Consumer Interest In DVD Remains Strong

In the first quarter 2005, more than 400 million DVDs shipped to retail according to figures compiled by Kaplan, Swicker and Simha on behalf of DEG: The Digital Entertainment Group.

This represents a 21 percent increase over the same period last year, bringing the total number of units shipped since the launch of the DVD format to more than 4.3 billion discs. There are now morethan 43,000 DVD titles available to consumers across a wide variety of genres.

“We are pleased to see new DVD owners so enthusiastic about their players and starting a DVD library,” said Bob Chapek, president, DEG and president, Buena Vista Home Entertainment. “In fact, such strong player sales in the holiday season have enabled the entertainment industry to essentially create a new ‘fifth quarter’ to continue the momentum from the fourth quarter and market titles to these new enthusiasts.” NORTH AMERICAN DVD-VIDEO SOFTWARE SHIPMENTS BY QUARTER (in millions)

QUARTER   1997 1998  1999  2000  2001    2002    2003    2004    2005----------------------------------------------------------------------1st Quarter   N/A  3.3  11.1  29.0  69.2   120.1   231.7   332.2   403.0----------------------------------------------------------------------2nd Quarter   N/A  4.1  13.9  33.2  81.7   152.2   195.5   316.8     N/A----------------------------------------------------------------------3rd Quarter   2.3  5.9  29.0  42.7  75.9   153.3   214.6   340.9     N/A----------------------------------------------------------------------4th Quarter   3.2 11.8  44.0  77.5 137.6   259.4   381.5   528.4     N/A----------------------------------------------------------------------YEARLY TOTAL     5.5 25.1  98.0 182.4 364.4   685.0 1,023.3 1,518.3   403.0----------------------------------------------------------------------TOTAL(since launch)       30.6 128.6 311.0 675.4 1,360.4 2,383.7 3,902.0 4,305.0----------------------------------------------------------------------

Figures compiled by Kaplan, Swicker & Simha on behalf of DEG: The Digital Entertainment Group

DVD PLAYERS IN MORE THAN 73 MILLION U.S. HOMES

According to figures compiled by the DEG based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, more than seven and a half million DVD players were sold to consumers in the U.S. in the first three months of 2005, a 13 percent increase over the same period last year.

Since launch, more than 135 million DVD players, including set-top and portable DVD players, DVD recorders, Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combination players, have sold to consumers, bringing the number of DVD households to 73 million (adjusting for households with more than one player). Approximately 46 percent of DVD owners have more than one player.

The DEG estimates that more than 80 percent of U.S. households will have at least one DVD player by the end of this year. U.S. DVD HARDWARE SALES BY QUARTER (in millions)

QUARTER    1997 1998  1999  2000   2001    2002   2003   2004    2005---------------------------------------- -----------------------------1st Quarter   .030 .094  .358 1.350  2.220   3.565  4.858  6.855   7.741---------------------------------------- -----------------------------2nd Quarter   .079 .149  .611 1.435  2.404   3.750  5.506  6.057     N/A---------------------------------------- -----------------------------3rd Quarter   .077 .244  .880 1.550  2.537   4.740  6.470  6.593     N/A---------------------------------------- -----------------------------4th Quarter   .119 .459 1.701 5.542  9.501  13.058 16.900 17.621     N/A---------------------------------------- -----------------------------YEARLY TOTAL     .305 .946 3.550 9.877 16.662  25.113 33.734 37.125   7.741---------------------------------------- -----------------------------TOTAL(since launch)                                                      135.054---------------------------------------- -----------------------------

Includes set-top and portable DVD players, Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combination players