The joint venture company, Matsushita Universal Media Services of LLC of America , will install major DVD production capabilities within Universal Music Group's existing CD manufacturing facility in Pinckneyville, Illinois. The facility is strategically located near Panasonic's major customers' DVD disc distribution centers. Panasonic and Universal expect the new company to begin producing DVD discs this fall. In addition, the joint venture company will continue to manufacture audio CDs for the Universal Music Group.

With this new manufacturing operation coming on line, Panasonic plans to further expand its leadership role in DVD disc manufacturing by doubling its existing U.S. DVD production capacity from the current 2.5 million units per month to 5 million units per month by the end of 1999.

The Los Angeles-based DVD Video Group estimates that first quarter 1999 DVD disc sales for the entire industry were 10 million units and will continue to grow substantially this year. More than three thousand movie titles have been released on DVD to date, and it is expected that the format growth will further increase with the introduction of DVD-Audio this year.

The joint venture builds upon Universal's close relationship with Panasonic's parent company, Matsushita Electric, which is a strategic partner and minority shareholder in Universal Studios, Inc.

"In the United States, the DVD business is growing rapidly with player sales passing the two-million-unit mark this spring," said Bob Pfannkuch, president of PDSC. "By combining Matsushita's strengths in technology and Universal's strengths in software distribution and CD manufacturing, we believe the joint venture company will quickly be able to provide world-class DVD manufacturing services to PDSC's Hollywood studio and other customers."

Bruce Hack, Vice Chairman of the Universal Music Group, added, "We are delighted to expand our wonderful relationship with Matsushita in another tangible way -- producing CDs for the U.S. market at lower costs and participating in the exciting growth of the new DVD format."

Established in 1997 in Torrance, California as the world's first DVD-only replication facility, Panasonic Disc Services Corporation is a subsidiary of Osaka, Japan-based Matsushita Electric Industrial Co., Ltd. (NYSE: MC; PCX), one of the world's leading developers and producers of digital electronic products for the home, the office, and in between. Based in Osaka, Japan, it recorded annual sales of $63.7 billion in the fiscal year ended March 31, 1999. Best known by its Panasonic brand, Matsushita has more than 275,000 employees worldwide, with overseas operations that include over 220 companies in 46 countries and regions. For more information, visit http://www.panasonic.com .

Universal Music Group is the world's leading music company with wholly-owned record operations or licensees in 59 countries around the world. Its businesses also include Universal Music Publishing Group, one of the industry's largest global music publishing operations, and Universal Concerts.

Universal Music Group consists of record labels A&M, Blue Thumb, Decca Record Company, Def Jam, Deutsche Grammophon, Geffen, GRP, Impulse!, Interscope, Island, MCA, MCA Nashville, Mercury, Mercury Nashville, Motown, Philips, Polydor, Universal, and Verve as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world.

Universal Music Group is a unit of The Seagram Company Ltd., a global entertainment and spirits and wine company.

SOURCE: Panasonic Disc Services Corporation