Coinstar and PhotoWorks Kiosks Announce Pilot of Digital Photo Printing Service; Provides Convenient, Economical Prints from Digital Cameras.

Business Editors/High-Tech Writers

BELLEVUE & SEATTLE, Wash.--(BUSINESS WIRE)--Jan. 9, 2003

Coinstar Inc. (Nasdaq:CSTR) and PhotoWorks Kiosks, Inc. today announced the launch of a pilot that provides high-quality prints and photo CDs to digital camera users. The pilot is scheduled to begin in January 2003 at approximately 50 supermarket locations in Reno, Nevada, Charlotte, North Carolina, and Seattle, Washington. The pilot is expected to run for six months.

To use the service, a digital camera user brings a digital memory card or CD to the Coinstar Center. At the Center, the customer can view the images on a touchscreen interface, select the images to print, and complete the credit card order--a process that can take less than two minutes. The images are uploaded to PhotoWorks for advanced digital photo printing. Professional quality prints and photo CDs are then delivered to the customer, via mail, typically within two to three days--eliminating the need for a return trip to pick up photos. A 4"x6" print can cost as little 29 cents.

"This service is consistent with our strategy of making Coinstar a highly convenient touchpoint for a wide range of consumer services that save people time and money, and simplify their lives," said Dave Cole, chief executive officer of Coinstar. "While the use of digital cameras has increased significantly, printing or uploading digital images from home can be very expensive and time consuming."

According to industry data, 14.3 percent of U.S. households owned a digital camera at the end of 2001. And by the end of 2006, 48 percent of households are expected to have digital cameras--provided there is a convenient, economical way to get prints.

"We're providing a print solution that is convenient, easy to use, and less expensive than home printing," said Gary Christophersen, President of PhotoWorks Kiosks, Inc. "We believe the accessibility of Coinstar Centers, combined with value pricing make this service an attractive option for the rapidly growing number of digital camera owners."

About Coinstar Inc.

Coinstar Inc. owns and operates the only network of supermarket-based machines that offer coin counting and other electronic services. The company has more than 10,500 machines linked by a sophisticated interactive network throughout the United States, as well as in Canada and the United Kingdom.

About PhotoWorks Kiosks, Inc.

PhotoWorks Kiosks, Inc. is a wholly owned subsidiary of PhotoWorks, Inc. (OTCBB:FOTO), a leading online, direct mail, and retail photo services Company. Founded in 1978, PhotoWorks, Inc. combines 24 years of experience with a tradition of innovation, including being the first to offer free scanning, online archiving, and e-mail sharing services to both film and digital camera users. PhotoWorks Kiosks, Inc. provides digital cameras users with easy solutions, at a retail location, for getting digital prints and CDs.

This press release contains forward-looking statements relating to the size and growth rate for the photo development market, which involve a number of risks and uncertainties. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause or contribute to such varying results include, but are not limited to, technical hurdles, consumer acceptance, retailer acceptance, and coordination and cooperation among the parties involved in the service. These and other risks are more fully described under the caption "Risk Factors" included in the most recent reports filed with the Securities and Exchange Commission by Coinstar Inc. and PhotoWorks, Inc. Coinstar and PhotoWorks undertake no duty or obligation to update the information provided herein.