OpenTV Reports Record Second-Quarter Financial Results; Revenue Increases 83 Percent From Significant Growth in Royalties, License Fees and Services.

Business Editors

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 27, 2000

OpenTV Corp. (Nasdaq:OPTV) (Amsterdam Stock Exchange:OPTV), the leading worldwide provider of software to enable digital interactive television, today announced financial results for the second quarter ended June 30, 2000.

"We are very pleased by our strong financial results in the second quarter," said Jan Steenkamp, chief executive officer of OpenTV. "Momentum for OpenTV continues to grow on a worldwide basis. We have extended our market leadership to the United States with our launch on EchoStar's DISH Network, and secured new deployment commitments from four additional network operators.

"In addition, we forged a number of important strategic partnerships with interactive content and services providers and completed our merger with Spyglass. We also welcomed three exceptionally talented and seasoned executives to our senior management team. I am confident that their contributions will help us take OpenTV to greater levels of success as we expand our business worldwide."

Financial Summary

For the second quarter of 2000, revenues were $11.3 million, an 83 percent increase from the $6.2 million reported for the second quarter of 1999. OpenTV received its first significant revenue from EchoStar during the quarter, which will be recognized on a modified subscription basis over the approximately six-year contract period.

OpenTV's pro forma operating expenses, excluding noncash and nonrecurring expenses, were $17.2 million in the second quarter of 2000, a 131 percent increase from $7.4 million in the second quarter of 1999.

The significant growth in year-over-year operating expenses reflects the company's investment in developing its applications business, and increased investment in sales and marketing to address the U.S. television market, both of which are expected to generate substantial revenue in future periods.

OpenTV's pro forma net loss for the second quarter of 2000 was $3.3 million, or 7 cents per share, compared with a pro forma net loss of $1.2 million, or 3 cents per share, in the second quarter of 1999.

Including the impact of noncash and nonrecurring charges, the company reported a net loss of $7.8 million, or 17 cents per share, for the second quarter of 2000, compared with a net loss of $2.1 million, or 6 cents per share, for the second quarter of 1999.

For the six months ended June 30, 2000, OpenTV's revenues were $22.2 million, an 85 percent increase from the first six months of 1999. The company's pro forma net loss for the first six months of 2000, excluding noncash and nonrecurring expenses, was $5.8 million, or 13 cents per share, compared with a pro forma net loss of $2.2 million, or 6 cents per share, for the first six months of 1999.

Including the impact of noncash and nonrecurring charges, the net loss for the first six months of 2000 was $38.5 million, or 85 cents per share, compared with a net loss of $3.3 million, or 9 cents per share, in 1999.

As of June 30, 2000, OpenTV had cash and short-term investments of $152.5 million.

Business Highlights

OpenTV's results in the second quarter of 2000 included a number of significant achievements. Highlights for the quarter are as follows:

Spyglass Acquisition

On July 24, 2000, OpenTV completed its previously announced merger with Spyglass Inc. Spyglass became a wholly owned subsidiary of OpenTV Corp. in a tax-free, stock-for-stock transaction. Spyglass stockholders, option holders and warrant holders will receive approximately 14.9 million OpenTV shares and own approximately 18 percent of the combined company's stock on a fully diluted basis.

Worldwide Network Operators

Through March 31, 2000, OpenTV software was installed in more than 7.8 million digital set-top boxes (STBs) worldwide, and more than 20 network operators had begun deploying OpenTV to their subscribers, reinforcing the company's position as the worldwide market-share leader in digital interactive television software.

On May 1, EchoStar's DISH Network became the first U.S. operator to begin deploying OpenTV, and OpenTV is expected to be in more than 1 million DISH Network homes by year-end.

Four additional network operators committed to deploy interactive television using OpenTV technology, bringing the total number of digital television network operator commitments to 32.

-- United Broadcasting Corp. (UBC), Thailand's leading satellite

and cable TV operator, announced an agreement to deploy

OpenTV's interactive television (ITV) software to UBC's

viewers. The two companies intend to offer easy-to-use e-mail,

e-commerce and Internet browsing capabilities, among many

other ITV services, to a country of 60 million people where

only 2 percent of the population own personal computers.

-- Viasat Broadcasting, the largest satellite network operator in

Scandinavia, selected the OpenTV platform for launching

interactive digital TV services later this year. Viasat

currently has more than 1.1 million subscribers.

-- Irish Multichannel, Ireland's largest Microwave Multipoint

Distribution System (MMDS) operator and second-largest cable

television operator, selected OpenTV as its software platform

for digital interactive services. Currently, Irish

Multichannel serves 250,000 households across the Republic of

Ireland.

-- Galaxy Satellite Broadcasting Ltd., a subsidiary of Television

Broadcasts Ltd. (TVB), entered into an agreement to use OpenTV

as its software platform to broadcast Chinese-language

programming in Australia and the United States. TVB is the

largest producer of Chinese-language television programs and

the leading terrestrial television station in Hong Kong,

capturing 80 percent market share.

OpenAdvantage Program

The OpenAdvantage developer program, which was launched in the first quarter, now includes more than 450 companies developing OpenTV applications from around the world. The expanding OpenAdvantage membership continues to drive interactive television deployment for the company, as well as generate incremental revenues from the sales of authoring tools, training and other products.

Technology Partners

OpenTV and Spyglass entered into or extended some key technology partnerships during the quarter.

-- OpenTV successfully ported its digital interactive television

operating system to the United States' most widely deployed

digital set-top terminal, the Motorola DCT-2000. OpenTV's

software solution can be flash-downloaded to all DCT-2000s,

currently in more than 5 million North American homes, without

rolling a truck to a subscriber's home or switching out a

set-top terminal. Once enabled, the OpenTV/DCT-2000 set-top

terminal can support multiple interactive services from

electronic program guides and e-mail to e-commerce and

video-on-demand.

-- Personal television creator TiVo licensed Spyglass Device

Mosaic 4.0 for use in its next-generation software platform

and service. Spyglass Professional Services unit will port

Spyglass Device Mosaic to the Linux operating system and

assist in the integration of the technology with TiVo's

Linux-based platform.

Worldwide Applications Partners

OpenTV also announced several additional partnerships to develop interactive television applications or services. Under most of these agreements, OpenTV will share with its partners in the recurring revenues generated by the applications and services.

-- OpenTV and DIVA announced a strategic alliance to integrate

OpenTV's software with DIVA's Video-On-Demand and other

services. In addition, OpenTV made a strategic equity

investment in DIVA.

-- OpenTV entered into a strategic partnership with ICTV to

integrate ICTV's interactive service with OpenTV's platform.

ICTV provides an Internet browsing solution whereby the

browser resides at a cable operator's head-end, and its

solution is optimized for broadband cable networks with thin

set-top boxes such as Motorola's DCT-2000. OpenTV also made a

strategic equity investment in ICTV.

-- OpenTV and Wink Communications Inc. (Wink) completed an

agreement to enable OpenTV's interactive software to deliver

Wink-enhanced programming and advertising to EchoStar's DISH

Network(TM) satellite TV customers nationwide.

-- OpenTV signed a letter of intent to enter into the Digital

ADCO joint venture with Motorola and ACTV and help drive

worldwide deployment of Digital ADCO's SpotOn(TM) service.

SpotOn is a comprehensive, software-based end-to-end solution

for the delivery and accounting of highly targeted interactive

advertising via digital cable, satellite and broadcast

television.

-- OpenTV entered into an agreement with Visiware to distribute

the LudiTV games channel exclusively in the Americas and Asia

for the next three years. The agreement allows OpenTV to offer

one of the largest catalogs of interactive television games

available today to cable, satellite and terrestrial operators.

-- OpenTV entered into a partnership with Lagardere to create,

develop and market interactive television (ITV) programs based

on content derived from Car & Driver and Woman's Day

magazines. Debut services are expected to be ready for

broadcast in the United States by the end of the year. In

addition, the two companies will work together to build

virtual retail TV channels that encompass automotive, cooking

and crafts genres.

Management Team

OpenTV undertook major strides to strengthen its management team with the addition of three senior executives:

-- James Ackerman was named president and chief operating

officer. Ackerman was previously president and chief executive

officer of British Interactive Broadcasting, the parent

company of Open Interactive, the leading interactive

television portal in the United Kingdom.

-- Sharon H. Brown, a veteran of cable television and new-media

industries, was named chief marketing officer. Brown

previously held senior management positions at TCI Music,

INTRO Television, Liberty Media and Cable AdNet.

-- Craig Opperman joined OpenTV as chief intellectual property

officer. Opperman will manage and develop the strategy for

leveraging OpenTV's extensive portfolio of patents, trademarks

and copyrights. Previously, Opperman was a partner at the

leading Silicon Valley law firm of Cooley Godward.

About OpenTV

OpenTV is the leading worldwide provider of software, services and applications that enable digital interactive television. OpenTV provides a complete end-to-end solution for the development and delivery of interactive services via digital satellite, cable and terrestrial broadcast.

Through its recent acquisition of Spyglass, OpenTV is a leading provider of strategic Internet consulting, software and professional services that enable content providers, service operators and device manufacturers to capitalize on the potential of the Internet as it pertains to television and other interactive media devices.

OpenTV set-top box software has been shipped with or installed in more than 7.8 million digital set-top boxes worldwide and has been selected by 32 television network operators in more than 50 countries, including BSkyB in the United Kingdom; TPS and Noos in France; PrimaCom in Germany; Via Digital in Spain; GLA, the exclusive provider of DIRECTV(TM) in Latin America; and EchoStar's DISH Network(TM) in the United States.

The OpenTV set-top box software is licensed to 29 digital set-top box manufacturers, and OpenTV's authoring tools are licensed to hundreds of independent developers and content and service providers.

Worldwide headquarters for OpenTV is located in Mountain View. Information on OpenTV is available at www.opentv.com.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those contemplated herein, including but not limited to the risk that the OpenTV and Spyglass businesses will not be integrated successfully and that unanticipated costs will be incurred in connection with their integration; the risk that the combined company will not be able to manage its growth and a larger, more geographically dispersed organization; the risk that OpenTV-enabled products and services will not be deployed by network operators effectively or at all within anticipated time periods; risks related to the timely identification, development, acceptance and pricing of new OpenTV-enabled products and services; risks related to the impact of competitive products and services and the pricing of those products and services; and other risk factors detailed in the registration statements on Forms F-1 and F-4, annual report on Form 20-F and other documents filed from time to time by OpenTV Corp. with the Securities and Exchange Commission. OpenTV undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note to Editors: Copyright 1999, OpenTV Inc. All rights reserved. OpenTV, OpenAuthor, OpenTV Runtime, OpenStreamer and the OpenTV logo are trademarks or registered trademarks of OpenTV Inc. in the United States and other countries. Java and all Java-based trademarks and logos are trademarks or registered trademarks of Sun Microsystems Inc. in the United States and other countries. All other trademarks are the property of their respective owners.

                             OPENTV CORP.
           Unaudited Consolidated Statements of Operations
          (In thousands, except share and per-share amounts)

                              Three Months Ended     Six Months Ended
                                    June 30,              June 30,
                                1999       2000       1999       2000
Revenues:
 Royalties                   $ 4,116    $ 7,306    $ 7,031   $ 15,011
 License fees                    816      1,649      1,175      2,961
 Services and other            1,222      2,308      3,808      4,236
 Total revenues                6,154     11,263     12,014     22,208
Operating expenses:
 Services                        847      1,892      2,178      3,737
 Research and development      2,569      8,014      4,797     16,193
 Sales and marketing           2,974      5,889      5,148     10,917
 General and administrative    1,050      2,454      2,129      4,844
 Amortization of intangibles     446        382        446        764
 Amortization of stock-based
  compensation                   408      1,451        622      4,675
 Noncash warrant expense          --      1,552         --     24,908
 Total operating expenses      8,294     21,634     15,320     66,038
Loss from operations          (2,140)   (10,371)    (3,306)   (43,830)
Other income/(expense), net       61      2,584         (4)     5,328
Net loss                     $(2,079)   $(7,787)   $(3,310)  $(38,502)
Shares used in computing
 net loss per share, basic
 and diluted              36,362,176 45,599,154 35,096,379 45,417,591
Net loss per share, basic
 and diluted                 $ (0.06)   $ (0.17)   $ (0.09)  $  (0.85)

                             OPENTV CORP.
           Pro Forma Consolidated Statements of Operations
          (In thousands, except share and per-share amounts)

                              Three Months Ended     Six Months Ended

                                    June 30,              June 30,
                                1999       2000       1999       2000

Revenues:
 Royalties                   $ 4,116    $ 7,306    $ 7,031   $ 15,011
 License fees                    816      1,649      1,175      2,961
 Services and other            1,222      2,308      3,808      4,236
 Total revenues                6,154     11,263     12,014     22,208
Operating expenses:
 Services                        847      1,892      2,178      3,737
 Research and development      2,569      7,065      4,797     13,907
 Sales and marketing           2,974      5,876      5,148     10,904
 General and administrative    1,050      2,359      2,129      4,749
 Total operating expenses      7,440     17,192     14,252     33,297
Loss from operations          (1,286)    (5,929)    (2,238)   (11,089)
Other income/(expense), net       61      2,584         (4)     5,328
Net loss                     $(1,225)   $(3,345)   $(2,242)  $ (5,761)
Shares used in computing
 net loss per share, basic
 and diluted              36,362,176 45,599,154 35,096,379 45,417,591
Net loss per share, basic
 and diluted                 $ (0.03)   $ (0.07)   $ (0.06)  $  (0.13)

Notes:

The above unaudited pro forma consolidated statements of operations exclude the effects of the following (in thousands):

-- One-time, nonrecurring research and development fee of $2,600, of which $1,337 and $949 were fully amortized during the quarters ended March 31, 2000, and June 30, 2000, respectively.

-- One-time, nonrecurring sales and marketing and general and administrative expenses related to the Spyglass acquisition, totaling $13 and $95, respectively, for the quarter ended June 30, 2000.

-- Amortization of intangibles over five years of $446 for the quarter ended June 30, 1999, and amortization of $382 for the quarters ended March 31, 2000, and June 30, 2000, respectively.

-- Amortization of noncash, stock-based compensation over four years of $214 and $408 for the quarters ended March 31, 1999, and June 30, 1999, respectively, and amortization of $3,224 and $1,451 for the quarters ended March 31, 2000, and June 30, 2000, respectively.

-- Additional General Instrument noncash performance warrant expense related to the warrant's variable accounting treatment and quarterly amortization totaling $23,356 and $1,552 for the quarters ended March 31, 2000, and June 30, 2000, respectively.

                             OPENTV CORP.
                     Consolidated Balance Sheets
                            (In thousands)

                                                    Dec. 31,   June 30,
                                                      1999       2000
                                                   (Audited)(Unaudited)
Assets:
 Cash and short-term investments                  $186,535   $152,461
 Accounts receivable, net                            6,234      6,210
 Prepaid expenses and other current assets           1,698      3,722
 Long-term marketable securities                        --      2,301
 Property and equipment, net                         5,025      7,815
 Long-term private equity investments                   --     20,000
 Other assets, net                                   7,298     13,355
 Total assets                                     $206,790   $205,864
Liabilities and stockholders' equity:
 Accounts payable and accrued liabilities         $  8,665   $  8,280
 Deferred revenue                                    3,564      5,447
 Total liabilities                                  12,229     13,727
 Total stockholders' equity                        194,561    192,137
 Total liabilities and stockholders' equity       $206,790   $205,864