Source: Private Media Group, Inc.
(BARCELONA, SPAIN) — Private Media Group Inc. (NASDAQ: PRVT) a worldwide leader in premium-quality adult entertainment products, services and Internet content, comments on current business developments in the areas of brand licensing, mobile content and online broadcast.
Licensing
There are three new initiatives that have been signed in the licensing arena that we expect to see rolled-out over the next six months. These include an online Casino, an innovative Poker site and the opening of Gentlemen’s Clubs in Europe.
The Private Casino (PrivateCasino.com), to be developed and operated by an experienced online casino licensor, will provide the online gaming community with an innovative “Private Casino Experience” at the click of the mouse. Thanks to an exclusive licensing agreement with Private for a distinctive visual experience, casino lovers around the world1 will, as of this month, be able to enjoy a new level of online gaming 24 hours a day, 7 days a week. This Casino agreement requires no investment from Private, and the licensing fees are based on a share of the house winnings.
Still within the online gaming industry, the Company has signed a licensing agreement with a European gaming group for the launch and operation of PrivatePoker.com, and related sites, whereby the gaming operator obtains the rights to use the Private brand. This licensing agreement includes quarterly guaranteed minimums as well as a net revenue sharing agreement for Private. The licensor is expecting to have the site live by year-end and will offer a dynamic, secure and unique gaming experience thanks to its significant investment in, and development of, cutting edge “robot-proof” poker software. The licensor strives to be the worlds most certified and secure online gaming website with applications to be certified by local gaming boards, as well as international auditing firms..
The Gentlemen’s Clubs licensing agreement recently signed with the international businessman Zyon Ayni takes the Private brand further into the mainstream lifestyle segment. Operating under the Private brand, the new clubs will offer high-class entertainment for gentlemen looking to enjoy a night out on the town in an elegant, exciting location with up-scale adult entertainment. The Private Gentlemen’s Clubs will be promoting adult entertainers from around the world. Through this multi-year licensing agreement Private will receive a percentage of gross revenues comprised of admissions fees, consumption and merchandising, including a minimum annual guarantee per club. Two prime locations have already been secured in Barcelona, Spain and Bucharest, Rumania, and openings are scheduled for Q4 2005 and Q1 2006 respectively.
Thanks to Private’s solid distribution reach in traditional media, with daily combined magazine and DVD sales in excess of twelve thousand units per day, coupled with the strong online presence of Private through its various sites, with over 2.5 million unique visitors per month, the Company provides an exceptional advertising platform and cross-selling opportunity for our licensing partners.
Commenting on these licensing developments, Private Media Group, Inc., CEO, Berth Milton stated: “As pioneers within our sector to embrace new distribution channels, such as online, it is only natural for us to continue to explore and develop opportunities in this area. These recent agreements enable us to capitalize on our brand in new, yet absolutely complimentary sectors, such as online gaming, which is estimated to be worth 8 billion dollars.
“The maturity of our brand in Europe is such that, taking it into lifestyle- in this instance through the gentlemen’s clubs- is a strategic step of relevance. Our brand recognition should and will go beyond where it is today, reaching a broad, valuable and growing customer base. This is just one of the many steps I expect us to take in this direction.”
Mobile
Following the recent appointment of Tim Clausen and the creation of a specific business unit dedicated to the further development of the opportunities in the ever growing mobile content market, the Company has signed two new agreements with mobile content aggregators, that jointly reach 32 countries via 55 network operators and 10 ISPs. These contracts cover Asia, Eastern and Western Europe as well as Brazil, Israel and Russia.
As part of Private’s strategy to remain in the forefront of emerging commercial markets, the new Private Mobile Portal is currently in development and scheduled to go live in the last quarter of this year. The Private Mobile Portal, built on a totally dynamic and modular platform will be a rich and immersive environment, using the latest technology available and consisting of channels, sites, promotions, movies and downloadable products. Our customers will be able to interact with Private anytime, anywhere.
With reference to recent developments relating to Mobile content, Mr. Milton elaborated, “We are now present in every European market as well as in the key growth markets such as Russia, Brazil and India. Our exclusive library, innovatively packaged by industry leading aggregators, is now optimally placed for both our new and existing customers in a wide range of formats: from wallpaper, image galleries, animations and videos to games and Java slide shows. Through these agreements we are able to deliver endless content in any format, which will enable us to keep at the forefront of consumer demand in this ever-evolving market.
“We will launch before year-end our Private Mobile Portal. With the value of mobile adult content forecast to rise by over 50% this year to Us$ 1.01 billion worldwide, and even more aggressive growth forecasts for 2009, we are very excited about both the proprietary development of our mobile portal as well as the aggregator agreements reached and coverage they represent.”
Vod and NVoD Online
Online, Private has an established and growing presence in the global Near-Video-on-Demand (NVoD) and Video-On-Demand (Vod) online market via its proprietary websites and third party revenue share or licensing arrangements with more than twenty online aggregators/operators in Europe and the USA.
Private has recently signed two agreements for online content delivery services, one for Europe and one for South America. These agreements are based on a revenue-linked structure, common to the industry, whereby there is no initial investment by Private.
In Europe, the Company has signed with one of Italy’s leading web sites, where Private will provide content for both video streaming and the downloading. The second deal targets the significant South American market with the presence of Private on the ESDC platform.
The Private library will be available to Latin American broadband subscribers through third party Internet Service Providers. With uptake of the platform growing rapidly throughout the region, this platform features a full and growing range of interactive content and online video, TV and radio. ESDC is the most sophisticated entertainment solution available to operators and consumers in this market.
In 2004, the global broadband market grew by 50% to 150 million2 subscribers; during the same period Latin America exhibited an annual growth rate of around 87%3 making it the world’s fastest growing region in terms of broadband uptake. This new agreement represents Private’s first step towards expanding into the rapidly developing Latin American online market.
With regard to Broadcast Online, Mr. Milton added: “It is becoming clear that broadband is reshaping the global entertainment market. While Vod online is still in its absolute infancy it is interesting to note that forecasts4 see global consumer spend going from 70 million Us$ in 2003 to 2.34 billion Us$ in 2007, representing a CARG (Compound Annual Growth Rate) of 142%.
“These agreements for broadband content delivery confirm the universal demand for our quality content and are yet another example of Private’s ability to open new markets and to leverage our premium quality content across new distribution platforms.”
Increased Geographic Presence
The Company is opening a subsidiary in Hong Kong to respond to an ever-increasing local demand for the Private brand, including licensing of content for broadcast TV, Vod online, ipTV and mobile as well as brand licensing for clubs and retail outlets. Immediate interest in Private is principally stemming from Korea, China, Japan and Hong Kong. Nonetheless the whole consumer culture in this region is ripe for superior adult-oriented products with a strong brand identity.
In parallel to the creation of a subsidiary and to further address the ever-evolving Asian market, Private has signed a Letter of Understanding with Atlas Interactive, a premium content distributor and member of the Atlas Group, whereby the companies will explore the various marketing and sales opportunities for Private’s library of content through broadcast TV, broadband (TVoIP), cable TV/Vod and mobile. Atlas’s formidable presence and local experience makes it an ideal partner.
Mr. Milton added: “The Asia-Pacific region has seen impressive growth over the last decades, but until recently was subject to certain volatility. We are now comfortable that the acceptance for our products is firmly in place. The maturity of our brand, coupled with our latest business developments and agreement partners means that our offer should be perfectly tailored to this large and exciting regional market. I am confident that the timing could not be better.
“We have been very active on various fronts over the recent months and are confident that we will continue in this direction, we foresee these abovementioned deals to significantly impact our financials starting in Q4 2005 and going forward.” – –
Notes To Editors
About Private Media Group (PRVT.com)
With its 40 year track record, Private is a leading global adult entertainment company that distributes its content over a wide range of media platforms, including narrow and broadband Internet, DVD and video, magazines, broadcasting and wireless technologies. It owns the worldwide rights to the largest archive of high quality adult content in the world, which it physically distributes in over 40 countries.
About ESDC
ESDC is a B-to-B product that integrates direct marketing tools, an audio and video manager, web and 3D, especially oriented to broadband, allowing companies to design, implement and manage applications for Internet in a fast, efficient and inexpensive way.
ESDC is a unique and innovative proposal organized around three dimensions: video and audio at a streaming and pay per view level; multiplayer games in 3D and 2D; and a powerful community engine that allows each user to personalize contents.
These three dimensions are displayed on the same interface where state of the art technologies converge, providing unique power and versatility. This interface was especially designed to run on broadband platforms, such as cable modem, ADSL, wireless and satellite (Direct PC).
ESDC has a full range of top rate contents, in line with the interests of its multi-target audience. Over 1500 videos and digitalized films -in AVH and DVD quality-; clips for adults by Venus, Playboy and Playboy TV; movie films, documentaries and Infinito contents; current events and information; MuchMusic music; its own radio; channels to upload personal videos and audio files; tutorials fully developed on video and 2D community tools make up this innovative product that optimizes the benefits of broadband.
About Atlas Interactive
Atlas Interactive Group Ltd is a key player in the expanding market for interactive premium content distribution via fixed or mobile telephone, the Internet and television. Atlas Interactive offers access and billing services for premium rate interactive content around the world, using both domestic premium rate numbers and international numbers. Atlas Interactive is a subsidiary of the Atlas Group of companies and is Privately held.
About Atlas Group
The $350 million Atlas Group of companies provides a range of video, voice, data, internet services and interactive content to customers in over 70 countries. Atlas was founded in 1995, is Privately owned, has proven highly entrepreneurial in capturing new and profitable market opportunities arising from market liberalization and new technologies.
Disclaimer
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.
For further information please contact
Alejandra Moore Mayorga
Tel +34 91 531 23 88
Private Media Group, Inc.
