BOULDER, Colo. — New Frontier Media, Inc. , a worldwide producer and distributor of transactional television and general motion picture entertainment, today reported revenue of $17.9 million for the quarter ended December 31, 2007, representing an increase of 8% from $16.6 million during the same quarter in the prior year.

This is the highest quarterly revenue ever reported by the Company. The Company reported earnings per share of $0.13 for the quarter ended December 31, 2007, as compared to $0.14 per share for the same quarter last year.

“We are pleased with the financial results and performance of our business in the third quarter,” said Michael Weiner, Chief Executive Officer of New Frontier Media, Inc. “The Film Production segment had a very strong quarter as expected, and our Transactional TV segment continues to execute well in a very competitive market. We believe this segment has now stabilized and is poised to resume a growth trend in our next fiscal year as we experience results connected with our recent launch of an additional channel on the nation’s largest DBS platform. We appreciate the support of shareholders who have believed in the Company’s ability to execute through the challenging quarters of this past fiscal year.”

The Company’s Transactional TV segment (formerly referred to as the Pay TV segment) reported revenue of $9.9 million for the quarter ended December 31, 2007, as compared to $11.2 million for the same prior year quarter, representing a decrease of 12%. The following detailed revenue results were reported for the Transactional TV segment:

— Pay-per-view (“PPV”) revenue during the current quarter declined 22% to $5.4 million from $6.9 million for the same quarter last year. The decrease is primarily a result of the renegotiated agreement with one of the Company’s key customers during the third quarter of fiscal year 2007. Simultaneously, this customer added two incremental competitive channels to its adult category, thereby creating a lower relative value for each of the Company’s services. This will be the last period that the comparison of the Company’s year-over-year quarterly results is impacted by the above-mentioned renegotiated agreement.

— Video-on-demand revenue increased to $4.4 million during the current
quarter representing a 16% increase from the $3.8 million in revenue during the same prior year quarter. This increase is due to a general improvement in the performance of the Company’s content.

— C-Band revenue decreased to $0.1 million from $0.5 million in the
prior year. As previously announced, this service was discontinued during the current quarter.

Cost of sales for the Transactional TV segment was $2.8 million and consistent with the same prior year quarter. Operating expenses declined 9% to $2.0 million from $2.2 million for the same quarter a year ago primarily from a reduction in certain advertising costs. Operating income for the Transactional TV segment was $5.1 million which reflects a 19% decline as compared to the same quarter in the prior year.

Film Production

The Company’s Film Production segment reported revenue of $7.6 million for the current quarter reflecting an increase of approximately 58% as compared to $4.8 million in the same prior year period. The following detailed revenue results were reported for the Film Production segment:

— Owned product revenue increased 16% to $4.3 million during the current quarter from $3.7 million in the same prior year quarter. This increase is primarily due to the delivery of a 13 episode movie series to a premium TV service.

— Repped product revenue declined slightly to $0.7 million as compared
to $0.9 million in the same prior year quarter.

— Other revenue increased to $2.6 million for the quarter ended December 31, 2007 as compared to $0.2 million for the same quarter a
year ago. The increase in revenue is from the completion and delivery of a producer-for-hire arrangement during the current quarter.

Cost of sales increased to $4.0 million in the current quarter as compared to $1.8 million in the same prior year quarter from expenses realized in connection with the completion of the producer-for-hire arrangement.

Operating expenses for the Film Production segment increased to $1.4 million in the current quarter as compared to $1.2 million in the same prior year quarter primarily due to a $0.7 million impairment charge associated with two film events.

The estimated future benefit from these events was originally established when the Company acquired MRG Entertainment, Inc. (“MRG”). During the current quarter, the Company lowered its original estimate of the benefits expected from these two events, thereby resulting in an impairment charge equal to the difference in the remaining unamortized costs of the events and the estimated future benefits.

Partially offsetting the impact of the $0.7 million impairment charge was the reversal of a $0.5 million earn-out accrual that had been previously accrued during the nine months ended September 30, 2007. The former shareholders of MRG were entitled to receive an additional earn-out payment of $0.7 million during the calendar year ended December 31, 2007 if certain performance targets were achieved. During the nine months ended September 30, 2007, the Company estimated that the performance targets would be met and accordingly, recorded an accrual. MRG did not achieve the twelve month performance target, so the earn-out accrual was reversed in the current quarter.

The Film Production segment generated operating income of $2.2 million for the quarter ended December 31, 2007 representing an increase of 22% as compared to $1.8 million during the same prior year quarter.

Internet

The Company’s Internet segment reported net revenue of $0.4 million for the quarter ended December 31, 2007 as compared to net revenue of $0.6 million for the same prior year quarter, representing a decrease of 33%. Operating income for the Internet segment was $0.1 million for the quarter ended December 31, 2007 as compared to a loss from operations of $0.5 million for the quarter ended December 31, 2006. The results for the prior year quarter included a $0.4 million impairment charge for the write-off of certain licensed content.

Corporate Administration Expenses

Corporate administration expenses for both the quarter ended December 31, 2007 and 2006 were $2.6 million.

Adjusted EBITDA and Cash Flows

The Company reported Adjusted EBITDA for the quarter ended December 31, 2007 of $5.6 million compared to $6.5 million in the same prior year period. A schedule reconciling EBITDA and Adjusted EBITDA (both defined below) to the most directly comparable United States generally accepted accounting principle (“GAAP”) financial measure — Net Income — is included in this press release.

The Company believes EBITDA and Adjusted EBITDA are important financial measures and they are used by management to monitor the financial performance of the Company. The decline in Adjusted EBITDA for the current quarter compared to the same period last year is primarily attributable to the following:

— lower net income from a decline in the PPV revenue reported in the
Transactional TV segment from the renegotiated contract with a key customer; and

— an increase in cash investments in content associated with the Film
Production segment’s creation of new content.

Total cash and investments as of December 31, 2007 increased to $19.6 million as compared to $16.6 million as of September 30, 2007. The increase from the previous quarter is primarily attributable to the following:

— a $3.7 million increase in cash flows from operations as compared to the second quarter of fiscal year 2008; and

— the timing of the payment of a $3.0 million dividend which was
accrued in the quarter ended December 31, 2007 but not paid until January 2008. The $3.0 million dividend for the prior quarter ended September 30, 2007 was accrued and paid during that same quarter.