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IPTV Infrastructure Not Ready for Prime Time According to Broadcast International

Bandwidth Crunch on the Horizon as New Content Sources, HD, Explode

-IPTV was the talk of the major international broadcasting conference, IBC, in Amsterdam earlier this month. But according to Broadcast International (OTCBB: BCST “BI”), the infrastructure for delivering on the promise of IPTV – HD-quality video delivered on an IP broadband network, wherever and whenever users want it – is not yet ready for prime time. The weak spot in the delivery chain is inadequate video compression technology, which is necessary for providing the quantity and quality of video that users will demand, according to Rod Tiede, CEO of Broadcast International, a leading video technology innovator.

As new video content sources proliferate – from traditional broadcast media, to portal players such as Yahoo! and Google, to YouTube-style user-generated content – bandwidth will be devoured at unprecedented levels, precipitating a “crisis in bandwidth.” Even new fiber initiatives such as those from Verizon and AT&T will be challenged to deliver HD-quality, according to Tiede.

“Experience has shown us that as broadband adoption has increased, so have consumers’ appetites for ways to use that extra bandwidth. IPTV will test those limits,” said Tiede. “Right now, most video compression solutions are not up to the challenge of dealing with the avalanche of video content that will accompany the emergence of IPTV, and certainly not with anything approaching HD quality. At best, most offer a 25 percent reduction in bandwidth, with compromised picture quality, which is nowhere near that required for IPTV.”

According to Tiede, a video compression solution that is capable of dealing with the content requirements for IPTV must offer closer to a 90 percent reduction in bandwidth for both live and pre-recorded video and deliver an HD quality experience.

“In order for IPTV to live up to its promise, the user experience must be at least as good as that delivered by traditional broadcast media; and in fact, it should exceed it. But the existing infrastructure is just not up to that standard without a major change in video compression technology,” said Tiede.

According to Tiede, an IPTV-ready video compression solution must be based on an open software architecture so that it can be easily upgraded as new standards such as H.264 emerge, and as new specialized codecs come onto the market. A scalable underlying hardware architecture is also required so that additional processing power can be readily added to accommodate the predicted surges in video consumption brought about by IPTV.

“Right now,” said Tiede, “there are billions of dollars in video compression infrastructure that will have to be literally thrown away when new standards emerge because the software and hardware on these ‘encoders’ are so tightly coupled. That’s like having to throw out your whole computer every time Microsoft releases a new version of software. It’s just a bad model that has been rejected in nearly every other segment of the technology industry, but somehow persists in the encoder market.”

BI’s patented video compression software, CodecSys, reduces bandwidth needs by more than 80 percent for HD-quality video over satellite, cable, IP and wireless networks.

CodecSys achieves its breakthrough performance through an open, patented architecture that uses artificial intelligence to analyze a video stream and select the codec best-suited to a particular video frame or sequence from an entire library of codecs. By selecting the best codec for the job, CodecSys is able to offer performance several times higher than competitive products, which rely on a single codec for every type of video stream.

Its open software architecture enables new codecs or video compression standards to be easily accommodated when they emerge, virtually “future-proofing” the technology.

At IBC in Amsterdam, Broadcast International and IBM debuted the first public demonstration of a jointly developed video compression solution. The demo featured BI’s patented CodecSys video compression software running on IBM’s BladeCenter QS20 “Cell Blade” multi-core processor. The new video compression solution is highly scalable, allowing customers to easily add additional processing power by simply adding extra processors or “blades.”

About Broadcast International

Broadcast International is a leading provider of video-powered broadcast solutions, including IP, and digital satellite, Internet streaming and other types of wired/wireless network distribution. BI’s patented CodecSys software is a breakthrough, artificial intelligence-based video compression technology that cuts video bandwidth requirements more than 80% over satellite, cable, IP and wireless networks.

By slashing bandwidth needs, CodecSys enables a new generation of applications such as streaming video to cell phones, and offers unprecedented price/performance benefits for existing applications such as HD video.

Broadcast International is a public company (OTCBB: BCST) headquartered in Salt Lake City UT. For more information go to www.brin.com and www.codecsys.com.

Forward-Looking Statements

All statements in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the caption "Additional Factors That May Affect Our Business" in the Company's most recent Form 10-K and 10-Q filings, and amendments thereto. In addition, we operate in a highly competitive and rapidly changing environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statement.

BladeCenter, IBM, QS20 and Power Architecture are trademarks of International Business Machines Corporation in the United States, other countries or both.

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