying new business opportunities for Sony pictures including:  Digital first sale model for Ultraviolet  Theatrical Serial project with SPT and SP Distribution  “On Location” film clip application  Managed legal and information security groups in drafting and implementing SPE’s Content Protection Manual, securing SPE’s intellectual property from point of capture through distribution.  Oversee Verance WM embedding in SPE motion pictures.  Prepared and testified before the U.S. Copyright Office to limit further exceptions to the Digital Millennium Copyright Act, resulting in a successful outcome for the motion picture industry.

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Corporate Alliance

Core Functions Key Facts & Achievements

 New Technology & Format Incubation  Technology development and business model creation for new formats (3D,  New Technology Education UltraViolet, 4K, etc.) w/ Sony Group and industry partners  Film / TV Production Workflow Creation  Facilitated development of new Digital Production / Distribution Workflows  Co-development of Sony’s Professional and  Launched Media Cloud Services to build secure, flexible, cost effective cloud- Consumer Products based production tools and services.  Promotion and facilitation of SPE Content for  Initiated F65 seminar. Trained over 300 industry professionals. Helped create and Sony’s Global Sales and Marketing Activities successfully transfer workshop to Sony’s Digital Motion Picture Center.  Utilization of Sony products for SPE’s digital  Led collaboration between Sony and SPE to create Sony’s new Professional content distribution & advertisement Products (F65, F55, etc.) and Consumer Products (3DTV, 3D Handycam, etc.)  Distribution of Consumer Electronics Industry  Collaborated w/ Sony to enhance home cinema experience: “Cinema Mode” for News Sony TVs (8 mil units), “Digital Cinema Sound” for amplifiers (440K units), “Movie Mode” for Headphones (50K units)  Pre-installed SPE promotional content in Sony products. (17M units)  Facilitated the promotion of SPE trailers/clips for Trade Shows (CES, NAB, IFA, CEATEC, Tokyo Game Show, etc.)  Supported all SPE initiatives that require coordination with other Sony group Financial Summary companies. (Advanced product placement for Battle of The Year, About Last Night, Spiderman 3 Tokyo Premiere, etc.)  FY13 Budget: $1.3M  Support all SPE initiatives that require coordination with Japan such as Metal  FY13 Budget Headcount: 5 Gear Solid- Konami negotiations, Jeopardy! Japan shoot, Rights acquisition for Ultraman, Monkey Magic, Location negotiations for The International, etc.  Installed DMT/SIGNAL at Sony Tokyo HQ for more efficient, lower cost screening management  Create and distribute weekly “Eye-Openers” news summarizing key technology SPE Confidential trends both internal and external to Sony Corp 23 Sony Pictures Technologies – FY13 Three Year Plan Review

3D Tech Center

Core Functions Key Facts & Achievements

 Industry education teaching best practices in  Supervised accelerated & acclaimed conversions of Green Hornet and 2012 shooting and converting 3D for Columbia Pictures.  Evangelizing high-quality 3D across films,  Consulted on and assisted with the 3D workflow on Columbia Picture’s The television, and gaming. Amazing Spider-man.  3D consultation on various film & television  Our industry leading seminar has taught the principals of high quality 3D to projects over 4,000 cinematographers as well as hundreds of directors, producers,  Support of SPE (Columbia/Screen Gems) visual effects supervisors, and art directors. internal 3D films and projects  Won the 2012 International 3D Society’s Sir Charles Wheatstone Award for  Support Home Entertainment in 3D Blu-ray our efforts in industry education. Disc releases and convergence   Pipeline and workflow for converting library Provided consulting and cost effective on-set supervision for Screen Gem’s titles into 3D Battle of the Year in 3D.  Published a widely distributed white paper demonstrating our workflow for shooting 3D on a 2D budget showcasing Battle of the Year and 3D episodes of Days of our Lives and Happy Endings. Financial Summary  Worked with UK production companies, including Sony Pictures Television’s Left Bank, to produce three 3D episodes of Christmas Crackers for the Sky  FY13 Budget: N/A (Covered by Sony Corp) network as part of an outreach program getting international production  FY13 Headcount: 2 companies on board with 3D.  3DTC now members of the International 3D Society’s Board of Governors helping influence & create policy while expanding adoption of 3D.  Showcased Sony technology and workflows in numerous filmed promos including Road to the Oscars, Forbes, and an upcoming 3net special. SPE Confidential 24 25

SP Tech Three Year Plan Sony Pictures Technologies – FY13 Three Year Plan Review

SP Tech EBIT Improvement Plan - Summary

SP Tech EBIT Improvement FY14 FY15 FY16

SP Tech Operations Savings $1.1 $3.2 $1.8

Colorworks Savings 1.6 1.6 1.6

Total $2.6 $4.8 $3.4

WPF Manufacturing Savings $27.4 $33.6 $34.8

Total SP Tech Incremental EBIT Contribution $30.1 $38.5 $38.2

SPE Confidential 26 Sony Pictures Technologies – FY13 Three Year Plan Review

Chris Cookson, President SP Technologies Proposed Functional Org Executive Dept • Production & Post Production Technology Vision and Strategy Chart • Administration of SP Technologies Division • Content Preservation and Distribution • Digital Strategy and Policy Development • Application Development Studio • Sony Product Technology Strategy Alignment • Sony Corp Strategy Alignment Services ( Gary Martin)

Mitch Singer Charlie Falcetti Executive Vice President Executive Vice President Digital Policy Group Production Services (Studio Ops, Sound, Colorworks) • Digital Licensing Policy and Strategy • Digital Intermediate Services • Digital Entertainment Content Ecosystem (DECE) • Trailer Finishing • Worldwide Anti-Piracy / Content Protection • TV Finishing • Content Protection Technology Evaluation • Creative Editorial Services • Asset Restoration Services • VFX / Cosmetic Fixes • Theatrical & HE Deliverables Spencer Stevens Executive Vice President Technology Development

Terri Davies, • Digital Media Technology Reserarch and Development Executive Vice President • Format Standards Leadership WPF Client Operations • Studio-wide Technology Initiatives • Digital Asset Management • Digital Workflow Automation • Manage Content Preparation and Fulfillment • • Supply Chain Management Forensic Watermarking & Content Fingerprinting • Metadata Procurement, Creation & Maintenance • Content Protection • Quality Control Grover Crisp Executive Vice President WPF Asset Management

• Asset Restoration & Preservation • Supply Chain Management • New Release & Catalog Mastering • Asset Storage and Global Logistics

SPE Confidential 27 28

Sony Pictures Technologies – FY13 Three Year Plan Review

Headcount

FY13 Category Budget FY14 FY15 FY16

SP Tech Operations SP Tech Officers 3.0 6.0 6.0 6.0 Technology Development 11.0 27.0 27.0 27.0 Digital Policy Group 4.0 3.0 3.0 3.0 Digital Media Group 17.0 - - - Corporate Alliances 5.0 - - - Subtotal SP Tech Operations 40.0 36.0 36.0 36.0

Colorworks 53.0 51.0 51.0 51.0

Worldwide Product Fulfillment Client Operations 86.0 80.0 75.0 70.0 Asset Management 16.0 15.0 15.0 15.0 Global Logistics 51.0 51.0 51.0 51.0 WPF Management 6.0 5.0 5.0 5.0 Subtotal WPF 159.0 151.0 146.0 141.0

Total SP Technologies 252.0 238.0 233.0 228.0

SPE Confidential Sony Pictures Technologies – FY13 Three Year Plan Review

Strategic EBIT Opportunities & Considerations

. In addition to the aforementioned cost reduction opportunities, the following are other strategic opportunities for management consideration that may provide additional cost reduction / profit improvement for SPE

. These ideas are conceptual and will require further analysis and collaboration to determine their viability

. The common foundation for these opportunities is the leveraging of SP Tech infrastructure and competencies across on-going SPE business activities Opportunity: Dubbing Spend Leveraging

Chris to provide details if needed

Opportunity: Projector Room Networking

SPE Confidential 29 Sony Pictures Technologies – FY13 Three Year Plan Review

Strategic EBIT Opportunities & Considerations

Opportunity: On-set File Based Workflow

Opportunity: DCP Versioning

Opportunity:

SPE Confidential 30 Appendix 32

Sony Pictures Technologies – FY13 Three Year Plan Review

FY13 Overhead Budget: SP Tech Operations FY13 Budget

Salaries & Wages $9.0

Fringe Benefits & Payroll Taxes 1.9 Employee Bonus 1.9 Travel & Entertainment 0.5 Maintenance & Repair 0.3 Equipment Service Charges 0.2 Telephone & Telex 0.1 Legal Fees - Corporate 0.1 Books, Subscriptions And Dues 0.3 Outside Services/Processing 0.5 Other 0.2 Total Operating Expenses 14.9

Operating Income Before Depreciation/Allocations (14.9)

Depreciation/Amortization 1.6 Allocations (4.9)

Net Operating Income (Loss) ($11.6)

SPE Confidential 33

Sony Pictures Technologies – FY13 Three Year Plan Review

FY13 Budget: Colorworks

FY13 Budget

Revenues $28.9

Cost of Sales 12.6

Gross Profit 16.4

Salaries & Wages 3.8 Fringe Benefits & Payroll Taxes 1.0 Employee Bonus 0.5 Temp Employee Expenses 0.1 Travel & Entertainment 0.1 Maintenance & Repair 0.5 Rent - Machinery & Equipment 0.1 Equipment Service Charges 0.2 Telephone & Telex 0.1 Materials & Supplies 0.3 Outside Services/Processing 0.1 Other 0.1 Total Operating Expenses 6.8

Operating Income Before Depreciation/Allocations 9.6

Depreciation/Amortization 3.6 Allocations 0.1

Net Operating Income (Loss) $5.9

SPE Confidential 34

Sony Pictures Technologies – FY13 Three Year Plan Review

FY13 Overhead Budget: WPF Consolidated FY13 Budget

Salaries & Wages $11.7 Fringe Benefits & Payroll Taxes 3.1 Pension/401K And Profit Sharing 0.2 Employee Bonus 1.4 Temp Employee Expenses 0.6 Travel & Entertainment 0.3 Maintenance & Repair 0.2 Rent - Machinery & Equipment 0.1 Telephone & Telex 0.2 General Insurance 0.4 Materials & Supplies 0.4 Messenger Services 0.1 Outside Services/Processing 2.1 IT Service Charges - Corporate 1.2 Other 0.1 Total Operating Expenses 22.0

Operating Income Before Depreciation/Allocations (22.0)

Depreciation/Amortization 0.4 Allocations (22.4)

Net Operating Income (Loss) $0.0

SPE Confidential Sony Pictures Technologies – FY13 Three Year Plan Review

Overall DMG System Usage

DMG Systems (monthly transfers in GB)

140000

120000

100000

EAGL Downloads

EAGL Uploads 80000 cSHARE Downloads

cSHARE Uploads 60000 ACORN Downloads

ACORN Uploads 40000

20000

0 3 4 7 9 2 5 3 8 9 2 3 6 9 1 8 3 8 3 9 4 0 4 9 5 0 5 0 6 0 2 3 5 6 8 0 1 2 4 6 7 9 0 9 9 9 9 9 9 0 0 0 0 0 0 0 1 3 3 3 3 3 3 4 4 4 4 4 4 4 4

SPE Confidential 35 36

Sony Pictures Technologies – FY13 Three Year Plan Review

Territory Growth

January January July November Q1 2011 2012 2012 2012 2013 Active Territories 14 44 73 132 163 Percent Growth -- 175% 66% 81% 270%

Active Territories

180 160 140 120 100 Active Territories 80 60 40 20 0 Jan-11 Jan-12 Jul-12 Nov-12 Q1 - 2013

SPE Confidential 37

Sony Pictures Technologies – FY13 Three Year Plan Review

Account-Territory Growth

CURRENT

Total Region EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW) Product Features Features Features Features Features (BZ) Features Features Features Features Features TV TV # of Territories 27 10 1 15 1 2 0 0 15 2 2 6 # of Partners 24 1 22 3 2 5 0 0 6 8 2 11 Acct-Territories (by Territory) 116 10 22 18 2 8 0 0 19 16 4 29 Acct-Territories (by Manager) 116 22 18 10 0 0 19 20 29 234

NEW

Total Region EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW) Product Features Features* Features Features Features (BZ)* Features Features Features Features* Features TV TV # of Territories 7 12 3 16 5 11 32 6 # of Partners 1 1 1 1 1 1 1 Acct-Territories (by Territory) 7 12 3 16 5 11 32 6 Acct-Territories (by Manager) 7 12 3 21 11 32 6 0 92

* includes YouTube/Google BZ, IN, RU

TOTAL

Total Region EMEA US LAM/Carribean AU/NZ MID EAST AFRICA ASIA CANADA GLOBAL (ROW) Acct-Territories (by Manager) 123 34 21 31 11 32 25 20 29 326

39% increase across Q3 & Q4

SPE Confidential