SOURCE: Public Media Works

March 16, 2010 12:25 ET

Public Media Works Enters Into Letter of Intent to Acquire EntertainmentXpress

Company Plans to Combine Media Content Access With Innovative Kiosk Based Delivery Platform

LOS ANGELES, CA--(Marketwire - March 16, 2010) -  Public Media Works (OTCBB: PUBM) announced today their intent to capitalize on their entertainment relationships and direct access to media content and distribution by acquiring EntertainmentXpress whose business model is built around the rapidly growing digital distribution network of kiosks that provide an affordable, convenient way for consumers to buy or rent movies, games and other entertainment media.

"We have been studying the market and sizing up the best way for us to take advantage of our access to the entertainment industry and media content. We strongly feel that EntertainmentXpress has a business model and existing relationships which can make them stand out in the DVD and video game rental kiosk marketplace", stated Joseph Merhi, Public Media Works CEO.

"And as part of Public Media Works, we believe that EntertainmentXpress should be uniquely positioned to realize advantages that can lead the way in the industry of digital entertainment distribution. We believe these synergies would enhance the profit potential of their distribution model and the depth of their relationships with grocery stores and quick-serve restaurants," Merhi continued.

According to CEO of EntertainmentXpress, Garrett Cecchini, "The ability to integrate our business plan with Public Media Works, which is solidly anchored in entertainment business, creates the possibility of offering our distribution partners a compelling solution. We believe that by combining exclusive branded entertainment content with physical DVD distribution we can bring a unique experience to customers that will draw them to our distribution partner's branded kiosks. The collateral benefit being increased foot traffic and storewide revenue. To make that happen we address current and anticipated consumer demands for convenient and affordable ways to present digital entertainment venues, in a variety of digital formats, through a proven distribution system."

"Our philosophy is to be a solutions provider sensitive to the economic interests of our distribution partners which is largely influenced by the consumer experience of their customers", added Cecchini. "In other words, our model is to work collaboratively with our distribution partners to find creative ways to increase store sales, foot traffic and return customers where the kiosk then becomes part of an overall sales growth solution, not just a vending machine."

According to The NPD Group, a leading market research company, DVD and video game rental kiosks are receiving increasing attention from consumers, which is leading to more competition for consumers among traditional video rental stores and subscription rental services. While traditional store rentals still account for the greatest share of video rental turns among U.S. consumers today, kiosk rentals are experiencing more growth than either subscription services or store rentals.

"The DVD and video game rental kiosk business is growing at a significant pace at the expense of video subscription services and traditional brick-and-mortar video store rentals", continued Cecchini. "NPD forecasts that video rental kiosks may make up nearly 30 percent of video rentals in 2010. Our plan is to take advantage of this expansion."

EntertainmentXpress plans to roll out a network of conveniently located, self-service, kiosks which deliver demographically relevant digital media content to consumers. Their core media distribution business model comprises the rental and sales of DVDs and video games, and more through kiosks located in quick-serve food locations, grocery stores and other high-traffic, public venues. A fully integrated solution for in-store advertising and kiosks pre-designed to be media filling stations to digital storage devices are features intended to differentiate EntertainmentXpress in the marketplace.

"Based upon existing relationships we are seeking agreements with distribution partners representing some 35,000 grocery and 30,000 food service locations. At full service each location is capable of generating $3,000 per month in revenue. These prospective distribution partners alone represent a substantial addressable market with an annualized gross revenue potential of $2.3 Billion", added EntertainmentXpress President and COO Larry Gitlin. "If we can differentiate ourselves in the marketplace by combining with Public Media Works we believe we can dramatically increase our odds of harvesting this revenue potential over time."

The Company's letter of intent with EntertainmentXpress provides for the parties' to work together to negotiate and execute a definitive agreement for the Company's acquisition of EntertainmentXpress. The parties anticipate any resulting acquisition would close by May 1, 2010. Upon completion of an acquisition, EntertainmentXpress would be operated as a wholly-owned subsidiary of the Company. The completion of the acquisition is subject to the negotiation and execution of a definitive acquisition agreement and the completion of the audit of EntertainmentXpress, and the Company cannot provide any assurances that such an acquisition will be completed, or if completed, the timing of such completion. 

ABOUT PUBLIC MEDIA WORKS

Public Media Works, Inc. is engaged in the development, production, marketing and distribution of film, music and television entertainment media. The company is developing a network of production resources and also seeks out raw content in the form of film concepts, trailers, scripts, treatments, music and book proposals to acquire or license for further development and distribution.

For more information visit the company web site at www.publicmediaworks.com

ABOUT ENTERTAINMENTXPRESS

EntertainmentXpress, Inc. is rolling out a network of conveniently located, self-service, kiosks which deliver demographically relevant digital media content to consumers. The company's core business model comprises the rental and sale of DVDs, video games, and more through kiosks located in quick-serve food locations, grocery stores and other high-traffic, public venues. A fully integrated solution for in-store advertising and kiosks pre-designed to be media filling stations to digital storage devices are features intended to differentiate EntertainmentXpress in the marketplace. The company's forward thinking media acquisition and cross promotion strategies are designed to deliver a better value proposition for consumers and increase appeal to distribution partners. According to The NPD Group, a leading market research company, DVD and video game rental kiosks are experiencing more growth than either subscription services or store rentals and video rental kiosks will make up nearly 30 percent of video rentals in the U.S. in 2010. EntertainmentXpress' focus is on becoming a significant participant in this rapid expansion through a combination of organic and acquisition growth strategies.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Such forward looking statements, particularly as related to completion of the acquisition of EntertainmentXpress by Public Media Works, the business plans of Public Media Works and EntertainmentXpress, expectations of strategic relationships, business opportunities related to content sourcing and the DVD and video game rental kiosks business, the ability of EntertainmentXpress to enter into agreements with distribution partners, to gain market share, the size of the market, and the ability of EntertainmentXpress to compete effectively in the marketplace, and the future opportunities of the Company, are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the Company's expectations and estimate.

Contact Information

  • For More Information:
    Go to www.publicmediaworks.com

    Company Contact:
    (310) 358-3213

    Investor Relations Contact:
    Mark Bernhard
    (415) 332-7200 x222