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                                                                   EXHIBIT 10.25

                      FIRST AMENDMENT TO WARRANT AGREEMENT

         FIRST AMENDMENT TO WARRANT AGREEMENT (this "Amendment"), dated as of
August 12, 1998, among VIDEO UPDATE, INC., a Delaware corporation (the
"Company"), BANQUE PARIBAS, GRAND CAYMAN BRANCH (the "Purchaser") and PARIBAS
(the "Bank"). Unless otherwise indicated, all capitalized terms used herein and
not otherwise defined shall have the respective meanings provided such terms in
the Warrant Agreement referred to below.

                              W I T N E S S E T H:

         WHEREAS, the Company and the Purchaser are parties to a Warrant
Agreement, dated as of March 6, 1998 (the "Warrant Agreement");

         WHEREAS, the Bank is an affiliate of the Company and is a party to the
Credit Agreement referred to in the Warrant Agreement;

         WHEREAS, subject to and on the terms and conditions set forth in this
Amendment, the Purchaser and the Company hereto wish to amend the Warrant
Agreement as herein provided; and

         WHEREAS, subject to and on the terms and conditions set forth in this
Amendment, the Bank wishes to waive its right to receive a certain consent fee
pursuant to the Credit Agreement as herein provided;

         NOW, THEREFORE, it is agreed:

I.       Amendments to Warrant Agreement and Exhibit B-1 thereto

         1. Section 5 of the Arrant Agreement is hereby amended by (i) deleting
the amount "$2.68" appearing in the first sentence of the second paragraph of
said Section and inserting the amount "$[1.40]" in lieu thereof and (ii)
deleting the amount "$6.35" appearing in the second sentence of the second
paragraph of said Section and inserting the amount "$[1.40]" in lieu thereof.

         2. Section 9 of the Warrant Agreement is hereby amended by (i) deleting
the amount "$2.68" appearing in the first sentence of said Section and inserting
the amount "$[1.40]" in lieu thereof and (ii) deleting the amount "$6.35"
appearing in the first sentence of said Section and inserting the amount
"$[1.40]" in lieu thereof.

         3. Exhibit B-1 to the Warrant Agreement is hereby amended by deleting
the amount "$2.68" appearing in said Exhibit and inserting the amount "$[1.40]"
in lieu thereof.

          4. Exhibit B-2 to the Warrant Agreement is hereby amended by deleting
the amount "$6.35 appearing in said Exhibit and inserting the amount "$[1.40]"
in lieu thereof.

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          5. In order to induce the Company to enter into this Amendment with
the Purchaser, the Bank hereby agrees to waive (and hereby does forfeit) its
right to receive the consent fee referred to in Section 8.20(a) of the Credit
Agreement, it being understood that the Company shall be permitted to retain any
amount otherwise required to be paid to the Bank pursuant to said Section 9.

II.      Miscellaneous

         1.       In order to induce the Purchase to enter in to this Amendment,
                  the Company hereby (i) makes each of the representations and
                  warranties contained in Section 10 of the Warrant Agreement
                  and (ii) represents and warrants that since March 6, 1998
                  through the Amendment Effective Date 9as defined below), no
                  event described in Section 9 of the Warrant Amendment has
                  occurred requiring an adjustment to the New Warrant Exercise
                  Price or the Exchange Warrant Exercise Price pursuant to, and
                  in accordance with the terms of, said Section 9.

         2.       This Amendment is limited as specified and shall not
                  constitute a modification, acceptance or waiver of any other
                  provision of the Warrant Agreement or any other Warrant
                  Document.

         3.       This Amendment may be executed in any number of counterparts
                  and by the different parties hereto on separate counterparts,
                  each of which counterparts when executed and delivered shall
                  be an original, but all of which shall together constitute one
                  and the same instrument. A complete set of counterparts shall
                  be lodged with the Company and the Purchase.

         4.       THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE APRTIES
                  HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
                  BY THE LAW OF THE STATE OF NEW YORK.

         5.       This Amendment shall become effective on the date (the
                  "Amendment Effective Date") when (i) the Company and the
                  Purchaser shall have signed a copy hereof (whether the same or
                  different copies) and shall have delivered (including by way
                  of facsimile transmission) the same to White & Case LLP, 1155
                  Avenue of the Americas, New York, NY 10036 Attention: Adam
                  Moniz (facsimile number 212-354-8113), (ii) the Company shall
                  have duly executed and delivered to the Purchaser (x) a
                  replacement New Warrant Certificate in the form of Exhibit B-1
                  to the Warrant Agreement, as amended hereby, and (y) a
                  replacement Exchange Warrant Certificate in the form of
                  Exhibit B-2 to the Warrant Agreement, as mended hereby and
                  (iii) the Purchaser shall have surrendered its existing New
                  Warrant Certificate and its existing Exchange Warrant
                  Certificate to the Company in exchange for such replacement
                  New Warrant Certificate or Exchange Warrant Certificate, as
                  the case may be.

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         6.       From and after the Amendment Effective Date, all references to
                  the Warrant Amendment in the Warrant Agreement and the other
                  Warrant Documents shall be deemed to be references to the
                  Warrant Agreement as modified hereby.

         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
         of this Agreement to be duly executed and delivered as of the date
         first above written.


                                        VIDEO UPDATE, INC.


                                        By: ________________________________
                                            Name:
                                            Title:


                                        BANQUE PARIBAS, GRAND CAYMAN
                                            BRANCH, as Purchaser


                                        By: ________________________________
                                            Name:
                                            Title:

                                        BANQUE PARIBAS


                                        By: ________________________________
                                            Name:
                                            Title:

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