Universal Studios Home Video to Streamline Distribution Effective with the December 5, 2000 Release of The Nutty Professor II: The Klumps

UNIVERSAL CITY, CA – Universal Studios Home Video today announced that it will streamline its current distribution affiliations in a move to allow more focused sales and marketing efforts.

The company will distribute rental product through Ingram Entertainment Inc. and Video Product Distributors (VPD) as well as continuing its revenue sharing relationship with Rentrak. Sell-through product will be distributed through Ingram Ent., VPD and Valley Media. The new streamlined distribution initiative will launch with the December 5, 2000 release of the season’s biggest family hit, The Nutty Professor II: The Klumps. Order close is October 30.

All January 2001 releases will be under the new distribution umbrella including Bring It On, and Rocky and Bullwinkle (street date: January 23, 2001 – VHS order close: December 27, 2000; DVD order close: December 18, 2000).

Additionally, the company has initiated a new Universal profit-lease program through Ingram Ent., and VPD designed to allow retailers to provide consumers with a higher level of satisfaction. All Universal Studios Home Video products will be included in the new distribution system. DreamWorks titles are not affected and will continue to be sold through existing distribution channels.

“We have made the decision to concentrate our sales efforts through a more focused and efficient distribution system. The results will allow a more strategic sales and marketing effort that will greatly enhance retailers’ ability to realize maximum profits from our product flow,” stated Craig Kornblau, President, Universal Studios Home Video.

For artwork or screeners, please fax your request to Universal Studios Home Video Publicity at (818) 866-0226

Universal Studios Home Video is a part of Universal Studios (www.universalstudios.com), a unit of The Seagram Company, Ltd., a global entertainment and beverage company.

Retail Question and Answer

Why did we do this? We have made the decision to concentrate our sales efforts through a more focused and efficient distribution system. The results will allow a more strategic sales and marketing effort that will greatly enhance retailers’ ability to realize maximum profits from our product flow.

Why did DreamWorks make the decision to keep all the distributors for their product?

DreamWorks chose to remain status quo due to the products they have in solicitation and their desire to maintain continuity for the balance of the year in their distribution strategy.

Why did Universal choose the distributors that it did?

Universal felt these partners would provide both the best representation of its product line and the smoothest distribution of product to retailers.

What was the rationale for this decision?

The industry has gone through a great deal of change over the past few years and Universal believes that establishing this network of distribution will provide the proper focus on our products while insuring a smooth flow of product to all retailers.

How is this different than the Warner Direct program?

The major difference is that Universal’s program continues to work with a distributor network though a reduced one, versus Warner which eliminated distributors with its rental strategy.

How does this change benefit the retailer?

Retailers will benefit through an enhanced understanding of Universal’s programs due to a more focused Universal and distributor sales force. This enhanced understanding will allow retailers to maximize the titles and funding Universal offers to improve sales and profits.

What is the status of my existing orders with one of the eliminated distributors?

The status of any existing orders should be discussed with the distributor with whom the order was placed.

How do I handle returns of my current inventory? RMF/Co-Op? Other business issues?

All existing business issues should be addressed with the distributor with whom you have been dealing up until the start of this program that commences with The Klumps on December 5, 2000.

I refuse to purchase through one of Universal’s chosen distributors. What are my options?

We believe that this change is in the best interest of the industry and would encourage you to establish a relationship with a chosen distributor. This is the only way for retailers to acquire Universal product.

Do I have to fill out another credit application?

If you do not currently have a line of credit with one of the distributors in our program, you will have to fill out a new credit application with the distributor you select.

Am I going to still have an outside rep contact me from my new distributor?

If you had distributor representation prior to this move, you should consider asking for the same consideration from whichever distributor you select going forward. It is an agreement that you must work out with the distributor.

How will the new distributor know how to set my goals?

Universal and our distributor partners will work together to insure that the proper information is exchanged in order to determine fair and equitable goals on all titles going forward.

What will the new distributor charge me?

This should be addressed with the new distributor with whom you choose to partner.

Is Universal concerned about limiting distribution options?

Universal Studios is concerned with insuring the effective communication of its programs to retail and the efficient distribution of its product to all retailers. At this time, we believe that this program provides Universal and all retailers the best means to maximize our product portfolio. We believe that this program provides a focus that is in the retailers and Universal’s best interests while still providing the best options.