iVAST CHALLENGES MICROSOFT TO WORK IN THE BEST INTEREST OF CONSUMERS

Company Claims Microsoft Seeking to Undermine Industry Standards With Unfair Digital Media Licensing

Santa Clara, CA – January 9, 2003 – In yet another barely cloaked attempt to extend its operating system monopoly to all consumer devices, Microsoft plans to undermine the most promising new audio/video industry standard, MPEG-4, noted Elliot Broadwin, CEO of iVAST a leading worldwide provider of standards-based digital media software. Microsoft’s move to undercut the license fees recently announced by MPEG-LA, the licensing body for the MPEG-4 patent pool, is recognized generally by the industry as designed to expand Microsoft’s control of the digital media industry.

“Is this in the best interests of the consumer? Have we forgotten Microsoft’s history of predatory practices?” asks Broadwin.

“This is not a time to sit back and watch Microsoft extend its monopoly at the cost of consumer choice just as it has done with operating systems, web browsers, office productivity, and streaming media software. The interest of consumers is best served when they have choice – which is exactly what open industry standards, like MPEG-2 and MPEG-4, are designed to provide,” he added.

The claims are the same as usual. Mr. Will Poole, corporate vice president of Microsoft’s Windows New Media Platform division said in a January 7 New York Times article, “(With Microsoft)… the consumer will have a better experience with compatibility with all these devices.”

According to Broadwin, the MPEG-4 industry takes issue with Microsoft’s claim of compatibility. True compatibility, and the way in which MPEG-2 has worked with DVDs, digital cable television and digital satellite television, is an environment in which hundreds of companies build technologies in support of that application. While any other company would publish open interfaces to offer these benefits to consumers, Microsoft insists that the only way to achieve these benefits is to create all new content in a proprietary Microsoft format, deliver it over Microsoft servers with Microsoft management software, and play it back on devices running Microsoft’s Windows Media software. In a field where patent rights are traditionally pooled for licensing purposes, does Microsoft plan to offer indemnification to its licensees?

“This is about power and control. Microsoft is attempting to wrestle control of the media industry away from programmers, broadcasters and network operators, and in the process extend its operating system monopoly, stifle innovation, and eliminate competition,” said Broadwin.

“We at iVAST strongly support open standards with fair and reasonable licensing terms for digital media, and encourage everyone to remember the benefits of open industry standards for end users worldwide,” he concludes.

About iVAST

iVAST is a leading worldwide provider of standards-based software for the creation, distribution and interactive viewing of high-quality digital media. Building on the success of the MPEG-1 and MPEG-2 open standards, the iVAST MPEG-4 Platform™ enables the efficient distribution of entertainment, enterprise and educational content across any network – broadcast or broadband – to end user devices. iVAST is headquartered in Santa Clara, California, offers creative services through its studio in Los Angeles, and Asia Pacific sales and support through its office in Tokyo. For more information, please visit www.ivast.com.