MOD Systems Introduces Low Cost In-Store Digital Media Appliances for Retailers.

Integrated Offering Provides Affordable, Reliable Entertainment Merchandising Solution

LAS VEGAS -- MOD Systems, a leading provider of in-store digital media solutions, today unveiled at 2007 International CES([R]) new digital media merchandising and fulfillment hardware appliances for retailers. The offerings, which include the MOD Point-Of-Decision (POD) Device and MOD Store Server Appliance, are designed to provide retailers with a highly reliable, low cost solution for entertainment merchandising and fulfillment. MOD Systems will demonstrate its hardware solutions by private appointment at CES, January 8-11, 2007.

"Until now, retailers have not had an efficient, cost-effective way to merchandise and cross-sell using a virtual inventory of music and video entertainment," said Mark Phillips, CEO of MOD Systems. "We've radically reduced the cost of deploying a sampling system by about two-thirds, giving retailers the ability to create an engaging in-store experience, provide better access to information, and deliver a vast amount of entertainment content to consumers."

Low Cost Entertainment Merchandising System

The HD compatible MOD Store Server Appliance and MOD POD are part of MOD Systems' integrated platform for retailers to cost-effectively manage, merchandise and fulfill digital media. The MOD Store Server Appliance and MOD POD are designed to provide retailers with affordable access to a merchandising and sampling system that scales to include content fulfillment via optical disk (CD and DVD) or directly to music and video players and devices.

The MOD Store Server Appliance provides high-definition, full-motion video output and enables retailers to create an engaging in-store experience. The Store Server Appliance controls digital signage, overhead music and video for support of merchandising and promotional initiatives throughout the store. It includes the following features:

* DVD drive for video displays.

* Network connection which drives up to 50 MOD PODs, one overhead display, and five zones of background music.

* Disk space storage up to one terabyte.

* Delivery of entertainment content direct to a device.

"More than three quarters of consumer purchase decisions are made at the point of purchase," said Gale Daikoku, retail research director, Gartner. "Kiosks and sampling devices can deliver endless aisles to the customer and multichannel integration to retailers, providing a compelling merchandising alternative. By significantly reducing the cost of in-store hardware, these benefits become more achievable for wider deployment."

Sampling and Fulfillment

The MOD POD is a self-enclosed, 10.5 inch flat-panel device for retailers to offer in-store sampling, purchasing and fulfillment of digital music and movies. It includes the following features:

* 10.4 inch LCD touch screen with an intuitive user interface and 800 x 640 resolution.

* Card swipe and bar code scanner for secure point-of-purchase customer transactions.

* Camera for real-time customer communications.

* USB and Ethernet ports for downloading digital entertainment to media devices and media capable mobile phones.

* Headphone jack for sampling audio files.

The MOD POD fulfills content via a wide range of delivery options including CD and DVD burning, as well as downloads direct to media devices such as MP3 players and media capable mobile phones.

Rich Content Catalogues

Retailers can effectively merchandise and sell music and movies to consumers with MOD Systems' content catalogues. The catalogues currently include more than one million music tracks from independent and major music labels (including Warner Music Group, Sony BMG, Universal Music Group, and EMI Music); as well as trailers from ScreenPlay Inc., provider of the world's largest movie trailer catalogue of more than 15,000 titles, including new releases. MOD Systems is also currently in content discussions with major movie studios and independents to add more video content to its system; in particular for future in-store manufacturing of DVDs.

About MOD Systems

MOD Systems provides retailers with a complete system for profitably managing, merchandising, and delivering digital media to customers. Founded in 2005 and headquartered in Seattle, MOD Systems' unique approach is based on managing digital content intelligently and delivering it flexibly, with a focus on large scale deployments. With MOD Systems, retailers are positioned for the next generation of retailing supporting a wide range of consumer devices and delivery options including CD/DVD burning, direct to device, and wireless. More information is available at www.modsystems.com.

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