WebTV ANNOUNCES VIDEO TECHNOLOGY BREAKTHROUGH
Software Upgrade to Bring TV-Quality Video to WebTV Subscribers
LAS VEGAS, Nevada (January 8, 1997) - WebTV Networks, Inc. today announced a new high-quality video technology that should change the nature of the Internet viewing experience. The patent-pending technology, called WebTV VideoFlash TM, bridges the gap between the Internet and television by providing an unprecedented full-screen, television-quality video capability from the Internet through conventional phone lines. The new technology will be demonstrated for the first time at the Consumer Electronics Show in Las Vegas this week. Demonstrations will be shown in WebTV Networks' consumer electronics licensees' booths, Philips Consumer Electronic Company (#643) and Sony Electronics Inc. (#N109.)

In contrast to conventional Internet video technology, VideoFlash technology provides a level of video quality comparable to standard television and, utilizing the WebTV NetworkSM online service, is capable of providing significantly faster download times. VideoFlash technology will allow WebTV TM subscribers to view movie trailers, TV show previews, news clips, advertising and animation, all at a much higher resolution than has previously existed. Also, leading content providers can now achieve much higher production values on the Internet.

"VideoFlash is the first Internet video technology that will allow National Geographic to deliver a visual experience on the Internet comparable to the imagery, drama and depth we offer with our television programming," said Larry Lux, vice president of National Geographic Interactive.

Although video clips are currently available on the Internet, even the fastest modems generally take one-half hour to download a 30-second, grainy, low-frame rate video clip that plays in a tiny window on the computer monitor. Streaming video through a phone line is of even lower quality and in even smaller windows. User testing has shown that television viewers had little interest in such low-quality video because of the image quality they have come to expect from a television.

"In 1996, WebTV brought Internet capability to the television," said Steve Perlman, co-founder, president and CEO of WebTV Networks Inc. "In 1997, with VideoFlash technology, WebTV will bring television capability to the Internet."

VideoFlash technology was developed by Peter Barrett, WebTV Networks research fellow and inventor of CinepakTM, the de facto standard video format used by Internet developers today, and by Bruce Leak, co-founder and COO of WebTV Networks and creator of another multimedia standard, Apple QuickTime . VideoFlash, the first video format to bring low-cost, high-quality video technology to the Internet, marks another milestone in the evolution of digital video.

The new technology will download automatically to all WebTV subscribers as part of a regular software upgrade later this year. Current WebTVTM Internet Terminal units, manufactured and distributed nationwide by Sony and Philips, were designed to support VideoFlash technology.

VideoFlash technology adds to WebTV Networks' broad intellectual property portfolio of the fundamental technologies needed for Internet television.

WebTV Networks is the developer of the WebTVTM Reference Design and WebTV Network online service that delivers the Internet through television. WebTV Internet Terminal units are currently available at consumer electronics stores nationwide.

Founded in June 1995 by Steve Perlman, Bruce Leak and Phil Goldman, WebTV Networks is dedicated to bringing high-quality, affordable Internet access to television consumers through integrated, easy-to-use, standards-based technologies and services. WebTV Networks is based in Palo Alto, Calif.

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