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• General

– What do we most need to be more successful? Clear goals? Clear priorities? Identification of challenges? Organizational changes that address those challenges?

• Technology / control

– If PlayStation is a “hero” / priority platform, are there challenges that need to be addressed with regard to control of PlayStation services, firmware, client development, etc.

– Do we have a plan for apps

• Content

– How do we best manage content initiatives and engage the content Cos.

• Organization

– General description of organization and responsibilities

– How do we address the trade-offs between content resources close to content cos. (credible, near expertise) vs. in service co (better able to translate content into service)

• Economics of current services

– What direct costs keep services from being profitable today

– What level of marketing budget moves the needle

• Current initiatives

– Who can help us model a VOD uplift for Crackle+

– Can we launch UV in-time to support titles in June

Questions

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STRATEGIC CONSIDERATIONS

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– Differentiated content

– Marketing

Fundamentals

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Acquire Customers Retain/Monetize

Execution

– Goals

– Priorities

– Success on one platform and territory first, then broaden

– Integrated service offering across Music, Video, Games

– Each offering is fully competitive (music competitive with Spotify)

– Killer UI (competitive with XBOX)

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Customer Acquisition

• Free / easy to discover content for customer acquisition

• Increased marketing spend

– Incorporation in Electronics TV ads

– Increased SNEI budget

– Increased support by SPE, SME, SCE

Monetization

• Improved underlying services to capitalize on and monetize newly acquired customers

• Improved User Interface

– Single promotional “landing page” with clearly highlighted content for Music, Video, Games

• 3rd party services on PlayStation behind a pay wall (in-line with XBOX Live Gold)

Tactics

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Why Try (Customer

Acquisition)

Customer Value Proposition – “Why Try / Why Buy”

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Why Buy (Monetization)

Vivo+ (Free)

Compelling Service (Music Unlimited)

Crackle+ (Free)

Heavily Promoted and Exclusive Films

(Early EST, PVOD, UV)

VOD & EST PS+ required to access premium

services

Music Video PS+ (On PlayStation Only)

Cross-Sell Cross-Sell Gateway to Other Services

Gateway to well-known 3rd party

services (e.g., Netflix)

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• Economic goals

– Discuss willingness to accept significant near-term investment to ensure we can create a highly competitive service which will eventually yield:

• Significant service-level profits

• And, provide ancillary benefits to hardware

• Service and hardware prioritization

– First: Convert more customers to active, paying SEN customers

• New accounts: Increase % of Sony Hardware customers that have SEN accounts

• Increase % of current accounts that are active / paying

• Increase revenues from current active / paying accounts

– Then: Use the service, content offerings, and customer enthusiasm to drive hardware sales

Goals and Priorities

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• Platform Goals

– First: Establish a superior service with differentiated content on a “hero” platform, namely the PlayStation

– Then: Broaden that service in a uniform fashion across device platforms

• Geographies for differentiated content

– First: Introduce new offerings in U.S.

– Shortly after (a matter of months): Launch in 2-3 other key markets [Japan, Europe?]

– Then: Roll-out globally at a realistic pace

Goals and Priorities

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• February: Announce support for UV

• February : Significant SPE and SME marketing support of existing services in the market

• May: Announce Crackle+ concept and upcoming originals

• June: First “Exclusive and Early” title available; UV support necessary

• Fall: Crackle+ and Vivo+ launch

Biggest “Exclusive and Early” titles; security needed by October

• Discuss: Planned UI changes

Planned improvements to the music service

Preliminary Timelines

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Areas to be Managed

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ContentPlatform Service

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Organizational

• Engage and leverage the entertainment companies and content initiatives [discuss best method]

• Single point of ownership over elements critical to SEN’s success [discuss if this includes PlayStation services and firmware]

Financial

• Marketing budgets (in SNEI and Hardware; with “in-kind” support from SPE and SME) sufficient to:

– Generate wide-spread brand awareness for SEN

– Generate a specific understanding of what the service offers

– Promote specific content opportunities

Technical

• Compelling UI roll-out (competitive with XBOX)

• Improvements to the music service

Must Haves

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Potential Changes

• Vivo (current ad-supported version) on PlayStation immediately

• Build a solution for apps

• On the PlayStation, move the 3rd party services behind the PS+ pay wall; keep Video Unlimited and Music Unlimited as peers to PS+ (not behind the PS+ pay wall); Crackle+ starts in front of pay wall

• Music service switches from 180 day trial of the “light” product, to a 30 day trial of the full product (and service is improved)

• Launch integrated search and UI across Music, Video, Games

• UV support by June

• Security for PVOD by October

Projects that may now be duplicative

• Movie-a-day service (Crackle+ offering has greater volume free to consumer)

• Crunchy roll (incorporate Anime in Crackle+)

Discuss

• SEN TV

Potential Service Changes to Discuss

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