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The Sony channel New Channel Evaluation Fuel for Brilliant DECISIONS February 2013 Fuel for Brilliant DECISIONS Outline 1.Introduction i. Methodology ii.Who we spoke to 2.Main Findings in Detail i. Is there a need? ii.Could Sony do it?

SLIDE 1 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS

The Sony channel

New Channel Evaluation

February 2013

SLIDE 2 Fuel for Brilliant DECISIONS

Outline

1.Introduction

i. Methodology

ii.Who we spoke to 2.Main Findings in Detail

i. Is there a need?

ii.Could Sony do it? iii.Would they watch it? iv.Would it drive subscriptions? 3.Conclusions & Implications

SLIDE 3 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Introduction

SLIDE 4 Fuel for Brilliant DECISIONS

Background and methodology

Background SONY and FOXTEL have been in discussions regarding a channel for women. In February 2012, research was conducted to test the channel concept for propensity to watch, measure the appeal of the channel and proposed programming and identify any potential barriers to viewing and successful channel launch. Methodology D&M Research hosted an online survey with 500 Australian women aged 25-54 years. The survey was 15 minutes long and included visual stimulus in the form of a video showing elements of the SONY channel

ffering.

To achieve a good spread of women, quotas were placed on age and location. The sample included 50:50 Pay TV Subscribers / Non subscribers, with the data weighted back to the population proportions in the analysis. The typical respondent was a women aged 40 years, married with children, living in a Capital City with a combined household income of around $90K.

SLIDE 5 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Who We Spoke To

SLIDE 6 Fuel for Brilliant DECISIONS

Who We Spoke To

For this study, the typical respondent was 40 years old, married with children, living in a Capital City with a combined household income of $93K. Base = 502 Base = 502 Base = 502 25-34 33% Married or de facto 74% Working full time 44% 35-44 34% Never married 15% Working part time 24% 45-54 33% Divorced or separated 10% Unemployed, seeking work 3% Average Age 39.5 Widowed 1% Looking after the home 23% Prefer Not To Say 1% Studying full time 2% Studying part time 1% Sydney 20% Retired 3% Rest of NSW 12% Young single person living alone 5% ACT 2% Peer group flatting together 4% Melbourne 19% Young couple with no children 14% Under $40,000 (25) 12% Rest of VIC 6% Family mainly pre-school children 16% $40,000 to $59,000 (50) 12% Brisbane 9% Family mainly school children 29% $60,000 to $79,000 (70) 20% Rest of QLD 11% Family with mainly adult children 17% $80,000 to $99,000 (90) 15% Adelaide 5% Older couple / single person 12% $100,000 to $120,000 (110) 19% Rest of SA 2% Prefer not to say 3% $121,000 to $140,000 (130) 8% Perth 8% Over $140,000 (180) 14% Rest of WA 3% Average $93K Darwin 1% Yes 29% Rest of NT 0% Shared 29% Subscription Tasmania 2% No 42% Pay TV Subscriptions Already have a Pay TV service 29% Have had a Pay TV service in the past 21% Not connected now and would never consider having a Pay TV service 20% Age Location Marital Status Employment Household MI E HHI

SLIDE 7 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Is there a need? Main Findings in Detail

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Types of Shows or Programs like to Watch

Mini series / Movies Drama / Drama serials Sports Other (Specify 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 34% 39% 15% 32% 32% 33% 39% 25% 17% 6% 10% 8% 4% 15% 11% 1% Watched Favourites 77% 76% 72% 72% 71% 71% 69% 63% 44% 40% 39% 35% 31% 30% 25% 2%

Women claim to watch and love Dramas, Soaps and Miniseries / Movies.

QA1a. Which of these types of shows or programs do you watch? QA1b. And which
f these types of shows or programs are your favourites?

Based on Genre All respondents n=502

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Types of Shows or Programs like to Watch

Pay TV subscribers are significantly higher on watching Documentaries (71%) than Non Subs (60%). Non Subs were significantly higher on watching Movies / Mini Series (81%) than Pay TV Subscribers (68%) and Comedies (77% vs 60%). All respondents n=502 Movies / Mini series Documentaries / Nature / History Drama / Drama serials Talk shows / Chat shows / Panel shows Sci Fi / Fantasy 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

QA1a. Which of these types of programs or shows do you watch?

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Top 3 Favourites by Show Type

Net Dramas & Soaps Reality/ Celebrity Soaps/ Soap Operas Sports 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 33% 27% 16% 13% 9% 7% 5% 8% 6% 3% 2% 2% 1% 0% Top 3 Favourite

QA2. Which television shows were your favourite 3 programs or shows in 2012?

55% 48% 35% 27% 26% 18% 18% 15% 11% 8% 7% 5% 4% 3% 1%

Just over 1 in 2 mentioned an actual Drama or Soap show in their top 3, and 1 in 3 as their most Favourite.

Based on Shows All respondents n=502

SLIDE 11 Fuel for Brilliant DECISIONS Crime / Law / Mystery Talk shows / Chat shows / Panel shows Documentaries / Nature / History Sports 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Top 3 Favourites by Show Type

Pay TV Subscribers are significantly higher on choosing Lifestyle genres (43%) than Non Subs (27%), and Sport (16% compared to 7%). Non Subs were significantly higher on selecting Comedies (36%) than Pay TV Subscribers (22%) as one of their favourite genres. All respondents n=502

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Favourite show – Top show

Revenge Downton Abbey MasterChef Once Upon a Time Law and Order Supernatrual 0% 10% 20% 30% 40% 50% 8% 6% 4% 4% 3% 3% 3% 3% 2% 2% 2% 40% Revenge is the most chosen 1st Favourite show by 8%. The Big Bang Theory is in the second position on 6%, then Downton Abbey & Home & Away on 4%. A large proportion chose another show as their 1st Favourite, though none of these individual shows accounted for 2% of all mentions.

CHECK+++

QA2. Which television shows were your favourite 3 programs or shows in 2012?

All respondents n=502

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Favourite Show – Top 3 combined

Revenge is the most watched Top 3 Show at 17%. When all Top 3 Shows are combined, Revenge is the most watched by 17% overall and by 34% of those who said they watched Dramas / Drama serials. For 8 in 10, another show was mentioned as a Top 3 show.

QA2. Which television shows were your favourite 3 programs or shows in 2012?

All respondents n=502 Revenge Bones Home and Away Modern Family Criminals Minds Supernatrual 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 17% 12% 9% 9% 7% 7% 6% 6% 6% 6% 5% 5% 5% 4% 4% 4% 3% 3% 3% 3% 3% 3% 81%

SLIDE 14 Fuel for Brilliant DECISIONS B&B 49% of USA Soap Viewers

USA = 63% AUS = 62%

UK = 17% Other = 9% Home & Away 72% of AUS Soap Viewers Downton Abbey 34% of UK Soap Viewers

Top Soaps by Country

Watching soaps

One in 4 women said they watch Soap Operas, among these:

0.25 0.75; 100%

All respondents n=502 N= 127 respondents who watch soaps

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Most watched Soaps in 2012 by Country

The most watched USA Soaps are The Bold and the Beautiful (49%), Days of our Lives (20%) and Revenge (13%). The most watched Australian Soaps are Home & Away (72%), Neighbours (33%) and Packed to the Rafters (18%). The most watched UK Soaps are Downton Abbey (32%), Eastenders (24%) & Coronation Street (20%). N= 127 respondents who watch soaps Population = 1,145 USA = 63% AUS = 62% Base 83 Base 80 Base 23 Population 729 Population 722 Population 195 The Bold and the Beautiful 49% Home and Away 72% Downton Abbey 32% Days of our Lives 20% Neighbours 33% Eastenders 24% Revenge 13% Packed to the Rafters 18% Coronation Street 20% The Young and the Restless 10% Winners and Losers 4% Emmerdale 5% Bones 6% House husbands 9% Other 34% Parenthood 6% Offspring 3% Dont know 15% The Big Bang Theory 5% Underbelly 3% Dallas 4% Other 3% Other 11% Dont know 3% Dont know 3% Australian Soaps USA Soaps UK Soaps UK = 17%

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Watching ‘Daily’ Talk / Chat Shows

Ellen 50% of USA Talk/Chat Viewers The Panel 13% of Australian Talk/Chat Viewers Top ‘Daily’ Talk Shows by Country

USA = 72%

AUS = 32% Other = 12% Among those who watch Talk/Chat show, 72% watch USA ‘Daily’ shows and 32% watch Australian ‘Daily’ shows. Just over 1 in 10 watch chats from another country. The most popular USA Talk/Chat show is Ellen at 50%. The most watched Australia Talk/Chat show is The Panel at 13%. Talk/Chat shows are watched by 40%.

Yes; 40% No; 60%

n= 138 respondents who watch a ‘Daily’ Talk/Chat n= 196 respondents who watch a Talk/Chat

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Watching Comedies

Comedies are watched by 72%. Nearly all of the top 14 Comedies watched in 2012 were American. The Big Bang Theory is the most watched at 45%, well ahead of all others. Modern Family is in the second position on 18%, followed by Two and a Half Men and How I Met Your Mother on 15%. The Big Bang Theory How I Met Your Mother The Simpsons Mrs Browns Boys Mike and Molly 0% 10% 20% 30% 40% 50% 45% 18% 15% 15% 7% 5% 5% 4% 4% 4% 4% 3% 3% 3% 35% N= 344 respondents who watch Comedies

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. . . Australian women aged 25-54 think there is something missing from the current Australian television offering (71%) Is anything missing?

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What’s missing in the current offering?

When asked what, if anything, is missing from the current Australian offering, only 29% said ‘Nothing/Don’t know’, indicating that for 71%, something is missing.

DK/Nothing Quality programming/quality acting and writing/less cheap reality Documentaries/Nature/History Variety Drama/Drama series Comedies/good comedy Movies/Mini Series/Better movies Australian/local content 0% 5% 10% 15% 20% 25% 30% 35% 29% 6% 6% 7% 7% 8% 12% 14%

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What’s missing in the current offering?

When asked what, if anything, is missing from the current Australian offering, ‘Australian / local content’ has the highest mentions at 14%. ‘Movies / Mini Series / Better movies’ is in the second position, mentioned by 12% then ‘Comedies / good comedy’ mentioned by 8%. ‘Drama / Drama Series’ is mentioned by 7%. There were a few differences between Pay TV Subscribers and Non Subscribers, with Subs slightly higher on mentioning Drama and Non Subscribers slightly higher on Documentaries / Nature / History – though these differences were not significant. For 29%, nothing top of mind is missing.

B1. Now we’d like you to think about the current Australian television offering. By this we mean Channels

being broadcast on both Free to Air and Pay TV in Australia, not just television that is made in Australia.What, if anything, do you think is missing in the current Australian television offering" Total Pay TV Subscribers Non Subscribers Base = 502 248 254 Population= 4553 1320 3233 Australian/local content 14% 14% 13% Movies/Mini Series/Better movies 12% 11% 13% Comedies/good comedy 8% 9% 8% Drama/Drama series 7% 11% 6% Variety 7% 9% 6% Documentaries/Nature/History 6% 3% 7% Quality programming/quality acting and writing/less cheap reality 6% 8% 6% Less repeats of shows 5% 6% 5% New programs/up to date shows/we are so far behind America 5% 4% 6% Lifestyle eg Home improvement/health/fashion 5% 4% 5% Sport/more range in sports 3% 3% 3% News/Current Affairs/better journalism and coverage of news and current affairs showing both sides, not just one sided/responsible journalism/unbiased reporting 3% 2% 4% family friendly programs/sitcoms/kids shows /not dark or violent 3% 3% 3% Less Advertisements/ad free 3% 4% 2% Sci fi - science fiction 3% 1% 3% Free/free to air TV/make it free 2% 4% 2% Reality/celebrity reality 2% 2% 2% Crime/Law/Mystery 2% 2% 2% British/English shows 2% 2% 1% Different, edgy and unique shows 1% 2% 1% U.S. Content 1% 2% 1% Chat/Talk Shows 1% 1% 1% Soap/Soap Opera 1% 1% 1% More interesting, fun, and addictive content 1% 2% 0% Music 1% 0% 1% A good balance of different programs… more range… not just focussing on one particular style of show 1% 2% 0% Live programs 1% 1% 1% G ame shows/quizz shows 1% 1% 0% Other 8% 9% 8% DK/Nothing 29% 26% 30%

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. . . Australian women aged 25-54 think the current Australian television offering needs a channel that caters more towards women (31%) Is there a need? Almost

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The current Australian offer

B2. How well do you think the current Australian television offering caters to women?

Total (N=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 27% 33% 24% 36% 34% 37% 22% 20% 23% 10% 7% 11% 5% 6% 5%

6 6 6

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

Overall, Australian Women give the current television offer for women a 6/10.

All respondents n=502 Extremely well Not at all well

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Who caters best to women

Net FTA =50% Net Pay TV =17% Overall, the FTA channels are seen as having the best offering for women, with 1 in 2 selecting one of the 4 FTA channels as a channel they think caters best for women. Seven is seen as the best channel for women, chosen by just over 1 in 5, with Ten and Nine chosen by around 1 in 10. Of the Pay TV channels, the Lifestyle channel is the highest performer for catering to women on 8%. Seven Nine Gem Arena E Channel Dont know 0% 5% 10% 15% 20% 25% 21% 11% 10% 5% 3% 8% 3% 3% 0% 21% 19% All respondents n=502

SLIDE 24 Fuel for Brilliant DECISIONS Seven Nine Gem Arena Other 0% 5% 10% 15% 20% 25% 30% 12% 4% 5% 2% 1% 23% 8% 9% 27% 12% 25% 13% 13% 6% 4% 2% 1% 0% 19% 22% Pay TV Subscribers (n=248) Non Subs (n=254)

Who caters best – Pay TV Subscribers vs. Non Subs

Channel 7 is seen as catering best to women amongst Non subs, Lifestyle the best for Subs – who also rate it higher.

QB3. Which television station – on either FTA or Pay TV – do you think caters best to

women?

All respondents n=502 Rating 7/10 Rating 7.5/10

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Rating the best channel

Seven (21%) Nine (10%) Gem (3%) Arena (3%) 0% 20% 40% 60% 80% 100% 1 2 3 4 5 6 7 8 9 10 7 7 7 6 7 8 8 8 When rating how well the ‘Best Channel’ caters to women, the FTA channels all derive more than half of their ratings in the 6-7 range. While the Pay TV channels all have lower bases, those who do nominate them as the ‘Best Channel’ have the majority of their scores in the Top 3 Box. All respondents n=502

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Interest in channel dedicated to Soaps

N= 127 respondents who watch soaps Population = 1,145 Total Soap Watchers (n=127) Pay TV Subscribers (n=64) Non Subs (n=63) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 34% 40% 31% 29% 34% 27% 11% 8% 12% 11% 3% 14% 16% 15% 16%

6 7 6

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

Around 2 in 3 women who watch soaps are interested in a channel dedicated to Soaps, including 1 in 3 highly interested. Interest is higher amongst Pay TV Subscribers.

Extremely Not at all

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Interest in a channel that focuses on family & relationships

QB6. How interested are you in a channel that airs drama, comedies, reality, lifestyle

shows, talk/chat shows and documentaries that have a family and relationship focus?

Total (n=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 39% 45% 37% 31% 29% 32% 16% 15% 17% 8% 5% 9% 5% 6% 5%

7 7 7

NETT Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

7 in 10 women are interested in a channel that airs a variety of genres with a family and relationship focus. Among them, 4 in 10 are highly interested.

All respondents n=500 Extremely Not at all

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Comedies women like

Total Comdey Watchers (344) Pay TV Subscribers (149) Non Subs (n=195) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 35% 45% 31% 29% 25% 31% 36% 30% 38% 2 2 2 No Unsure Yes Average Overall, the perception that there were enough comedies that women like to watch in 2012 was polarising, with 35% thinking there was enough and 36% thinking there wasn’t. Pay TV Subscribers, with a larger selection, were more inclined to think there was enough (45%) while Non Subscribers were more inclined to think there wasn’t enough (38%) or be unsure (31%). N= 344 respondents who watch comedies

SLIDE 29 Fuel for Brilliant DECISIONS Drama/Drama Serials; 12% Soaps/Soap Operas; 9% Mini series / Movies; 13% Lifestyle; 16% Comedy; 12% Crime/Law/Mystery; 10% Reality/Celebrity Reality; 8% Documentaries/Nature/History; 8% Daily Style Chat or Talk; 8% Variety/Talent Shows; 5%

What would women build?

If women could build their own TV Channel catering for women about 1/3rd of all programming would be dedicated to Drama and Soaps, Mini series and Movies.

All respondents n=502 Net Drama/Soaps/Mini series/Movies = 34% Respondents were shown 10 feature genres as ingredients for a channel that catered predominantly for women and asked what percentage of each genre they would include if they were making the channel themselves.

SLIDE 30 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Could SONY do it? Main Findings in Detail

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Spontaneous Associations with SONY – Word Cloud

QC1. Thinking now about the brand SONY. When you think about the brand SONY, what comes to mind?

There is a high free association of SONY with Quality (31%) and Televisions.

* A ‘Word Cloud’ is a visual depiction of the responses to this question. The frequency of mention is indicated by the font size of the word PRE-CONCEPT ASSOCIATIONS

SLIDE 32 Fuel for Brilliant DECISIONS Non Subs (n=254) Pay TV Subscribers (n=248) Total (n=502) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 15% 21% 16% 43% 34% 41% 28% 30% 28% 9% 10% 9% 6% 5% 6% Strongly Disagree Partly Disagree Neither agree nor disagree Partly Agree Strongly Agree

Could SONY do a TV Channel?

QC2. Thinking about the SONY brand, regardless of whether they currently do it or not, how

much do you agree or disagree that SONY could do the following in the future?

Nearly 6 in 10 (57%) think SONY is capable of having a TV channel, and less than 1 in 5 (15%) disagree.

All respondents n=502 3.5 3.6 3.5 PRE-CONCEPT

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Could SONY do it?

QC2. Thinking about the SONY brand, regardless of whether they currently do it or not, how

much do you agree or disagree that SONY could do the following in the future?

Travel Agency Fashion Label Credit Card Sports Brand TV Channel Mobile Phone Network Movie Studio Online Music Store 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2% 4% 4% 5% 16% 17% 25% 44% 7% 11% 16% 16% 41% 41% 44% 40% 33% 28% 32% 31% 28% 28% 21% 11% 28% 25% 24% 28% 9% 9% 6% 4% 31% 32% 24% 20% 6% 4% 3% 1% Strongly Disagree (1) Partly Disagree Neither agree nor disagree Partly Agree Strongly Agree (5) 4.2 3.8 3.6 3.5 2.6 2.5 2.3 2.2 Nearly 6 in 10 (57%) think SONY is capable of having a TV channel, with nearly 1 in 6 thinking this is something SONY is highly capable of. Only 15% in total disagree that SONY can have a TV Channel in now or in the future. There is high agreement that SONY can have an online music store or a movie studio. All respondents n=502

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Product to brand association

Nearly 1 in 20 (4%) already associate SONY with TV shows or channels. SONY has the highest product to brand associations in the competitive set for Consumer Electronics, Music – recording / selling and Gaming video games & consoles. Movies – production & distributions and TV shows are more associated with Disney and Travel & Money with Virgin. All respondents n=502 QC

3. Please indicate which of the following brands you associate with

each of these products. S ONY Virgin S amsung Apple Microsoft Disney None C

nsumer E

lectrical i.e. TV units, sound systems, PC ’s Tablets, Phones 88% 11% 86% 78% 57% 1% 2% Music – recording / selling 64% 46% 8% 42% 6% 12% 7% G aming i.e. video games / console games 59% 3% 13% 48% 52% 14% 10% Movies – production / distribution 19% 3% 3% 6% 2% 91% 5% S ports – sponsorship / equipment 16% 27% 23% 6% 8% 2% 57% TV shows or channels 4% 2% 2% 5% 1% 87% 9% Travel 1% 81% 1% 1% 0% 6% 16% Money / C redit cards / Finance 1% 81% 1% 1% 1% 2% 17%

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Product to brand association - SONY

QC3. Please indicate which of the following brands you associate with each of these

products.

Consumer Electrical i.e. TV units, sound systems, PC’s Tablets, Phones TV shows or channels 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 88% 64% 59% 19% 16% 4% 1% 1% All respondents n=502 SONY’s highest product to brand association is with Consumer Electricals – TVs, sound systems, PC’s etc., at 88%. SONY also has high associations with Music and gaming. Only 4% would currently associate SONY with TV shows or channels.

SLIDE 36 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Do they like it and will they watch it? Main Findings in Detail

SLIDE 37 Fuel for Brilliant DECISIONS Respondents were shown a 30 second video featuring a selection of content from the SONY women’s channel, accompanied by a stylised SONY logo and mood music. When the video ended, respondents were shown the 5 feature components again for 10 seconds each.

Visual Stimulus

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Overall appeal

Total (N=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 47% 52% 45% 28% 24% 29% 8% 8% 8% 8% 7% 8% 9% 8% 9%

7 7 7

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

The SONY channel was well received, with 3 in 4 (75%) giving a positive score, including nearly (47%) giving a top 3 box score for overall.

All respondents n=502 Very Appealing Not at all Appealing

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What do you like about the SONY Channel – Top 3 Box (47%)

QD1b. What, if anything, do you particularly LIKE about the channel?

“The variety of women's shows that differ greatly though are all easy shows to get glued too.” “All the good shows on ONE channel so you don't have to go fishing around looking for them!!” “The variety of shows. I could count at least 5 of the shows I particularly like.” “I like a lot of the shows mentioned (eg. grey's anatomy), and I like the sound of the new shows they would like to air. I also like that there would be a channel to play the soaps I miss!” General Content / Programs / Shows 29% Variety / Range

f Programs /

Shows 31%

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Likes by Appeal

For those who gave an 8-10 appeal, the highest attributes are for the programing – with 31% mentioning - Variety / Range of Programing and 29% mentioning General Content. Interestingly, 16% of those who gave a Bottom 3 Box rating for appeal mentioned Local Repeats / Australian Programs as something they liked about the channel.

D1. Likes in Channel by D1a. Based on what you have just seen, how

appealing do you feel this channel is to you? Total Top 3 Box 6-7 Neither 3-4 Bottom 3 Box Base= 502 244 134 42 38 44 Variety/Range of programs and shows 22% 31% 23% 4% 11% 0% General Content/ Programs/ Shows NFI 21% 29% 18% 15% 15% 3% New shows 8% 10% 6% 3% 10% 0% Movies NFI 7% 5% 5% 8% 6% 17% Australian content / Austraian shows NFI 5% 4% 7% 5% 7% 0% Drama NFI 4% 6% 3% 4% 5% 0% Encores of homegrown favourites/Australian Programs / Specific show 4% 2% 5% 1% 7% 16% Event Miniseries and Movies / Specific Movie/Miniseries 4% 5% 6% 0% 0% 6% Doesnt have unliked content 3% 2% 6% 0% 4% 3% Female focused 3% 4% 2% 0% 2% 0% Everything/ All of it 2% 5% 0% 1% 0% 0% Greys Anatomy 2% 2% 3% 1% 0% 6% Exclusive Premieres from the U.S. / Specific show 2% 1% 6% 3% 0% 0% Comedy NFI 2% 3% 2% 4% 0% 0% Mini Series NFI 2% 2% 2% 0% 5% 0% American content / US Shows NFI 1% 1% 1% 0% 7% 0% Repeats/ Encore Screenings 1% 2% 0% 1% 0% 0% Soaps NFI 1% 2% 1% 0% 0% 0% Old content 1% 2% 0% 0% 0% 0% Other 5% 4% 4% 18% 0% 5% Nothing/DK 11% 1% 7% 31% 24% 44%

SLIDE 41 Fuel for Brilliant DECISIONS

What do you dislike about the SONY Channel – Bottom 3 Box (9%)

When giving an 0-1 appeal score, the predominant attribute again is to the shows – the variety of shows, shows they like, shows that look interesting etc. “Too many shows with the beautiful people being nasty and overtly sexy.” “I do not watch any of the programs shown on the channel.” “American and female based....horrible!” “Too many soaps and chat shows and shows, not enough really interesting / challenging

content. If eat pray love is an example of the

kind of movies on offer, that's a bit off putting. What about something like black swan.”

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Dislikes by Appeal

D1. Dislikes in Channel by D1a. Based on what you have just seen,

how appealing do you feel this channel is to you? Total Bottom 3 Box 3-4 Neither 6-7 Top 3 Box Base= 502 44 38 42 134 244 Soaps NFI 17% 15% 23% 20% 24% 11% Doesn't have content I like 9% 3% 8% 12% 14% 7% General Content/ Programs/ Shows NFI 6% 23% 8% 12% 2% 5% American content / US Shows NFI 6% 5% 3% 12% 10% 2% Repeats/ Encore Screenings 5% 4% 15% 5% 5% 3% Negative female stereotype 4% 19% 6% 13% 3% 0% Same shows available on other channels 4% 7% 7% 7% 5% 2% Drama NFI 3% 11% 7% 5% 3% 1% Talk Shows NFI 3% 3% 12% 1% 3% 1% Old content 2% 2% 8% 3% 4% 1% Express From The U.S. much loved Daytime Series / Listed show 2% 5% 3% 0% 3% 1% Female focused 2% 3% 0% 0% 3% 1% Everything/ All of it 1% 9% 5% 1% 0% 0% Mini Series NFI 0% 3% 0% 0% 0% 0% Sports NFI 0% 1% 0% 0% 0% 0% Other 3% 12% 8% 0% 4% 1% DK/Nothing 38% 1% 13% 31% 23% 59% Overall, 38% said there was nothing they didn’t like about the channel, which rises to around 6 in 10 (59%) respondents who gave a Top 3 Box Appeal. Looking at Channel Dislikes, 17% mentioned Soaps.

SLIDE 43 Fuel for Brilliant DECISIONS

What type of person would the SONY Channel be?

Loves to entertain Feminine Modern High quality Clever wit Sexy 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 84% 79% 79% 77% 75% 70% 70% 67% 66% 66% 65% 64% 63% 60% 60% 53% 52% 52% 50% 43% 43% 28% All respondents n=502

For 84%, the top personality trait associated with the SONY Channel is “Loves to Entertain”. SONY also has high associations with Accessible (79%), Friendly (79%), Fun (77%) and Modern (75%).

SLIDE 44 Fuel for Brilliant DECISIONS

How would you describe the SONY Channel?

The top description associated with the SONY channel is “Light entertainment – nothing too dark or heavy”. Other high associations include: Offers great TV, particularly escapist drama and comedy (68%), Fun and addictive shows and Features shows with strong, relatable female leads (66%).

All respondents n=502 Light entertainment – nothing too dark or heavy It’s not a 24 hour soap channel Humour that is clever, never crass A guilty pleasure 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 79% 68% 66% 66% 65% 62% 61% 60% 60% 59% 58% 55% 54% 54% 52% 52% 46% 44% 43% 35% 34% 32% 25% 21%

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Channel diagnostics

It looks really different to other channels It suits the SONY brand This channel would be for someone like me It made me feel different about the Sony brand I really like the idea of this channel The channel would have programs and shows I would want to watch 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54% 46% 65% 63% 71% 76% 19% 31% 13% 26% 13% 8% 26% 16% 21% 9% 16% 16% Disagree Neither Agree 3.9 3.9 3.8 3.7 3.5 3.4

Over 7 in 10 agree that they like the idea of this channel and that it would have programs they would like to watch.

All respondents n=502

*Benchmark against best Fox Footy concept = 68% Average 5 = Strongly Agree

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Likelihood to watch

Total (N=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 59% 60% 59% 22% 19% 23% 7% 7% 7% 5% 4% 5% 8% 10% 7%

7 7 7

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

8 in 10 women are likely to watch the SONY Channel if it was available, with 6 in 10 highly likely to watch.

All respondents n=502 Would definitely watch Not at all likely to watch

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. . . Prefer the name

SONY Entertainment

Preferred name

in 3

2

Almost

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Preferred name

Almost 2 in 3 (65%) chose Sony Entertainment as the preferred name

Sony Entertainment Sony Entertainment Television Sony Glow Sony Stella Sony Fling 0% 20% 40% 60% 80% 100% 65% 60% 47% 29% 27% 27% 18% 16% 11%

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Will it build subscriptions? Main Findings in Detail

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Acquisition / Retention Propensity – Foxtel

There was no change to the Foxtel Retention / Churn proportion (0-4) and a 6 percentage point decline in Acquisition proportion (6-10), after seeing the SONY channel concept 0-4 Retention / Churn 6-10 Acquisition 0% 10% 20% 30% 40% 50% 4.4% 27.0% 4.3% 21.2% Resting Propensity Concept Propensity All respondents n=502 Resting Propensity = prior to concept Concept Propensity = after concept

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More on Retention

Firstly the Sony Concept impacts positively on the retention of those most vulnerable.

Interestingly, mapping Resting Propensity with Concept Propensity for RETENTION, shows quite significant upward lifts for the most vulnerable – i.e. all resting scores of below 6 increase. All Pay TV Subs n=248 100 200 300 400 500 600 700 1 2 3 4 5 6 7 8 9 10 6 6 5 7 7 6 7 7 8 8 9 Population CONCEPT PROPENSITY RESTING PROPENSITY 000’s Definitely Not at all Definitely Resting Propensity = prior to concept Concept Propensity = after concept

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Where does behaviour change?

Most likely to Churn Less likely to Churn Less likely to Acquire Most likely to Acquire

But isn’t behaviour more likely to occur at the extreme ends of the propensity scale?
What would the net impact on subscriptions look like using a conventional Top 3,

Bottom 3 Box Approach?

Indifferent 1 2 3 4 5 6 7 8 9 10 Acquirers Churn Risk Churners Acquire Potential Passive

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Top 3 box propensity model

An alternative Top 3 (Acquisition) - Bottom 3 (Retention) model shows;

A 1.2 percentage point decrease in the Retention / Churn proportion; and
A 1.7 percentage point increase in the Acquisition proportion,

All respondents n=502 0-2 Retention / Churn 8-10 Acquisition 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 3.2% 3.7% 2.4% 5.4% Resting Propensity Concept Propensity Net 3 percentage point increase in subscriptions (5.4 Acquire – 2.4 Churn)

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Projected Subscriptions

Using past OZTAM data as the base shows a realistic survey estimation of future subscriptions using the resting propensity (29.3%). Adding the Sony Channel to the subscription environment shows a result that is better than the baseline (31.8%). Qtr 1 '11 Qtr 3 '11 Qtr 1 '12 Qtr 3 '12 Qtr 1 '13 Qtr 1 '14 Sony Channel Proj 25% 30% 35% 29.6% 29.8% 30.1% 30.1% 29.9% 29.7% 29.2% 29.2% 28.8% 29.3% 31.8%

PAY TV Penetration Estimates & Projections (Using Top 3 / Bottom 3)

QTR 1 2014 Prediction = QTR 1 2013 (28.8%) + (Acquire (3.7%) - Churn (3.2%) ) (Based on women only)

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Conclusions and Implications The Way Forward

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Is there a need?

What's missing: Australian / Local Content (14%), Quality Movies / Mini Series (12%), Quality comedies (8%), Drama (7%) and Variety (7%).

7 in 10 women think that something is

missing from the current Australian TV

ffering.

Overall Channel 7 is seen as catering best to women, although Lifestyle is seen as #1 amongst Pay TV Subscribers. What’s Missing Catering to Women CONCLUSION: Australian women do feel that something is missing from TV, and rate the current attempts to cater to women as average at best. Subsequently many think there is room for a channel more dedicated to their gender.

When asked almost 1 in 3 (31%) women

aged 25-54 think there is need for a channel that caters more towards women. Is there a need?

Women give a 6 out of 10 to the current

efforts of TV to cater to women, including nearly 4 in 10 (37%) who rate it a 5 out of 10

r less. There is clearly plenty of room for

an improved offer.

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Could SONY do it?

SONY already has a strong association with QUALITY and TVs.

A majority (57%) of women agree that

SONY could do a TV Channel. In addition it was seen as providing: light entertainment, not too dark or heavy (79%), a great escape (68%), with fun and addictive shows (66%) and strong relatable female leads (66%) – but importantly still accessible to a broader audience (60%). SONY & TV SONY Personality CONCLUSION: SONY is well positioned to deliver a TV channel to the Australian female market and would benefit from its existing quality and entertainment heritage.

SONY currently is more associated with

electronics and in particular TVs, but can clearly stretch into the realm of a TV channel as evidenced by its acceptance and ability to demonstrate a love of entertainment. Could SONY do it?

Personality wise - the Sony Channel itself

was seen as: Loving to entertain (84%), Accessible (79%), Friendly (79%), Fun (77%), and Modern (75%).

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Would they watch it?

Almost 1 in 2 (47%) women aged 25-54, gave the SONY Channel an appeal score of 8 or more!

The SONY Channel as presented has great

appeal with a mean appeal score of almost 7

ut of 10.

The SONY Channel was also seen as: having attractive programs (76%), being relevant (65%), and differentiated (54%). Is it Appealing? Do they like it? CONCLUSION: The SONY Channel as presented is well liked, has great appeal and would be watched if available.

Watching propensity is high assuming

availability with an average score of over 7 (where 10 is definitely watch) – a majority (59%) gave a watch propensity score of over 8 out of 10. Will they watch?

Overall the SONY Channel was really liked

(71%).

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Would it drive subscriptions?

Using a bottom 3 box approach to retention (i.e. those most likely to churn) shows a 1.2 percentage point decrease in the Retention / Churn proportion.

Although on average a fairly flat effect on

retention scores, the SONY channel does provide marked uplift in intended retention amongst those currently most vulnerable. Using the top 3 box approach to acquisition (i.e. those most likely to subscribe) shows a 1.7 percentage point increase in the Acquisition proportion. Does it Retain? Does is acquire? CONCLUSION: The SONY Channel as presented has potential to both Retain and Acquire subscriptions.

Based on a calculation of Acquisitions minus

Churns, shows a potential 3 percentage point increase in Subs using the top 3, bottom 3 approach. Does it build Subs?

The SONY channel also has the potential to

attract new subscribers.

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D&M Research Pty Limited Newtown Business Centre Suite 104, 1 Erskineville Road NEWTOWN, NSW 2042 e query@dandmresearch.com.au ph +61 2 9565 2655 fax +61 2 9565 2787 Derek Jones – Principal e derek@dandmresearch.com.au

HOW TO FIND US

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Pre and Post Propensity Scores Appendix

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Pay TV Subscribers - Retention

Pay TV Subscribers n=248

The table below shows pre and post Retention scores which clearly move around a fair bit for Pay TV Subscribers

Likelihood to Retain Resting Propensity Post Propensity Absolute Difference Relative Difference 0 - Not at all 0.4% 1.2% 1% 303% 1 1.6% 0.4%

26% 2 1.2% 0.8% 0% 66% 3 0.4% 1.1% 1% 270% 4 0.8% 0.8% 0% 98% 5 - Neither 4.4% 13.4% 9% 302% 6 4.7% 5.4% 1% 115% 7 12.5% 7.1%

56% 8 13.5% 14.0% 0% 103% 9 12.8% 17.0% 4% 133% 10 - Definitely 47.5% 38.7%

82% Means 8.5 8.1

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Non subs – Acquisition

Non subs n=254

A similar effect can be seen for pre and post Acquisition scores for Non-Subs

Likelihood to Subscribe Resting Propensity Post Propensity Absolute Difference Relative Difference 0 - Not at all 32.3% 39.3% 7% 122% 1 13.9% 9.9%

72% 2 4.1% 5.8% 2% 141% 3 1.9% 5.7% 4% 294% 4 5.9% 3.9%

67% 5 - Neither 14.9% 14.2%

95% 6 12.4% 9.2%

74% 7 10.8% 6.6%

61% 8 1.5% 2.8% 1% 193% 9 1.2% 1.1% 0% 94% 10 - Definitely 1.1% 1.4% 0% 131% Means 3.1 2.7

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Type of Foxtel Connection

Don’t know / unsure Foxtel on Internet TV Foxtel iQHD Foxtel iQ 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 22% 6% 37% 40% The majority of PAY TV subscribers had either Foxtel IQ (40%) or Foxtel IQHD (37%). Pay TV subs n=248

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Foxtel Package – Set Top Box

Movie Basic Family Movie Basic Showcase HD Kids & Music Sports Knowledge & Adventure Drama & Lifestyle Get Started 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 32% 33% 36% 53% 58% 59% 65% 90% Nine in ten Foxtel Subs have the Get Started Package. Around 2 in 3 (65%) have Drama & Lifestyle. Pay TV subs n=182 with set top box (unsure of connection type not included)

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Foxtel Package – Internet TV

Sport Movie Basic Showcase Entertainment Get Started 0% 10% 20% 30% 40% 50% 60% 70% 80% 38% 40% 59% 72% Seven in ten Foxtel Subs with Internet TV have the Get Started Package. Pay TV subs n=14 with Internet TV