Pop3 Media Corp. Q2 Shows Significant Increase in Revenue

Pop3 Media Corp. today announced revenue of $1,056,437 for the quarter ended December 31, 2004, a 400% increase over results from the same quarter of the previous year. The Company generated $1,056,437 in revenues against $368,530 in cost of sales resulting in a gross profit of $687,907.

"The dramatic increase in revenue has been fueled by several factors, including two successful album launches during the quarter and a resulting increase in distribution revenue," said Richard Spector, Pop3 Chief Operating Officer. "Combine this type of revenue generation with multiple cost cutting initiatives, and we are on a steady track toward pursuing profitability."

The distribution of music CD's comprised the bulk of the Company's overall revenue for the quarter, as did mastering services rendered through Masterdisk, a wholly owned subsidiary of Pop3 media. The remaining company revenue was from a settlement of accounts payable with one of Pop3's distribution vendor accounts.

As a result, the Company incurred a net loss of $119,788 for the three months ending December 31, 2004, compared to a net loss of$1,226,096 for the same period ending December 31, 2003. The significantly reduced net loss was due to the implementation of several cost cutting initiatives in conjunction with accelerated CD sales and mastering revenue.

Six months ending December 31, 2004

During the six months ended December 31, 2004, the Company generated $1,629,982 in revenues against $702,846 in cost of sales resulting in a gross profit of $927,136.

Revenue from mastering comprised 63% of the Company's overall revenue, 30% of total revenue was from the distribution of music CD's and remaining 7% of revenue was from the settlement of accounts payable to one of the Distributor's Vendor accounts, advertising costs and rebates. Distribution recognized superior gross margins of 99%, whereas the mastering division had a smaller gross margin of 32%, as the total gross profit of $927,136 was comprised of $339,406 from mastering and $587,730 from CD sales.

The Company incurred a net loss of $678,725 for the six months ended December 31, 2004, compared to $2,334,373 for the same period ending December 31, 2003. The significantly reduced net loss was due to an increase in gross profit and a dramatic reduction in overhead expenses compared to the previous period.

For more information:

--  Pop3 Media Corp: http://www.pop3media.com
    

About Pop3 Media Corp.:

Pop3 Media Corp. is engaged in development, production and distribution of entertainment related media for film, television, music and publishing interests. The Company's portfolio currently includes ownership of ViaStar Distribution Group, A.V.O. Studios, Moving Pictures International, ViaStar Records, Quadra Records, Light of the Spirit Records, and ViaStar Classical, ViaStar Artist Management group and Masterdisk Corporation.

Except historical matter contained herein, matters discussed in this news release are forward-looking statements and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect assumptions and involve risks and uncertainties, which may affect the Company's business and prospects and cause actual results to differ materially from these forward-looking statements.

Distributed by Market Wire