Sony Music MRP Phase II Review (2014)

MRP Phase II Review
October 8, 2014
Mid-Range Plan
Agenda
Executive Summary
Full Year FYE15 Forecast

Brief Overview/Phase I Recap
Market Overview
Competitor Analysis
Key Strategic Initiatives and Goals
Financials (Main Focus)

Financial Anatomy of the Business
MRP Assumptions
Financial Projections
Risk/Opportunities & Sensitivity Impact of Key Drivers
Potential Strategic Investments
2
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
3
Corporate Strategy
Vision
A Global Market Share Leader Powered
By The Industry's Best Creative Teams
And Delivering Maximum Profits
Key Strategic Priorities

Roadmap to Winning During Mid-Range Planning Period
Grow Market
Share
Expand and
Grow Digital
Revenue
Models
Maximize
Results
Across All
Our
International
Operations
Maximize
Opportunities
With Broader
Rights and
New Business
Reduce and
Control
Costs/
Maximize
Efficiencies
Aggressively
Pursue
One Sony
Initiatives
5
FYE15 Financial Results ($ In Millions)

September YTD
FYE14ACT FYE15ACT Vs. PY
Full Year
FYE15FC
Revenues
$1,286
$1,261
-$25M
$2,780
Operating
Income
$95
$107
+$12M
$240
Net Cash Flow

Before Financing
$42
$66
+$24M
$138
Full Year
Forecasted
Operating
Income and
Cash Flow
Expected to
be On or
Above
Business Plan
Strong Start to Fiscal Year, Well

Positioned Going In to Second Half
New and Developing Artist Success
6
Recent New and Developing Artist Success
MAGIC!
Meghan Trainor
Ella Henderson
Pharrell Williams
Calvin Harris
A Great Big World
Kid Ink
Sia
Rita Ora
Hozier
MKTO
Pentatonix
Fifth Harmony
Kongos
Bobby Shmurda
Future
Tyler Farr
George Ezra
Collabro
Juicy J
Becky G
Tinashe
Bleachers
G-Eazy
7
Strong Slate of Key Releases In Balance of Year
Barbra Streisand (Sep 14)
Kenny Chesney (Sep 14)
Jason Aldean (Oct 14)
Pentatonix (Nov 14)
Pink Floyd (Nov 14)
Pitbull (Nov 14)
One Direction (Nov 14)
Foo Fighters (Nov 14)
Calvin Harris (Nov 14)
Olly Murs (Nov 14)
Garth Brooks (Nov 14)
Usher (Dec 14)
Meghan Trainor (Dec 14)
AC/DC (Dec 14)
Miguel (Dec 14)
Carrie Underwood (Dec 14)
J. Cole (Feb 15)
Adele (Mar 15)
Kelly Clarkson (Mar 15)
Alicia Keys (Mar 15)
MRP Financial Highlights ($ In Millions)

SME Revenues
$2,820
$2,780
$2,735
$2,763
$2,896
CAGR
+0.4%
FYE12
Actual
FYE15
Forecast
FYE16
FYE17
FYE18
Mid-Range Planning Period
SME Operating Income

$240
$250
$260
$133
% Operating
Income Margin
$275
MRP Period Will

Continue to Deliver
Improved Profits
and Profit Margins
Operating Income
and Cash Flow
Targets Favorable
to Prior MRP
CAGR
+12.9%
FYE12
Actual
FYE15
Forecast
4.7%
8.6%
FYE16
FYE17
FYE18
9.1%
9.4%
9.5%
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
10
September YTD ($ In Millions)

$1,286
$1,183
$1,261
-$25M
Vs PY
+$78M
Vs BP
+$12M
Vs PY
+$77M
Vs BP
$107
$95
$30
FYE14ACT
FYE15BP
FYE15ACT
FYE14ACT
Revenues
Operating Income
Net Income
Net Cash Flow
Before Financing
$1,286 $1,183 $1,261

$95
$101
$42
$30
$18
$38
FYE15ACT
Operating Income
FYE14ACT FYE15BP FYE15ACT
Revenues
FYE15BP
$107
$57 *
$66
Vs PY
Vs BP
-$25M
+$78M
+$12M
+$77M
-$44M
+$24M
+$39M
+$28M
Highlights
Favorable Sales Due to:
Success of Michael Jackson and Pharrell Williams
Unbudgeted John Legend Carryover, Jack White and Future
Favorable Sales and Success of MAGIC!
Earlier Than budgeted Release of Sia and Kenny Chesney
Favorable Digital Track Sales of Meghan Trainor, DJ Snake and Calvin Harris
Favorable SoundExchange
Recognition of Digital Unearned Advances/Guarantees (SNEI and XBOX)
Partially Offset by: Slippage of Usher, Rita Ora, Maxwell and Miguel
Favorable Operating Income Due to:
Favorable Flow Through From Sales
Recognition of Beats Gain On Sale and Sale of Nashville Building
Favorable Syco International TV Format Revenues
Favorable Timing of Talent
Favorable Cash Flow Due to:
Higher Operating Results
Proceeds From Sale of Nashville Building and Proceeds From Sale of Beats
Investment
Partly Offset by Syco Dividend Payment to Simon Cowell and Timing of
Payments
* Net Income Significantly Unfavorable to Prior Year As Prior Year Included Favorable Tax Audit Settlement In Holland
11
September YTD Major Sellers (Revenues)
Michael Jackson*
Chris Brown
Sia
$13M
$29M
Pharrell Williams*
$7M
Miranda Lambert
$7M
$6M
Beyonc
$5M
($11M RTD)
($31M RTD)
John Legend
Barbra Streisand
$10M
Now 88
$9M
$6M
MAGIC!
$6M
$5M
Now 87
($22M RTD)
Calvin Harris (singles) ($7M RTD)

($47M RTD)
Michael Jackson Includes 10M In Additional Revenues Due to Sony Mobile Deal; Pharrell Williams Includes Sales of Both Album G I R L and Single Happy
$5M
($10M RTD)
12
Full Year FYE15 ($ In Millions)
Revenues
Operating
Income
FYE13ACT
FYE14ACT
FYE15FC
$2,790
$2,869
$2,780
$218
$238
Net Income
$192
(1)
$194
Net Cash
Flow Before
Financing
$162 (3)
$150
$240
(2)
$138
FYE15 Forecast
Expected to Be
On or Ahead of
Business Plan
$138
1) FYE13 Net Income Includes Reversal of Brazils Valuation Allowance

2) FYE14 Net Income Includes Reversal of Tax Provisions As A Result of Favorable Tax Audit Settlements In Holland
3) Includes $30M Benefit From Deferring NOW! Investment Into FYE14
13
FYE15 Worldwide Key Release Schedule

(Release Revenues In Millions)
Original BP
Slipped Within Year
Brought Forward
Unplanned Major Seller
Out of Year
Pink Floyd
$9
Garth Brooks
$10
AC/DC
$22
Calvin Harris (UK)
$12
T.I.
$6
Fifth Harmony
$3
Usher
$7
Tamar Braxton
$4
Miguel
$6
Carrie Underwood
$8
Susan Boyle
$5
Future
$3
$12
Jack White
$4
Sia
$8
Pitbull
Foster The People
$1
George Ezra
$6
Barbra Streisand
$5
Foo Fighters
$16
Pharrell Williams
$14
MAGIC!
$8
Kenny Chesney
$8
A$AP Rocky
$6
$3
Chris Brown
$11
NOW 89 (UK)
$20
John Legend
One Direction (UK)
Shakira
$5
Kasabian (UK)
One Direction (UK)
$5
Michael Jackson
$22
The Script (UK)
Beyonc
$8
NOW 87 (UK)
$13
NOW 88 (UK)
Miley Cyrus
$4
Miranda Lambert
Carryover
1st Quarter
$9
$9
$13
Train
$7
2nd Quarter
$9
Il Divo (UK)
Olly Murs (UK)
$4
$12
Jamie Foxx
$4
3rd Quarter
Dave Matthews Band
$45
Kesha
Sara Bareilles
4th Quarter Release

Risk of Slipping Out of
the Year
Opportunity for
Earlier Release
Within the Year
Adele
$20
Meghan Trainor
Kelly Clarkson
$7
$11
Alicia Keys
$7
Rita Ora
$3
J. Cole
$8
Maxwell
$4
Andre 3000
$5
Future
$3
4th Quarter
19
$2
Adele Budgeted for Late
$5
$2
Ciara
John Mayer
Karmin
Miley Cyrus
Matre Gims (FRA)
Christina Aguilera
$3
$3
$3
$11
$3
$4 14
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
15
U.S. Industry Revenues RIAA Figures ($ In Millions)

1H 2013
Total Physical
1H 2014
B/(W)
$571
$482
-15.6%
$1,076
$956
-11.2%
Subscriptions (Paid)
151
204
+35.1%
Streaming (Ad-Supported)
105
165
+57.1%
Digital Radio
267
323
+21.0%
26
17
-34.6%
$1,625
$1,665
+2.5%
99
88
-11.1%
$2,295
$2,235
-2.6%
Downloads
Other
Total Digital
Sync
Total U.S. Industry
Strong Growth In Revenues

From Streaming Services
(Growth of 33% Y-O-Y) Helped
to Offset Continued Declines
In Physical and Downloads
Streaming Services Combined Contributed to 31% of

the Industry Revenues, Up From 23% In Prior Year
16
Worldwide iTunes Year-on-Year Growth (Industry Level)
7%
4%
3%
1%
1%
-4%
-5%
-7%
-6%
-11%
-13%
-14%
-14%
-16%
-17%
Apr
May
Jun
Jul
Aug
2013
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
-15%
-14%
-15%
-17%
May
2014
Jun
Jul
Aug
Sep
Fiscal 15
Budget
Assumption
17
Spotify & Pandora Active Monthly Users (In Millions)

+47%
48.2
Launch of Mobile Free Brings In

More Than 5M Users In the Month
of December, With 700K Paying
11.5
Paid Subscriptions
Active Users
7.0
1.0
6.0
12.0
3.0
31.0
15.0
May 2011 Jan 2012
20.0
25.0
5.0
Jun 2012
15.0
8.9
32.9
+26%
Aug From Jan
(11.5M Paid
Subscriptions)
9.1
8.2
36.7
4.0
11.0
9.0
Aug From Jan

(48.2M Total
Active Users)
16.8
22.1
Dec 2012 Nov 2013 Dec 2013
23.8
Jan 2014
Aug 2014
5.04 Billion Quarterly Listener Hours
71.1
76.4
54.5
36.1
21.0
10.0
QE Jun 2009
QE Jun 2010
QE Jun 2011
QE Jun 2012
QE Jun 2013
QE Jun 2014
18
Market Trends Recorded Music Only

(Trade Value, Excluding Japan, $ In Billions)
Actual
Forecast
-1.3%
$11.0
-4.4%
-2.7%
-0.8%
+3.6%
$10.5
$10.3
$10.1
$10.6
$5.9
$6.4
$5.7
$5.3
Digital
Physical
Total
FYE14
+8%
-10%
-1%
$4.6
$3.9
$7.1
$8.2
$3.0
$2.4
FYE15
FYE16
FYE17
MRP
MRP
+4% FYE15BP
+8% Prior
+12% Prior
+12%
+9%
+12%
MRP
MRP
-13% FYE15BP
-16% Prior
-21% Prior
-18%
-16%
-20%
-4%
-3%
-1%
Excludes New Business Revenues; Digital Figures Include Digital Radio
FYE18
+15%
-23%
+4%
19
Worldwide Digital Market Growth Projections (ex-Japan)

U.S. Vs. International ($ In Billions)
$5.9
$3.0
$2.9
FYE15
Forecast
$6.4
$3.4
$3.0
Total
CAGR
$8.2
+11%
$4.7
Intl
CAGR
$7.1
$3.9
+16%
$3.2
U.S.
CAGR
$3.5
+6%
FYE16
FYE17
FYE18
20
Worldwide Digital Market Growth Projections ($ In Millions)

100%
80%
60%
2%
7%
11%
1%
7%
7%
7%
13%
15%
14%
Other
27%
37%
Digital Radio
48%
59%
Video
40%
20%
0%
Audio Subs/Streaming
52%
Downloads
41%
21%
FYE16MRP
FYE16MRP
FYE17MRP
FYE17MRP
FYE18MRP
FYE18MRP
CAGR
$3,091
$2,606
$2,132
$1,705
-18%
1,614
2,372
3,416
4,782
+44%
Video
661
860
1,033
1,140
+20%
Digital Radio
412
468
513
538
+9%
Other
137
68
17
-69%
Total
$5,915
$6,374
$7,111
$8,169
+11%
Downloads
Audio Subs/Streaming
FYE15FC
FYE15FC
30%
21
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
22
Market Share Trends

Owned and Distributed Market Share Trends
Global Excluding Japan
2008
Indies
EMI Acquired
EMI
PLG
NOW!
Organic
2013
22.6%
+0.2%
+2.3%
25.1%
Now! Acquisition For $55M
30.6%
+7.8%
-3.4%
35.0%
EMI Acquisition For $1.9B,

Divested PLG and NOW!
15.4%
+2.3%
-3.1%
14.6%
PLG Acquisition For $765M
10.3%
21.1%
+4.2%
25.3%
Competitors Have Been Aggressive In Their Investment Strategies Over the Last Few Years
Source: IFPI For 2008 Through Proforma 2012. 2013 Based On Internal Estimates.
23
Calendar 2013 Market Share Breakdown by Territory

Universals Acquisition of EMI Has Increased Their Leadership Position In Most Key Markets
35.0%
25.1%
14.6%
Growth
Rank From 2012
U.S.
UK
Germany
France
Australia/NZ
Canada
ROW (incl. SA)
Asia (excl. Japan)
Latin America
WW (excl. Japan)
39.2%
32.2%
33.1%
32.5%
44.0%
42.0%
32.8%
16.2%
33.2%
35.0%
28.5%
23.9%
22.2%
22.0%
25.9%
21.6%
22.8%
12.2%
32.5%
25.1%
UNI +9.9% pts

Based On Internal Best Estimates
2
2
2
2
2
2
2
2
2
2
+0.5%
+2.7%
+0.9%
+4.3%
+0.2%
+0.3%
+2.1%
+0.6%
+0.5%
+1.2%
17.6%
15.1%
9.9%
14.5%
14.5%
14.5%
14.5%
7.6%
12.2%
14.6%
WMG -10.5% pts

24
Competitor Comparison Recorded Music

Most Recent 12 Months Available (Including Japan, $ In Millions)
Includes SMEJ
$5,467
$3,625
$644
SMEJ $774
$2,526
$414
$275
SMEJ $80
Digital
$2,251
Revenues EBITDA
ROS
12%
Digital
$1,273
(SME Only)
Digital
$1,090
Revenues EBITDA
Revenues EBITDA
11% incl. SMEJ

12% excl. SMEJ
11%
Revenues & EBITDA Amounts Shown for Comparative Purposes; Adjusted for One-Time and Other Items
UNI, SME & WMG 12 Months Ended June 30, 2014
UNI Includes EMI Acquisition From September 28, 2012; WMG Includes Parlophone Acquisition From July 1, 2013
25
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
26

Roadmap to Winning During Mid-Range Planning Period
Grow Market
Share
Expand and
Grow Digital
Revenue
Models
Maximize
Results
Across All
Our
International
Operations
Maximize
Opportunities
With Broader
Rights and
New Business
Reduce and
Control
Costs/
Maximize
Efficiencies
Aggressively
Pursue
One Sony
Initiatives
27
25.85%
25.60%
25.35%
25.10%
+0.25%
pts
+0.25%
pts
+0.25%
pts
Flat Growth
FYE15
Forecast
FYE16
FYE17
FYE18
Maximize New Talent Development Success Across

All Our Creative Repertoire Sources
Aggressively Invest In New Talent
Grow Market
Share
Expand Our Relationships With Independent Label

Sector
Look For Opportunities to Sign Established Talent
and Acquire Catalog
28
Maximize New Talent Development Success Across All Our

Creative Repertoire Centers
U.K.
Labels
Nashville
Core Labels
Classical
Catalog Artists
CMG
Indie Services
Salaam
Remi
ASTRONAUTS
WANTED
Wolfgang
Boss
Creative Partnerships
Asia
Latin Am.
Europe
Germany
France
Japan
Dr
Luke
Exclusive Producer
Local Talent Development
29
Aggressively Invest In New Talent
UK
Alex &
Sierra
Hozier
Rita
Ora
London
Grammar
MKTO
sgeir
Zhu
Kid
Ink
MAGIC!
Bleachers
Sia
Tinashe
Pentatonix
G-Eazy
A Great
Big World
Fifth
Harmony
Kat
Dahlia
Meghan
Trainor
Kongos
Bobby
Shmurda
Future
Tyler
Farr
Casey
James
Steven Lee
Olsen
The
Henningsens
Jerrod
Neimann
Swon
Brothers
Josh
Dorr
George
Ezra
Laura
Doggett
Nothing
But Thieves
Lonely
The Brave
Rag N
Bone Man
Madeon
Jamie
Joseph
Ella
Henderson
Collabro
Jack
Pack
Etta
Bond
Marlon
Roudette
Ady
Suleiman
Kid
Arkade
Targeting
to Achieve
35% or
Greater
Share of
New Artist
Breakouts
During
MRP Period
Strengthen Our Focus On Country and EDM Genre. Recent Achievements Include Signing of
Garth Brooks, New JV Deal With Disruptor Records and Continued Alignment With Ultra.
30
Look For Opportunities to Sign Established Talent and

Acquire Catalog
Maximize Digital Revenue Opportunities Through Targeted Partner Driven
Initiatives
Aggressively Pursue Strategic Catalog Investments
FYE08
New
Music
63%
Catalog
37%
FYE14
New
Music
59%
Catalog
41%
Importance of Catalog Assets Continues As We Migrate More Towards Digital

31
SME Digital Revenues
Total
CAGR
$1.9 B
$1.6 B
$1.3 B
$1.3 B
$1.4 B
$1,060
$868
$577
Expand and
Grow Digital
Revenue
Models
+13%
Considers Market &
Market Share Growth
Downloads
Streaming (Paid & Ad-Supported)
Video
Digital Radio
Other
Total
$636
$686
$701
FYE14A
$817
250
85
69
42
$1,263
FYE15FC
$704
375
120
90
26
$1,315
Intl
CAGR
+19%
$728
$706
$752
$830
FYE16MRP FYE17MRP FYE18MRP

$600
$496
$401
558
812
1,148
158
194
217
104
116
123
13
3
1
$1,433
$1,621
$1,890
U.S.
CAGR
+7%
CAGR
-17%
45%
22%
11%
-68%
13%
Estimated $0.6B Growth In Digital Revenues Over the MRP Period Driven by
Significant Growth In Paid Streaming
An Overall 44% Growth From FYE15
32
Global Revenues Continue Decline While Consumption

Reaches Record Highs
GLOBAL REVENUES EXPECTED TO
CONTRACT FURTHER
GLOBAL CONSUMPTION NUMBERS

ACROSS CHANNELS AT ALL TIME HIGH
PAID STREAMING
26M Paid Monthly Subscribers
520M music hours / month
$11.0 $10.5 $10.3 $10.1 $10.6
AD-SUPPORTED
WITHIN SUBSCRIBTION SERVICES
2013A
2014FC
2015MRP 2016MRP 2017MRP
45M monthly listeners

450M music hours / month
MUSIC CONSUMPTION HOWEVER

CONTINUES TO GROW
DIGITAL VIDEO
1BN monthly users
2.4BN music hours / month
OWNERSHIP + SUBSCIPTION (US)

98b

62b
581m
844m
1,070m
1,172m 1,271m 1,271m 1,336m

24b
588m
2006
501m
2007
428m
2008
382m
2009
1,259m
31b
20b
326m
331m
2010
2011
DIGITAL RADIO
OTHER CONSUMPTION
316m
289m

2012
2013

33
Conversion into Paid Subscription Is Ultimate Goal

Subscription Will Be Leading Revenue Channel by 2016
AVERAGE REVENUE PER USER
$70
PAID SUBSCRIPTION
$48
DOWNLOADS
$19
$4
PHYSICAL
AD-SUPPORTED
Strategies to support growth and healthy

transition from ownership to access are critical
Continue to adjust ad-supported streaming
tiers to drive conversion to paid
Remove on-demand listening capability
in ad-supported tiers
Further limit ad-supported experience
through changes in functionality and
content availability
Developing policies to restrict/limit promotion
on free and ad-supported channels
Limit digital radio where possible to ensure
partners have incentive to drive paid tier
Develop higher-price premium tier to include
a higher price point for high-definition audio,
lyrics, audiovisual and family plans
34
Conversion into Paid Subscription Is Ultimate Goal (contd)

Promote Device Ubiquity and Focus on Car Access
Service to device ubiquity will
accelerate consumer adoption of paid
subscription
Need paid subscription to win the
battle for the car, against current
low/zero monetization options such
as terrestrial/ digital/ satellite radio
Consistency of experience on
mobile, car and home is key yet
currently missing for consumer and
will incentivize conversion
SME to provide necessary incentives
to high-revenue partners so that
they are able to compete against
current alternatives
35
Continue Developing Other Revenue Streams

Maximize monetization of video content
YouTube subscription has potential to be significant
contributor to growth
SME to re-evaluate/limit licensing terms for ad-supported
during MRP period currently only ad-supported platform
offering on-demand features on both mobile and desktop
Continue to invest and create significant value in VEVO
- Develop VEVO.com migrate traffic from YouTube
- Expand original programming and content
development
- Expand internationally in priority territories
- Develop subscription offering for service without ads
and for premium content
36
Continue Developing Other Revenue Streams (contd)

Dont abandon download customer
Download business still significantly material and
some customers will not make the switch
Casual buyer will not transition to higher ARPU of
subscription
Ownership still preferred within some
demographics
Enhance products including more visual element and
high definition audio
Download product continues to simply be an audio
file
Sound quality and audiovisual have been outlined
as key developments of interest by listeners
37
Maximize
Results Across
All Our
International
Operations
Common International Initiatives

Across All Territories
Artist
Secure Global Artist

Breakthrough
Market
Continue to Aggressively
Pursue Opportunities to
Increase Repertoire Base
(Organically and by Acquisition)
Expansion
Aggressively Pursue
Opportunities to Exploit New
and Emerging Markets to
Secure No. 1 Position
38
Expanding Repertoire Base
Grow Market Share

A&R Joint Venture with
BLACK BUTTER
Negotiation with
COLDPLAY
Negotiation with
STROMAE
Possible Acquisition
with SME Classics:
HARMONIA MUNDI
Possible Label
Acquisition:
NAIVE
Negotiation with
LUIS MIGUEL
Negotiation with
ENRIQUE IGLESIAS
Exploring Acquisition
of TRADEMARK:
BRAVO
Label Acquisition:
PHONAG/TBA
Acquisition targets:
YMC /
CHROME/YEDANG
Exploring
Acquisition
with GDB:
BELIEVE
Negotiation with
major artist
KHALIL
Acquisition target:
RED FOO
MRP Initiative Aggressively Pursue Opportunities to increase

Repertoire base (Organically and by Acquisition)
39
Expanding Regionally
LATIN AMERICA
PERU:
Grow and exploit growing Peruvian
market through newly opened office
in Lima
CUBA:
Explore market entry.
Potential Acquisition of Catalogs, e.g.
EGREM for worldwide exploitation.
BRAZIL:
Further Explore Digital Opportunities
Explore opportunities around
Olympic Games 2016
TICKETING
Explore and build Ticketing Business
in Latin America
Overall Goal for Region
To Grow Profits by 40% to $50m
Secure No. 1 Position

AFRICA
KENYA/NIGERIA:
Grow and exploit West- and East
African digital markets through
newly opened office in Lagos and
Nairobi.
REPERTOIRE:
Target acquisition of local music
catalogue, e.g. Premier Music, Ivory
Music (African) or Melody, Rotana
(Arabic).
Target JV opportunities with
established players (Chocalate City,
DB Records)
DIGITAL EXPANSION:
Currently in Discussions with most
African Mobile Network Operators
e.g. MTN Nigeria, Etisalat, Airtel,
Huawei, Safaricom, Tigo, Vodafone,
IMI mobile.
Partnership with Digital Service
Provider NMusic in expansion to
Africa
ASIA
CHINA:
Expand Digital Business through
China Mobile Video deal and direct
online license deal with either
Tencent, Alibaba or CMC.
Increase Repertoire through
signing of major artists KHALIL from
Gold Typhoon (recent Warner
Acquisition) and MO MO WU from
Indie Dream China.
INDIA:
Grow Digital Business with new DSP
launches, e.g. Spotify, Google
Hungama, Eros, Rdio, Boinc (Sri
Lanka), Rockville (Pakistan).
Targeting Catalogue acquisitions:
Crescendo & Magnasound.
VIETNAM:
Explore market opportunities,
possibly open office
MRP Initiative Aggressively pursue opportunities to exploit new

and emerging markets to secure No.1 position
40
MRP Assumes $261M Revenues

SME Global FYE15FC
New Business Revenues
Passive
Artist Rights
Participation
($ In Millions)
Other
Artist
Management
Merchandising
Brands/
Sponsorship
($33M Profit
From Syco TV JV)
$23
$26
$11
$6
Total
$261
$37
Live
Maximize
Opportunities
With Broader
Rights and New
Business
$70M Op. EBIT
$74
$84
TV/Film
Artist Services
Capture and Exploit Broader Rights From New Artist Signings

Continue to Maximize Exploitation of X Factor and Got Talent TV Formats
Develop New Formats and Visual Content From Syco and Astronauts Wanted
(Judy McGrath) JV
Seek to Extend Long Term Successful Relationship With Simon Cowell
41
% Operating Income Margins

9.1%
8.3%
FYE14
Actual
Reduce and
Control Costs/
Maximize
Efficiencies
9.4%
9.5%
8.6%
FYE15
Forecast
FYE16
FYE17
FYE18
Targeting to Continue to Improve Operating Income

Margins Over MRP Period Through Initiatives In
Overhead, Marketing and Supply Chain
42
Overhead, Marketing Costs and Supply Chain

HC 8,000
$1,556M
HC 4,182
$954M
Overhead/
Headcount
2005
FYE15FC
Targeting $45M Gross Savings During MRP

Period to Partially Offset Inflation
FYE16
FYE17
FYE18
Overhead and Headcount Excludes Increases From Investment In Growth Areas and Emerging Markets
$560M
Marketing
Costs
15.3%
2005
$350M
15.3%
FYE15FC
$660M
Supply Chain
(Physical + Digital)
19.7%
% OF
NET SALES
2005
$280M
Targeting to Maintain Efficient Spending Rate

While Focusing On New Artist Development
FYE16
FYE17
FYE18
Targeting to Partly Offset Effects of Declining

Physical Pricing With Supply Chain Savings
(% of Net Sales Going From 12.4% to 8.4% Over MRP Period)
12.4%
FYE15FC
FYE16
FYE17
FYE18
43
Japan
50%
25%
ELECTRONICS
Aggressively
Pursue
One Sony
Initiatives
Michael Jackson Xscape FYE15 Successful

One Sony Global Collaboration
Sony Music Partnered With Sony Mobile, Sony Electronics
and Sony Network Entertainment On A Global Co-Marketing
and Promotion Campaign
44
To Continue to Seek One Sony Opportunities

Pursue Joint Signing Opportunities When Feasible
Maximize Sync Opportunities With Sony Music Owned Masters and SATV Controlled Copyrights
Maximize Collaboration Around Industry Related Issues
Continued Shift of Warehousing and Distribution Service Requirements to DADC:
- Comprehensive Reintegration of Manufacturing and Distribution, In Australia, Hong Kong, UK, Iberia,
Mexico
- New Long Term Exclusive Manufacturing Deal In Europe
- Under Negotiation - to Appoint DADC In Brazil As Our New Partner For Manufacturing and Distribution
- Licensing Out to DADC In Hong Kong Under Review
Explore Potential Synergies Between The Orchard JV and DADC Digital Ops Group
James Bond 2015 One Sony Collaboration
Collaboration With Sony Music, Sony Pictures and Sony Mobile On Running With Music: Ghostbusters
Edition, A Ghostbusters Branded Mobile Game
Exploring Sales & Distribution Cooperation Opportunities With Sony Pictures (Mexico, Benelux, Nordics,
Turkey, India, Africa, Brazil and France)
Continue to Explore Cost Efficiencies Across All Support Areas
Collaboration With Syco JV On Film/TV Opportunities, Including Potential Investment
ELECTRONICS
SME Is Currently Exploring Numerous Hi-Res Audio, 4K, and SOMC collaborations:
- Creating A Global Hi-Res Album Bundle For Xperia, and Potential Hi-Res Offering On Xperia Through
Sprint In the U.S. In Q1 2015
- Working With the U.S. Hi-Res Audio Team On An October Hi-Res Walkman Listening Event
- Shooting Yahoo Live! Music Events In 4K to Build Up SELs 4K Library
- A 12-18 Month Partnership Between Sony and the Foo Fighters Which Would Integrate Hi-Res Audio,
4K and Potentially Other Divisions Around the Artists 2015 U.S. and Global Tour Schedule
- Working With SOMC to Provide On An Emerging Artist Platform and A Recurring Offer/Streaming
Solution For Xperia Users, Allowing the Customer to Stream A Selection of Music Every Month
- Successful Sony Jive Music App to Be Launched In Indonesia and Other Territories
45
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
46
Repertoire Center Profit Summary
Local
International
Repertoire
Columbia
25%
UK Syco
UK
(ex. Syco)
Nashville
Epic
75%
Major
Repertoire
Centers
RCA
Talent From Major Repertoire Centers (Primarily English Language) Account For 75% of Global
Profits Therefore Critical to Success
Talent From Local Repertoire Centers Account for 25% of Global Profits Therefore Also An
Important Part of Our Business and Potential Growth Area, Particularly In Emerging Markets
47
Impact of Talent Investment
60%
of
Revenues
Talent
Investment
$173M
Talent
Investment
Talent
Investment
Talent
Investment
New
Music
New
Music
New
Music
New
Music
New
Music
New Catalog
New Catalog
New Catalog
New Catalog
New Catalog
New Catalog
40%
of
Revenues
Existing
Catalog
Existing
Catalog
Existing
Catalog
Existing
Catalog
Existing
Catalog
FYE15
FYE16
FYE17
FYE18
FYE19
Catalog Highly Profitable Due to Upfront Investment In New Music (Talent and Marketing)
Reduction In Talent Spending Will Have A Positive Short-Term Impact On Profit, But A Negative Medium
and Long-Term Impact On Profit and Valuation
Reduced Talent Spend Would Negatively Impact SME Market Share
New Releases Become Part of Catalog 18 Months After Release
48
Market Share Importance

Market Share Enables Leveraging of Fixed Cost Structure Gains Has Been One
of the Contributing Factors to Profit Increases and Margin Improvements
SME Global
Owned &
Distributed
Market Share
Source: IFPI
25.1%
24.0%
+3.1% pts
Over 2
Years
22.0%
CY11
Market Share Influences Negotiations of

Rates/Terms/Advances/Minimum
Guarantees/Equity In DSPs
CY12
CY13
Market Share Is An Important Factor In Determining

Income From Digital Services and Public
Performance and Broadcast (Radio Play)
Industry International Public Performance and Broadcasting Income
$630M
SME PP&B
Revenues For
FYE14 $166M
$751M
5.2 PPB%
of Industry
6.2 PPB%
of Industry
2010
2013
PP&B Industry Revenues Have Grown 19% Over

the Last 3 Years
Is A Significant Revenue Source
49
Global Industry Breakdown Recorded Music Only

(FYE15FC, Trade Value, Excluding Japan, $ In Billions)
Total Global Industry
Physical
$4.6
44% $10.5B
Digital Breakdown
Subscriptions
$1.6
27%
Digital
$5.9
56%
Downloads
$3.1
52%
Digital
Breakdown
$5.9B
Video
$0.7
11%
Digital Radio
Ringtones/ $0.4
7%
Other
$0.1
3%
Streams Per $1 SME Revenue

(Global CY14 Jun YTD)
633
727
769
AdSupported
Stream
Digital
Radio
408
109
Paid
Subscription
Stream
AdSupported
Stream
Excludes New Business Revenues; Digital Figures Include Digital Radio
AdSupported
Stream
50
Top Physical and Digital Partners

Physical
U.S.
On Average, >70% of Physical Revenues Come

From Only Top 5 Customers In Key Markets
Physical Projection of
-20% CAGR of 3 Yr MRP
Other
25%
Anconnect/
Anderson
30%
Concentration of Top Accounts Means Exit of

One Retailer Can Have Significant Impact On
Revenues
TransWorld
4%
Amazon
14%
Target
13%
Alliance
14%
Top 5 = 75%
Digital
Digital Projection of
+11% CAGR of 3 Yr MRP
Top 10 Global Digital Partners

Downloads,
Streaming (Beats),
Radio
53%
Streaming
11%
Downloads,
Streaming
Downloads
4%
Top 10 Global Digital Partners

Account For 89% of Total
3%
Mix of Top Partners Will Change

As We Move Towards More of
A Streaming Model
Risk of Cricket Exit
Radio
5%
Streaming
2%
Video
4%
Streaming
2%
Video
4%
Streaming
1%
Top 10 = 89%
Concentration of Major
Accounts to Be Spread Across A
Greater Number of Partners Is
Dependent On Partners Ability
to Achieve Financially Profitable
Business Models (See Spotify
and Pandora Example On Next
Page)
51
Spotify and Pandora Financial Data and Future

Profitability ($ In Millions)
Spotify First Launched

In Oct 2008 In Sweden
and EBITDA For 2013
Was A Loss of $109M
Pandora First
Launched In Jan 2000
Forecast Years Per Morgan Stanley
52
Album to Track Market

Albums
49%
51%
FYE14A
54%
46%
FYE15FC
61%
39%
Tracks
The Migration of the Music Market From

Physical and Downloads to Streaming
Reduces the Relevance of the Album
SME to Continue to Migrate Artist
Contracts and Operating Practices to
Support the Business Evolution Away From
Albums and Towards Track Consumption
70%
30%
77%
23%
FYE16MRP FYE17MRP FYE18MRP
Changes Could Include:

- Artist Contract Migration Towards Track
Focus
- Track Based Marketing As Opposed to
Traditional Album Based Marketing
- More EP Releases and Less Full LPs
- Ensuring Cost Efficiencies Around Lower
Volume of Recordings As Focus Is Not
On Releasing Albums With 10+ Number
of Songs
- Reverse Order of Release Planning Tracks to EPs to LPs
- Maximize Our Physical Business Where
Possible (Such As Consignment Based
Sales For Physical, Exclusive Product
Offerings, Digital/Physical Offerings)
53
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
54
Key Assumptions
Forecast
FYE15

FYE16
FYE17
FYE18
Comments
Physical Market
-13%
-16%
-21%
-23%
Accelerated decline in Physical Market
Digital Market
+4%
+8%
+12%
+15%
More aggressive growth expected during

later MRP years
Market Share
25.10%
To
25.35%
To
25.60%
To
25.85%
Increase of 0.75% pt during MRP period
Talent Costs
$173M
Flat
$180M
$210M
Investments to drive A&R/market share

growth & investments in emerging
markets
Inflation
-$20M
$20M
$20M
$20M
Savings
$20M
$15M
$15M
$15M
Real Estate
Flat
Flat
$12M
Flat
Reflects increased rent related to

relocation into new corp. headquarters
Investment In Emerging
Markets & Other Growth
Areas
$0M
$0M
$6M
$20M
Targeting emerging markets and growth

areas
-$23M
$20M
23
$20M
$20M
Overhead Vs. PY:

(Net After Inflation)
Restructuring
Offset inflation through targeted

savings initiatives
55
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
56
Comparison Vs. Prior MRP ($ In Millions)

Forecast
FYE15
Revenues
Operating Income
Net Cash Flow

Before Financing

FYE16
FYE17
FYE18
Prior MRP
$2,766
$2,831
$2,904
Forecast/MRP
$2,780
$2,735
$2,763
Inc/(Dec)
$14
($96)
($141)
Prior MRP
$230
$240
$250
Forecast/MRP
$240
$250
$260
Improvement
$10
$10
$10
Prior MRP
$130
$130
$135
Forecast/MRP
$138
$140*
$150
Improvement
$8
$10
$15
$2,896
$275
$160
MRP Op. Income Favorable From Prior Year MRP Despite Declining Revenues
* Assumes No Capital Payment Associated With NY Headquarters Relocation
57
Projected Improvement In All Profit Measures ($ In Millions)

FYE15
Bus. Plan Forecast

FYE16
FYE17
FYE18
$2,768
$2,780
$2,735
$2,763
$2,896
Operating Income
$240
$240
$250
$260
$275
Margin %
8.7%
8.6%
9.1%
9.4%
9.5%
Net Income
$138
$138
$150
$158
$168
Operating Cash Flow
$285
$292
$320
$330
$344
Net Cash Flow Before Financing
$138
$138
$140
$150
$160
Return On Equity
11.5%
11.3%
11.3%
11.2%
11.5%
EBITDA
$348
$341
$350
$367
$389
EBITDA Margins
12.6%
12.3%
12.8%
13.3%
13.4%
Revenues
MRP Reflects
Continued
Improvement In
Operating Income
Margins
58
Reconciliation
FYE14 Actual to FYE15 Forecast ($ In Millions)
Revenues
$2,869
Total Digital $53

+3.8%
+$21
Breakage +21
+$125
+$34
+$22
-$16
-$143
+$12
$2,780
Other
(New Business)
FYE15
4Q
Actual
Forecast
-$33
-$112
FYE14
FYE14
Actual
Actual
One Time Items
Physical Mkt
Decline -13%
Audio Subs/
Streaming
+50%
Downloads
-14%
Digital Video
+40%
Digital Radio
+32%
Other
-39%
Syco
Operating Income
Total Digital $31
$238
+$24
Breakage +14
Beats Gain +7
Other Gains +3
+$76
+$20
+$18
-$9
-$35
+$10
-$20
-$20
Orchard +6
NOW! +4
VEVO
Equity
Income
+$12
OH Inflation
OH Savings
Talent
New Business
$240
-20
+20
Flat
+12
-$74
FYE14
FYE15
Actual
One Time Items
Physical Mkt
Decline -13%
Downloads
-14%
Audio Subs/
Streaming
+50%
Digital Video
+40%
Digital Radio
+32%
Other
-39%
Syco
Costs/
Other/New
Business
FYE15
FYE16
Forecast
59
Reconciliation
FYE15 Forecast to FYE16 Target ($ In Millions)
Revenues
Total Digital $102

+7.8%
$2,780
$2,759
-$21
+$25
$2,735
Market Share
Gain +0.25% pt
FYE16
4QTarget
Actual
+$13
+$37
+$176
-$13
Breakage -21
-$151
-$111
FYE15
FYE14
Forecast
Actual
One Time Items
Adj. FYE15
Forecast
Physical Mkt
Decline -16%
Downloads
-16%
Audio Subs/
Streaming
+47%
Digital Video
+31%
Digital Radio
+14%
Other
-50%
Operating Income
Total Digital $64
$240
$216
+$105
+$20
-$44
One Time Items
Adj. FYE15
Forecast
Physical Mkt
Decline -16%
Downloads
-16%
$250
Biggest Risk Is Streaming Growth

47% Assumed Incremental
Growth Contributes $105M to
Profit If Only 30% Growth, Profit
Impacted Negatively by ~$39M
-$64
FYE15
FYE14
Forecast
Actual
+$2
OH Inflation
-20
OH Savings
+15
Other Cost Savings +6
-$8
-$24
Breakage
-14
Beats Gain -7
Other Gains -3
+$12
+$11
Audio Subs/
Streaming
+47%
Digital Video
+31%
Digital Radio
+14%
Other
-50%
Market Share
Gain +0.25% pt
Costs
FYE16
4Q
Target
Actual
60
Reconciliation
FYE16 Target to FYE17 Target ($ In Millions)
Revenues
Total Digital $168

+11.5%
$2,735
+$245
+$33
+$10
+$27
$2,763
Market Share Gain

+0.25% pt
4QTarget
Actual
-$10
-$167
-$110
FYE16
FYE14
Actual
Target
Physical Mkt
Decline -21%
Downloads
-18%
Audio Subs/
Streaming
+44%
Digital Video
+21%
Digital Radio
+10%
Other
-75%
FYE17
Operating Income
Total Digital $82
+$136
$250
+$12
+$9
-$7
-$54
-$70
FYE16
FYE15
Target
+$14
Physical Mkt Downloads

Decline -21%
-18%
$260
-$12
-$6
-$7
Inflation -20
Savings +15

Audio Subs/
Digital Video Digital Radio
Streaming
+21%
+10%
+44%
Other
-75%
-$5
Market
Share Gain
+0.25% pt
Real Estate
Emerging
Market
Investment
Talent
Investment
Costs
FYE17
FYE16
Target
61
Reconciliation
FYE17 Target to FYE18 Target ($ In Millions)
Revenues
Total Digital $251

+14.9%
$2,763
+$6
+$21
+$325
+$24
$2,896
Market Share Gain

+0.25% pt
FYE18
Target
4Q Actual
-$2
-$142
-$99
FYE17
Target
FYE14 Actual
Physical Mkt
Decline -23%
Audio Subs/
Streaming
+40%
Downloads
-20%
Operating Income
Digital Video
+11%
+$7
+$13
+$4
$260
-$1
-$48
Downloads
-20%
-$20
$275
-$30
Audio Subs/
Streaming
+40%
Digital Video
+11%
Digital Radio
+5%
Other
-75%
-$9
Inflation -20
Savings +15
Other
-4

-$63
Physical Mkt
Decline -23%
Other
-75%
Total Digital $109
+$162
FYE17
FYE15
Target
Digital Radio
+5%
Market
Share Gain
+0.25% pt
Emerging
Market
Investment
Talent
Investment
Costs/Other
FYE18
FYE16
Target
62
Cash Flow ($ In Millions)
Actual
Forecast
FYE14
FYE15
FYE16
FYE17
FYE18
$215
$215
$225
$235
$250
Depreciation/Amortization
83
78
80
87
94
Working Capital
(2)
(1)
15
$320
$330
$344
Earnings Before Interest & Taxes
Cash Flow From Operations
$296
$292
Capital Expenditures
(22)
(25)
(29)
(26)
(25)
Strategic Investments
(67)
(60)
(60)
(60)
(60)
$231
$244
$259
Proceeds From Disposal of Assets

EBIT Cash Flow
29 (1)
1
$208
$236
(2)
Interest & Taxes
(34)
(70)
(75)
(77)
(81)
Minority Interest Payments (3)
(24)
(28)
(16)
(17)
(18)
Net Cash Flow Before Financing
$150
1) Includes Proceeds From Sale of Beats ($17M) and Sale of Nashville Building ($12M)
2) Includes Receipt From SCA On Prior Year Taxes
3) FYE14 and FYE15 Reflects Dividends Paid to Simon Cowell and Benefit of X Factor U.S.
$138
$140
$150
$160
63
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
64
Risks During the MRP Period

Aggressive Market Assumptions
MRP Assumes 44% CAGR for Streaming and 20% CAGR for Video
Physical Decline Could Accelerate and Cause Accounts to Exiting Music Cliff Event
Unsustainable Profit From Syco TV

and Syco Music
MRP Assumes Extension of SC deal At Existing Terms

MRP Assumes Success With New Formats ($46M Profit From New Formats Over 3 Year MRP)
Higher Artist Royalty Cost
Pressure On Artist Royalty Rate For Digital Particularly Streaming

MRP Assumes Some Slow Rate Creep Could Be Faster and Higher
Talent Exposure On Superstar Artist

Deals and JVs
Key Superstar Talent Assumed to Perform Consistent With Historical Sales and No Additional
Advance Exposure
JVs Expected to Perform Develop New Talent and Turn Profitable
Unable to Generate Overhead

Savings to Offset Inflation
MRP Assumes $15M Savings Initiatives Per Year ($45M Total) All Currently Unidentified
Mitigated by Restructuring Provisions
Higher VEVO Funding Needed to

Drive Strategy
MRP Assumes $20M Per Year For Funding of VEVO Operations Which Is Only the Current Run Rate
Universals Aggressive Practices

Further Negatively Impacts Business
Economics
Drives Up Costs For Key Artist Renegotiations and New Artist Signings
Pricing Decisions Will Force Us to Follow Suit to Maintain Sales and Positioning
Potential Unfavorable Result From

Online Rate Hearing
Negative Impacts For Recorded Music From By-Product of DOJ Review of Publisher Issues
Negative Impact of the Orchard Exit

Provision
If Forced to Sell Lower Operating Income and Market Share/Influence

Mitigated by One Time Gain On Sale
Contingency Plans
to Mitigate Risks
Would Include:
Further Overhead Reductions

Reduction In New Talent Investment
Reduction In New Releases and Rosters
Potential Wholesale Changes In the Way We Do Business
- Exclusives/Windowing
- 3rd Party Artist Financing
65
Opportunities During the MRP Period

Purchase of Controlling Interest In
the Orchard
Consolidation of Earnings (51% to 100%)

Recognition of Gain From Revaluing Existing 51%
Interest
Sale of Spotify Equity
Potential Sale of Warrants and Equity Totaling ~7%

Interest
Approximately $4B Valuation
Liquidation of Other Equity

Investments
Deezer (5%)
VEVO (37.7%)
Higher Growth In Emerging Markets
Digital Business Provides Opportunity to Grow

Legitimate Music In Emerging Markets
Potential For Favorable Result From

Online Rate Hearing
U.S. Copyright Review Hearing On Online Radio

Rates to Take Place Calendar Year 2015
Recognition of Breakage
Unearned Advances
Minimum Guarantees
Flats From Digital Service Providers
66
Physical Market Sensitivity Operating Income ($ In Millions)

1% pt Growth/Decline In Physical Impacts
Profitability by Approximately $3M
High Case and Low Case Exclude the
Potential Offsetting Effect of Digital Market
Movements
Lower Case
CAGR
$289
$273
$259
$275
-16%
Base Case
CAGR
-20%
$260
Higher Case
$263
$250
CAGR
-24%
$248
$240
$241
FYE15
Forecast
FYE16
FYE17
FYE18
67
Digital Market Sensitivity Operating Income ($ In Millions)

1% pt Growth/Decline In Digital Impacts
Profitability by Approximately $8M (FYE16)
High Case and Low Case Exclude the
Potential Offsetting Effect of Physical
Market Movements
Higher Case
$395
CAGR
+15%
$333
Base Case
$284
$240
$250
$260
$275
+11%
$216
Lower Case
$190
CAGR
$164
FYE15
Forecast
FYE16
CAGR
FYE17
+7%
FYE18
68
Mid-Range Plan
Agenda
Executive Summary

Market Overview
Competitor Analysis

MRP Assumptions
69
Strategic Investments Summary

Similar to Prior Years, the FYE15 and MRP Includes $60M Per Year For Strategic Investments This Is to Fund Investments and Artist Renegotiations Which
Are Not Major or Individually Not In Excess of $25M
VEVO Funding Up to $20M Per Year Is Covered Within the FYE and MRP
Additionally, A $50M Provisions For Investments In Talent Acquisitions In Emerging Markets Have Been Assumed In the MRP Split Across FYE17 and FYE18
Summary of Potentially Major Strategic Investments Individually Over $25M and Not Included In the MRP Requiring Additional Capital
Investment
Opportunity
Investment Type
Strategic
Priority
Acquisition of
German Compilation
Brand
MEDIUM
Acquisition of 50%
of Syco JV
$3M
$5M
$4M
$3M
(6 Years)
MRP Assumes Our Relationship

With Simon Cowell Extends
Beyond the 12/31/15 Term of
Current Syco Venture
If This Is Not the Case, Our MRP
Profits In Year 2 + Year 3 Could Be
Negatively Impacted by $10M or
More Per Year
HIGH
Strengthens Position In Country Music

A Growing Genre
Provides Key Executive Talent
Provides Opportunity to Consolidate
Operations (Cost Synergies)
FYE15
or
FYE16
$100M+
$10M
$20M
$10M
$15M
HIGH
Preserves Market Share (~3.5%)

Gives SME Control and Allows
Consolidation
Provides Connection to Indie Label
Sector
EBIT Accretive
Transaction Could Result In Significant
One-Time Gain (~$100M+)
FYE15
or
FYE16
$175M $300M
$15M
$20M
$20M
$25M
FYE15
or
FYE16
$40M
(Not All
Upfront)
$2M
$6M
$2M
$4M
(2 Years)
Acquisition of
Remaining 49%
Interest
COLDPLAY
$30M
Annual
Impact
Thereafter
$100M+
(Taylor Swift)
Operating Talent
Investment In
Global Rock Band
Extends Relationship With Simon

Cowell
Key Global Repertoire Source
TV Formats Contribute Profits/Talent
FYE15
Potential Incremental MRP

Annual Profit Impact
Year 1
Year 2
Year 3
FYE15
or
FYE16
HIGH
Acquisition of
Country Music
Label/Key Executive
Strategic Rationale
~2% Local Market Share
EBIT Accretive
Potential
Potential Investment
Timing
$s
MEDIUM
Gives Us Relationship With One of the

Top Bands In the World
Helps Build Market Share
70
Strategic Investments Summary

Investment
Opportunity
Investment Type
Strategic
Priority
Acquisition of 80%
Shares In Kontor
Records
MEDIUM
Acquisition of Cuban
Record Label
MEDIUM
Acquisition of Key
European Digital
Distribution Company
Acquisition In Razor &

Tie Record Label
Potential Incremental MRP

Annual
Annual Profit Impact
Impact
Year 1 Year 2 Year 3 Thereafter
$52M
TBD
TBD
TBD
TBD
Important Cuban Music Catalog and

Would Put SME As Leader In This
Important Latin Genre
FYE15 FYE16
~$25M
TBD
TBD
TBD
TBD
MEDIUM
Believe Digital Is A Direct Competitor of

The Orchard With Significant Presence In
Central Europe
Opportunity Exists to Achieve Synergistic
Value With The Orchard
FYE16 FYE18
$75M $150M
TBD
TBD
TBD
TBD
MEDIUM
Razor & Tie Are Creators of Popular Kidz

Bop Franchise and Diverse Artist Roster
(0.5% U.S. Market Share)
SME and Razor & Tie Have Had
Longstanding Distribution Relationship
FYE16 FYE18
TBD
TBD
TBD
TBD
TBD
FYE16 FYE18
TBD
TBD
TBD
TBD
TBD
FYE16 FYE19
TBD
TBD
TBD
TBD
TBD
HIGH
VEVO Is Expected to Continue to

Experience Positive Revenue Growth and
Will Require Additional Funding to
Continue to Expand Their Business, Cover
Working Capital and Other Operational
Cash Expenses
TBD
TBD
TBD
TBD
TBD
TBD
HIGH
To Renegotiate Our Deal With Beyonc

and Other Superstar Artists
As Well As Look At Other Potential New
Superstar Signings
Help Grow Market Share
TBD
TBD
TBD
TBD
TBD
TBD
Buyout of Dr. Lukes

Interest In JV At End of
Term
MEDIUM
Retain Kemosabe Label and Relationship

With A&R Executive
Buyout of Patrick
Moxeys Interest In JV
At End of Term
MEDIUM
Retain Ultra Label and Relationship With

A&R Executive
Operating Talent
Investment In Global
Superstars
Potential
Investment
$s
FYE15 FYE16
Continued Operational
Funding of VEVO JV
BEYONC
/Others
Strategic Rationale
Strengthens Position of SME In Germany
Increases Digital Market Share In
Germany by 7%-8% pts
Strong Partner In Dance Music
Potential
Timing
71
Bravo
Strategic
Priority
MEDIUM
Germany acquisition of BRAVO Hits compilation series

Overview/
Long Term
Strategic Value
The BRAVO Hits compilation series is by far the biggest selling compilations product series
in GSA
Until 2013, SME GSA was part of a JV with UMG licensing the brand from Bauer Verlag
Given their market power after EMI acquisition, UMG pushed SME out of the JV contract
and licensed directly from Bauer, resulting in profit loss of $4.6M for SME
Acquiring the trademark gives SME chance to get back into this important compilation brand
Bravo represents in total 2% of market share
In acquiring brand and then forming a JV with UMG would increase SMEs Market share by
roughly 1% (and reduce UMGs respectively)
Estimated cost
~$30M
Timing
F2015
Expected IRR
~11-12%
Incremental
Profit
EBIT of $37M over 10 years
72
Big Machine/Taylor Swift
Strategic
Priority
HIGH
Acquisition of indie label Big Machine

Overview/
Long Term
Strategic Value
Addition of Big Machine label to our Country division and Taylor Swift, the top female
country artist, to our roster
Big Machine founder/owner, Scott Borchetta potential Sony executive
Synergy opportunities in integrating Big Machine with Sony Music Nashville
Position Sony Music as leader in Country music genre
Estimated cost
$100M+
Timing
F2015 - F2016
Expected IRR
TBD
73
Syco
Strategic
Priority
Key Initiative
HIGH
Extension of Simon Cowell Services Current Deal Expires 12/31/15

Simon Cowell Is:
- One of the Most Prominent and Successful TV Personalities
- The Most Successful A&R Executive In the Industry Over the Last 15 Years
- Proven Developer of Highly Successful TV Formats
Simon Cowell and Sony Music: A 24 Year Relationship
Potential New Deal Framework
- Purchase of All or Part of SCs Interest In the Syco JV, Excluding Music
(Est. $60M - $100M)
- Enhance Music Relationship Possible Converting Override Arrangement to JV
Arrangement (Estimated Profit Advance TBD)
- Extend SCs Services On TV and Music For An Additional 5 Years (Annual Salary TBD)
- Discussions Underway With SPE TV
- Timing Expected During FYE15 or FYE16
- IRR Range 10%-20%
Syco JV (Primarily TV Format Income)

$102.3M
$95.8M
Syco Artists
$99.0M
$62.2M
$61.7M
$48.7M
Revenues
Profit
FYE12ACT
$67.8M
$42.8M
Revenues
Profit
FYE13ACT
Revenues
Profit
FYE14ACT
Revenues
Profit
FYE15FC
Total Syco JV Post-Tax Dividends FYE11-FYE14 $146M

- Sonys Share $105M; SCs Share $41M
- Sony Allocated $64M Higher Than SC Due to Contract Terms Which
Protect/Recovered Sonys Initial Investment
MRP Assumes Flat From FYE15FC
74
The Orchard
Strategic
Priority
HIGH
Current equity investment with 51% non-controlling ownership stake. Negotiating with
Dimensional about potential purchase of remaining 49% interest.
Overview/
Long Term
Strategic Value
SMEs investment in the Orchard has created significant value since Mar12. Our $25M cash
investment has generated $14M of equity income to date for a net investment value of
$38M. Orchards CY14 EBITDA is forecasted to be $25M.
Purchase of remaining 49% of the Orchard gives SME full control and allows us to consolidate
Orchard financials. Based upon Orchards 3 year MRP, EBITDA is projected to grow from
$25M to $47M by CY17.
Given current net investment value on our books, purchase of the remainder of company at a
valuation of $350M-$660M could result in significant one time P&L gain due ($144M+)
Preserve Market Share: Based on our agreement we have the last right to match any binding
third party offer to buy Orchard. If we elect not to buy the remaining 49% at the third party
valuation we would be forced to sell our 51% interest. This would result in a loss of over 3.5%
pts in global digital market share.
Estimated cost
$175M - $330M (based on overall valuation of $350M - $660M) Based on offer received from
3rd party
Any deal could include significant earn out component
Timing
3 - 12 months
Current Status
Given current gap between Dimensional and SMEs valuation, Dimensional will explore
potential third party interest to acquire its 49% share.
SME will make a decision on exercising its right to match at the appropriate time
Expected IRR
10%-20%
75
Coldplay
Strategic
Priority
MEDIUM
Signing iconic band Coldplay (currently have one album remaining with WMG) in a
distribution deal & license agreement
Overview/
Long Term
Strategic Value
Coldplays recent albums sold over 6M units each worldwide
Estimated cost
Maximum commitment $40M
Timing
Signing in F2015, effective F2016

Payments spread over contract term (per album)
Expected IRR
~20%
Profit Impact
Profit contribution of $18M over 3 albums
Will increase our artist roster with an iconic band, long-term deal with 3 firm albums,
creation of catalog product
76
Kontor Records (Germany)
Strategic
Priority
MEDIUM
Acquisition of 80% shares in Kontor Records, a local German EDM music label
Overview/
Long Term
Strategic Value
Acquisition in artists, repertoire and brands which immediately increases local digital market
share by 7%-8% pts and strengthen significantly the position of SME in GSA
Acquisition of a very strong partner in dance music with existing brands and license income
Strong digital repertoire securing the future business
Estimated cost
Investment for SME Germany: purchase price = 52M USD for 80% of Kontor Records shares
Payment in cash, due dates to be discussed
Timing
TBD, could be FY2015
Expected IRR
TBD, based upon financial review and analysis
77
Egrem (Cuban/Latin America)
Strategic
Priority
MEDIUM
Acquisition of Cuban record label Egrem

Overview/
Long Term
Strategic Value
Cuban music is a very important genre in the Latin region and is so far not exploited
Internationally
Estimated cost
May be up to or below $25M
Timing
Within the next year
Expected IRR
N/A
Acquisition of this important Cuban music catalog would put us ahead of the game and
ensure Sony Music holds a significant market share in this important genre
78
Believe Digital
Strategic
Priority
MEDIUM
Potential acquisition of Believe Digital, a competitor to the Orchard with a significant

presence in Continental Europe
Overview/
Long Term
Strategic Value
While The Orchards organic growth prospects continue to be strong, opportunity exists to
achieve synergistic value through this acquisition (as evidenced by the integration of The
Orchard & IODA)
International strength presents a much more attractive acquisition target as it completes the
Orchards global market share profile
Believes distribution fees are in line with the Orchard which should enable a high label
retention rate
Estimated cost
$75M - $150M (based on 100% acquisition)
Timing
1-3 years
Expected IRR
10%-20%
79
Razor & Tie
Strategic
Priority
MEDIUM
Potential acquisition/investment in Razor & Tie record label

Overview/
Long Term
Strategic Value
Longstanding distribution relationship with proven track record. Creator of popular Kidz Bop
franchise, as well as a diverse artist roster specializing in metal, rock. R&T had 0.5% U.S.
market share CY13
Depending on deal structure, potentially allows us to consolidate Razor & Tie financials (FY14
recorded music revenue through SME of $20M + additional ancillary revenue streams)
R&Ts specialty compliments SMEs catalogue and distribution business
Estimated cost
TBD
Timing
1-3 years
Expected IRR
TBD
80
Kemosabe/Dr. Luke
Strategic
Priority
MEDIUM
Sony Entered Into A 50/50 JV With Dr. Luke In January 2012

- Start Up Label Therefore We Expected Ramp Up Time to Be Up to 2 Years With Limited Releases In 3rd Year (F15), We Are Expecting
Several Releases
Relationship With Dr Luke Brought the Ten Label Deal to Sony and Helped Us Secure An Extension With Shakira
Under Exclusive Producer Arrangement Dr. Luke Produced Tracks For Most JV Artist As Well As Several Non-JV Artist (Britney Spears, Pitbull,
One Direction, Avril, Cher Lloyd, Adam Lambert)
Potential Buyout
- Contractual Option to Buy Dr. Lukes Interest In JV At End of Term (December 2017)
- Potential Timing F17 or F18
- Potential Purchase Price and IRR TBD
$33.8M
$7.6M
Juicy J
Miley Cyrus
Smurfs OST
Kesha
$6.5M
Profit
Revenues
Profit
JV Year 1
JV Year 2
15 Months Ending March 31, 2013
Releases Expected During the Next 12 Months

Kesha
Juicy J
Christian Burghardt
Everything Everything
Zara Larsson
Kesha
G.R.L.
Sophia Black
Becky G
Miley Cyrus
Juicy J
Industrys Most Successful Producer

of the Last 5 Years
Tracks Produced Have Sold Over 50
Million Units
Dr. Luke
Has Written/Produced Hit Songs for Kelly

Clarkson, P!nk, Avril Lavigne, Katy Perry, Britney
Spears, Miley Cyrus, Kesha
-$2.3M
Revenues
Song Writer, Record Producer,

Remixer
Elliphant
Lil Bibby
J Mike
Doja Cat
Miley Cyrus
Yelle
Young Yawn
Saint Johns
Rock City
Dallas K
Smurfs OST
Relaunched Mileys Career As An

Adult Performer
Album Bangerz Debuted At No. 1

On the Billboard 200, Selling 270,000
Copies In Its First Week in the U.S.
Wrecking Ball Became Cyrus' First
Single to Reach Number 1 On The
Billboard Hot 100
Miley Cyrus
Fastest Growing Video On VEVO With Wrecking Ball

At No. 1, Logging Over 100 Millions Views In Just Six
Days
G.R.L.
Becky G
81
Ultra Records/Patrick Moxey
Strategic
Priority
MEDIUM
Sony Acquired 50% Interest In An Established Label, Ultra, In December 2012 Increasing Sonys
Footprint In EM (Dance)
- An Established and Profitable Label Therefore No Startup Period Immediate Profit
Patrick Moxey Also Serves As Head of EM For Sony Music International
- Providing Support to All International Affiliates In EM A&R and Marketing Activities
- Several International EM Acts Have Been Signed, Including Mr. Probz, With Patricks Oversight and Format Credibility
Potential Buyout
- Contractual Option to Buy Patrick Moxeys Interest In JV At End of Term (December 2017)
- Potential Timing F17 or F18
- Potential Purchase Price and IRR TBD
$28.8M
$23.0M
$7.0M
Revenues
Profit
Sonys Share
$3.5M
P. Moxey Share $1.0M
$4.5M
Revenues
2012 (Pre-JV)
Profit
JV Year 1
Annual Profit Allocation Protects Sonys Investment

From Declining Profits
- 1st - Sony receives $3.5M profit each year,
- 2nd - PM receives next $3.5M profit,
- 3rd - Sony receives shortfall on $3.5M/year, if any
- 4th - 50%/50
Ultras Yr 1 Profits Declined From Historical Level Due to Fewer Big Hits Than Prior Years
- Deals Expired and Not Renewed On A Few Established Acts
- Universal Aggressively Overpaid For Several EM Acts After Losing Bid to Acquire Ultra
Mr. Probz
Steve Aoki
Benny Benassi
Kaskade
Carnage
Project 46
82
VEVO
Strategic
Priority
HIGH
Continued funding of VEVO JV

Overview/
Long Term
Strategic Value
VEVOs business performing better than forecasted with revenue growing 57% yoy in 1st half
of year. SMEs license revenue from VEVO is forecasted at $85M for FYE15. Overall, net
income to SME from VEVO is positive as net profits from content fees after artist royalties is
forecasted to exceed SMEs equity losses by $31M for FYE15.
While VEVO is expected to continue to experience positive revenue growth, VEVO will
require additional capital funding to continue to expand their business, cover working capital
and other operational cash expenses over the MRP period. Growth in VEVO can be achieved
through investment in original content, launch of a subscription service and International
expansion.
Majority Shareholders (Universal / SME) believe significant value growth can be achieved and
will therefore continue to invest in building of the business. As a result, no outside
investment from 3rd parties is likely during Mid Range Plan.
Exception could be made for investment by Warner Music if antitrust requirements can be
met
Estimated cost
$60M of funding
Timing
Throughout MRP Period
Expected IRR
N/A
83
MRP Phase II Review
October 8, 2014

Sony Music MRP Phase II Review (2014)

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Sony Music MRP Phase II Review (2014)

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MRP Phase II Review

Full Year FYE15 Forecast

Financials (Main Focus)

Full Year FYE15 Forecast

Financials (Main Focus)

Key Strategic Priorities

FYE15 Financial Results ($ In Millions)

Net Cash Flow

Strong Start to Fiscal Year, Well

Recent New and Developing Artist Success

A Great Big World

Strong Slate of Key Releases In Balance of Year

Barbra Streisand (Sep 14)

Kenny Chesney (Sep 14)

Jason Aldean (Oct 14)

Pentatonix (Nov 14)

Pink Floyd (Nov 14)

Pitbull (Nov 14)

One Direction (Nov 14)

Foo Fighters (Nov 14)

Calvin Harris (Nov 14)

Olly Murs (Nov 14)

Garth Brooks (Nov 14)

Usher (Dec 14)

Meghan Trainor (Dec 14)

AC/DC (Dec 14)

Miguel (Dec 14)

Carrie Underwood (Dec 14)

J. Cole (Feb 15)

Adele (Mar 15)

Kelly Clarkson (Mar 15)

Alicia Keys (Mar 15)

MRP Financial Highlights ($ In Millions)

SME Operating Income

MRP Period Will

Full Year FYE15 Forecast

Financials (Main Focus)

September YTD ($ In Millions)

$1,286 $1,183 $1,261

FYE14ACT FYE15BP FYE15ACT

September YTD Major Sellers (Revenues)

Calvin Harris (singles) ($7M RTD)

Full Year FYE15 ($ In Millions)

1) FYE13 Net Income Includes Reversal of Brazils Valuation Allowance

FYE15 Worldwide Key Release Schedule

Calvin Harris (UK)

Foster The People

One Direction (UK)

One Direction (UK)

The Script (UK)

Dave Matthews Band

4th Quarter Release

Adele Budgeted for Late

Full Year FYE15 Forecast

Financials (Main Focus)

U.S. Industry Revenues RIAA Figures ($ In Millions)

Strong Growth In Revenues

Streaming Services Combined Contributed to 31% of

Worldwide iTunes Year-on-Year Growth (Industry Level)

Spotify & Pandora Active Monthly Users (In Millions)

Launch of Mobile Free Brings In

May 2011 Jan 2012

Aug From Jan

Dec 2012 Nov 2013 Dec 2013