Divisional details Television 1 Television Market Update - PowerPoint PPT Presentation

Divisional details Television 1

Television Market Update ● Multiple factors are driving growth in the global television market − The global number of television households continues to grow − There are a greater number of distribution customers in the marketplace − SVOD customers (e.g., Netflix, Amazon Instant Video, local SVOD players) are creating greater demand for studio content ● U.S. television product, particularly TV dramas, is increasingly sought for international markets ● Affiliate fees are generally stable; ad sales have rebounded since the 2008 downturn, although economic conditions in some territories have slowed growth ● The television industry will also face some challenges − Studio programming prices continue to rise creating margin pressure on networks − Volatility of foreign currencies creates uncertainty for predicting financial results in U.S. dollars ● Competition across the global TV industry remains strong, however SPE’s assets and expertise leave it well positioned to succeed 2

Media networks 3

Media Networks Strategic Priorities • Continue to focus on maximizing efficiencies • Continue to invest in both local and global original programming Existing Operation • Continue to invest in programming, marketing, ad sales s infrastructure, and technology infrastructure for Crackle U.S. • Invest in programming and marketing for GSN • Launch a Hindi language rural channel, TV ON, in India New • Launch a second Hindi movie channel in India, MAX2 Operation • Selectively launch channels in new and existing territories through s EBIT accretive acquisitions to build scale and remain competitive 4

Media Networks Networks Brands by Genre SPT’s portfolio of network brands cover a wide variety of genres and demographics SONY GENERAL ENTERTAINMENT AXN GENERAL ENTERTAINMENT ANIME/YOUTH LIFESTYLE/MUSIC DIGITAL MOVIES PARTNER NETWORKS 5

Media Networks Networks Worldwide Reach 159 COUNTRIES 860+ MILLION HOMES 124 FEEDS 22 LANGUAGES EUROPE & RUSSIA EUROPE & RUSSIA KOREA NORTH AMERICA JAPAN AFRICA ASIA LATIN AMERICA AUSTRALIA 6

Media Networks Strong and Consistent Earnings Growth • Revenue reaches over $2 billion in FYE15, growing at a 21% CAGR over the five year period • Operating Income reaches $335 million in FYE15, growing at a 15% CAGR over the five year period (excluding monetizations) OI Revenues Budget Assumptions Revenues One-Time Events/Monetizations $700 $2,500 • Ad sales across the portfolio are Operating Income expected to grow by +20% year on $600 $569 $2,004 year $2,000 • $500 Continue to invest in new business $375 opportunities to help sustain the $1,500 $400 strong growth profile into the future $336 (i.e. GEC and Movie channel in India, $1 $266 $300 strategic EBIT accretive acquisitions $335 $1,000 $36 such as Bash Games in US) $930 $200 $271 $230 $248 $500 $100 $194 $0 $0 FYE11 FYE12 FYE13 FYE14 FYE15 ($ In millions) Note: All years restated on a consistent basis to include U.S. channels; excludes 3net

Media Networks Operating Income by Region As a result of recent investments, North America and Europe grow as a percentage of Networks’ Operating Income from 16% in FYE11 to 41% in FYE15 Operating Income FYE11 Operating Income FYE15 North America; 7% sia / Australia; 10% North Ameri Australia; 22% Europe; 8.9% ia; 34% Latin Ame Europe; 1 India; 29% Latin America; 16% Note: All years restated on a consistent basis to include U.S. channels; 8 excludes 3net

Media Networks MSM India update ● Revenue and EBIT are budgeted for double digit year-over-year growth − Revenue is expected to grow from $588 million to $695 million (+18%) driven mainly by recovery in domestic Indian ad sales performance and ongoing digitization efforts − EBIT will grow from $122 million to $151 million (+24%) (excluding new channel launches) with the increase primarily from higher expected performance at SET ● In spite of FX and economic headwinds, MSM expects to continue its strong growth trajectory in FYE15 and increase its offering in India − TV On, a new Hindi GE channel targeting a female-centric, more rural audience, is expected to launch in June 2014 − Goal is to capture 10% incremental share from the Hindi GEC market − MAX 2, a library Hindi movie channel, is expected to launch in April 2014 − A flanker channel for the existing MAX channel which will help MSM mitigate a recent rule change that limits ad minutes by broadcast hour ● Indian Premier League (IPL) Cricket − IPL season 7 will shift to an 8 team, 60 match format - ad sales and license fees reduced accordingly, EBIT expected to grow slightly from Season 6 − EBIT margin remains strong at 22% − Season 7 may move outside India for the second time in its history due to general elections running concurrently with the tournament. Final decision still TBD 9

Television ProductionS 10

Television Production Strategic Priorities • Drama – Maximize value of worldwide appetite for quality drama across all outlets with continued emphasis on broadcast and cable and additional focus on new platform opportunities U.S. TV Productio • Comedy – Maintain and support a strong comedy strategy as part of our overall portfolio n business as comedy continues to maintain strong value in the syndicated marketplace • First Run Syndication – Stabilize and grow the Queen Latifah daytime series for the 14/15 broadcast season and look to expanding the business into new lower cost opportunities • Create IP that travels (e.g. The Patch , Fan Band , Popheads , Beat Shazaam ) • Maximize prelaunch of The Crown through integrated sales, marketing and publicity campaign • Rebuild SPT Russia’s capacity to produce enduring sitcoms and dramas that travel Int’l TV • Support and strengthen existing production companies Productio • Support SPT Latin America/Teleset to execute 5 year plan to build high quality, n sustainable library of Spanish language programming for the region • Seek extension of HUASO (China) license and restructure operation • Explore expansion opportunities for network of production companies in key strategic markets (e.g. Scandinavia, Turkey, Netherlands, Australia, N. Ireland) 11

U.S. Production Current Programs SPT’s portfolio of current programs is diversified across all genres to balance risk vs. reward Scripted Non-Scripted Other Drama Comedy Game Show Reality/Talk MOWs / Mini • Battle Creek (CBS) • Goldbergs (ABC) • Shark Tank (ABC) Network • Blacklist (NBC) • Sing Off (NBC) • Days of our Lives (NBC) • Unforgettable (CBS) • The Young & the Restless (CBS) • Before Crack • Men at Work (TBS) • Mom’s Got Game • The Dorm (MTV) Cable (OWN) • Fallout Asylum (SyFy) (Netflix) • Outlaw Prophet (Lifetime) • Better Call • Red Tent (Lifetime) Saul (AMC) • Drop Dead Diva (Lifetime) • Helix (SyFy) • Justified (FX) • Masters of Sex (Showtime) • Outlander (Starz) • Untitled KZK Project 12 (Netflix) Note: Current Programs reflect named programs projected for the 14/15 broadcast season. TBD series are not reflected. • Jeopardy! • The Dr. Oz Show First Run

U.S. Production Current Series, Pilots & Development Significant contribution from current series Operating Income from Current Series, Pilots & Development: Budget Assumptions $140 $120 • Breaking Bad approaches $275 $100 million in series ultimate profit due to $80 performance in all markets (i.e Home $126 $60 Entertainment, SVOD and $92 $40 international), contributing $150 $57 $20 million in operating income for FYE14 $0 $0 • ($20) The Blacklist is ordered for a ($52) second season and becomes ($40) available in syndication in FYE15 ($60) ($80) FYE11 FYE12 FYE13 FYE14 FYE15 New series investment ($82) ($95) ($93) ($134) ($77) & development All other current series $30 $95 $150 $260 $169 Total current series ($52) $0 $57 $126 $92 13 ($ In millions)

U.S. Production Library, Game Shows and Daytime Series Core programs continue to perform Licensing Daytime Serials $500 Wheel of Fortune and Jeopardy! Library Budget Assumptions $419 $400 • Wheel of Fortune and Jeopardy! are renewed through 15/16 season $163 $300 $271 $267 • Licensing deal extended through 2024 $249 $250 $26 $36 generating $163 million in EBIT in $38 $32 $34 FYE14 $200 $103 $117 $91 $106 $104 • Days of Our Lives and The Young and the Restless renewed through $100 15/16 and 16/17 seasons, respectively $138 $127 $118 $111 $112 $0 FYE11 FYE12 FYE13 FYE14 FYE15 14 ($ In millions)

International Production Operating Companies Companies in 13 countries around the world covering multiple regions; Programs aired in 88 countries, 73 languages and counting… Amsterdam Beijing London Cologne Moscow ASIA Paris Rome Culver City Beirut Cairo Hong Kong Miami Dubai (Latin America/USH) Bogota AMERICAS EMEA (Europe, Middle East, Africa) Sao Paolo Tuva lu