NEARLY ONE BILLION DVDs SHIPPED TO RETAIL THIS YEAR

Robust Fourth Quarter Expected With
Top Grossing Box-Office Hits Coming to DVD and Variety of Players

DVD Players in More Than 63 Million U.S. Homes

      LOS ANGELES ( October 19, 2004) – DEG: The Digital Entertainment Group announced DVD hardware and software sales figures for the third quarter at today’s TV on DVD Conference.

     According to figures compiled by Kaplan, Swicker & Simha on behalf of the DEG, approximately 340 million DVDs shipped in the third quarter of 2004, a 59 percent increase over the same period last year. Setting another DVD record, nearly one billion discs shipped so far this year, bringing the total number of DVDs shipped since launch to more than 3.3 billion.

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	340.9
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	989.9
TOTAL SHIPMENTS (since launch)		30.6	128.6	311.0	675.4	1,360.4	2,383.7	3,373.6 (a/o 9/30/04)

     The holiday selling season is anticipated to provide another record-breaking fourth quarter for the popular home entertainment format, supported by new releases of more than $4 billion of box office hits. In addition to these blockbuster films, a variety of genres such as TV series, classics, special interest and music titles continue to fuel DVD sales with nearly 38,000 titles currently available.

TOP-GROSSING THEATRICAL TITLES AVAILABLE FOR THE HOLIDAYS
(in order of street date)

Each of the films listed above grossed more than $75 million at the domestic box office.
(according to DVD Release Report)

      “The unprecedented growth of the DVD format is a true testament of the partnerships between the hardware, software and retail industries,” said Bob Chapek, president, DEG and president, Buena Vista Home Entertainment.  “In the coming years, those alliances will be put to the ultimate test in defining the next generation of players.  As all of our industries have learned from the DVD format, these cooperative efforts are the only thing that will help the next generation to grow.”


STRONG HARDWARE SALES CONTINUE, RAMPING UP FOR 4 th QUARTER
      According to figures compiled by DEG: The Digital Entertainment Group based on data from the Consumer Electronics Association (CEA), retailers and manufacturers, the consumer electronics industry experienced its strongest third quarter ever, with nearly 6.6 million DVD players sold to U.S. consumers. Nearly 110 million DVD players have sold since launch ( including set-top and portable DVD players, Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combination players) , bringing the number of DVD households to over 63 million. Currently, 42 percent of all U.S. DVD households have two or more DVD players.

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	6.593
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	19.505
TOTAL (since launch)								109.692 (a/o 9/30/04)

    "As the consumer electronics industry continues its transition to high definition, DVD remains the principal driver by bringing the benefits of high quality video and audio to the widest possible audience," said Mike Fidler, Vice President, DEG and Senior Vice President, Home Products Division, Sony Electronics. "In addition, the ever expanding range of DVD lifestyle applications is creating a variety of new business opportunities for us all."

      DEG: the Digital Entertainment Group (formerly the DVD 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 offers a forum 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.

      Regular members of the DEG are Anchor Bay Entertainment, Buena Vista Home Entertainment, Columbia TriStar Home Entertainment, DreamWorks Home Entertainment, D&M Holdings, DTS Entertainment, EMI Recorded Music, GoodTimes Entertainment, Hewlett Packard, Hitachi, Image Entertainment, JVC Company of America, Lions Gate Entertainment, MGM Home Entertainment, New Line Home Entertainment, Panasonic Consumer Electronics, Paramount Home Entertainment, Philips Consumer Electronics, Pioneer Electronics (USA), Sony Electronics, Sony Music Entertainment, Thomson, Toshiba America Consumer Products, Twentieth Century Fox Home Entertainment, Universal Music Group, Universal Studios Home Video and Warner Home Video.

      Associate members are Alta Resources, Blink Digital, Broadcast Text, Deluxe Media Services, InterActual Technologies, Macrovision, Sonopress, Sony DADC, Technicolor and Universal Studios Operations Group.

     Interested consumers can reach the DEG at (310) 967-2940, via e-mail at getinfo@digitalentertainmentinfo.com or through its web site at www.digitalentertainmentinfo.com.

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