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CHECKPOINT SYSTEMS CHALLENGES NARM'S SOURCE TAGGING RECOMMENDATION AS SEVERAL KEY ISSUES REMAIN UNRESOLVED

 THOROFARE, N.J., March 8 /PRNewswire/ -- Three of the seven criteria originally established by NARM and RIAA (Recording Industry Association of America) for source tagging have not been thoroughly evaluated, according to Checkpoint Systems, Inc. (NASDAQ: CHEK). The first criterion, according to a May 1992 NARM press release, was that the EAS technology recommended, must have no adverse effect on either audio or video product." Before making a final recommendation, NARM ordered an additional lab test. "Although the purpose of this discrete test was not disclosed, we feel it was directly related to adverse effects caused by acousto-magnetic deactivation of audio tapes," said A.E. Wolf, Checkpoint's president and CEO.
 After the discrete test, and immediately prior to making a recommendation, NARM revised this first criterion to read "compact disc, laser disc, MiniDisc, video tape, Digital Compact Cassette, and Type II and Type IV and audio tape when packaged in a Norelco box." It is our understanding that the audio cassettes not included in the recommendation represent a significant portion of cassette tapes sold," Wolf added. According to the RIAA, cassettes tapes represent more than 50 percent of all music media sold.
 The two other criteria still unresolved include number four: "the tag must be applicable on-line by manufacturers for all configurations" (audio cassettes, CDs, digital compact cassettes (DCCs), laser discs, and MiniDiscs); and number six: "the system must be cost-effective."
 "NARM's recommendation is just a recommendation and does not guarantee acceptance by the music industry. It is our understanding that the RIAA will conduct its own evaluation of the recommended technology based on all seven original criteria. We trust that the RIAA's evaluation will take into consideration the concerns of the artists, the music labels and consumers," said Wolf. Consumer concerns were raised when a study conducted by Audits & Surveys rel?ed that 199 consumers out of 200 consumers heard audio degradation in cassette singles that were passed over an acousto-magnetic deactivation device. Audits & Surveys conducted the double-blind test at a mall testing facility in Pennsylvania.
 "Other key issues being ignored include activation and cross-market compatibility. EAS source tagging will require activation in bulk packaging. In the case of acousto-magnetic technology, bulk activation will require larger magnetic fields, a fact that is likely to increase the chance of degradation.
 "Cross-market compatibility is one of the most critical issues being ignored in the NARM controversy. Music products are sold through a variety of retail distribution channels, including supermarkets where acousto-magnetic technology is not suitable for high throughput environments," commented Wolf. In fact, the 1993 Ernst & Young/IMRA Survey of Retail Loss Prevention Expenses and Trends, revealed that audio cassettes, CDs and video cassettes are the most shoplifted general merchandise items in supermarkets. Checkpoint's radio frequency technology, which met and exceeded the original criteria tested by NARM, is sold across all retail markets, including supermarkets.
 "A standard technology for source tagging can be implemented only when all the issues have been addressed and resolved to the satisfaction of all concerned parties. There is much work to be done. At Checkpoint, we urge the music industry to thoroughly investigate all the issues.
 "In summary, despite all the controversy surrounding NARM's recommendation, Checkpoint is still progressing toward another record year," Wolf concluded.
 Checkpoint Systems, Inc. offers a variety of security and loss prevention solutions for the protection of assets in diverse market applications. Checkpoint's Electronic Article Merchandising(SM) (EAM(SM)) and electronic access control systems are based on its Electronic Signatures(R) technology that makes unique radio signals assignable to items or people. Using detectable paper-thin disposable radio frequency (RF) targets that can be deactivated without contact, the company has installed more than 70,000 EAM systems worldwide. Checkpoint's source tagging program, Impulse(SM), embeds its RF targets into products or product packaging at the point of manufacture or packaging.
 -0- 3/8/93
 /CONTACT: Steve Selfridge of Checkpoint, 800-257-5540, ext. 2473/
 (CHEK)


CO: Checkpoint Systems, Inc. ST: New York IN: SU:

TS-WB -- NY034 -- 3939 03/08/93 10:56 EST
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