(BARCELONA, Spain) -- Private Media Group Inc. (Nasdaq: PRVT - news), a leader in high-class adult entertainment products and services since 1965 and the first such company trading on the Nasdaq National Market, today announced that sales of its DVD (Digital Video Disc) titles have increased from $142,611 in the second quarter 1999 to $269,004 in the third quarter, an increase of 89%. In addition, the Company also announced that it is to increase DVD production from its current three titles per month to four releases per month in the first quarter 2000, with a total release target of 100 titles during the first year of the Millennium.

Significantly, Private Media Group already sets the standard for the worldwide DVD and entertainment industries with each DVD released by the Company possessing five language options as well as four other subtitled languages. Currently, the majority of DVDs released in the US and, indeed, worldwide are produced in one language. This is an enormous competitive advantage for Private Media Group, being hugely attractive to consumers on a global basis and vastly expanding the Company's international marketing and sales potential. As a consequence, this global presence is a significant factor in reducing the Company's overall unit costs and increasing profit margins where other companies have to either license country-by-country or manufacture each title in separate languages. In addition, the manufacturing of each DVD title Master Disc, prior to duplication, costs an initial $20,000, further restricting competitors' ability to commit to the format and minimizing their international revenue potential.

Currently, mainstream movie titles are released on DVD in six Regional Codes, or Zones, each in a different playing format, much like the difference between VHS videos in the US (NTSC) and in Europe (PAL). This is predominantly because producers do not control the worldwide rights to titles. Private Media Group DVDs are playable in any region, in every country in the world, because the Company owns and controls the global rights to everything it has produced since its foundation in 1965.

Private Media Group's DVDs are also 'Internet Activated', which means that when one plays the DVD in a personal computer (PC), one also gets a direct link to Private's websites where one can not only view the massive high- quality content, but also take out membership to www.private. com and view the huge mail-order shopping area. The Company can also add 'extras' to each DVD, including alternative endings to movies, interviews with the stars, biographical data on the actors, their roles in other Private Media Group productions and publications, and multiple-angle views for the user.

DVD has had an exceptional introduction to the marketplace, easily outstripping the initial launch sales of VHS video and CDs. In the first two complete years of the format's availability, 1998 and 1999, over 5 million DVD players will have been sold in the US alone. This compares with just 450,000 VHS players and 960,000 music CD players sold in those formats' first two years. The world's major hardware manufacturers have backed the DVD format virtually en masse, with over 100 models of DVD player already on the market. Low cost players have recently become available for as little as $200, paving the way for massive, widespread consumer interest and potentially record-breaking sales.

In line with the huge sale of DVD players, sales of DVD discs are expected to reach 50 million units in the US by the end of 1999. The 3rd European DVD Conference, recently held in Portugal, concluded that this trend is also being reflected in Europe, which is estimated to be approximately one year behind the US. Superior to VHS, CD-Rom and laserdisc, DVDs produce almost studio- quality pictures and the world's movie producers are rapidly supporting the format, with Warner Home Video currently generating approximately 30% of it revenues from DVD sales. Especially significant in this context is the fact that 65% of this revenue comes from back-catalogue titles, a fact that is particularly important for Private Media Group, which possesses the largest high-quality back-catalogue in the history of adult entertainment stretching, as it does, back to the Company's foundation in 1965.

"With this dramatic increase in sales and declaration to increase production of our multilingual DVDs, Private Media Group again confirms its leadership of the global adult entertainment industry with a clear advantage over its competitors," says Berth Milton, CEO of Private Media Group.
"Our zone-free, internationally marketed DVDs can, by programming your DVD player to ask for a password, be made unviewable by minors. Not only is this a major bonus that was not available with VHS video, it will allow for expansion of our distribution channels into mainstream leisure and entertainment outlets and chain stores which traditionally would not allow adult material. The Company owns and controls the worldwide rights to a back-catalogue that Forbes magazine called "the MGM archive" of adult entertainment. DVD is a new format and, much like the boom in music CDs, consumers will not only want to buy new releases but replace their VHS titles with the new high-tech version. Private and DVD were 'made' for each other."

Private Media Group Inc. commenced operations in 1965. Its primary business activities today include the creation, refinement and delivery of proprietary Internet sites and the licensing of its library content and brand name for Internet sites and broadcasting transmission; the acquisition, refinement and delivery of adult feature products, including unrated and adult feature DVDs, magazines, videos, and CD-ROMs; the distribution and licensing of Private's total proprietary product range on the Internet, including DVDs, magazines, videos, interactive services and the Private Circle fashion line; the licensing of its internationally reputable brand name for product lines, including adult novelty product ranges such as Private Collection; the production and control of distribution rights to its Private Dynamite energy drink; and TV Home Shopping for Private's proprietary and licensed products.

For more information visit the Company's corporate website at www.prvt.com.

This release contains, in addition to historical information, forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company's current judgments of those issues. However, because those statements are forward-looking and apply to future events, they are subject to such risks and uncertainties, which could lead to results materially different than anticipated by the Company.

SOURCE: Private Media Group Inc.