Private Media Comments on Licensing, Mobility and VOD

BARCELONA, Spain — Private Media Group commented on several new business developments today, including new licensing initiatives, mobile content plans and growth in the company’s Video-on-Demand (VOD) services.

In the licensing realm, Private expects to open a new online casino this month. The Private Casino, which will be operated by an undisclosed casino licensor, will be open 24 hours a day, seven days a week. Private reported that all the licensing fees for the casino are based on a share of the house winnings and required no investment from Private.

“As pioneers within our sector to embrace new distribution channels, it is only natural for us to continue to explore and develop opportunities in this area,” Private CEO Berth Milton said.

Along with its new casino, Private plans to launch a new poker site through a licensing deal in Europe. PrivatePoker.com, as well as several sister sites, are expected to launch by the end of the year. The licensing agreement includes quarterly guaranteed minimums, as well as a net revenue sharing agreement for Private.

Private also has announced new license agreements with international businessman, Zyon Ayni, to expand Private’s Gentlemen’s Clubs throughout Europe. Through this multi-year licensing agreement, Private will receive a percentage of gross revenues and a minimum annual guarantee per club. Two locations have already been secured in Barcelona, Spain, and Bucharest, Rumania, and openings are scheduled before the end of the first quarter next year.

“Our brand recognition should and will go beyond where it is today, reaching a broad, valuable and growing customer base,” said Milton. “This is just one of the many steps I expect us to take in this direction.”

On the mobility front, Private announced two new agreements with mobile content aggregators that will enable the company to reach 32 countries. Milton hopes the new Private Mobile Portal, expected to go live before the end of the year, will capitalize on what some experts think will represent a billion-dollar global market by 2006.

“We are now present in every European market, as well as in the key growth markets such as Russia, Brazil and India,” Milton said.

Along with mobility, Private hopes to expand its presence in the Near-Video-on-Demand (NVOD) and Video-On-Demand (VOD) market, recently signing two new agreements for online content delivery services in Europe and South America. The company now has licensing arrangements with more than twenty online aggregators/operators in Europe and the USA.

“It is becoming clear that broadband is reshaping the global entertainment market,” said Milton. “While VOD online is still in its absolute infancy, it is interesting to note that forecasts see global consumer spending going from 70 million in 2003 to 2.34 billion in 2007.”

Milton added that tackling the global market will be even easier, thanks to a new subsidiary Private plans to open in Hong Kong.

“The whole consumer culture in this region is ripe for superior adult-oriented products with a strong brand identity,” he said.

Milton said he expects the company’s recent deals to significantly impact financials by the end of the fourth quarter this year. For the first six months of 2005, Private had zero net income and decreased sales across all major business units.

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