Phenomedia AG Contracts with USVO to Stream Lord of the Rings Web-Based Promotional Campaign.

Business/Entertainment Editors

MYSTIC, Conn.--(BUSINESS WIRE)--Dec. 3, 2001

Phenomedia AG (www.phenomedia-usa.com), a leading company in the interactive entertainment market, has signed a contract with USVO (OTCBB: USVO; CDNX: US; BSE/Frankfurt: USF www.usvo.com) to stream four promotional videos showing footage from the up-coming New Line Cinema hit film The Lord of the Rings.

These promotional clips will be accessible online in conjunction with a collection of interactive games developed by Phenomedia AG as part of a European marketing campaign.

Phenomedia AG is the creator of web-based games that have attracted wide audiences of Internet users. Previous Phenomedia AG successes in this arena include the on-line game Moorhen, which attracted more than 250,000 simultaneous players for an Internet tournament it promoted and hosted.

"We're glad to see our relationship with Phenomedia AG expand into new territory with this deployment," said Daniel E. Kinnaman, USVO's Senior Vice President of Sales and Marketing. "Our suite of StreamHQ(TM) solutions are designed to support a wide range of rich media initiatives, and our premium encoding services ensure the quality of movie trailers and other important video content distributed via the Internet."

About Phenomedia

Phenomedia of Bochum, Germany creates entertainment content for interactive television, the Internet, and mobile device platforms. Phenomedia has been strengthening its role as a key supplier in the dynamically growing market of interactive entertainment through investments and acquisitions in Germany and abroad, and was the first publicly traded entertainment software company on the Neuer Exchange (symbol: PNM).

Phenomedia also created the Moorhen online games championships, which have attracted hundreds of thousands of players from throughout Europe. The championship solidified Phenomedia's role in designing extremely entertaining games as highly effective promotional tools. Phenomedia recently co-founded MobileScopeAG in Dusseldorf to develop software - and game software in particular - for mobile devices. Some of Phenomedia's other clients include Deutsche Telekom, Mercedes-Benz, Panasonic, Sony Music Publishing, and RTL New Media. For more information, visit www.phenomedia-usa.com or contact Miguel Oliveira 415-8240860, [e-mail].

About USA Video Interactive (USVO)

USVO is a developer and supplier of Internet media delivery services, systems, and innovative end-to-end solutions. The company has developed its StreamHQ(TM) architecture to provide a wide range of business customers with value-added content delivery services. StreamHQ(TM) facilitates the transmission of digitized and compressed video to the user's desktop via multiple modes that take advantage of the available connectivity. While competitors take a "one-size-fits-all" streaming approach, StreamHQ(TM) brings unique value propositions to individual vertical markets with functionality designed specifically for those markets. Beyond high quality content delivery, USVO gives its customers media asset management tools and information that provide accountability and return on investment (ROI) for their streaming expenditures. StreamHQ(TM) encompasses a range of end-to-end services from source to viewing, including content production, content encoding, asset management and protection, media and application hosting, multi-mode content distribution, and transaction data capture and reporting. USVO has created Zmail, which uses StreamHQ(TM) to deliver rich media emails for advertising, marketing, corporate communications, and customer service applications. USVO holds the pioneering patent for store-and-forward video, filed in 1990 and issued by the United States Patent and Trademark Office on July 14, 1992; it has been cited by at least 145 other patents. USVO holds similar patents in Germany, Canada, England, France, Spain, and Italy, and has a similar patent pending in Japan. For more information, visit www.usvo.com.

USA Video Interactive Corporate Headquarters Office: 70 Essex Street; Mystic, CT 06355; [phone]; [phone]. Canada Office: 837 West Hastings Street; Suite #507; Vancouver, B.C. V6C 3N6. Trading symbol on the OTCBB: USVO; Trading symbol on The Canadian Venture Exchange: US; Trading Symbol on the Berlin Stock Exchange: USF. Standard & Poors Listed. CUSIP 902924208. The Canadian Venture Exchange (CDNX) has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. For more information contact: Kevin Yorio, 860-572-1560; [e-mail]

This press release may contain forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which may cause actual results to differ from those described.