Wherehouse Music and CheckOut.com Announce Equity Investment and Strategic Partnership

Business Wire, Nov 17, 1999

LOS ANGELES--(BUSINESS WIRE)--Nov. 17, 1999--

Companies Jointly Invest Additional $40 Million to Create the

First Retail and Online Partnership for Entertainment

Wherehouse Music, one of the nation's largest entertainment retailers, and CheckOut.com, the online connection to the worlds of music, movies and games, today announced a $40 million equity investment and strategic partnership.

Under terms of the agreement, CheckOut.com becomes the exclusive Internet partner for Wherehouse Music. CheckOut.com will be integrated in to all Wherehouse marketing, advertising and the close to 600 Wherehouse Music stores nationwide.

The partnership will include:

-- CheckOut.com will immediately begin to be integrated as the

exclusive online arm for Wherehouse Music. By the 1999 holiday

season, CheckOut.com will be featured in all Southern California

Wherehouse Music stores with an in-store holiday consumer

promotion and POP displays featuring CheckOut.com entertainment

information and services. Shortly thereafter, CheckOut.com will

be featured in all Wherehouse Music stores nationwide.

-- CheckOut.com will be included in all Wherehouse Music national

and local advertising including television, radio and print.

-- WherehouseMusic.com will become CheckOut.com starting today. The

popular WherehouseMusic.com "Lounge" will be integrated into

CheckOut.com under a co-branded CheckOut.com/Wherehouse Music

umbrella. The "Lounge" is a weekly live broadband Webcast

featuring music's top performers. Past Lounge acts have included

Ice T, Melissa Etheridge and the Moody Blues, among other top

artists.

-- CheckOut.com and Wherehouse Music will together work with

artists, record labels and entertainment studios as a single

point of contact for both the retail and online space.

-- The companies will leverage Wherehouse Music's leadership

position in the used and out-of-print music category. In the near

future, kiosks will be added to Wherehouse Music stores featuring

CheckOut.com entertainment content and commerce.

"The partnership gives CheckOut.com an off-line presence with a leading entertainment retailer and access to Wherehouse Music's several million customers per month, which we see as a key differentiation for our branding and customer-acquisition strategy," said Richard Wolpert, chief executive officer, CheckOut.com.

"The merger allows both companies to do what most online and traditional brick-and-mortar businesses are striving to achieve and that is to create a cohesive experience for consumers both off- and online. The Wherehouse Music and CheckOut.com partnership is one of the first real examples of `clicks and mortar,' a trend that we will see many traditional retailers and online businesses follow in the near future."

"We quickly realized that the best way to successfully compete online was to partner with a well-established and independent online company," said Tony Alvarez, chairman and chief executive officer, Wherehouse Music.

"Partnering with CheckOut.com allows us to concentrate on what we do best -- delivering the most exciting shopping experience available off-line, while CheckOut.com can concentrate on providing the same outstanding experience online. We think this partnership gives Wherehouse Music a strong lead over other brick-and-mortar retailers in integrating an off- and online strategy."

Hugh Hilton, president of Wherehouse Music, added: "In structuring an online partnership, two qualities were of paramount importance. Number one was a site that integrates content and commerce in a functional way. Second, it was important that our partner have a strong technical team that developed the site in-house to adjust to market trends and add new product offerings quickly and cost effectively.

"Our partnership with CheckOut.com achieves both these goals and gives us a huge advantage over our competition."

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 600 stores in 33 states with 1998 pro forma revenues of more than $800 million.

About CheckOut.com

CheckOut.com (www.CheckOut.com) is the online connection to the worlds of music, movies and games. With exclusive celebrity chats and breaking interviews, CheckOut.com connects fans with their favorite entertainment personalities.

The site offers a unique interactive experience that blends online shopping with entertainment news and communities, and features more than 1 million product and artist information pages. Taking entertainment and e-commerce to the next level, CheckOut.com delivers a dynamic and personalized shopping experience.

Note to editors: Photos of Wherehouse Music and CheckOut.com executives announcing the merger are available at www.businesswire.com/photowire/checkout.