Verimatrix and i3 micro technology Team to Deliver Industry's First Set-Top Box Integrated with Digital Forensic Watermarking.

LAS VEGAS -- Live Demonstration of Verimatrix's VideoMark(TM) Fully Integrated with i3's Mood(TM) 300; IP Set-Top Boxes Now Available

Verimatrix, the leading developer of IPTV content protection and security solutions, and i3 micro technology, developer of premier IP customer premise equipment (CPE) for advanced triple play services, today announced the Mood 300 as the industry's first IP set-top box (STB) to be fully integrated with Verimatrix's VideoMark, its patent pending user-specific forensic watermarking technology. Both companies are demonstrating the integrated solution during the 2006 International CES show.

VideoMark, an available feature of the Verimatrix Content Authority System (VCAS), is the industry's first robust and invisible content tracking solution that enables forensic, user-specific marking of individual video copies to track piracy to the individual STB. i3's Mood 300 STB is already widely deployed, including with Belgacom, Belgium's largest carrier, which is one of the first major commercial deployments of IPTV in Europe. The Mood 300 supports Personal Video Recorder (PVR) and decoding for MPEG-2 and MPEG-4 AVC and enables various types of interactive and personal viewing services, including pause and trick-play of live content, plus instant record and replay, as well as a video-on-demand (VOD).

Operators of IP networks directly benefit from integrated forensic watermarking STBs with several competitive advantages. Primarily, network operators can bid for earlier release or higher quality Hollywood content due to a superior and highly protected distribution channel. Many content owners have already indicated they will mandate the use of digital watermarking for high definition (HD) content. Therefore, operators are now able to future-proof their networks through the deployment of VCAS and VideoMark. Integration and deployment costs are minimal since VideoMark is a pure software upgrade that does not require any disruptions or hardware upgrades for existing customers.

According to the Motion Picture Association of America (MPAA), the U.S. motion picture industry loses more than $3 billion annually in potential revenue due to piracy, which does not include Internet piracy losses. The VideoMark/Mood 300 solution is an effective way for Hollywood studios to trace illegal copies to deter peer-to-peer file sharing, and consequently capture more revenues.

Digital video delivered via STB with invisible, user-specific watermarks creates an environment with unique advantages to effectively secure the content. Every STB contains an individual user identification, which is linked to that consumer via a unique digital certificate. Because piracy can be traced back to the source, and not just the network operator, content owners are ensured a higher protection level than other distribution methods, such as DVDs and VHS tapes. Forensic watermarking can also be deployed as an effective way to change consumer behavior. Prosecuting piracy and copyright infringement provides a strong deterrent and alters the general perception on the legalities of copyright abuse.

"Forensic watermarking is critical to provide technology advantages, as well as peace of mind, for IPTV operators and content owners," said Chris Chalkitis, CTO, i3 micro technology. "Verimatrix has proven its market and technology leadership in regards to content protection specifically designed for IPTV. We are excited to bring this integrated product to market, which outpaces the traditional cable and satellite markets."

Key Features of VideoMark, which was first announced at IBC2005 (see "IPTV Operators Can Now Track Video Piracy to Its Source" Aug. 31, 2005):

--Patent pending forensic watermarking technology that embeds invisible information that can trace piracy to its source.

--Requires very low processing power from the STB.

--Robust and invisible marking that survives a high degree of compression, transcoding and analog re-recording, known as the "analog hole," making it superior to less robust solutions such as fingerprinting.

--Available software developer kit (SDK) for set-top box and PVR manufacturers to integrate VideoMark into IP consumer devices.

"i3 is one of our most forward-thinking partners and we are proud to be the first to deliver this integrated solution to the marketplace," said Niels Thorwirth, director, Media Security at Verimatrix. "Network operators and content owners will immediately benefit from this unique and robust solution, which is the only STB video watermarking solution available today."

Availability

The integrated VideoMark/Mood 300 STB will be commercially available in Q1 2006.

About i3 micro technology

i3 designs and delivers premier IP customer premise equipment (CPE) for advanced triple play services: Internet access, Voice over IP, IP-TV and on-demand entertainment. i3's comprehensive product portfolio of IP Residential Gateways, Set-top boxes and related management applications, provides service providers with unprecedented return on investment -- delivering new service revenues and impressive cost savings over the lifetime of the product. i3 micro technology was established in 1997 and is headquartered in Kista, Sweden with sales office in Paris and U.S. subsidiary in Seattle. For more information, please visit www.i3micro.com.

About Verimatrix

Founded in 1999, Verimatrix is the leading provider of digital content protection solutions with many customers in North America, Western Europe, Japan, South Korea and Australia. Verimatrix offers provider approved, carrier-grade solutions designed specifically for today's bi-directional IPTV networks. Through the seamless integration of patented digital watermarking technology into its best-of-breed encryption and clone detection solutions, Verimatrix protects content and revenue streams, as well as detects digital piracy wherever it occurs within the distribution chain. Verimatrix has excellent relationships with the major Hollywood studios by providing valuable anti-piracy solutions for the fight against rampant digital piracy. For more information, please visit www.verimatrix.com.