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DVD Industry Ships Over 100M DVD Players

Members of DEG: The Digital Entertainment Group met with top retailers and industry leaders today at the DVD Retail Summit during the VSDA Home Entertainment 2004 to announce that DVD continues to beone of the best selling home entertainment formats with robust sales for the first half of the year. Consumer enthusiasm for DVD, whether new blockbuster hits, the growing non-theatrical categoriesor music on DVD titles, has led the industry to ship 649 million DVD titles to retail in the first six months of 2004. This is a 52 percent increase over the same period last year according tofigures compiled by Kaplan, Swicker and Simha on behalf of DEG: The Digital Entertainment Group.

Since the format came to market in 1997, software shipments in North America have reached a whopping three billion units — faster than any other home entertainment medium. There are currently some 34,000 DVD titles in release.

 NORTH AMERICAN DVD-VIDEO SOFTWARE SHIPMENTS BY QUARTER (in millions)QUARTER   1997  1998   1999   2000   2001     2002     2003      2004--------------- ----- ------ ------ ------ -------- -------- ---------1st Quarter   N/A   3.3   11.1   29.0   69.2    120.1    231.7     332.2--------------- ----- ------ ------ ------ -------- -------- ---------2nd Quarter   N/A   4.1   13.9   33.2   81.7    152.2    195.5     316.8--------------- ----- ------ ------ ------ -------- -------- ---------3rd Quarter   2.3   5.9   29.0   42.7   75.9    153.3    214.6        ----------------- ----- ------ ------ ------ -------- -------- ---------4th Quarter   3.2  11.8   44.0   77.5  137.6    259.4    381.5        ----------------- ----- ------ ------ ------ -------- -------- ---------YEARLY TOTAL     5.5  25.1   98.0  182.4  364.4    685.0  1,023.3     649.0--------------- ----- ------ ------ ------ -------- -------- ---------TOTAL           30.6  128.6  311.0  675.4  1,360.4  2,383.7   3,032.7(SINCE                                                         (a/o LAUNCH)                                                      6/30/04)--------------- ----- ------ ------ ------ -------- -------- ---------Figures compiled by Kaplan, Swicker & Simha on behalf of DEG: TheDigital Entertainment Group

“It is encouraging to see the continued excitement that consumers have for DVD, whether it be the early adopter who continues to be an avid collector or families who more recently began to embrace the format,” said Bob Chapek, president, Buena Vista Home Entertainment and president, DEG: The Digital Entertainment Group. “The variety of top-selling titles demonstrates this insatiable enthusiasm across a number of genres, with the average consumer buy rate still at about 16 per household each year. This is unprecedented for a format, particularly as our installed base climbs well beyond half of all U.S. homes.”

APPROXIMATELY 13 MILLION DVD PLAYERS SOLD IN THE U.S. IN FIRST HALF 2004

According to figures compiled by the DEG based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, nearly 13 million DVD players were sold to consumers in the first half of 2004, a 25 percent increase over the same period last year. More than 103 million DVD players have sold since launch, bringing the number of DVD households to nearly 62 million — adjusting for the 40 percent or 25 million DVD homes with more than one player. Homes with more than one DVD player have grown eight percent so far this year due to a variety of models meeting consumer demands, lower price points and continued consumer enthusiasm for the format.

           U.S. DVD HARDWARE SALES BY QUARTER (in millions)QUARTER    1997  1998   1999   2000    2001    2002    2003      2004---------- ----- ----- ------ ------ ------- ------- ------- ---------1st Quarter   .030  .094   .358  1.350   2.220   3.565   4.858     6.855---------- ----- ----- ------ ------ ------- ------- ------- ---------2nd Quarter   .079  .149   .611  1.435   2.404   3.750   5.506     6.057---------- ----- ----- ------ ------ ------- ------- ------- ---------3rd Quarter   .077  .244   .880  1.550   2.537   4.740   6.470---------- ----- ----- ------ ------ ------- ------- ------- ---------4th Quarter   .119  .459  1.701  5.542   9.501  13.058  16.900---------- ----- ----- ------ ------ ------- ------- ------- ---------YEARLY TOTAL     .305  .946  3.550  9.877  16.662  25.113  33.734    12.912---------- ----- ----- ------ ------ ------- ------- ------- ---------TOTAL                                                         103.099(since                                                          (a/o launch)                                                      6/30/04)---------- ----- ----- ------ ------ ------- ------- ------- ---------Includes set-top and portable DVD players, Home Theater in a Boxsystems, TV/DVD and DVD/VCR combination playersDEG: The Digital Entertainment Group

“In just seven years, the DVD format has driven demand for prerecorded entertainment in ways never anticipated,” said Mike Fidler, senior vice president, home products, Sony Electronics and vice president, DEG. “It is a key factor behind the industry’s rapid migration to widescreen digital television, as well as the foundation for true high definition video platforms in the future.”

DEG: The Digital Entertainment Group is a Los Angeles-based, industry-funded nonprofit corporation that advocates and promotes the many benefits associated with DVD while providing updated information regarding the format to both the media and the retail trade. The DEG also offers opportunities for member companies to engage in ongoing discussions concerning various issues and opportunities which relate to other new digital technologies that may emerge in the future.

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