This is the message which was sent this afternoon to Sony Pictures Home Entertainment staff. In addition, in IT, CIO Rick Hopfer is leaving, and Steve Andujar of that department is replacing him.

From: Bishop, David
Sent: Wednesday, January 27, 2010 2:03 PM
Subject: SPHE Changes

Sony_pictures_logoWe announced to you in December that SPHE is conducting a review of our organization to proactively confront the changing economic model in our industry. Our choice is simple – we can make strategic choices today to direct the evolution of our business, or be overwhelmed by changes that are imposed on us by forces outside of our control.

We’ve chosen to act now to meet the shifting demands of a fast-changing marketplace. We’re building a new operating model that will streamline decision-making, increase accountability and innovation, and focus on strategic and analytic thinking. As a result, we will maximize our speed and flexibility – attributes that will be critical to SPHE’s growth and prosperity in the years to come. Many of you have been engaged in this process, and we thank you for your participation and ideas.

In the short term, this effort will require us to make hard decisions and begin to transition to this new model for our business. As a first step in this process, I have restructured my executive team and wanted to let you know about these key changes:

· Emphasizing our new business model’s focus on innovation, John Calkins will transition from his current role in SPE Corporate Development to a newly-created position within SPHE as Executive Vice President of Global Digital and Commercial Innovation. This new team will focus on developing and implementing strategies to maximize new technologies. Our current SPHE Business Affairs and Worldwide Digital Distribution groups will now report to him, and we look forward to him joining SPHE. As part of this transition, Bob Rubin will be leaving SPHE. Bob has been a strong asset to our team, and his guidance and counsel will be missed. In addition, Sean Carey will be moving on from SPHE to another position in the Sony family. We want to thank him for his years of service to Sony Pictures and wish him well, and we all look forward to working with him going forward.

· With the increasing importance of operating as a global entity, and to particularly recognize the significance of our European region, John McMahon will now report directly to me. John has added tremendous value to the business in the year since he transferred to SPHE from SPTI, and I look forward to working with him more closely in the future.

· Recognizing the need to streamline our commercial operations, Matt Brown will add oversight of the North American sales operations to his current role managing the rest of the international business. As a result of this move, Marshall Forster will be leaving the company. Marshall has been with SPHE for over 17 years and managed the North American business during a time of tremendous growth. I would like to personally thank him for all of his efforts during this time, and I know you will join me in wishing him the best for the future.

· The Advanced Technologies team headed by Don Eklund will move out of SPHE into the Sony Pictures Technologies group under the leadership of Chris Cookson. Don will continue to be a valued resource for SPHE, but his role will expand into other areas.

· These reporting changes are effective immediately. For an organization chart outlining these shifts, please click here.

Those who are leaving the organization will not be departing for a few weeks and will be available at your request to assist in any transition matters.

Change of this nature is always difficult, but successfully adopting new strategies and processes is imperative for business growth and success. We will continue to keep you informed of our change initiatives through our already-established communications channels and will update you as more details are available. We currently anticipate that our new operating model will be fully in place by the beginning of April. In the meantime, I ask for your continued focus on our work during this period of transition.

As always, please feel free to talk with me or any other member of the executive team about any questions you may have.