NDS, SAGEM and IBM Plan to Develop Next Generation Set Top Box to Drive PVR Technology

Business Wire, Dec 5, 2001

Business & Technology Editors

LONDON & PARIS & EAST FISHKILL, N.Y.--(BUSINESS WIRE)--Dec. 5, 2001

Highlights:

- NDS's XTV Personal Video Recorder (PVR) and Open VideoGuard Technologies and
Personal Video Recorder (PVR) applications to be integrated into SAGEM set-top
boxes (STB) using IBM's latest PowerPC integrated STB Controller

- SAGEM to bring digital STB expertise to wider market incorporating advanced
functions as standard features

- TV operators and viewers to benefit from new levels of innovative STB
technologies and functions.

NDS Group plc (NASDAQ/NASDAQ Europe: NNDS), a News Corporation (NYSE: NWS, NWS.A) company, SAGEM and IBM (NYSE: IBM) today announced that they intend to develop an advanced digital set-top box (STB) through which TV operators can deliver improved services to viewers and run their businesses more effectively.

Under the proposed agreement, IBM would integrate NDS's conditional access and XTV(TM) technology into its latest PowerPC integrated controller chips, which SAGEM will incorporate into its next-generation set-top boxes. SAGEM anticipates that products based on these technologies would be available in mid-2002. Development platforms are available immediately.

NDS's XTV PVR software gives operators a platform from which they can deliver to consumers digital reception and content protection, encrypted and personalized in a single, secure digital set-top box. IBM's new PowerPC-based set-top box controller provides the performance levels necessary for operators to handle delivery and management of new interactive digital services, such as PVR, video-on-demand and e-commerce.

Commenting on the proposed agreement, Dr. Jas Saini, Vice President Consumer Devices, NDS Group plc, said "Set-top boxes are dramatically changing the way people are able to be entertained and informed. The level of sophisticated, open technologies being developed by companies like IBM, NDS and SAGEM means that viewers are able to access the latest digital services in rapid time."

"With the arrival of digital broadcasting, TV is no longer just a source of passive entertainment," said Eric Tsou, director, Digital Video Products Group, IBM Microelectronics. "It is migrating into home networking and e-commerce arenas and set-top boxes are central to this movement. Working with companies such as NDS and SAGEM to provide innovative, interactive TV applications for existing and future customer engagements is key to our long-term strategy in the digital TV space."

"Co-operation with IBM and NDS is for us the opportunity to go forward and to further develop our STB offer; our objective being to meet our clients' future needs," commented SAGEM.

Earlier this year, IBM and NDS signed an agreement to integrate NDS's Random Access to Scrambled Content Process (RASP) technologies to enable both viewers and operators to benefit from the arrival in the set-top box of the hard disk and applications such as Personal Video Recorder (PVR).

RASP enables ease of access to encrypted content on a PVR by inserting access points into the encrypted content to allow viewers using the recorder to perform certain modes like fast forward, rewind and record more efficiently and quickly.

With revenue a key factor in content provision, XTV allows broadcast operators the opportunity to exploit more effectively content that may be stored on the hard disk in the STB. For example, different Pay-Per-View and rental models may be proposed, while viewers will have a greater choice of valuable content, stored and encrypted on the disk.

About NDS

NDS Group plc is a leading supplier of open conditional access software and interactive systems for the secure delivery of entertainment and information to television set-top boxes and personal computers. The company also develops secure datacasting solutions for the distribution of data and multimedia. See www.nds.com for more information.

About Groupe SAGEM

SAGEM is an internationally based high-technology company that maintains a presence in more than 20 countries. It is the second largest French group in the field of telecommunications and the third largest European company in electronics for defence and security. See www.sagem.com for more information

About IBM Microelectronics

IBM Microelectronics is a key contributor to IBM's role as the world's premier information technology supplier. IBM Microelectronics develops, manufactures and markets state-of-the-art semiconductor and interconnect technologies, products and services. IBM makes chips for a wide range of devices from the world's most powerful computers to the smallest cell phones. Its superior integrated solutions can be found in many of the world's best-known electronic brands. More information about IBM Microelectronics can be found at: http://www.chips.ibm.com.

Cautionary Statement Concerning Forward-Looking Statements

The statements contained in this release which are not historical facts may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to the plans, projections or future performance of the companies referenced, which involve certain risks and uncertainties, including risk of market acceptance, the effect of economic conditions, possible regulatory changes, technological developments, the impact of competitive pricing and the ability of the companies and their commercial partners to develop systems and solutions which meet the needs of the broadcasting industry in a timely and cost-efficient manner, as well as certain other risks and uncertainties which are detailed in the companies' filings with the SEC. Company or product names have been used for identification purposes only and may be the trademarks or registered trademarks of their respective companies.