CheckOut and Wherehouse Music Complete Merger;CheckOut Receives $20 Million Investment from...

Business/Entertainment Editors

LOS ANGELES--(BUSINESS WIRE)--March 2, 2000

The CheckOut Entertainment Network and Wherehouse Music today announced the completion of the merger of CheckOut.com and WherehouseMusic.com.

Under terms of the agreement, CheckOut received a

"This merger clearly establishes The CheckOut Entertainment Network as a leader in the online entertainment industry," said Richard Wolpert, chief executive officer, The CheckOut Entertainment Network. "With our rapidly growing daily traffic and significant on- and off-line partnerships, we continue to take the online entertainment category to the next level."

Business Strategy of The CheckOut Entertainment Network and

Wherehouse Music Merger

The partnership between CheckOut and Wherehouse Music solidifies the new company's industry position in two key areas -- entertainment content and commerce.

This month, CheckOut will debut a new design that will include the following under The CheckOut Entertainment Network: content destinations -- CheckOutMusic.com, CheckOutMovies.com and CheckOutGames.com; The Lounge, a live events and community area; the Wherehouse Online Stores featuring dedicated stores for music, movies, games and related entertainment merchandise; and new features including broadband enhancements for high-speed users.

Wolpert added: "The online entertainment category has exploded and is expected to be the `most sought-after' category on the Internet this year. Users shouldn't have to sift through thousands of different entertainment-related sites for their online needs.

"It is the goal of CheckOut's Entertainment Network to make it easy for fans to find everything that they're looking for online at one Web destination. Our success in this arena is already evident as we are one of the fastest growing entertainment sites on the Web according to Media Metrix."

The companies' combined marketing strength both on- and off-line creates a strong competitive advantage. CheckOut's Network of entertainment destinations will be featured in the almost 550 Wherehouse Music retail stores nationwide and will be included in regional and national print, radio and TV advertising.

Together, the companies will bring entertainment fans shared promotions, sweepstakes, contests, access to their favorite artists and more, available both in-stores and online. Currently, the companies have initiated a kiosk pilot for select Wherehouse stores where content and community from The CheckOut Entertainment Network is featured.

In addition, Wherehouse Music is the No. 1 specialty retailer in the country for used music. The Wherehouse Online Stores will leverage Wherehouse Music's leadership in this category and incorporate a used category with the site redesign.

On top of marketing and used merchandise, The CheckOut Entertainment Network and Wherehouse Music will work together to build strong and lasting relationships with record labels, entertainment studios and game companies.

"Wherehouse Music has been developing key relationships with the entertainment industry for more than a decade," said Hugh Hilton, president, Wherehouse Music. "We are a proven market leader on new release titles. As a testament to our leadership in this arena, Wherehouse Music was the No. 1 retailer in first-day sales nationwide for D'Angelo's new release `Voodoo.'

"With The CheckOut Entertainment Network, we can now bring labels and studios an additional marketing avenue and a solid online partner that will support the needs of the entertainment community and represent their artists and products to the millions of fans on the Internet."

About The CheckOut Entertainment Network

The CheckOut Entertainment Network, based in Los Angeles, is the recognized online entertainment leader. It develops, maintains and markets online entertainment destinations including CheckOutMusic.com, CheckOutMovies.com, CheckOutGames.com, The Lounge and the Wherehouse Online Stores. The CheckOut Entertainment Network is one of the fastest-growing destinations on the Web according to Media Metrix.

In November 1999, The CheckOut Entertainment Network entered into a strategic partnership with Wherehouse Music to become the exclusive Internet arm for the almost 600 Wherehouse retail locations. The CheckOut Entertainment Network and also holds key partnerships with RealNetworks, Talk City, GameSpy Industries, EarthLink and LAUNCH, among others.

About Wherehouse Music

Wherehouse Entertainment Inc., is the third-largest music retailer in the United States. With the acquisition of Blockbuster Music, the Torrance, Calif.-based retailer owns and operates nearly 550 stores in 33 states with 1998 pro forma revenues of over $800 million.