CineComm to Introduce Digital Delivery of Theatrical Films to Exhibitors.

LOS ANGELES--(ENTERTAINMENT WIRE)--Nov. 17, 1998--

Venture Taps QUALCOMM and Hughes-JVC as Technology Providers;

CineComm to Finance Exhibitor Transition to New System

Representing a new paradigm in the delivery and projection of theatrical motion pictures, CineComm Digital Cinema L.L.C. has been formed to replace a century-old tradition of celluloid with an end-to-end digital system.

Utilizing proprietary software and equipment provided exclusively to CineComm by technology providers Hughes-JVC (HJT) and QUALCOMM Inc. (Nasdaq:QCOM), the venture will provide a full turn-key system for movie delivery and exhibition.

CineComm, which expects to begin the electronic delivery of first-run motion pictures within the next 24 months, is led by Chairman and Chief Executive Officer Michael Targoff, former president/chief operating officer of Loral Space and Communications, a leading manufacturer of satellites and supplier of satellite-based multimedia communications systems.

Joining Targoff is company director and lead counsel Douglas Ferguson, a veteran attorney involved in launching numerous entertainment-based ventures, who currently serves on the boards of Lucas Digital Ltd. and LucasArts Entertainment Co.

CineComm's management team and founders include CineComm Chief Technical Officer Russell Wintner, former executive vice president/COO of National Theatre Corp.; Alex Gorovitz, founder of motion picture promotions company Century Media Network; and motion picture exhibition and marketing veteran Kevin Romano, founder of cinema promotions company Pro Motion Slides Inc.

The CineComm Digital Cinema system will use QUALCOMM's patented compression algorithm and data management network to uplink encrypted motion pictures through satellites with worldwide coverage for downloading to theaters equipped with QUALCOMM's theater management system and HJT projectors.

At the theater, the movie will be stored until show time, then decrypted and decompressed in real time as it is displayed through the HJT patented electronic projector. Electronic or Digital Cinema has been discussed, debated and anticipated as a future evolution of the industry for years.

"CineComm will be the conduit through which Digital Cinema becomes a reality, and revolutionizes the film distribution and exhibition process," said Targoff. "Technology now allows us, in a cost-efficient way, to address the industry needs and concerns regarding quality, reliability, security and controllability.

"The quality will be comparable to any Hollywood premiere and that quality will be maintained night after night. The encryption protection will reduce the multi-billion dollar piracy issue the industry is currently burdened with, and the flexibility afforded both exhibition and studios will provide increased operating efficiencies to the industry.

"CineComm will deploy turn-key systems worldwide at our cost and employ a convenient pay-per-view concept for both movies and live events to reduce the up-front capital requirements and risks for both studios and exhibitors," concluded Targoff.

The benefits of Digital Cinema are as numerous as its applications. For audiences, there will be consistent image quality. Films will be free of time-inflicted scratches and pops; megaplexes will be able to show popular films on more screens; and special events can also be enjoyed in-theater.

For directors, producers and cinematographers, digital copies guarantee the same perfect quality in every theater, week after week, with no degradation. Finished works can be distributed immediately without time-consuming transfer to film and duplication.

With the transmission of multi-language sound and picture tracks, Digital Cinema offers a greater ability to cater to global audiences; and with the elimination of audio compression limitations, cinema patrons can enjoy multiple discrete sound channels of full bandwidth audio.

Distributors will be protected from making too many or too few prints, while end-to-end encryption, digital fingerprinting of screened programs, and the ability to simultaneously release motion pictures worldwide will further ensure against piracy.

Exhibitors, in turn, will benefit from ease of use, scheduling flexibility, better audience monitoring, guaranteed program accuracy, cost-efficiency for smaller venues, increased revenue streams through event programming, and automatic diagnostics that allow the system to not only detect and report equipment failures, but to allow presentations to go on uninterrupted during most failure events.

In addition, Digital Cinema also eliminates environmental hazards from the disposal of film.

Hughes-JVC Technology, a wholly owned subsidiary of Japan Victor Corp., is a leader in the large-screen projection industry with its patented Image Light Amplifier (ILA) Technology. With a complete product lineup of versatile and reliable large-screen projectors, Hughes-JVC is renowned for producing the best pictures in the business.

From video to computer data and graphics, Hughes-JVC specializes in cinema-quality, high-resolution images that are deeply saturated with lifelike colors and contrast. Hughes-JVC and ILA Technology are uniquely poised to be a key component of the cinema of the future.

QUALCOMM is a leader in developing and delivering innovative digital wireless communications products and services based on the company's CDMA digital technology. The company's major business areas include CDMA phones, Application Specific Integrated Circuits (ASICs), wireless infrastructure, technology licensing and satellite-based systems, including OmniTRACS and portions of the Globalstar system.

QUALCOMM has headquarters in San Diego. QUALCOMM's fiscal 1998 revenues exceeded $3 billion. For more information, visit the company's Web site at http://www.qualcomm.com.

CineComm Digital Cinema has headquarters in Los Angeles.