Consumers Connect With HD DVD Brand, Driving Hardware and Movie Sales.

HD DVD Studios Project $600 Million in Revenue for 2007; Market to Grow 40 Times the Rate of 2006

LAS VEGAS -- At a press event today at the 2007 Consumer Electronics Show in Las Vegas, the companies of the North American HD DVD Promotional Group recapped a strong year for the high definition format, surpassing significant milestones for 2006, announcing more than 300 additional movie titles that will be available this year, for an expected total of more than 600 titles worldwide. The group also revealed compelling revenue and growth projections for HD DVD in 2007, and showcased a live demonstration of the next level of internet connectivity to give consumers a more personalized experience.

In just nine months time, "The Look and Sound of Perfect[TM]" has struck a chord with consumers, showing strong movie title sales and high attach rates. As of January 5th, there are estimated to be more than 175,000 HD DVD players sold in North America, with new models in high demand. Using Nielsen data and retailer reports for title sales to date, the HD DVD studios projected an annualized attach rate of 28 movies per player. Based on an expected install base of more than 2.5 million players by the end of 2007, the HD DVD Promotional Group estimates HD DVD movie title sales to exceed $600 million in North America for 2007. This is more than 40 times the revenue accrued in 2006 by the format.

"HD DVD is a well recognized brand name, and it's the best way for consumers to make the transition from DVD into the high definition world," said Craig Kornblau, president of Universal Studios Home Entertainment and chairman of the North American HD DVD Promotional Group. "Look at the facts: HD DVD has the most reasonably priced players and drives on the market, the highest quality picture and sound possible, and our hardware sales and attach rates are high. By the holidays, we'll have more than 600 movies available globally, and offer an advanced level of internet connectivity to drive HD DVD sales."

Attendees of the press event saw a live demo of HD DVD's new advanced interactive features, working on both multiple PC platforms and consumer electronics based players - effectively showing the wide breadth of support for these features. HD DVD titles with advanced interactivity will take advantage of HD DVD's mandatory specifications for network connectivity, secondary video decoders and persistent storage. Titles using player memory as well as the secondary video encoder for picture-in-picture were shipping throughout 2006, and titles using network connectivity are expected to be available in 2007. Using Microsoft's HDi[TM] interactive technology, the live demo showed how to save and share favorite scenes from a movie with other HD DVD owners, and how to download HD trailers and other content from the Internet. To date, HD DVD is the only format delivering titles using true picture-in-picture.

Fueled by brisk sales of second-generation Toshiba HD DVD players, the HD DVD drive for Xbox 360, and HD DVD-enabled Intel[R] Core[TM]2 Duo laptops and desktop PCs from companies like Acer, HP, Niveus and Toshiba, HD DVD's installed base is estimated to have exceeded 175,000 in North America.

Several of the more innovative of the Asian manufacturers such as Alco, Jiangkui/ED Digital, Lite-On, and Shinco will add competitively priced HD DVD products to the market, and well-known brands such as Meridian and Onkyo will create HD DVD players as well.

"With the addition of new consumer electronics companies to HD DVD, we're predicting more than 2.5 million units in the market by the end of 2007," stated Yoshihide Fujii, president and CEO of Toshiba's Digital Media Network Company. "This growing level of manufacturer support is a clear result of HD DVD winning over enthusiasts and movie lovers alike."

Earlier today, Toshiba released news of the HD-A20, a 1080p HD DVD player priced competitively at $599, offering a more affordable path to get the highest resolution output. The players will be available in the U.S. by Spring 2007.

Microsoft announced that the HD DVD player for the Xbox 360 video game console continues to sell rapidly at $199, bundled with the Universal Studios title "King Kong." Microsoft executives stated that the company will continue to manufacture players for the Xbox 360 to keep up with expected demand from gamers in 2007. With the knowledge that every Xbox 360 HD DVD player sold is purchased by someone who wants to watch high definition movies, studios supporting HD DVD see significant value in the player, as a great way to bring "The Look and Sound of Perfect" to gamers while helping ensure strong movie attach rates for each and every player sold.

Of the more than 41 studios and distributors supporting HD DVD worldwide, Warner Home Video, Paramount Home Entertainment, Universal Studios Home Entertainment, HBO Home Video, New Line Home Entertainment, Genius Product, Inc., The Weinstein Company, Studio Canal, and Bandai Visual, one of the largest animation companies in the world, collectively announced more than 300 additional HD DVD titles will be released this year. The list included acclaimed hits such as: "The Departed," "The Good Shepherd," "Flags of Our Fathers," "Babel," the entire "Harry Potter" series, "The Matrix" trilogy and "Blade Runner." Hit TV series will also appear on HD DVD, including "Battlestar Gallactica," "The Sopranos," and the original episodes of "Star Trek," which have been digitally remastered.

Another reason consumers are finding the transition from DVD to HD DVD easy and compelling is the release of many of the most anticipated day-and-date releases on "combo discs" - with an HD DVD version on one side, and a standard DVD version on the other. This combo feature, unique to HD DVD, gives consumers the option of building their library of HD DVDs before they purchase an HD DVD player, and lets consumers buy one movie that will play on HD DVD players as well as in standard DVD players elsewhere in the home or in the car. The release of combo discs was another milestone the HD DVD camp promised from CES 2006.

As the official successor to DVD, HD DVD is successfully building on the heritage of the most successful consumer electronics format ever. An important element of the group's strategy was a nationwide, 18-wheeler tour known as the HD DVD Mobile Experience. Over five months, the Mobile Experience helped educate more than 25,000 consumers on the benefits of HD DVD, showcasing stunning 1080p movie experiences in a home theater, with PCs and laptops, and through the Xbox 360. New scenarios continue to be added, including a concept demonstration by Alpine of an HD DVD player system for use in vehicles. The Mobile Experience will be featured inside the Main Hall at CES (booth #7914).

About HD DVD

HD DVD is the next generation, post-DVD standard for high capacity, high definition optical discs, approved by the DVD Forum. The DVD Forum develops and defines DVD formats. Its more than 200 strong membership brings together leaders in movies and entertainment, computing, consumer electronics and software. HD DVD is fast becoming the primary visual medium for the age of high-definition TV. The North American HD DVD Promotional Group, Inc. is an organization established to promote the HD DVD format and educate consumers in North America. For more information and a complete listing of HD DVD launch titles please visit http://www.TheLookAndSoundOfPerfect.com.