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Macrovision Signs Copy Protection Agreement with Microsoft Home and Retail Division

SafeDisc Technology to be Applied to Microsoft's Educational, Games, and Personal Finance Software PC CD-ROM Titles

SUNNYVALE, Calif.--(ENTERTAINMENT WIRE)--June 2, 1999-- Macrovision Corporation announced today that Microsoft Corporation has signed a two-year agreement to use Macrovision's SafeDisc(TM) PC CD-ROM copy protection. Under the agreement, Microsoft will use SafeDisc on a wide variety of educational, games, and personal finance software distributed worldwide.

"We were prompted to consider a copy protection solution because of ongoing losses incurred by software distributors from returns on software that is copied using CD-ROM recordable devices," said Bill Smith, product unit manager at Microsoft. "The Home and Retail Division has run SafeDisc through an exhaustive evaluation process and has found that it will be the most effective way to protect those who legally try to sell software from the impacts of software piracy."

The total estimated value of unauthorized copies of PC CD-ROMs in consumer households is estimated at almost $1 billion according to a study sponsored by Macrovision. The study, which was conducted by San Mateo, CA-based Merrill Research & Associates, estimates that based on survey responses, consumers have 30 million unauthorized CD-ROM copies in their inventory, and that over half of these copies would have displaced interactive software purchases.

"The collective engineering capability, worldwide technical support, relationship with replicators who support our other technologies, and substantial financial resources of the Macrovision/C-Dilla partnership uniquely allows us to support Microsoft's Home and Retail Division and its numerous replicators and OEMs worldwide," said Brian Dunn, vice president of computer software copy protection at Macrovision Corporation. "In addition, Microsoft has been of great assistance in enabling us to develop a Windows-compliant SafeDisc solution."

The SafeDisc technology, which is licensed at 28 replicators worldwide, is a software-based solution that does not require any changes to standard PC or CD-ROM hardware. It is comprised of both an authenticating digital signature embedded on the disc, as well as a multilayered encrypted wrapper that secures the CD-ROM content. The digital signature, which cannot be copied by CD recorders, is added to each original disc during the mastering/replication process. When a user inserts an original disc in a CD-ROM drive, the authentication software reads the digital signature, allowing the program to be decrypted and run normally. If an unauthorized copy is loaded, the authentication software will not be able to find the digital signature, and the copy will not run. The technology is licensed directly to interactive software publishers, and to mastering and replication facilities who are able to offer the technology to their software publishing clients.

SafeDisc, a collaboration between Macrovision and C-Dilla, UK Ltd., represents Macrovision's first copy protection product for the interactive software market. Macrovision is best known for its videocassette copy protection technology, which has been applied to over two billion videocassettes over the past decade. C-Dilla is best known for its rights management software for high value-added information and software publishers.

About C-Dilla Ltd.

C-Dilla, a privately held 35-person UK company founded in 1991, is a recognized leader in rights management software for high value-added information and software publishers. The company's current line of security and rights management products are marketed worldwide to over 150 software and data publishers such as Autodesk, Lotus Development UK, Pitney Bowes, British Telecom, and the Financial Times. C-Dilla's CD-ROM based rights management software includes multi-track unlocking capability, "Try before you Buy," and metered usage capability. C-Dilla also markets secure products for the Internet and the electronic software distribution market. C-Dilla opened a San Francisco Bay Area sales and support office in 1998, which distributes its rights management software product line to the North American market.

About Macrovision

Macrovision Corporation develops and markets technologies to prevent the illicit duplication, reception or use of video and audio programs and computer software. The Company provides its products and services primarily to the home video, consumer multimedia software, pay-per-view, cable, satellite, and video security markets. Macrovision has its headquarters in Sunnyvale, California with subsidiaries in London and Tokyo.

All statements contained herein, as well as oral statements that may be made by the Company or by officers, directors or employees of the Company acting on the Company's behalf, that are not statements of historical fact, constitute "forward-looking statements" and are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements including the intention of a customer to use the Company's products in the future involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties are outlined in the Company's Registration statement on Form S-3 and in its reports on Form 10QSB and Form 10KSB. The Company is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

SafeDisc is a trademark of Macrovision Corporation and C-Dilla Ltd. Other product and company names herein may be trademarks of their respective owners.

Note to Editors: Additional background information on Macrovision Corporation can be obtained from http://www.macrovision.com .


Contact:

     Macrovision Corporation
     Hector Marinez, 408/743-8429
     
[email protected]



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