19 January 1998

TO:               Home Video Channel Ltd.
                  Aquis House
                  Station Road
                  Hayes
                  Middlesex
                  UB3 4DX
                  ("HVC")

FROM:             British Sky Broadcasting Limited
                  Grant Way
                  Isleworth
                  Middlesex
                  TW7 5QD
                  ("Sky")

Dear Sirs

Re:      THE ADULT CHANNEL (the "Channel")

We refer to the following documents:

(a)      A letter from Sky to HVC dated 21 August 1997, signed by both parties 
         (the "Letter).

(b)      An agreement between Societe Europeene des Satellites SA ("SES") and
         Sky dated 30 August 1996 for the use of analogue transponder capacity
         on ASTRA 1B Satellite (the "Head Lease").

1.   The Letter sets out, without limitation, the main commercial terms on which
     Sky will sub-lease to HVC certain Astra non-pre-emptible capacity on
     Transponder 24 of the Astra 1B satellite (the "Capacity") for the purpose
     of the transmission of the Channel.

2.   This letter of agreement ("Agreement") confirms the key commercial terms 
     as follows (subject to paragraph 5 below):

         (i)      The Capacity will be provided from 1 August 1998 to the expiry
                  of the term of the Head Lease or 31 December 2002, whichever
                  is the earlier (the "Term).

         (ii)     The Capacity will be provided in analogue form on Transponder 
                  24 of Astra 1B.

         (iii)    The hours of transmission of the Channel will be from midnight
                  to 0400, seven (7) days per week.

         (iv)     HVC will pay to Sky 900,000 Pounds plus UK Value Added Tax
                  ("VAT") per annum during the Term in consideration of the
                  provision of the Capacity. The said sum shall, with effect
                  from 1 August 1999 be subject to corresponding increases to
                  the Retail Prices Index ("RPI") during the preceding twelve
                  months. Payment will be made each year during the Term by HVC
                  in twelve equal monthly installments in advance on the first
                  day of each month, commencing on 1 August 1998. For the
                  avoidance of doubt, failure by HVC to broadcast the Channel
                  during the Term shall not relieve it in any way of its
                  obligations to make payment to Sky hereunder.

         (v)      HVC will pay to Sky 66,000 Pounds plus VAT per annum during
                  the term in consideration of the provision by Sky of uplinking
                  services to Transponder 24 on Astra 1B. The said sum shall,
                  with effect from 1 August 1999 be subject to corresponding
                  increases to the RPI during the preceding twelve months.
                  Payment will be made each year during the Term by HVC in
                  twelve equal monthly installments in advance on the first day
                  of each month, commencing on 1 August 1998. For the avoidance
                  of doubt, HVC shall at all times during the term be
                  responsible at its sole cost for delivering the Channel's
                  signal to Sky's uplink site.

3.   Sky and HVC will use their respective best endeavours to execute a long
     form transponder agreement in respect of the Capacity and an agreement in
     respect of the applicable uplink services (the "New Agreements"} by a ate
     no later than 00:01 on 1 August 1998 (the "Start Date"), to give effect to
     the matters referred to in paragraph 2 above.

4.   If the New Agreements have not been executed by the Start Date, Sky and HVC
     will continue to use their best endeavours to execute such documents as
     soon as possible after the Start Date and, until such times as the New
     Agreements are executed, Sky shall, as from the Start Date, sub-lease the
     Capacity to HVC and provide the corresponding uplinking services and the
     terms on which Sky shall do so shall be as follows:

         (i)      Each of the provisions of paragraph 2 above shall apply in its
                  entirety.

         (ii)     In respect of the Capacity, HVC shall do all that is necessary
                  to conform with all material terms of the Head Lease as if it
                  were an original party thereto and shall indemnify and keep
                  Sky fully indemnified in respect of any breach by Sky of the
                  Head Lease cause by an act or omission of HVC.

         (iii)    In respect of the uplinking services, HVC will comply with all
                  the provisions of Sky's standard form uplinking agreement for
                  Transponder 24 from time to time, a copy of which will be
                  provided by Sky to HVC prior to the Start Date if a long form
                  agreement in respect of uplinking services has not been
                  executed by parties prior to the Start Date.

5.   The provision by Sky to HVC of the Capacity is conditional upon Sky first
     being able to obtain such consents as may be necessary from SES in respect
     thereof and Sky agrees to use all reasonable endeavours to obtain such
     consent prior to the Start Date.

6.   In the event of any conflict between the Letter, this Agreement and any
     other document signed by the parties relating to the provision of capacity
     and uplinking for the Channel, the terms and conditions of this Agreement
     shall prevail.

7.   The contents of this Agreement shall be confidential and shall at all times
     remain so prior to, during and after the expiry of the Term save to the
     extent that it is necessary for the parties to communicate to subscribers
     and potential subscribers the fact that the Channel will, from the Start
     Date, move from Transponder 54 to Transponder 24 and save as may be
     required to be disclosed by any applicable law or regulation or
     requirements of any relevant stock exchange or regulatory authority.

8.    This Agreement is legally binding on Sky and HVC and shall be governed by
      English law.

9.   Sky may assign or sub-licence its rights thereunder without restriction.
     HVC shall not assign, sub-let, licence or otherwise allow any third party
     to exercise any of its rights under this Agreement without having first
     obtained the prior written consent of Sky, such consent not to be
     unreasonably withheld or delayed.

10.  To the extent that any provision of this Agreement constitutes a
     restriction or an information provision within the meaning of the
     Restrictive Trade Practices Act 1976 so as to make this Agreement
     registrable under that Act, no such provision shall come into effect until
     such time as particulars of this Agreement have been furnished to the
     Director General of Fair Trading, in accordance with that Act.



/s/ D. Stewart                                                   2/2/98
-----------------------------------------------------         -----------------
For and on behalf of British Sky Broadcasting                 Date
Limited


/s/ Jeremy Yates                                                 29/01/98
-----------------------------------------------------         -----------------
For and on behalf of Home Video Channel                       Date
Limited