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Thomson multimedia creates "Digital Media Solutions" to enable digital interactive entertainment and streaming media servives

 
New Business Segment Will Give Content Providers, Broadcasters, Network Operators, and Advertisers the Digital Building Blocks Required to Deploy Electronic Entertainment Services

PARIS - August 10, 2000 - Thomson multimedia (NYSE: TMS), a global leader in consumer broadband platforms and enabling interactive entertainment services, today announced the formation of Digital Media Solutions to provide key infrastructure products and services to the entertainment and media industries. The new business-to-business segment will stand alongside Thomson multimedia's four other segments: Displays & Components, Consumer Products, New Media Services and Patents & Licensing.

Digital Media Solutions to Offer Building Blocks for the Digital Media Chain

Throughout the world, an information and entertainment transformation is underway as consumers buy digital video and audio products and add broadband capability to their homes. Content creators are more readily using digital tools to create new shows, and to edit, store, and distribute programming. Home electronics products are now adding new digital options, including hard disc drives, memory, and other computer-like functionality.

New markets are being created for publishing, managing, and distributing audio and video content over broadband networks. The growing popularity of broadband (DSL and Digital Cable Modem) connectivity has stimulated the need for robust digital content management, packaging, and delivery solutions. Similarly, "rich media" content is becoming more commonplace with many Internet sites now featuring enhanced entertainment experiences.

The new Digital Media Solutions business segment will address the needs of this fast growing market. Digital Media Solutions will provide digital video networking systems for the secure delivery of the content from the studio to the consumer, and key application and media management services that provide the necessary tools for content owners, network operators, and consumers to manage, access, and retrieve streaming entertainment, news, sports, and information. These digital media services will focus on encoding, hosting, digital rights management, navigation and search, personalization, and metrics.

Thomson multimedia intends to aggressively build a leading market position by leveraging its core digital and MPEG video compression technologies, retail and on-line distribution capabilities, acquiring best-in-class digital media technologies, forming strategic partnerships and alliances, and strengthening its relationship with branded content providers.

"The evolution of digital technology makes possible new ways of delivering entertainment and information from the studio to the home. With today's announcement, Thomson multimedia plans to make a substantial commitment to speed development of these new technologies and services. The result will be more home entertainment and information choices for millions of consumers and new ways for the content community to securely reach a global audience with digital media ," said Thierry Breton, Chairman and CEO of Thomson multimedia.

Selected Thomson multimedia Investments to Support Digital Media Solutions

In preparation for this development, Thomson multimedia has recently completed several key investments and new business partnerships.

In June, Thomson multimedia announced a new agreement with Alcatel to bring together the interactive video network businesses of both companies. The new entity, called Nextream, will combine Thomson multimedia and Alcatel activities in MPEG network products, multimedia head-ends, and HFC (Hybrid Fiber Coax) solutions for cable TV networks.

This week, Thomson multimedia signed a letter of intent to acquire Singingfish.com, a leader in "rich media" search tools that will improve access to digital audio and video content on broadband networks across the worldwide web. Within Thomson multimedia’s Digital Media Solutions, Singingfish.com will maintain its leadership position as the world’s most comprehensive, relevant and up-to-date streaming media search service.

Thomson multimedia also owns a 5% stake (and rights to increase its equity position) in Virage, a leading provider of software and applications services that allow media and entertainment companies and consumers to deploy, manage, and distribute their video content over the Internet. Virage products and services make video easy to locate, browse and use, allowing content owners to derive significant value from their video assets.

MICROSOFT :

Software giant Microsoft has endorsed Thomson multimedia's Digital Media Solutions strategy, with Hank Vigil, VP Consumer Strategy & Partnerships of Microsoft, noting that "Microsoft is pleased to see Thomson multimedia bolster its efforts in this area. Broad availability of products and services that will help content providers make better use of the advent of broadband networks will help fuel the entire industry."

DIRECTV :

DIRECTV, the largest digital television service in the Americas, also expressed confidence in Thomson multimedia’s plans. "Six years ago, DIRECTV and Thomson multimedia launched the first digital direct broadcast satellite platform in the United States, forever changing the way American consumers watch television. We believe Thomson multimedia’s steps to form a dedicated Digital Media Solutions business segment will strengthen our opportunities for future collaboration and ultimately bring consumers more entertainment choices," said Eddy W. Hartenstein, DIRECTV global chairman.

ALCATEL :

"After voice and data, video will follow the Internet way. Nextream, our joint company with Thomson multimedia, will play a leading role in this promising market. We are fully supportive of the planned creation of Digital Media Solutions, within which Thomson multimedia's stake in Nextream will be included", said Jacques Dunogué, General Secretary of Alcatel.

About Thomson multimedia
With sales of 6.7 billion Euros (U.S. $6.5 billion) in 1999 and 55,000 employees in more than 30 countries, Thomson multimedia, is the world’s fourth largest producer of consumer electronics. The Group has four principal activities: Displays and Components, Consumer Products, New Media Services, and Patents and Licensing. Thomson multimedia engineers, manufactures, and markets display components and consumer products such as televisions, VCRs, audio systems, digital decoders, DVD players and professional video equipment under the popular RCA and Thomson brand names. Thomson multimedia is listed in the Paris (Sicovam: 18453) and New York (NYSE: TMS) stock exchanges. Thomson multimedia is the parent company of the U.S.-based Thomson Consumer Electronics, Inc.

This press release contains forward-looking statements regarding the development of our new digital media solutions business segment.

The development of this business involves a number of risks and uncertainties: business conditions and general economic conditions; competitive factors such as pricing and marketing efforts of rival companies; the availability of financing on commercially reasonable terms; the availability of new business partners and the ability to enter into commercially satisfactory alliances with these potential partners; timing of product introductions; ability of contract manufacturers to meet product price objectives and delivery schedules; legislative, regulatory, and industry initiatives that may affect planned or actual product features and marketing methods; and the pace and success of product research and development by us and by our competitors. For more information on the potential factors that could affect the company’s financial income, please review the relevant SEC filings.
For more information: www.thomson-multimedia.com

Contact Thomson

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Marc Meyer
Tel: +33 (0)1 41 86 50 03

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