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                                                                   EXHIBIT 10.32
                           COMMERCIAL LEASE AGREEMENT

THIS LEASE is made this 31st day of December, 2003, by and between Ekelund
Properties, LLC (hereinafter called "Lessor") and Genius Products, Inc.
(hereinafter called "Lessee"), and replaces and supercedes the sublease
agreement dated May 1st, 2003, between Lessor and Lessee.

                                   WITNESSETH:

1.          PREMISES:
            Lessor does hereby lease to Lessee that certain portion of the
            building known as 270 Water Street, Excelsior, Minnesota presently
            occupied by Lessee ("Premises") consisting of approximately 1,300
            square feet.

2.          TERM:
            Lessee is hereby entitled to lease the Premises on a one-year basis
            until this Lease is terminated by either party. Lessor and Lessee
            shall each be entitled to terminate this Lease at any time, for any
            or no reason, by providing written notice of the termination to the
            other party at least 60 days prior to the termination date.

3.          RENT, DEPOSIT AND LATE PAYMENT:
            Lessee covenants and agrees to pay Lessor, at the offices of Lessor,
            or to such other party or at such other place as Lessor may
            hereafter designate in writing, a base monthly rent in the amount of
            Twelve Hundred Dollars ($1,200.00). The base monthly rent for each
            month of the Lease term shall be paid in advance on the first day of
            each month.

            Lessee acknowledges that late payment by Lessee to Lessor of any
            rent or other sum due hereunder will cause Lessor to incur costs not
            contemplated by this Lease, the exact amount of which would be
            extremely difficult to ascertain. Such costs include, but are not
            limited to, processing and accounting charges, and late charges
            imposed on Lessor by the terms of any mortgage or trust deed
            covering the Premises. Therefore, in the event Lessee should fail to
            pay any installment of rent or any other sum due hereunder after
            such amount is due, Lessee shall pay to Lessor on the first day of
            each month, in addition to rent and any other sum due hereunder, a
            late charge equal to five percent (5%) of all unpaid amounts due and
            owing. A fifty dollar ($50.00) charge will also be paid by Lessee to
            the Lessor for each returned check.

                                                            Lessor  JE
                                                                   ----
                                                            Lessee  MM
                                                                   ----





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4.          COMMON AREAS:
            If the Premises is part of a building occupied by other tenants,
            Lessee agrees to conform to Lessor's rules and regulations
            pertaining to the parts of the building that are in common use by
            other tenants.

5.          REPAIRS AND MAINTENANCE:
            Lessee shall, at its own expense and at all times, keep the Premises
            neat, clean and in a sanitary condition, and keep and use the
            Premises in accordance with applicable laws, ordinances, rules,
            regulations and requirements of any governmental authorities. Lessee
            shall permit no waste, damage or injury to the Premises.

            Except for the roof, exterior walls and foundations, which are the
            responsibility of the Lessor, Lessee shall make such repairs as
            necessary to maintain the Premises in as good condition as it is
            now, reasonable use and wear and damage by fire and other casualty
            excepted. Lessee shall make all repairs to the Premises reasonably
            requested by the Lessor.

6.          ACCIDENTS AND LIABILITY:
            Lessor and its agents shall not be liable for any injury or damage
            to person or property sustained, by Lessee or others, in and about
            the Premises. Lessee agrees to defend and hold Lessor and its agents
            harmless from any claim, action, award, settlement and/or judgment
            for damages to property or injury to person suffered or alleged to
            be suffered on the Premises by any person, firm or corporation.

7.          USE:
            Lessee shall use the Premises for its general business operations,
            and for no other purposes without written consent of Lessor. In the
            event Lessee's use of the Premises increases Lessor's fire or other
            liability insurance rates on the building of which the Premises is a
            part, Lessee agrees to pay for such increase.

8.          LIENS AND SOLVENCY:

            Lessee shall keep the Premises free from any liens arising out of
            any work performed for, materials furnished to or obligations
            incurred by Lessee and shall defend and hold Lessor harmless against
            the same. In the event Lessee becomes insolvent or bankrupt, or if a
            receiver, assignee or other liquidating officer is appointed for the
            business of Lessee, Lessor may immediately terminate this Lease at
            its option.

                                                            Lessor  JE
                                                                   ----
                                                            Lessee  MM
                                                                   ----

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9.          SUBLETTING OR ASSIGNMENT:
            Lessee shall not sublet the whole or any part of the Premises, nor
            assign this Lease, without the written consent of Lessor. This Lease
            shall not be assignable by operation of law.

10.         ACCESS:
            Lessor shall have the right to enter the Premises at all reasonable
            times for the purpose of inspection or of making repairs, additions
            or alterations and shall have the right to enter and show the
            Premises to prospective tenants during the sixty (60) days prior to
            the termination of the Lease.

            Lessor shall at all times have and retain a key with which to unlock
            all of the doors in, upon and about the Premises, excluding Lessee's
            vaults, safes and files, and Lessor shall have the right to use any
            and all means which Lessor may deem proper to open said doors in an
            emergency in order to obtain entry to the Premises without liability
            to Lessee, and any entry to the Premises obtained by Lessor by such
            means, or otherwise, shall not under any circumstances be construed
            or deemed to be a forceable or unlawful entry, or a detainer of the
            Premises, or an eviction of Lessee from the Premises or any portion
            thereof.

11.         DAMAGE OR DESTRUCTION:
            In the event the Premises is rendered untenantable in whole or in
            part by fire, elements, or other casualty, Lessor may elect, at its
            option, not to restore or rebuild the Premises and shall so notify
            Lessee, in which event Lessee shall vacate the Premises and this
            Lease shall be immediately terminated; or in the alternative, Lessor
            shall notify Lessee, within thirty (30) days after such casualty,
            that Lessor will undertake to restore or rebuild the Premises, in
            which event the Lease may be immediately terminated at Lessee's
            option by written notice to Lessor within ten (10) days after
            receiving such notice from the Lessor. During the period of
            untenantability, Lessee's rent shall abate in the same ratio as the
            portion of the Premises rendered untenantable bears to the whole of
            the Premises.

12.         SIGNS:
            All signs or symbols placed by Lessee upon the windows and doors of
            the Premises, or upon any exterior part of the Premises, shall be
            subject to Lessor's prior written consent. Lessor may demand the
            removal of signs which are not so approved, and Lessee's failure to
            comply with said request within five (5) days of Lessor's demand
            will constitute a breach of this paragraph and will entitle Lessor
            to immediately terminate this Lease, or in lieu thereof, to cause
            the sign to be removed and the Premises repaired at the sole expense
            of the Lessee. At the termination of this Lease, Lessee will remove
            all signs placed by it upon the Premises, and will repair at its
            sole expense any damage caused by such removal.

                                                            Lessor  JE
                                                                   ----
                                                            Lessee  MM
                                                                   ----

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13.         ALTERATIONS:
            After prior written consent of Lessor, Lessee may make alterations,
            additions and improvements in and to the Premises, at its sole
            expense. As a part of Lessor's consent, Lessor may require Lessee to
            store during the term of this Lease, at Lessee's sole expense, any
            part of the Premises that is removed by Lessee in order to make any
            alteration, addition or improvement. In the performance of such
            work, Lessee agrees to comply with all laws, ordinances, rules and
            regulations of any proper public authority, and to defend and hold
            Lessor harmless from damage, loss or expense related to or arising
            from such work. Upon Lessor's request, or with Lessor's written
            consent, Lessee shall remove such alterations, additions and
            improvements and restore the Premises to its original condition not
            later than the termination date, at Lessee's sole expense. Any
            alterations, additions and improvements not so removed shall remain
            in and be surrendered with the Premises as a part thereof. Trade
            fixtures may be removed at Lessee's sole expense, provided that
            Lessee shall restore the Premises to its original condition or pay
            for any damage caused by such removal.

14.         CONDEMNATION:
            In the event a substantial part of the Premises is taken by the
            right of eminent domain, or is purchased by the condemnor in lieu
            thereof, so as to render the remaining Premises untenantable, then
            this Lease shall be terminated as of the time of taking at the
            option of either party. In the event of a partial taking which does
            not render the whole Premises untenantable, Lessee's rent shall be
            reduced in direct proportion to the taking. Lessee shall have no
            claim to any portion of the compensation for the taking of the land
            or building.

15.         TAXES, INSURANCE, MAINTENANCE: Not applicable to Lessee.

16.         DEFAULT AND RE-ENTRY:
            If Lessee shall fail to keep and perform any of the covenants and
            agreements herein contained and such failure continues for thirty
            (30) days after Lessee receives written notice from Lessor, unless
            appropriate action has been taken by Lessee in good faith to cure
            such failure, Lessor may immediately terminate this Lease and
            re-enter the Premises.

17.         REMOVAL OF PROPERTY:
            In the event Lessor lawfully re-enters the Premises as provided
            herein, Lessor shall have the right, but not the obligation, to
            remove all personal property located therein and to place such
            property in storage at the sole expense and risk of Lessee.

                                                            Lessor  JE
                                                                   ----
                                                            Lessee  MM
                                                                   ----

                                       4





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18.         COST AND ATTORNEYS' FEES:
            If, by reason of any default or breach on the part of either party
            in the performance of any of the provisions of this Lease, a legal
            action is instituted, the losing party agrees to pay all reasonable
            costs and attorneys' fees of the prevailing party in connection
            therewith. It is agreed that the venue of any legal action brought
            under the terms of this Lease shall be in the county in which the
            Premises is situated.

19.         SUBORDINATION:
            Lessee agrees that this Lease shall be subordinated to any mortgages
            or deeds of trust placed on the land on which the Premises is
            situated, provided that in the event of foreclosure, if Lessee is
            not then in default and agrees to attorn to the mortgagee or the
            beneficiary under any deed of trust, such mortgagee or beneficiary
            shall recognize Lessee's right of possession under the terms of this
            Lease.

20.         NO WAIVER OF COVENANTS:
            Any waiver by either party of any breach of this Lease by the other
            party shall not be considered a waiver of any future similar breach.
            This Lease contains all the agreements between the parties, and
            there shall be no modification of this Lease or the agreements
            contained herein except by written instrument signed by both
            parties.

21.         SURRENDER OF PREMISES:

            Lessee agrees, upon termination of this Lease, to peacefully quit
            and surrender the Premises without notice, to leave the Premises
            neat and clean and to deliver all keys to the Premises to Lessor.

22.         HOLDING OVER:

            If Lessee shall hold over after the termination of this Lease by
            Lessor, Lessee shall remain bound by all the covenants and
            agreements herein, with increased rent to be determined by Lessor.

23.         BINDING ON HEIRS, SUCCESSORS AND ASSIGNS:

            The covenants and agreements of this Lease shall be binding upon the
            heirs, executors, administrators, successors and assigns of both
            parties, except as hereinabove provided.

                                                            Lessor  JE
                                                                   ----
                                                            Lessee  MM
                                                                   ----

                                       5





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24.         NOTICE:
            Any notice required to be given by either party to the other party
            shall be personally delivered or deposited in the United States
            mail, postage prepaid, addressed to the Lessor at:

                                    Ekelund Properties, LLC
                                    Attn: Julie Ekelund
                                    5135 Meadville Street
                                    Greenwood, MN  55331

            or to Lessee at:

                                    Genius Products, Inc.
                                    Attn:  Michael Meader
                                    740 Lomas Santa Fe, Suite 210
                                    Solana Beach, CA 92075

            or at such other address as either party may designate to the other
            party in writing from time to time.

25.         PARKING:
            Parking in the back of 274 Water Street is restricted to two-hour
            parking. For long-term parking (more than two-hour) Lessee is
            required to park across the parking lot, near the library.

26.         TIME IS OF THE ESSENCE FOR THIS LEASE.

IN WITNESS WHEREOF, the parties hereto have executed this Lease effective as of
the date first above written.

LESSOR                                          LESSEE

Ekelund Properties, LLC                         Genius Products, Inc.

By:    /S/  JULIE EKELUND                       By: /S/  MICHAEL MEADER
     ----------------------------------------       ----------------------------
            Julie Ekelund, Authorized Officer       Michael Meader, President

                                                            Lessor  JE
                                                                   ----
                                                            Lessee  MM
                                                                   ----

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