SecProbe.io

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                        AVENUE ENTERTAINMENT GROUP, INC.

June 8, 2005

Mr. Joseph Foti
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington D.C. 20549-0305

RE:  AVENUE ENTERTAINMENT GROUP, INC.
     FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004
     COMMISSION FILE NUMBER: 001-12885

Dear Mr. Foti:

This letter addresses your letter dated May 25, 2005 in regards to the
above-referenced filing. We have reviewed each comment and provided our
responses as requested below.

ITEM 6. MD&A
------------

RESULTS OF OPERATIONS
---------------------

1.   Please note that the Results of Operations have been updated per your
     comment #4 regarding Other Income and due to entries to reflect imputed
     interest per your comment #9.

     Other Income as previously presented:

     12/31/04
     --------
     (50,000) film festival award for WAYWARD SON
        (543) interest income/bank accounts
       4,599  interest expense/bank loans
     -------
     (45,944)

     12/31/03
     --------
     (193,902) return of SAG bond for WAYWARD SON
       76,720  film costs for WAYWARD SON
       (1,233) interest income/bank accounts 5,241 interest expense/bank loans
        5,241  interest expense/bank loans

     --------
     (113,174)

     Other Income as revised for updates:

     Also included now is imputed interest of $6,289 and $54,005 for the years
     2004 and 2003, respectively. Calculations are listed under #9.

<PAGE>

Mr. Joseph Foti
June 8, 2005, Page 2

     12/31/04
     --------
       6,289  imputed interest expense on related party payable
        (543) interest income/bank accounts
       4,599  interest expense/bank loans
      ------
      10,345

     12/31/03
     --------
      54,005  imputed interest expense on related party payable
      (1,233) interest income/bank accounts
       5,241  interest expense/bank loans
     -------
      58,013

     While the film festival prize of $50,000 in 2004 for WAYWARD SON is not a
     recurring source of revenue it is moved from Other income to Operating
     revenues as it directly relates to the Company's normal motion pictures
     operations for a revised total of $995,002. Similarly the $193,902 return
     of the Screen Actors Guild bond for WAYWARD SON is moved from Other income
     to Operating revenues in 2003 for a revised total of $830,465 and the
     additional film costs of $76,720 for WAYWARD SON is moved to Film
     Production Costs for a revised total of $284,939.

Therefore, we propose the following to replace the text section of Results of
Operations:

RESULTS OF OPERATIONS

     For the year ended December 31, 2004 the Company had a net loss of $63,000
as compared to a loss of $939,000 for the year ended December 31, 2003. The
substantial decrease in net loss for the year ended December 31, 2004 compared
to the year ended December 31, 2003 is primarily attributable to the $165,000
increase of revenues, the $243,000 decrease of film costs and the $221,000
impairment loss on goodwill recorded in 2003.

REVENUES

     Revenues for the year ended December 31, 2004 were $995,000 as compared to
$830,000 for the year ended December 31, 2003. Revenues for the year ended
December 31, 2004 were derived primarily from producer fees for the theatrical
film CLOSER, the HBO First Look Deal, the licensing of its programming in
secondary markets through Janson Associates and a film festival award for the
project WAYWARD SON. Revenues for the year ended December 31, 2003 were derived
primarily from the licensing of its programming in secondary markets through
Janson Associates, the HBO First Look Deal, the return of a residuals bond held
in an escrow account by the Screen Actors Guild for WAYWARD SON, the balance of
producer fees from HBO for ANGELS IN AMERICA and the balance of producer fees
from Intermedia for the theatrical film MINDHUNTERS. The $165,000 increase of
revenues was primarily due to the larger producer fees earned for the theatrical
film CLOSER.

<PAGE>

Mr. Joseph Foti
June 8, 2005, Page 3

     In pursuing the development and/or production of film projects, there can
be no assurance that each project will be produced in the preferred timeframe
and with the preferred budget due to the contingencies of securing talent,
financing and distribution. The Company must rely upon the decisions of studios,
network or cable programmers who must approve and order the films in order to
provide adequate financing. Results of operations for any given period are
significantly dependent upon these factors, none of which can be predicted with
any certainty. Consequently, results of operations may fluctuate materially from
quarter to quarter and the results of any given quarter are not necessarily
indicative of results for future quarters.

FILM PRODUCTION COSTS

     Film production costs for the year ended December 31, 2004 were $42,000 as
compared to $285,000 for the year ended December 31, 2003. The $243,000 decrease
of film production costs is primarily due to a write down of film production
costs for the project WAYWARD SON and a significant write down of film
production costs for THE HOLLYWOOD COLLECTION for the year ended December 31,
2003. During the year ended December 31, 2004 these projects were fully
amortized.

     Estimates of anticipated total gross revenues are reviewed periodically and
revised when necessary. Unamortized film production costs are compared with net
realized value each reporting period on a title-by-title basis. If estimated
gross revenues are not sufficient to recover the unamortized film production
costs, the unamortized film production costs are written down to their estimated
net realizable value. These revisions can result in significant
quarter-to-quarter and year-to-year fluctuations in film write-downs and
amortization.

OTHER EXPENSE

     Other expense for the year ended December 31, 2004 was $10,000 of interest
expense compared to $58,000 for the year ended December 31, 2003. Interest
expense for 2003 consisted of $54,000 of cumulative imputed interest on the
payable due to related party.

2.   Due to the anticipated amended filing of Form 10-KSB at December 31, 2004,
     Form 10-QSB at March 31, 2005 will need to be resubmitted. In keeping with
     the better-detailed explanations incorporated above, the section under
     Results of Operations will be revised at March 31, 2005 and in future
     filings to clarify the significant increases and decreases.

     The various sources of the fiscal 2004 revenues are not necessarily unusual
     but they are not guaranteed in future periods. For the three months ended
     March 31, 2004 we had earned 80% of the producer fees for the feature film
     CLOSER compared to no new feature film or television movie in production
     for the three months ended March 31, 2005. Additionally, while we hope that
     the extended deal with HBO will derive additional revenues, there is no
     assurance that will happen.

<PAGE>

Mr. Joseph Foti
June 8, 2005, Page 4

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

3.   We propose the following to replace the section of Liquidity and Capital
     Resources:

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2004, the Company had approximately $7,000 of cash. The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. Revenues have been insufficient to cover costs
of operations in the past five years and the Company has a working capital
deficiency and an accumulated deficit of $9,062,915 through December 31, 2004.

     To our knowledge few, if any, public entertainment companies have a working
capital deficit comparable to Avenue Entertainment Group, Inc. Most public
companies working in film and television production are much larger in size and
generally have large libraries of film and/or television properties that provide
an ongoing revenue stream. Aside from a smaller library of films that are
primarily one-hour documentary biographies, the Company derives its revenues
almost entirely from its production fee revenues earned when it produces motion
pictures or television programming. Therefore, the Company relies heavily upon
the decision makers at the studios, network and cable stations. The generation
of revenue in the motion picture and television movie industry is more
competitive than ever for the Company and other independent motion picture and
television production companies. Additionally, there is no predictable seasonal
trend or variation inherent in the entertainment business, so the timing of such
revenues is highly unpredictable.

FINANCIAL STATEMENTS
--------------------

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------

4.   Please find below the revised presentation of the Consolidated Statements
     of Operations that resulted from the separation of components of other
     income and the updates to revenues, film production costs and interest
     expense:

<PAGE>

Mr. Joseph Foti
June 8, 2005, Page 5

                        AVENUE ENTERTAINMENT GROUP, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                     YEARS ENDED DECEMBER 31,
                                                  -----------------------------
                                                      2004              2003
                                                      ----              ----

Operating revenues                                $   995,002       $   830,465
                                                  -----------       -----------

Costs and expenses:
  Film production costs                                42,257           284,939
  Selling, general and
   administrative expenses                          1,004,766         1,188,351
Impairment loss on goodwill                                 0           221,172
                                                  -----------       -----------

Total costs and expenses                            1,047,023         1,694,462
                                                  -----------       -----------

Income (loss) from operations                         (52,021)         (863,997)

Other income (expense)
    interest (expense), net                           (10,345)          (58,013)
                                                  -----------       -----------

Profit (loss) before income tax                       (62,366)         (922,010)

Income tax expense                                        165            16,492
                                                  -----------       -----------

Net loss                                          $   (62,531)      $  (938,502)
                                                  ===========       ===========

Basic and diluted loss per share:
                                                  $     (0.01)      $     (0.17)
                                                  ===========       ===========
Weighted average common
   shares outstanding                               5,371,030         5,371,030
                                                  ===========       ===========

<PAGE>

Mr. Joseph Foti
June 8, 2005, Page 6

LEASES
------

5.   The previous five-year office space lease expired at October 31, 2004.
     During the course of the lease the Company scaled back operations and
     personnel and found it necessary to find two subtenants to partially offset
     office rent by sharing office space within the suite. The Company keeps the
     majority of corporate and production files at an offsite storage facility
     and only requires a minimal amount of space to conduct business. The
     Company produced the feature film CLOSER for Columbia Pictures and has been
     allowed to use temporary office space at its Culver City studio lot free of
     charge until November 1, 2005 and possibly longer.

EMPLOYMENT AGREEMENTS
---------------------

6.   It is expected that the amounts due to the Chairman and President will be
     repaid when and if there is a substantial increase in production fee
     revenues such that the Company could afford to pay a portion of this
     deferred compensation to either the Chairman and/or the President. It is
     also possible that the Chairman and/or the President would agree to forfeit
     their deferred compensations at some point in the future.

7.   The entire balance of Deferred Compensation is derived from the voluntary
     deferment of salary by both the Chairman and President. Therefore to
     clarify that no other amounts are represented in that category, we propose
     the following to replace the section on page 38 under Employment
     Agreements:

     In 2004 and 2003, the Chairman deferred additional amounts of $74,000 and
$122,000 of his compensation, respectively and the President deferred additional
amounts of $0 and $121,000 of his compensation, respectively. Total deferred
compensation as of December 31, 2004 for the Chairman and President is $407,830
and $775,879, respectively.

NOTE 9 - INCOME TAXES
---------------------

8.   The revised footnote has been updated for the imputed interest regarding
     your comment #9. The amount represents the Federal tax benefit applicable
     to state taxes for all the deferred tax amounts. A more appropriate
     disclosure would have been to allocate the tax affect for the various tax
     assets disclosed. Therefore no additional reserve is required. We propose
     the following corrected tax disclosure to replace the section under Note
     (9) Income Taxes:

<PAGE>

Mr. Joseph Foti
June 8, 2005, Page 7

(9)  INCOME TAXES

     Components of income tax expense (benefit) are as follows:

                                                    December 31,  December 31,
                                                       2004           2003
                                                       ----           ----
          Federal                                    $      --     $      --
          State and local                                  800           800
                                                     ---------     ---------
                                                     $     800     $     800
                                                     =========     =========

     Reconciliation of the statutory Federal income tax rate to the Company's
     effective tax rate is as follows:

                                                    December 31,  December 31,
                                                       2004           2003
                                                       ----           ----

          Tax (benefit)
            at Federal statutory rate of 34%           (21,204)    $(313,484)
          Increase (decrease) in taxes resulting
            from:
          State and local income taxes, net of
            federal income tax benefit                  (2,660)      (40,121)
          Nondeductible goodwill amortization               --        75,198
          Other                                          6,229         3,424
          Change in valuation allowance                 18,435       275,783
                                                     ---------     ---------
          Total                                      $     800     $     800
                                                     =========     =========

     The tax effects of temporary differences between the financial reporting
     and tax bases of assets and liabilities are as follows:

                                                         2004
                                                         ----