Digital Fountain Expands into Mobile Data Broadcasting; Leaders Honda and XM to Incorporate Company's Technology

FREMONT, Calif.--April 12, 2004--Digital Fountain, a supplier of patented network transport software, today announced its growth into the mobile data broadcast market and the licensing of its patented Meta-Content technology. Honda and XM have entered into agreements with Digital Fountain and intend to incorporate the company's technology into future mobile broadcast applications. This represents a significant milestone in the market adoption for the company's unique reliable communications technology, which has also been recently adopted in Japan for delivering perfect quality video over packet networks.

Meta-Content Technology for Mobile Broadcast

Digital Fountain's Meta-Content technology solves several otherwise intractable problems in broadcasting large amounts of data to a large universe of receivers. For example, with automobiles, the duration and time that the car will be in operation is impossible to predict or control, making it impossible to synchronize broadcast reception among cars. In normal usage scenarios, broadcasts to automobiles are frequently interrupted and are subject to numerous forms of loss.

With Meta-Content, rather than sending the original data, a precise mathematical "recipe" for the data is sent. Every Meta-Content packet is of equal information value and every one is unique. Cars and other mobile receivers need only collect any set of packets approximately equal in length to the original data package, to instantly and perfectly recreate the original data. Because there is no need to worry about which packets any particular receiver collects, the data is received quickly and reassembled accurately, even amidst intermittent reception schedules and frequent broadcast interruptions.

"With more than one million subscribers, XM Satellite Radio is the leading satellite radio entertainment service. We expect that data services will be an important element of our business in the future. Digital Fountain's technology will help us make that happen," said Dr. Stell Patsiokas, Executive Vice President Technology and Engineering, XM Radio.

"Broadcast over wireless is going to become a big market. Digital Fountain has a great technology to minimize the transmission while guaranteeing delivery," said J. Gerry Purdy, Ph.D. principal analyst with MobileTrax.

Applications and Benefits

Across the automotive, satellite broadcast and cellular industries, there are many new applications being developed for consumers and businesses. In the automotive industry, there is interest in offering new entertainment services that will deliver music to in-dash players, videos and movies to back-seat systems, updates to GPS-based navigation system databases and other popular types of data, software and content. In the cellular industry, handheld smartphones are evolving to become multipurpose communications, entertainment and productivity devices. Here too, it is widely recognized that broadcasting popular content is far more economical than having millions of subscribers individually download large files.

With Digital Fountain's Meta-Content technology, service providers can broadcast any type of data over any type of network in the shortest possible time without any need to coordinate the receiving schedules of individual devices. The technology is exceptionally efficient, operating with ease on low-power battery-operated devices. Uniquely, the technology is largely unaffected by packet loss, works on any size data and at any data rate.

"Honda and XM are widely regarded innovators and leaders who are known to have extraordinarily demanding standards," said Charlie Oppenheimer, President and CEO of Digital Fountain. "Having this kind of support on top of the success we are enjoying for live and on-demand video is simply outstanding and is validation of our successful business strategy."

Research estimates indicate that the automotive telematics industry is expected to grow to more than $30 Billion by 2008, and Digital Fountain technology enables new business models for automakers and service providers.

About Digital Fountain

Digital Fountain's patented Meta-Content technology provides perfect communications over imperfect networks. The company licenses its breakthrough network transport technology to leading companies around the world. Digital Fountain's Meta-Content technology is used today in a variety of enterprise, military and consumer devices and applications. Leading organizations including Honda, XM Satellite Radio, Technicolor, Warner Brothers, PeopleSoft, Altera, Sumitomo Electric Networks, the United States Postal Service and the United States military are using and building Meta-Content powered systems.