The Matrix performance won't translate to reported earnings for...

The Matrix performance won't translate to reported earnings for a number of years. The best way to look at the picture business is as you would a warrant.

The inital "return" being immediate box office and DVD sales, simply pays off the inital capital required to invest in product and the interest cost of that capital. All going to plan VRL exit (late this decade from the first two packages with Warner) with an large "libary" largely paid off and possibly a "small" return after finance costs. This "libary" spins a residual income stream (TV rights, residual levels of DVD sales, cross marketing, etc) back to VRL on an ongoing basis. This is the real lasting benefit from the production business.

So how's it tracking. Prior to MII, the 38 or so films were projected to exit with "small" positive value. MII will have brightened the picture. Interestly the VRL shareprice has reacted it appears to the US performance which like MI is significantly weaker than the Rest of World. MII has fallen far faster in the US than the ROW, and the good news for VRL is it doesn't matter - US is 100% AOL Time Warner, ROW is 100% VRL. But as I said don't expect to see the cash as a residual income stream from the libary until 2006/7/8 ? in the meantime you still have exposure to the current management of VRL.

I'm still in (VRLPA better entry than VRL).