Exhibit 99.1

 Image Entertainment Provides Guidance on Relativity Media Agreement

    CHATSWORTH, Calif.--(BUSINESS WIRE)--Aug. 17, 2006--Image
Entertainment, Inc. (Nasdaq:DISK), a leading independent licensee,
producer and distributor of home entertainment programming in North
America, held a conference call yesterday to discuss the Company's
recent agreement with Relativity Media, LLC. Image's Executive
Management as well as the principals of Relativity Media discussed in
detail their expectations for their relationship.
    During the conference call, Image's management stated that it
estimates the agreement will contribute net DVD revenues ranging from
$60-$90 million in calendar year 2007 based on the release of three
theatrical motion pictures, and $140-$210 million in calendar year
2008 based on the release of seven theatrical motion pictures. These
estimates are based on an average domestic theatrical box office
performance of $20-$25 million per motion picture. The Company expects
to realize an approximate 30% gross profit margin, resulting in a
pre-tax profit margin, or net profit before taxes, ranging between 8%
and 13% of net revenues generated by this agreement. However, there is
no guarantee that the actual results will be as estimated above.
    The three motion pictures to be released on DVD in calendar year
2007 and the seven motion pictures to be released on DVD in calendar
year 2008 are minimum contractual commitments and, if additional
motion pictures are released, revenue estimates will change. These
estimated revenues are in addition to Image's revenues generated from
its traditional, non major motion picture business.
    The call is available for replay on the Company's website at
http://www.image-entertainment.com/aboutUsInvestors.cfm. To access the
recording available until August 23, 2006, dial (888) 203-1112 and
enter the passcode 8844006. International participants please dial
(719) 457-0820 and use the same passcode.

    About Image Entertainment:

    Image Entertainment, Inc. is a leading independent licensee,
producer and distributor of home entertainment programming in North
America, with over 3,000 exclusive DVD titles and approximately 200
exclusive CD titles in domestic release and approximately 300 programs
internationally via sublicense agreements. For many of its titles, the
Company has exclusive audio and broadcast rights and, through its
subsidiary Egami Media, Inc., has digital download rights to more than
1,500 video programs and over 150 audio programs containing more than
2,500 tracks. The Company is headquartered in Chatsworth, California,
and has a domestic distribution facility in Las Vegas, Nevada. The
Company's subsidiary Image Entertainment (UK) maintains a content
acquisition office in London, England. For more information about
Image Entertainment, Inc., please go to www.image-entertainment.com.

    About Relativity Media:

    Relativity Media, LLC is a financing, consulting and production
company that utilizes both traditional and non-traditional channels in
order to raise production and distribution funds, both for major
studios and independent production entities. To date, Relativity has
structured and consummated more than $4 billion in production slate
financings. Relativity most recently provided financing and
co-produced or executive produced with Columbia Pictures and Universal
Pictures such films as "Talladega Nights: The Ballad of Ricky Bobby,"
starring Will Ferrell; "RV," starring Robin Williams, "The Fast and
the Furious: Tokyo Drift"; and "Inside Man," starring Denzel
Washington.

    Forward-Looking Statements:

    This press release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
relating to, among other things, our goals, plans and projections
regarding our financial position, results of operations, market
position, product development and business strategy. These statements
may be identified by the use of words such as "will," "may,"
"estimate," "expect," "intend," "plan," "believe," and other terms of
similar meaning in connection with any discussion of future operating
or financial performance. All forward-looking statements are based on
management's current expectations and involve inherent risks and
uncertainties, including factors that could delay, divert or change
any of them, and could cause actual outcomes and results to differ
materially from current expectations.
    These factors include, among other things, our inability to raise
additional working capital, changes in debt and equity markets,
increased competitive pressures, changes in our business plan, and
changes in the retail DVD and entertainment industries. For further
details and a discussion of these and other risks and uncertainties,
see "Forward-Looking Statements" and "Risk Factors" in our most recent
Annual Report on Form 10-K, and our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2006, particularly the Risk Factors
entitled "Relativity Media's failure to deliver the expected number or
quality of motion pictures may adversely affect our business" and
"Failure to effectively manage future growth from the Relativity deal
may adversely affect our business." Unless otherwise required by law,
we undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise.

    CONTACT: Image Investor Relations:
             MKR Group, LLC
             Charles Messman or Todd Kehrli, (818) 556-3700
             ir@mkr-group.com
             or
             Image Press/Corporate Contact:
             THE HONIG COMPANY, INC.
             Steve Honig, (310) 246-1801
             press@honigcompany.com
             or
             Relativity Contact:
             BWR Public Relations
             Lynda Dorf, (310) 248-6105
             Fx: (310) 550-1701