Landmark Theatres and Microsoft Create the Largest Digital Cinema Circuit in the United States

LOS ANGELES and REDMOND, Wash., April 3, 2003 — Today Landmark Theatres and Microsoft Corp. announced that they are equipping 177 screens in all 53 Landmark Theatres across the United States with digital cinema playback systems based on Microsoft® Windows Media®
9 Series. This unprecedented agreement represents the largest digital cinema theater circuit installation to date in the United States.

For the first time, a critical mass of the independent film industry’s infrastructure will be wired for digital distribution. This helps address the escalating costs of releasing theatrical films, which weighs heaviest on the independent sector, as it must pay the same costs to release a film as the major studios. The creation of a complete digital alternative represents a major breakthrough in these economies that will help guarantee greater diversity and access to the marketplace for independent filmmakers and distributors alike.

“Landmark’s mandate has always been to build an alternative infrastructure dedicated to the enhancement and proliferation of independent film,”
said Bert Manzari, executive vice president of Landmark Theatres.
“We exhibit over 250 films a year, and all too many of these films succeed or fail due to market economics rather than artistic accomplishment.”

The newly outfitted theaters will be able to screen films encoded digitally in Windows Media 9 Series, which enables high-resolution, theater-quality experiences with up to 7.1 channel surround sound. The network rollout is expected to be completed by the end of this year.

“Landmark Theatres’ commitment to specialty film and its established leadership in the independent exhibition space offers Microsoft the perfect opportunity to demonstrate its ongoing commitment to the independent film community,”
said Dave Fester, general manager of the Windows Digital Media Division at Microsoft.
“Moviegoers get the high-quality theatrical experience of Windows Media 9 Series, while producers and distributors benefit from the cost savings associated with mastering and releasing films digitally.”

Landmark President and CEO Paul Richardson was a featured presenter at a symposium on digital cinema at this year’s Sundance Film Festival.
“What has impressed me most is the enormous breadth of interest in digital cinema that has been generated since the festival. I’ve been contacted by key distributors, investment bankers and members of the creative community, all of whom want to know when we can deliver a complete solution to digital distribution,”
Richardson said.
“I believe that we will look back at this moment as one when we were able to fundamentally change the business model in a way that will allow far more of these films to compete successfully.”

Working with Microsoft and Landmark to deploy the network will be Digital Cinema Solutions (DCS). DCS will supply its solution, the Cinema System, which has powered the BMW Films Digital Cinema Series in 25 theaters since November 2002. The DCS Cinema System employs a networked PC architecture that integrates into existing theater infrastructure. Once the network is in place, Windows Media 9 Series allows films to be sent to theaters over private networks, on CD-ROM or on DVD-ROM, all protected with Windows Media Digital Rights Management technology.

“The independent film space has largely been ignored by digital cinema,”
said Jim Steele, president of DCS.
“The small, current base of digital cinema installations targets the largest screens and multiplexes focused on mainstream Hollywood blockbusters. The program announced today by Landmark and Microsoft will change all that because it creates a nationwide network of independent digital cinemas, effectively solving the ‘chicken and the egg’ problem for the independent film community by allowing them to move forward for the first time with wide-scale digital distribution.”

About Landmark Theatres

Founded in 1974 and headquartered in Los Angeles, Calif., Landmark Theatres is the nation’s largest specialized film exhibitor with 53 theatres and 177 screens in 20 markets across the U.S. Landmark has been dedicated to exhibiting first-run independent, foreign language, documentary and restored classic films for more than a quarter of a century. Landmark recently opened new theatres in Minneapolis, MN; Bethesda, MD; and New York City (Lower Manhattan) and has recently announced the largest specialized cinema complex in the country: the 14-screen Westside Pavilion Cinemas in West Los Angeles. More information about Landmark Theatres is available at http://www.landmarktheatres.com/.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) 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 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.

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