March 17, 2004

News Release: VHQ Agrees to Acquire Assets of Technology Company to Enable Online Rental of DVD'S in Canada

VHQ Entertainment Inc. (TSX: VHQ) announced today that it has entered into an arm's length agreement in principle to purchase the assets of a Canadian-based software development company which has successfully developed and launched a scaleable, cutting- edge software suite that facilitates the online rental of DVD's.

Upon completion, the acquisition will enable VHQ to be the first major home video retailer to introduce the advantages of online rentals to the Canadian consumer. The explosive growth of NetFlix (NFLX) in the U.S. market has already proven consumer acceptance of this new way to rent movies. VHQ will utilize online rentals to rapidly achieve a national presence in Canada and to enhance the value and expand the reach of its existing retail outlets. The purchase price payable by VHQ to the vendor for the purchased assets will be $480,000, with $120,000 payable in cash on the closing date and $360,000 being payable via the issuance on the closing date of 600,000 common shares of VHQ at a deemed price of $0.60 per common share. In addition to the purchase price, VHQ will pay the vendor a royalty equal to 20% of the gross revenue generated by the acquired assets from the closing date until April 30, 2009, with the aggregate maximum amount of such royalty to not exceed $365,000.

Closing of the acquisition is subject to a number of conditions including the completion of customary due diligence by VHQ, the receipt of regulatory approval and the approval of the VHQ board of directors. It is anticipated that the closing date for the acquisition will be on or about April 15, 2004.

VHQ Entertainment Inc. is an established video and home entertainment retailer that operates a chain of 59 corporately-owned retail stores in secondary and suburban markets in Alberta, Saskatchewan and NWT. VHQ's corporate website is located at www.VHQ.ca and the company's filings can be viewed at http://www.sedar.com. The common shares of VHQ are listed and posted for trading on the Toronto Stock Exchange under the trading symbol 'VHQ'.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

For further information: Trevor Hillman - President and CEO, Telephone:(403) 346-8119, Fax: (403) 340-2753, eMail: trevorh(at)vhq.ca; InvestorRelations: The Howard Group: Grant Howard/Peter Weichler, Telephone:(403) 221-0915, eMail: info(at)howardgroupinc.com, www.howardgroupinc.com

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