CinemaNow Announces Debut of Windows 2000-Based PatchBay, First Licensable System for Delivering Video on Demand

MARINA DEL REY, Calif., and REDMOND, Wash., Oct. 1, 2001 — CinemaNow Inc., the leading video-on-demand distributor of feature films over the Internet, today announced the immediate availability of PatchBay™ , the first fully integrated technology solution that can be licensed by distributors to launch their own Web-based video-on-demand networks. PatchBay, a solution owned by CinemaNow, is built on the Microsoft® Windows® 2000 operating system, including support for Windows Media™
Audio and Video and digital rights management. It is the first complete and licensable video-on-demand solution that makes it possible for distributors to quickly establish a Web presence, turning film rights into profit without investing in costly development and implementation.

“By making the real-world-proven video-on-demand technologies that manage our own Web site available as PatchBay, we are creating revenue opportunities for distributors worldwide,”
said Brad Serling, CTO of CinemaNow.
“We look forward to working with companies to implement PatchBay as the central nervous system for their video-on-demand initiatives.”

“PatchBay is the culmination of CinemaNow’s two years’ worth of experience in developing the leading Internet-based video-on-demand service along with our majority backer, Lions Gate Entertainment,”
said Curt Marvis, CEO of CinemaNow.
“PatchBay leverages all the most competitive aspects of IP-based video-on-demand, including worldwide distribution and a high rate of potential revenue return to distributors, in a form that can be easily implemented by studios and production companies seeking to further monetize their film libraries.”

PatchBay is a business application that manages all aspects of Internet-based video-on-demand distribution, including content distribution, content syndication, digital and territorial rights protection, user profiling, demographically targeted advertising, comprehensive pay-per-view and subscription services, e-commerce management, detailed report generation, and integration of other third-party components. Content distributed via PatchBay can reach any IP-enabled device, including Windows operating system-based PCs and Macintosh computers, handheld devices and set-top boxes.

A fully integrated solution, PatchBay currently manages nearly 1 million users watching more than 2 million streams of video each month on Third-party technologies integrated into PatchBay include Digital Envoy’s geolocation services, DoubleClick Inc.’s DART ad manager and VeriSign Inc.’s verification and payment collection services. The system is built entirely on Microsoft technologies, including Windows 2000, SQL Server™
and Windows Media Technologies for video compression and digital rights management.

“CinemaNow’s success in delivering millions of movies a month shows that people are ready to get film content on demand over the Internet and that, with Windows Media, the technology is here today to deliver a great experience,”
said Jonathan Usher, group manager for the Windows Digital Media Division at Microsoft.

As a Microsoft-based solution, PatchBay supports the latest Windows Media compression and digital rights management technology. The industry-leading video quality in Windows Media delivers a compelling viewing experience over today’s broadband connections, and Windows Media digital rights management has been proven to offer the security, flexibility and reach needed to deliver film over the Internet. PatchBay also supports earlier versions of Microsoft’s video technology.

Using Windows Media digital rights management and the additional management features offered by PatchBay, distributors can choose from a flexible array of rules to determine how the content can be viewed. Rules can incorporate territorial distribution rights, rights based on time or number of viewings, payment options, and more. For example, distributors can restrict viewing to North America or some other region; they can set fixed or relative
“time out”
deadlines; and they can allow rental or purchase.

PatchBay also allows distributors to link advertising to their content, track payments, produce user profiles, and generate advertising data and statistics on Web site usage. Patchbay’s comprehensive reporting module tracks the profitability of each digital asset and delivers real-time snapshots of all transaction activity.

CinemaNow is in active negotiations with several other content owners and technology companies in the United States and abroad to license this tested, real-world business application.

About CinemaNow

CinemaNow Inc. ( ) is the leading video-on-demand distributor of feature films over the Internet. CinemaNow currently streams more than 250 feature-length films using Windows Media Player on pay-per-view, subscription and ad-supported bases. CinemaNow’s library of more than 1,000 films from the Lions Gate, Trimark Pictures, Avalanche, Allied Artists, Tai Seng and Salvation film libraries represents the most comprehensive collection of exclusive content available via a true on-demand video service.

DFC Intelligence consistently lists the site as one of the top 15 trafficked streaming content sites. CinemaNow is majority owned by Lions Gate Entertainment (AMEX

About Microsoft

Founded in 1975, Microsoft (Nasdaq
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft, Windows and Windows Media are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages.

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