Universal Australia Staff Meeting

Tuesday 6th September International Home Entertainment Marketplace

• A $25Bn category in 2011

• Declining from a $28Bn Category in 2008

• Digital emerging as a viable alternative

• Customer base is evolving and moving online

• Piracy is increasing

• Operating costs are rising globally

• Studios are looking at how they operate Universal Australia

• Fourth largest International Market behind UK, Germany & Japan

• Strong and highly rated team

• Ranked between 5th and 7th largest Studio in territory

• Market has declined by X% since 2008

• Profit has declined by X% since 2008 Why we want to Lead Change

• The Home Entertainment market is changing

• We want to lead change - not be led

• To influence the shape of the future

• First mover advantage is important

• Our Customers are asking and needing us to change A New Business Model

• A Joint Venture between Universal Pictures & Sony Pictures Home Entertainment

• 50/50 Ownership between the two Businesses

• World class content from Universal and Sony

• Largest Home Entertainment business in Australia

• February 1st 2012 go-live date

• Unique in the world UNIVERSAL AND SONY PICTURES HOME ENTERTAINMENT AUSTRALIA Operating Principles

• JV will sell, market, produce and distribute all Universal and Sony content – New Release, TV, Special Interest and Catalogue, as well as Locally acquired content.

• One team in Sales, Marketing, Finance and Operations to deliver for both Studios.

• The JV’s Board members will be drawn 50/50 from Sony and Universal.

• The MD will report to a Board of 3 Sony & 3 Universal Executives.

• Sony DADC will continue to undertake physical distribution and order management on behalf of the JV, with combined volumes and efficiencies.

• The JV will design and manage all marketing programs and plans.

• The JV will negotiate and operate new Vendor and Customer terms. What does it mean for us?

• Change

• A new Company

• A new structure

• A new Team created from Universal & Sony employees

• A new home in Market Street

• New systems

• A huge opportunity, and long term stability

• Real scale in the market

• Opportunity to engage the Best Suppliers What does it mean for our Customers?

• One point of contact for all Universal & Sony titles

• One box delivery

• One invoice

• One Merchandising solution

• One set of trading terms

• The greatest depth and breadth of product in Australia

• The best team in Australia

• Market leading consumer insight / category trends across Local and Global markets

• Greater efficiency

• More profit The Management Team

• Managing Director Jim Batchelor • Marketing Director Cindy McCulloch • Sales Director Paul Courtney • Operations Director Kate Bradbury • Strategy Director Catherine Tan • Finance Director Peter Ayling • HR Manager Kelly Dowen • Legal Advisor John Bourne Other Key Personnel

• Jon Horley

• New Zealand will not form part of the JV

• Universal TV, Theatrical etc will be unaffected

• A UPA Finance function will remain at Munn Reserve to service other NBC Universal business’ led by Amanda Blinkhorn

• Acquisitions will continue to be led by Joanna White, who will move with the JV

• Liz van Hooven will return as interim MD as I transition into the JV Next Steps

• Functional meetings this afternoon

• 121 meeting with Directors

• Customers and Vendors notified this afternoon

• Press Release at 6pm

• Face to Face meetings with Customers on Wednesday & Thursday

• Clarity on your role by Monday, 19 September High Level Timeline to Go-Live

• Announce Date 6th September

• Notify Customers/Vendors 6th September

• Team Appointed19th September

• Vendor Negotiations Sept / Oct

• Customer Negotiations Sept / Oct

• Systems Go Live 31st October

• Full team in Market Street9th January

• GO LIVE 1st February Questions? Functional Breakout Meetings

• Sales Team : Boardroom • Marketing Team : Level 2 • Finance Team : Amanda’s Office • Operations Team : Level 4 Music • Acquisitions Team : Joanna’s Office