SETTLEMENT AGREEMENT
                              --------------------
                             (INVESTMENT AGREEMENT)
                             ----------------------


         SETTLEMENT AGREEMENT between Genius Products, Inc., a Nevada
corporation ("GPI") and American Public Media Group (formerly known as Minnesota
Communications Group), a Minnesota non-profit organization ("APMG") dated as of
December 21, 2000.

         WHEREAS, the parties entered into an Investment Agreement dated as of
March 31, 1999 (the "INVESTMENT AGREEMENT"); and

         WHEREAS, the parties desire to terminate the agreement and release each
other from all known and unknown actual and potential claims that exist or may
exist arising out of or in connection with the Investment Agreement; and

         WHEREAS, APMG is willing to cancel certain options under the Investment
Agreement to acquire additional shares in GPI;

         NOW THEREFORE, in consideration of the mututal covenants provided
herein, and for other good and valuable consideration the sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:

         1.       DEFINED TERMS: Capitalized terms shall have the meaining set
                  forth in the Investment Agreement unless otherwise defined.

         2.       CANCELLATION OF OPTION: In consideration of the issuance by
                  GPI to APMG of 25,000 restricted shares of GPI common stock,
                  APMG hereby agrees to cancel, relinquish and forfeit with
                  prejudice all rights to acquire any shares in GPI pursuant to
                  the Investment Agreement, including without limitation, the
                  option to acquire 400,000 Subject Shares under Section 2.4 of
                  the Investment Agreement and 500,000 Subject Shares under
                  Section 2.6 of the Investment Agreement.

         3.       RELEASE AND DISCHARGE: The parties for themselves and on
                  behalf of their respective subsidiaries and affiliates, and
                  each of their respective successors, assigns, agents,
                  representatives, shareholders, directors, officers, and
                  employees, and any other person or entity who may claim
                  through them, hereby release and forever discharge each other
                  and their respective subsidiaries and affiliates, and each of
                  their respective successors, assigns, agents, representatives,
                  shareholders, directors, officers, and employees, from any and
                  all actions, claims, demands and suits of whatever nature
                  arising out of or connected directly or indirectly with the
                  rights, duties and obligations of the parties under the
                  Investment Agreement.

                  The release and discharge set forth in this Section 3 extends
                  to and includes all damages, injuries, losses, claims and
                  rights now existing as well as any that may develop in the
                  future, whether known or unknown, as related to the
                  obligations and duties of the parties under the Investment
                  Agreement. Each party expressly waives and relinquishes any
                  and all rights and benefits conferred upon it by the
                  provisions of Section 1542 of the California Civil Code, which
                  provides as follows:

                           "A general release does not extend to claims which
                           the creditor does not know or suspect to exist in his
                           favor at the time of executing the release, which if
                           known by him must have materially affected his
                           settlement with the debtor."

                  The parties acknowledge that the waiver of Section 1542 of the
                  California Civil Code was separately bargained for, and they
                  agree that the this Agreement shall be given full force and
                  effect in accordance with the terms and provisions related to
                  unknown and unsuspected claims and damages as well as those
                  provisions related to known claims, demands, and causes of
                  action.



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         4.       NO ADMISSION OF LIABILITY. The parties agree and acknowledge
                  that the terms and conditions of this Agreement constitute an
                  accord and satisfaction of contested matters and neither the
                  offer nor the acceptance of the terms and conditions hereto
                  represent an admission of liability, responsibility or
                  wrongdoing on the part of either party, and each party hereby
                  expressly disclaims any such liability, responsibility or
                  wrongdoing.

         5.       GOVERNING LAW: This Agreement shall be construed in accordance
                  with and governed by the internal laws of the State of
                  California.

         6.       ENTIRE AGREEMENT. This Agreement embodies the entire agreement
                  and understanding among the parties with respect to the
                  subject matter hereof, and supercedes all prior agreements,
                  understandings and representations between the parties related
                  to the subject matter hereof.

         IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
by their duly authorized officers as of the dated first above written.

         GENIUS PRODUCTS, INC.

         /S/ Dorian Lowell
         ----------------------
         Dorian Lowell
         President



         AMERICAN PUBLIC MEDIA GROUP


         /S/ Thomas J. Kigin
         ----------------------
         Thomas J. Kigin
         Executive Vice President

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