Fox Exits Disney VOD Venture

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News Corp.'s Fox Entertainment Group is pulling out of a joint-venture
video-on-demand deal with The Walt Disney Co.

'After considering the potential regulatory process and logistical issues and
carefully examining technological and marketplace developments, [Fox] determined
that the joint venture was not an appropriate initiative at this time,' Fox said
in a prepared statement.

The deal was first announced in September, just weeks after five major
motion-picture studios formed a joint venture, dubbed Movielink, to deliver
films on-demand to broadband users in the United States.

The five studios were Metro-Goldwyn-Mayer Inc., Paramount Pictures, Sony
Pictures Entertainment, Universal Studios and Warner Bros.

In Demand L.L.C. has a similar VOD deal with Sony Corp.'s Columbia TriStar
International Television.

Unlike the other VOD partnerships, the Fox-Disney joint venture planned to
offer new releases from the studios on Movies.com on an exclusive basis for a limited
time ahead of the traditional pay-per-view window, which is normally 45 to 60
days after the video-rental release.

Disney has decided to go it alone. The company will continue to operate the
existing Movies.com Web site. Disney plans to license and aggregate feature-film
content from multiple studios to deliver on-demand content via cable, satellite
and broadband connections.

Fox said it is willing to license its feature films to Disney on a
nonexclusive basis if acceptable business terms can be
reached.

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