FOR IMMEDIATE RELEASE CONTACT: Corporate Communications 214/854-3190   VIACOM® SEES REVENUE SHARING PROGRAMS SIGNIFICANTLY IMPROVING BLOCKBUSTER®'S PERFORMANCE Company To Revise Tape Accounting To Reflect Revenue Sharing NEW YORK, NY, July 22, 1998 -- Viacom Inc. (Amex: VIA and VIAB) announced today that revenue sharing programs with the Hollywood studios have fundamentally changed Blockbuster's business model and are generating significant increases in all key measures of revenue performance. Viacom, which will announce 1998 second quarter results on July 29, said that improvements at Blockbuster, including the availability of more new release tapes made possible by revenue sharing, has led to a nearly 13.3% increase in Blockbuster's worldwide same-store rental revenues in the second quarter ended June 30, 1998, versus the same year-earlier period, when Blockbuster recorded a 3% decline. In addition, Blockbuster's domestic same-store rental transactions rose 16% in the 1998 second quarter, compared with the second quarter last year. The Company also reported that same- store active memberships increased 7% in the second quarter over the same prior-year period. Viacom also announced that, because Blockbuster expects to purchase approximately 90% of its rental units in the second half of 1998 under revenue sharing arrangements and because revenue sharing is satisfying consumer demand over a shorter period of time, the Company is revising its accounting for video rental transactions effective in the second quarter. Previously, Blockbuster purchased tapes for a fixed price, which was amortized over a period of six to 36 months. Under the new method, the nominal up-front amount Blockbuster now pays to the studios will be amortized on an accelerated basis over three months, and the studios' share of revenue will be expensed by Blockbuster as revenue is recognized. As a result of the related revaluing of its inventory, Blockbuster will record a one-time non-cash charge of $437 million in the second quarter of 1998. "Blockbuster's revenue sharing programs are putting more new release tapes in our stores and making the video rental experience better for consumers," said John Antioco, chairman and chief executive officer of Blockbuster Entertainment. "The consumer has responded by renting more and renting more often, which is not only benefiting Blockbuster, but the industry overall." Blockbuster operates approximately 6,000 Blockbuster Video and 400 Blockbuster Music neighborhood entertainment stores in the United States, its territories and 26 other countries and may be accessed internationally at www.blockbuster.com. Viacom Inc. is one of the world's largest entertainment and publishing companies and is a leading force in nearly every segment of the international media marketplace. The operations of Viacom include Blockbuster, MTV Networks, Paramount Pictures, Paramount Television, Paramount Parks, Showtime Networks, Simon & Schuster, television stations, and movie screens in 12 countries. Viacom also owns approximately 80 percent of Spelling Entertainment Group, as well as a half-interest in Comedy Central and UPN. National Amusements, Inc., a closely held corporation which operates approximately 1,200 screens in the U.S., the U.K. and South America, is the parent company of Viacom. More information about Viacom is available at the Company's Web site located at http://www.viacom.com. ### |  Current Releases   |  Archives   | BLOCKBUSTER name, design and related marks are trademarks of Blockbuster Entertainment Inc. © 1998 Blockbuster Entertainment Inc. All rights reserved. VIACOM and related marks are marks of Viacom International Inc. or its affiliates. All rights reserved.