SOURCE: VMH VideoMovieHouse

March 02, 2006 09:35 ET

VMH VideoMovieHouse.com Inc. Shareholder Update

VANCOUVER, BC -- (MARKET WIRE) -- March 2, 2006 -- "VMHVideoMovieHouse.com (OTC BB: VMHVF) has been undergoing a total transformation over the past few months and I am pleased to provide the following update of the company's activities to our shareholders and corporate partners. The company's intention in doing so is to provide a clear understanding of how our new and exciting DVDmarketplace.com online sales platform works, provide insight into what has transpired over the past 60 days and what to look forward to in the next 60 days," stated Mr. Steve Gaspar, President of VMH Videomoviehouse.com Inc. "Videomoviehouse.com is the owner and operator of DVDmarketplace.com and it is important for shareholders to know that every dollar in revenue earned by DVDmarketplace.com goes directly to VMHVideoMovieHouse.com," added Mr. Gaspar.

Business Model:

"DVDmarketplace.com intends to create the largest DVD Buyer/Seller community in the world using its unique third party marketplace platform to facilitate transactions between buyers and sellers worldwide. DVDmarketplace.com intends to offer the widest selection and the most competitive prices of DVDs for sale on the planet," says Mr. Brian Holden, DVDmarketplace's new Marketing Director. "DVDmarketplace.com receives a consistent fee per transaction (a flat rate percentage of the sale and a flat rate percentage of the shipping fee) limiting the downside risks associated with product depreciation or economic change found in traditional DVD fulfillment based business models. The burden of carrying high cost inventory by the company is thus eliminated. This means DVDmarketplace.com is assured of a profitable transaction regardless of the sales price of the DVD. The DVDmarketplace.com platform capitalizes on the competitive business environment created by sellers competing with each other head to head. Each merchant partner adds to the pricing power of DVDmarketplace.com as competitively low prices attract droves of bargain hunting consumers to our website where in most cases they buy multiple items per visit. They are also likely to return at a later date in search of more bargains. As our sellers supply our entire virtual inventory, the company does not have to incur losses supplying these loss leaders," stated Mr. Holden.

"Profit margin percentages on a transaction don't decrease allowing for a very predictable business model. Videomoviehouse.com, through DVDmarketplace.com has entered a market which represents over 20 billion dollars a year in sales. VMH has successfully transformed itself into a technology and marketing firm as opposed to a mail order company warehousing large quantities of rapidly depreciating inventory. By making this transformation the company can look forward to substantially reduced financing requirements in the future as virtual inventory has virtually no cost," added Mr. Gaspar.

Corporate Progress:

"Over the past 60 days DVDmarketplace.com has made tremendous inroads recruiting some of the largest and most respected merchant partners in the DVD distribution/fulfillment industry to list their DVDs for sale on DVDmarketplace.com. DVDmarketplace.com's ever expanding merchant roster includes video industry leaders such as CD Warehouse Inc., Newtown Video, Video Group, DVD Legacy, First Video, Buy Rite DVD, GameZnFlix Inc. and many others. The DVD industry as a whole has embraced the DVDmarketplace.com concept as illustrated recently by media coverage by such well known and respected media outlets such as HomeMediaRetailing.com (front page cover story) and Hispanicmpr.com. DVDmarketplace.com recently signed an MOU with Centaurus Media Group of Miami, Florida. The purpose of this agreement is to formulate a joint marketing program which would introduce DVDmarketplace.com into the South Florida region by utilizing CMG's tremendous media resources in the region's dominantly Hispanic community," according to Mr. Gaspar.

"DVDmarketplace.com has experienced tremendous growth in gross sales in its first 60 days of operation in conjunction with a steady increase in website traffic. As DVDmarketplace.com is what I consider 'work in progress' and is nowhere near complete as many new features are either in the planning stages or under development, expected growth over the next six months should be tremendous," states Mr. Holden. "Within the next 60 days my personal expectation is that we will have at least 1 million items of virtual inventory for sale on the DVDmarketplace.com website. Marketing efforts have only recently started and we already feature approximately 300,000 listings for sale at any one time. So far we have just only scratched the surface," added Marketing Director, Brian Holden.

Company Initiatives:

"Over the next 60 days DVDmarketplace.com expects to launch other DVD industry related websites designed to capitalize on new technologies and product demands communicated to the company by our diverse array of customers. These products include the sale of Bollywood DVD products, the sale of Blu-Ray DVDs and the sale of HD DVDs. Websites are currently under development," according to Mr. Steve Gaspar, President and CEO. "DVDmarketplace.com intends to launch in the not too distant future, nationwide marketing programs focusing on ethnic groups throughout the United States and around the world. The company is also actively seeking out and pursuing companies to work with that can help achieve our goal of increasing shareholder value," added Mr. Gaspar.

According to Brian Holden, Marketing director for DVDmarketplace.com, "This is an exciting time for employees and shareholders of DVDmarketplace.com. Our entrance as a transaction facilitator into the DVD sales industry has exceeded my highest expectations thus far. We have certainly been well received by the Video industry as a whole and I expect that the financial community will soon see our DVDmarketplace.com acquisition for what it is -- once the word gets out and people begin to understand what his company is now all about."

About VideoMovieHouse.com Inc.

VMH VideoMovieHouse.com (OTC BB: VMHVF) is an innovative online seller and renter of DVDs worldwide currently operating websites under the www.dvdmarketplace.com and www.videomoviehouse.com banners. The company intends to concentrate its near-term expansion efforts toward the third-party e-merchant business, commencing with DVDs and expanding to other media products as opportunities present themselves. The company is planning a national advertising campaign rollout with aims of creating one of the world's largest interactive DVD Buyer/Seller communities, www.dvdmarketplace.com.

Safe Harbor Act Notice:

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications that may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above. The company cautions that these forward-looking statements are further qualified by other factors including, but not limited to those set forth in the company's Form 10-KSB filing and other filings with the United States Securities and Exchange Commission (available at http://www.sec.gov/). The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.

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