Press Release

INTERTAINMENT AG makes strategic investment in US Internet company SIGHTSOUND.COM

Munich, December 22, 1999 - Intertainment AG has acquired 26% of the capital stock of US Internet company Sightsound.com, which holds an exclusive patent for the digital download of movies and music from the Internet. Sightsound.com works like a virtual video store. The customer downloads the movie from the Internet to his or her computer and, upon payment by credit card, decides whether to rent or buy the movie. It is impossible to copy the movie. Once the rental period has expired, the movie can no longer be viewed on the computer.

Sightsound.com opens up a completely new distribution channel for Intertainment AG’s top-class US studio productions. The co-financing agreement signed with Franchise Pictures will ensure that Sightsound.com’s netcasting platform will be stocked with first-class content. Moreover, Sightsound.com’s board member Frank Biondi (former CEO of Universal Studios, CEO of Viacom and CEO of HBO) is currently in negotiations with other US studios with a view to expanding the available range of high-quality movies.

Total US video revenues of a approximately DM 30 billion p.a. mean that Intertainment will be looking at a multi-billion dollar market in the coming years. In addition, Sightsound.com will generate license fees when other producers use the system as a distribution platform for their movies. Sightsound.com will benefit in two ways: first from the growing number of e-commerce users and second from additional proceeds from the sale of website advertising space.

Ruediger Baeres, Chief Executive of Intertainment AG said: "Through our acquisition of a significant share of Sightsound.com, we are making a meaningful strategic step into the age of the Internet. We are securing today a functioning and high-quality Netcast platform for the E-commerce market of the future. Our objective is to build up an international virtual film library offering high-quality commercial contents covering different genres."

Sightsound.com can be downloaded to any conventional Pentium PC. The use of Microsoft’s Windows Media Player 4.0 means the system offers the highest image and sound quality currently achievable on a computer.

Press contact:
Intertainment AG
Claudia Wilmans
Widenmayerstrasse 49
80538 München

Tel.: 089/21699-0
Fax: 089/21699-11
eMail: cwilmans@intertainment.de