K-tel Signs E-Commerce Pact with Damark

Music retailer K-tel Online signed an agreement with Damark International Inc. to provide its
“Custom CD” service to members of certain Damark clubs.

K-tel and Damark have joined forces and created a Web site designed for use
solely by Damark club members. Damark members will be able to electronically
create personalized CDs from music categories like Rock & Roll, Christmas, or
Classical from K-tel’s proprietary library of music titles.

Financial arrangements were not disclosed.

Damark, the 15th largest consumer catalog retailer in the U.S. and the third
largest publicly traded membership services company, is featuring K-tel’s
Custom CD service as a benefit of its Preferred Buyers and Gift Gallery
clubs.

Members of these clubs get access to K-tel’s Custom CD service at a
discounted price, allowing K-tel access to Damark’s base of over a million
shopping club members.

“A partnership of this caliber not only gives K-tel.com the ability to
reach an enormous, new customer base, but is also a great opportunity for new
consumers to discover K-tel.com’s vast library of music and content,” said
Randy Malinoff, general manger of K-tel Online.

K-tel is in the process of adding an additional 30,000 songs with the
recently acquired Marathon Music catalog.

K-tel International Inc. is a vertically integrated developer, marketer and
distributor of entertainment and consumer products worldwide. Ktel.com
features 250,000 music titles, custom CDs and 35,000 home video titles,
consumer products and an auction site.