ALLIANCE BROADCASTING

Alliance Broadcasting was formed in 1994 when Alliance acquired a licence to operate SHOWCASE Television, a Canadian cable channel in which Alliance now holds a 99% ownership interest. The Company also has an 88% ownership interest in History Television, a Canadian cable specialty service focused on historical dramas and documentaries and a minority interest in Budapest TV3, a privately-owned commercial broadcaster in Hungary.

The Company's strategic interest in acquiring broadcast assets is to create new outlets for the Company's products. It is the Company's strategy to acquire additionnal broadcast assets, principally in Canada, to expand its distribution and delivery operations and to further enhance the value of its libraries.

In September 1996, the Company, together with minority partner CTV, was awarded a license for History Television Inc. ("HISTORY"), a new specialty channel featuring a fascinating and entertaining blend of documentaries, movies and original historical programming from Canada and around the world. This was one of only four English language analog licenses granted in this latest round of applications. History Television began broadcasting on October 17th, 1997. In January and February 1997, the Company acquired an additional 44% ownership interest in Showcase Television Inc. ("SHOWCASE") and now owns 99% of the cable specialty channel.

Alliance partnered with Shaw Communications and applied for a video on demand (VOD) licence which was recently granted by the CRTC.  VOD puts the Company at the forefront of the drive to bring the video store into the consumers’ living room.  This exciting new technology will provide a new distribution window for Alliance’s library. It is expected to begin contributing to revenue in fiscal 1999.