ICTV's First Customer Coming Back for More After 2+ Years of Success

Business Wire, June 26, 2001

Business Editors/High-Tech Writers

LOS GATOS, Calif.--(BUSINESS WIRE)--June 26, 2001

Full Conversion to ICTV's Broadband Digital System in St. Joseph,

Missouri to Serve as First Full Commercial Launch of Broadband

Digital Interactive Platform

ICTV, supplier of advanced broadband systems with a headend-based solution for interactive TV, and News Press and Gazette today announced the digital launch of ICTV's Broadband TV delivery platform on its largest system, St. Joseph Cablevision.

Since February 1999, the ICTV service -- used for email, web surfing and games -- has been enjoyed in hundreds of St. Joseph homes with analog boxes. The improved digital service will be available to all digital homes throughout the St. Joseph system of over 26,000 subscribers.

"Having seen the customer satisfaction on the initial analog service, we are excited to offer this service over ICTV's new digital platform which makes very efficient use of bandwidth. At St. Joseph Cablevision, we have seen firsthand the satisfaction our customers have had with the ICTV service," said Bill Severn, general manager of News Press and Gazette. "Our experience over the past 27 months of operation shows that ICTV's interactive television system is a money-maker, with very little marketing. The digital service will let us expand our product offering on a platform that has proven success with our subscribers. We are further comforted by the fact that this type of service is unique to cable and cannot be effectively delivered via satellite -- our primary competition."

St. Joseph Cablevision branded the service "Magic Cable," and has enjoyed average revenues per subscriber to this service in excess of $18 per month. Unlike video-on-demand (VOD), Internet access does not require any royalties to be paid, so most of that is contribution margin. Also, much of the Internet infrastructure is shared with the cable modem service.

Robert B. Clasen, ICTV's chairman and CEO, believes the St. Joseph digital deployment proves the triumph of experimentation over theoretical analysis. "It is ironic since St. Joe did not have a large staff to analyze it to death, they simply tried it, and in the process learned more than the rest of the industry while making money at it. We're truly excited about this opportunity to bring our first customer to another level of services, features and cost efficiency. The Press News and Gazette was one of the first cable operators in the country to deploy interactive television services in St. Joseph, Mo., and their experience as a pioneer in the iTV arena is important validation of the opportunity that the right interactive television platform can provide."

Wes Hoffman, president of ICTV, stated, "While the cable industry groped for a business model in ITV, at least one viable business model has been proven. With the lower costs associated with our new digital platform, several additional new business models become viable. ICTV was the first ever to deliver web-surfing to TVs over cable in 1996 and was the first to invent headend-based multimedia iTV delivery to TVs. Once again ICTV is making a first by proving that this compelling service does not have to be a loss leader or a bundle, but rather it deserves its own category as a revenue generating unit (RGU) just as modems, digital video/VOD and telephony have earned this distinction."

About NPG Cable, Inc. d/b/a St. Joseph Cablevision

NPG Cable, Inc. serves 125,000 broadband cable customers in four states. A full-service provider of telecommunications products, NPG cable, Inc. offers an array of services, including cable television, high speed cable modem service, digital cable, commercial data services, web hosting and design, and dial-up internet access. NPG, Inc. also owns 3 daily newspapers, a weekly agricultural shopper, 5 broadcast television stations, and manages two other broadcast television stations.

About ICTV

Based in Los Gatos, Calif. (Silicon Valley), ICTV Inc. supplies advanced broadband communication systems for interactive television solutions to cable operators. The company's digital iTV delivery platform provides cable operators with a headend-based solution that enables delivery of broadband Internet, email with attachments, and interactive TV applications to any digital set-top box. The ICTV solution enables a full range of iTV possibilities, and provides a consistent experience across any digital set-top box, including all current and future generation boxes. Employing a patented frequency reuse model, the ICTV system is scalable on any two-way Hybrid Fiber Coaxial cable system. ICTV stands uniquely positioned, with its centralized system, to efficiently support the increasingly sophisticated delivery of broadband content to the television.

ICTV believes it will serve an important, long-term strategic role that is fundamentally synergistic with most set-top middleware and application companies. In addition, the company's technology is standards-based so content providers' and other technology providers' products will work on ICTV's platform. The company has 21 issued patents and numerous patents pending.