Sony Digital Cinema Business

1

Toshihiko Ohnishi

Senior Vice President Professional Solutions of

America Sony Electronics Inc.

Topics for Today

1. Market Outlook ; Digital Conversion

2. VPF (Virtual Print Fee)

3. Business Opportunities beyond Cinema

2

Worldwide Number of Screens (2009 Estimation, digital screens in

( ))

39,600 (7,900+)

2,800(300)

9,000(300)

North AmericaNorth America

Latin AmericaLatin America

37,800(4,580) 35,200

(1,300)

10,100(150)

3,400(300)

1,900(200)

4,000(200)

2,100(400)

EuropeEurope

ChinaChina

KoreaKorea

S.E. AsiaS.E. Asia

JapanJapan

IndiaIndia

AustraliaAustralia

World Wide : 149,300 World Wide : 149,300 (16,405, 11%)(16,405, 11%)

Source: Screen Digest Dec. 2009(# of Europe is updated based on Screen Digest Mar.

2010)

Worldwide Number of Digital Screens

0

10,000

20,000

30,000

40,000

50,000

60,000

2005 2006 2007 2008 2009 2010 2011 2012 2013North America Europe Asia Pacific Lat America

Source: Screen Digest May. 2009

Market Outlook

US Box Office Trend

Source: Box Office Mojo (http://boxofficemojo.com/)

3

0

2,000

4,000

6,000

8,000

10,000

12,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 20091,200

1,250

1,300

1,350

1,400

1,450

1,500

1,550

1,600

Gross Revenue Tickets Sold

($Million) (Million)

$5.39

$7.50

Market Outlook

Source: Screen Digest May 2009 Presentation

4

Market Outlook

0

2

4

6

8

10

12

14

16

2005 2006 2007 2008 2009

2D 3D

10%

20%

28%

44%

(‘000)WW Digital Projector

2009: 17 3D movies released 2010: 23 3D movies scheduled

Box Office of Recent 3D Releases (US & Canada)

DBO (to date) $124M $295M $740M

57%70%

81%

43%30%

19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cloudy with aChance ofMeatballs

Alice inWonderland

Avatar

3D Box Office 2D Box Office

Source: Rentrak and numbers reported by studios.

5

Movie Industry in US - Overview -

Hollywood Major

Studios

Independent/Others

Exhibitors

2000+

～ 2000

Market Outlook

Overview of “VPF Program”

6

SONY4K Projector

SONYDCSS

(Digital Cinema Solutions & Services)

2K ProjectorManufacturers

DCIP

Server & etc. Manufactures

Products Supplier

Integrator/Service Provider

Exhibitor/Theater Chain

Studio

•Products Supply

•Lease•Integration/Maintenance•(Solutions & Services)

VPF

Digital Content Distribution

Total Cost of Ownership for Digital Equipment

Consists of ;

•Projector & Peripherals (incl. Shipping, Installation)

•Server & Peripherals (Initial + Replacement)

•Replacement Parts (Lamps.

Reflectors, Lenses)

•On-going Maintenance

•Interests

VPF (Virtual Print Fee)

VPF

Cinedigm

Source of Funding ;

•Studios VPF (per title, per screen)

•Exhibitor Contribution (Maintenance, Replacement Parts, etc.)

Overview of “VPF Program”

7

SONY4K Projector

SONYDCSS

(Digital Cinema Solutions & Services)

2K ProjectorManufacturers

DCIP

Server & etc. Manufactures

Products Supplier

Integrator/Service Provider

Exhibitor/Theater Chain

Studio

•Products Supply

•Lease•Integration/Maintenance•(Solutions & Services)

VPF

Digital Content Distribution

Total Cost of Ownership for Digital Equipment

Consists of ;

•Projector & Peripherals (incl. Shipping, Installation)

•Server & Peripherals (Initial + Replacement)

•Replacement Parts (Lamps.

Reflectors, Lenses)

•On-going Maintenance

•Interests

VPF (Virtual Print Fee)

VPF

Cinedigm

Source of Funding ;

•Studios VPF (per title, screen)

•Exhibitor Contribution (Maintenance, Replacement Parts, etc.)

VPF agreement signed with all 6 major

studios and 2 mini-majors

•SEL-DCIP-AMC Purchase agreement signed

•SEL-DCIP-Regal Purchase agreement

signed

•DCIP-JPMC financing closed ($660M, 10,000

systems)

Master Lease agreement signed

with 10 theatre chains

•Simultaneous in 4 cities - Chicago, LA, San Francisco & Seattle•2 Day Event, Monday/Tuesday•Sold Out All Available Seats

8

Business Opportunities beyond Cinema

9

Business Opportunities beyond Cinema

Live Music Events

In Theater

At Home

Premium events, DVD sale on site

Sony Offers Variety of Services to the Theatres

Gaming lounges

Big Screen Gaming

Digital Infrastructure

Digital SignageMenu Boards4K Projector

Alternative Content: Music Series

10

Business Opportunities beyond Cinema

Theater Floorplan

Projector Booth

AuditoriumConcessio

n Stand

Box Office

Lobby

PlayStation Lounge

11

Business Opportunities beyond Cinema

4K Projector

Other Digital Equipment

Installation &Maintenance

VPF

Alternative Content

Big Screen Gaming

Live 3D Content

PS Hardware

Managed Service

Digital Signage

Digital Signage

CRM/Loyalty

Managed Service

Digital Signage

CRM/Loyalty

Managed Service

Security System

Digital Signage

CRM/Loyalty

Managed Service

Security System

Pre-show Ad.Gaming Event