BTG and Digital Interactive Streams, Inc. Partner to Bring to Market Novel Video Distribution Technologies.

Business Editors/High Tech Writers

WEST CONSHOHOCKEN, Pa. and JACKSONVILLE, Fla.--(BUSINESS WIRE)--July 15, 2002--

Breakthrough Products Eliminate Bandwidth and Cost Barriers

Enabling Delivery of High Quality Video At Low Bit Rates

Over Existing Communication Networks

BTG (LSE:BGC), the global technology commercialization company, today announced it will market a portfolio of MPEG-compatible video distribution products developed by Digital Interactive Streams, Inc. (DiStream) that will enable the delivery of near DVD quality digital video at 1 Mbps over existing telephone and cable networks with unprecedented security measures.

This partnership will allow BTG and DiStream to leverage their respective strengths - DiStream continuing to improve and yield advanced video delivery products, and BTG making sure the products are strategically marketed around an IP portfolio built to deliver a competitive advantage.

"BTG has strong capabilities and experience commercializing technologies that enable efficient distribution of multimedia, such as data compression and speech coding," said Anthony V. Lando, Executive Vice President & Director of BTG's Electronics, Engineering & Information Technologies division. "We had been looking for advanced technologies that could optimize distribution of digital video and are pleased that DiStream and BTG have converged to bring to market what we believe is the most cost-efficient way to distribute video-on-demand (VOD) to the home. We have received enthusiastic feedback from a number of potential licensees, and look forward to delivering a technology with the quality, speed and compatibility that customers have come to expect."

DiStream's family of MPEG-compatible solutions permits the use of low bit rates for distribution of video by correcting, after decompression, the visual artifacts associated with the pervasive encoding mechanisms in use today. This solution effectively allows for over-compression at the encoder end without creating image degradation at the receiving end. The result is not only the delivery of near DVD quality video with only 25% of the bandwidth required to transmit a cable TV MPEG-2 stream, but also the reduction of the required storage capacity per video by up to 75%. This is a huge potential savings in capital expenditures for DiStream's clients. DiStream's solutions are compatible, but not dependent, on the MPEG family of video distribution standards - providing customers with maximum flexibility in their encoder choice and obviating the need for industry to adopt a new codec specification.

"We provide an end-to-end solution for companies that want to competitively engage in the distribution of feature length films, videos, and other related types of media to their customers without a rebuild of their own current networking infrastructure - resulting in a lower cost of implementation," said Royal O'Brien, CEO of DiStream. "Some voices in the industry have heralded the inability of block-based encoders to deliver good quality at low enough bit rates for practical VOD. We agreed with them, but injected additional life into these codecs by correcting, after decoding, the artifacts they introduce. We are excited to be working with BTG to build our IP portfolio and to help us market and license our products on a global basis to set-top box manufacturers, semiconductor companies, telecommunications providers and content aggregators."

The DiStream solution provides the following benefits to video distribution networks and consumers:

- Utilizes existing network infrastructure to minimize up-front capital investment

- Reduces capital costs for content storage and operational expenditures for bandwidth utilization

- Incorporates multiple security features to prevent unauthorized distribution and playback of content

- Allows the cost-effective introduction of true VOD services and near DVD quality to full-sized televisions and personal computers over existing ADSL and cable networks

- Allows the simultaneous delivery of three different video streams to three different TVs in the home through one set-top box

- Enables interactive media services

There are three main software products that operate together to provide the DiStream solution (worldwide patents pending). Digital Video Enhanced Television, or DiVET(TM), provides video enhancement at the user end. DiTRAN(TM)provides transcoding and compression mechanisms that optimize DiVET(TM) performance. Digital-Enterprise Management System software, or DiEMS(TM), provides the turnkey tool-sets to build the first low bit rate, distributed farm of video servers incorporating multiple security layers. DiEMS(TM) is designed for secure delivery of high quality, full-screen video content using VOD, download and store, and streaming models.

DiVET(TM) is an intelligent and adaptive small footprint real-time software-based video correction engine, which can also be embedded into video processing chipsets. DiVET(TM) capitalizes on low-cost processing power to eliminate the visual artifacts introduced by the video compression applied to the video payload upstream and to render near DVD quality video. This allows the over-compression of the video payload upstream, thus enabling the delivery of video at low enough bit rates to support VOD over ADSL and two-way cable plants. Many telephone companies have upgraded, or are in the process of upgrading, their networks to improve the transmission of data at high speeds throughout the network backbone. However, copper wire continues to connect most residential subscribers to the network. Referred to as the "last mile" or local loop, this copper wire infrastructure traditionally creates a bottleneck in the delivery of high-speed data to residential subscribers. DiVET(TM) essentially eliminates the need to upgrade the last mile in order to deliver VOD.

DiTRAN(TM) is a faster than real-time transcoder allowing for the conversion of any high bit rate video format or broadcast streams to any low bit rate DCT-based format (e.g. MPEG-4). Coupled with DiPlex(TM), DiTRAN(TM) allows access providers to deliver multi-channel video over the existing network architectures used solely for data today, or cable operators to optimize their bandwidth utilization. DiStream's approach to television-on-demand is much more flexible than existing personal video recording solutions that require advanced planning and client storage.

DiStream Enterprise Management System, DiEMS(TM), extends the platform to integrate and manage a service provider's network and enables a highly secure client-server solution for the marketplace. This comprehensive solution can deliver an aggregated media offering to consumers, including VOD, audio-on-demand, Internet access, menu controls, and an interactive program guide. Additionally, DiStream has developed a high quality MPEG-4 encoder application (DiCode(TM)), a video multiplexing system for aggregating video streams (DiPlex(TM)), and encryption and authentication mechanisms to prevent unauthorized users from displaying video content (DiCrypt(TM)). One derivative use of DiCode(TM) is for storage of digital archives of film, using as little as a third of the storage space and taking half the time of existing storage methods.

About BTG

BTG finds, develops and commercializes emerging technologies in the life and physical sciences. These innovations are protected by a strong portfolio of intellectual property that BTG develops and enhances. BTG then captures the value in these technologies through licensing and venturing activities. From the origins of its business in 1949, BTG has commercialized major innovations such as Magnetic Resonance Imaging (MRI), recombinant factor IX blood-clotting protein, Campath(R) (alemtuzumab) and Multilevel Cell (MLC) memory. BTG is quoted on the London Stock Exchange under the symbol "BGC" and operates from offices in London and Philadelphia, with representation in Tokyo. BTG operates through wholly owned subsidiaries, BTG International Ltd. and BTG International Inc. in the UK and USA, respectively. Further information on BTG can be found at www.btgplc.com.

About Digital Interactive Streams, Inc.

Digital Interactive Streams, Inc. (also "DiStream" or the "Company"), a Delaware corporation, is a software solutions and intellectual property creation company that has developed certain proprietary software, middleware, security capabilities, and the network architecture solutions that enable cost-effective and high quality delivery mechanisms for encrypting, encoding, downloading, and streaming video content via the Internet to broadband customers. Headquartered in Jacksonville, Florida, the Company employs approximately twelve personnel with extensive technical, media and operational experience.

DiStream's software enables telephone companies, cable companies and other high-speed data service providers to deploy digital television-on-demand and interactive media services over a broadband network on a turnkey basis. The software may be viewed as an MPEG add-on (i.e. it is "standards-based") and is designed to work in conjunction with various third-party hardware and software, and to integrate with the service provider's existing network and systems. Further information on DiStream can be found at www.distream.com.