DIVA to Integrate Video-on-Demand Service With Microsoft TV Platform Adaptation Kit.

CHICAGO--(BUSINESS WIRE)--June 14, 1999--

DIVA(TM) announced today that it is working with Microsoft Corp. to integrate DIVA's end-to-end video-on-demand solution with the MicrosoftTV Platform Adaptation Kit (Microsoft TVPAK).

This combination of DIVA and Microsoft TVPAK provides another viable opportunity for MSOs to offer a compelling VOD service to customers. Together VOD and Internet services expand the cable TV experience, and generate new revenue streams and drive digital box penetrations.

"There is a growing interest within the cable industry in the Microsoft TVPAK platform which will accelerate and simplify deployment of multiple interactive applications on digital set-tops," said Ray McDevitt, DIVA's executive vice president of Business Development and Product Management. "Microsoft TVPAK is a strong platform enabling the cable operator to provide interactive services and, more specifically, video-on-demand."

"Microsoft believes VOD is a valuable service and is excited to be working with an industry leader like DIVA," said Alan Yates, director of Platform Marketing, Microsoft. "Together, we are providing cable operators an outstanding combination of technology, development tools and open interfaces."

The Microsoft TVPAK is comprised of client software and server software which merge technologies of the Internet and television, to create new devices, services, and content to enhance the entertainment value and usefulness of television for consumers. The client software, Microsoft TV, operates a range of TV-centric appliances -- from Internet terminals to advanced set-top boxes to integrated televisions -- while the server software, Microsoft TV Server, will be used by network operators to deploy and manage a rich, scalable, enhanced TV service.

The DIVA solution consists of the field-proven DIVA Video Server (DVS) -- which is fully scalable and enables cable operators to expand their mix of programming with more than 1,000 titles to serve thousands of customers simultaneously; DIVA's DigiLink -- the industry's lowest cost QAM modulator and upconverter for VOD applications that includes gigabit MPEG optical links from the video server; and the DIVA System Manager (DSM) -- a comprehensive suite of back-office software that enables On Demand TV services. The DSM also provides real-time, transactional billing interfaces with major billing companies, maintains video-asset tracking systems and controls the active VOD sessions via the consumer's digital set-top.

DIVA Systems Corporation (www.divatv.com) is a privately held company founded in June 1995 and is headquartered in the heart of California's "Silicon Valley" on the campus of SRI International (formerly the Stanford Research Institute), in Menlo Park. DIVA commercially launched its digital On Demand TV solution in cable television systems in the Fall of 1997 and is now deployed in five cable systems in the U.S.

Certain statements of DIVA contained in this release, including those relating to DIVA's current deployments, its ability to successfully integrate technologies, the cost of its products, and acceptance of DIVA's products by cable operators are forward looking statements. No assurance can be given that future results will be achieved. Actual events or results may differ and may differ materially as a result of risks facing DIVA or of assumptions differing from those underlying the statements contained in this release. Such risks and assumptions include, but are not limited to entry into long term agreements with cable operators, expansion of existing cable operator agreements based on the results of DIVA's initial deployments, the existence of upgraded cable plant, the continued development of DIVA's technical platform and services, the rate and extent of consumer acceptance, and the impact of competitive products and services. These risks and other risk factors are set forth in the Company's most recent 10-Q filed with the Securities and Exchange Commission.

Note to Editors: DIVA is a trademark of DIVA Systems Corporation. All other products or brand names are trademarks or registered trademarks of their respective owners.