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PROGRAMME DISTRIBUTION

We have successfully continued to grow our programming library, adding 423 new episodes in the period. Titles added include new series such as Action Man, Dinozaurs, Escaflowne, Flint the Time Detective, Mashrambo, Nascar Superchargers, Pigs Next Door, Power Rangers Timeforce, Scary but True, So Little Time and Wunschpunsch, as well as additional series of Digimon, Kids from Room 402, Power Rangers and Xyber 9. In addition, the rights for the European and Middle Eastern territories to 17 family films, including major properties such as The Addams Family, Casper the Ghost and Richie Rich, were acquired from Fox Family Worldwide.

As at June 30, 2001, 270 episodes were in production, including local European co-productions Jason & the Heroes of Mount Olympus, to broadcast on TF1 in France, and Gadget and the Gadgetinis, to broadcast on M6 in France, based on the worldwide classic character Inspector Gadget, for which Disney recently launched a major feature film.

The strength and depth of our library has allowed us to maintain our position as a leading distributor of children’s programming across Europe and the Middle East, with programming now supplied to more than 120 broadcasters in 50 countries, up from 36 countries in the previous fiscal year.

Significant new programme distribution agreements signed during the period included an agreement with Portugal’s leading terrestrial broadcaster Sociedade Independent de Communicacao (SIC). Under the terms of this new two-year output deal with SIC, we will supply 450 episodes for airing next year, accounting for 25% of SIC’s weekend children’s schedule. Other significant programming deals concluded during the period included a package deal with the BBC for So Little Time, Flint the Time Detective and Big Wolf on Campus, the sale of Digimon the Movie throughout Europe, as well as the sale of State of Grace and New Addams Family to RTL.

The final deliveries of Wunschpunsch, from the critically acclaimed German author Michel Ende, were made to ARD. This accounted for a significant proportion of the programme distribution revenues recognised in the second-half of the period.

Pursuant to our strategy of increasing the number of Fox Kids branded blocks on-air, a two-hour branded block airing during the peak children’s viewing time was launched on REN TV, one of the largest terrestrial broadcasters in Russia, reaching 105 million viewers. This consolidated our position in the Russian market where the Fox Kids channel is the most widely distributed children’s pay-TV channel. In September 2001, we also launched a daily one-hour syndicated block with 13 regional terrestrial television stations in Italy, representing 70% national coverage and reaching 14 million households every day. The block takes the feed directly from our Italian channel. As well as generating additional advertising revenues, the block will also allow us to increase our brand profile in Italy, which will benefit our other activities in that market.