Features Include: New Transitions and Filters, Improved Text Animation, VideoCD and Data CD burning, Interactive Tutorials and More

MADISON, Wis.--(BUSINESS WIRE)--July 23, 2001-- Sonic Foundry®, Inc., the leading developer and marketer of digital media and Internet software tools and services, today announced the release of VideoFactory(TM) 2.0, the most recent upgrade to Sonic Foundry's entry-level digital video editing program.

VideoFactory allows users to capture and edit digital video in real-time on their PC. This affordable solution is perfect for making home movies, creating music videos, documenting weddings, developing corporate presentations and preparing streaming media for the web. VideoFactory provides a straightforward, easy-to-use interface and is based on the same core technology used in their professional-level editor, Vegas Video. Not only can users preview edits as they make them, but they can also take advantage of sophisticated features such as titling, special effects, elaborate transitions, panning and cropping tools for still images as well as video, and numerous included audio effects. VideoFactory includes hundreds of royalty-free media clips, including video footage and still images from Artbeats®, the leader in royalty-free stock footage, sound effects and more. VideoFactory supports a wide range of file formats, including AVI, BMP, JPEG and GIF. Users can import audio files in MP3 and WAV formats and encode videos to RealVideo®, Windows Video®, QuickTime®, and MPEG-1 and 2 formats for web-based development and DVD authoring.

VideoFactory 2.0 now includes the following enhanced features:

    -   New video transitions and effects
    -   29 interactive "Show Me" tutorials
    -   VideoCD and Data CD burning
    -   Improved text animation and scrolling credits
    -   Video encoding wizards and email support
    -   DV scene detection
    -   CD audio extraction
    -   Still image capture and export
    -   Video web page creation
    -   User Interface enhancements

"VideoFactory 2.0 takes consumer video editing to an entirely new level. We designed it with one thing in mind. Make it easier for the beginner, yet powerful enough for the experienced user who needs fast, cutting-edge results," said Curtis Palmer, chief technical officer and co-founder of Sonic Foundry.

VideoFactory 2.0 is currently available as a downloadable product at www.sonicfoundry.com, and as a boxed product. The MSRP is $99.95 and is available from Sonic Foundry for $69.97 as a download (30% off) and $79.96 for a boxed product (20% off). Users of VideoFactory 1.0 can upgrade to VideoFactory 2.0 for $29.99 in box or download formats.

About Sonic Foundry

Sonic Foundry®, founded in 1991, is a leading developer of digital media and software tools and services with locations in Madison, WI; Santa Monica, CA; and Toronto, Canada. Sonic Foundry's award-winning software products, such as ACID(TM) and Sound Forge®, as well as its first-class services, are used worldwide for multimedia development, Internet streaming applications, broadcast solutions, and digital content creation. Sonic Foundry's Media Services Division is the pre-eminent supplier of digitization, management, and delivery solutions for various industries, with special emphases placed on service offerings to clients in the entertainment sector. These include the conversion, reformatting, and encoding of television, film, and audio content for multiple delivery platforms. Serving as the link between content and customers, Sonic Foundry provides proven, comprehensive processes that enable content delivery through existing and emerging distribution channels.

For specific product descriptions, please reference the "products" section of the Sonic Foundry web site at www.sonicfoundry.com.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for the Company's products, the Company's ability to succeed in capturing significant revenues from media services, the effect of new competitors in the Company's markets, and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission.