VitalStream Partners with Serious Magic to Offer First End-To-End Video Blogging Solution for Consumers

Business Wire, Jan 4, 2006

IRVINE, Calif. -- VitalStream, Inc. (OTCBB:VSTH), the world leader in video streaming, and Serious Magic, a leading developer of next-generation video software and communication tools, have teamed up to launch the first combined PC video blogging software and streaming solution for consumers looking to add video to their blogs.

Vlog It(TM) enables users to create dynamic video blogs, or vlogs, within minutes and requires no video editing experience. Users can narrate photos and video clips easily by adding a voiceover using Vlog It's built-in TelePrompTer. For the ultimate vlog, those who own a webcam or camcorder can host their vlog newscaster-style by appearing on screen while recording. Vlog It comes with a library of titles, graphics, transitions and effects that give vlogs a professional, TV-like appearance. For users, owning Vlog It is like having a TV newsroom right inside their computer.

Vlog It works with any blog site, including TypePad(R), Blogger(R) and My Space(R). To add a video, users simply drag and drop the video thumbnail when creating a new post in their blog. The file compression, uploading and linking is all done automatically behind the scenes by Vlog It and VitalStream.

"As a video streaming solutions pioneer, VitalStream aims to equip the world with innovative tools for streaming on the Web," said Jack Waterman, CEO of VitalStream. "Text blogs are increasingly popular with both consumers and business professionals, and VitalStream, along with Serious Magic, remains a step ahead by being one of the first to offer a complete video blogging solution. Vlogs are a powerful vehicle for networking and communicating, and their increasing use supports the fact that video streaming is becoming more mainstream."

"Consumers desire more innovative ways to express themselves on the Web," said Stephan Bouchard, executive vice president of Serious Magic. "VitalStream's reliable, secure streaming services, paired with our easy-to-use video blogging tool, deliver a complete solution to the consumer while taking the complexity out of file compression and FTP upload."

When Vlog It users install the software, they are provided a free, limited-time trial account for saving, sharing and playing back videos. A trial version of Vlog It is available immediately at www.seriousmagic.com. The commercial version will be available by mid-January 2006 and will sell for $49.95.

VitalStream's customer base includes Fortune 500 corporations, movie studios, news broadcasters, music companies and advertising agencies. For more information, please visit www.vitalstream.com.

About VitalStream

VitalStream, Inc., a wholly owned subsidiary of VitalStream Holdings, Inc. (OTCBB:VSTH), is the world's leading streaming solutions provider and international content delivery network that provides the reliable choice for delivering streaming media to global audiences. VitalStream provides complete solutions, including video and audio streaming, live event broadcasting, media asset management and consulting services that seamlessly integrate with today's leading streaming media technologies. VitalStream's innovative tool set streamlines the process of delivering the leading streaming media formats, Macromedia(R) Flash(TM) and Microsoft(R) Windows Media(R), over the Internet. VitalStream's worldwide content delivery network is certified for quality transfer in the United States, Europe and Asia and delivers much of today's most popular online media. VitalStream serves an international customer base, including Fortune 500 corporations, movie studios, news broadcasters, music and radio companies, advertising agencies and educational institutions. For more information, visit www.vitalstream.com.

About Serious Magic

Serious Magic, Inc. was founded in early 2001 by a team of industry veterans to create the next generation of visual communication tools. Award-winning products include Visual Communicator 2, empowering non-technical users to create stunning videos and presentations that captivate audiences, deliver key points and compel action; Ovation, companion software for Microsoft(R) PowerPoint(R) that instantly transforms PowerPoint slides into highly polished, professional presentations; ULTRA, a software breakthrough that transforms chroma keying into an incredibly easy and practical tool for all types of video producers; and DV Rack, the first PC-assisted, video production software designed to work with videographers while shooting to help improve video quality and prevent shooting disasters. The name Serious Magic was inspired by Arthur C. Clarke's observation: "Any sufficiently advanced technology is indistinguishable from magic." For more information, please visit www.seriousmagic.com.

Forward-Looking Statements

This news release contains forward-looking statements made by VitalStream in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ materially from those indicated by these statements as a result of various important factors, including, but not limited to, the risk that VitalStream's new product offerings based upon, intended for use in conjunction with or incorporating its partners' proprietary technology may not predictably be accepted by our customers, or prospective customers or consumers, or perform as anticipated, the risk that the current trends in user or consumer preferences may not continue, we may be unable to keep up with evolving industry standards and changing user and consumer needs, demands or preferences, our network security and performance may be adversely affected by both internal and external causes, and other factors that are discussed in "Risk Factors" and elsewhere in the Annual Report on Form 10-K of VitalStream Holdings, Inc. and other documents periodically filed by VitalStream Holdings, Inc. with the SEC. Such forward-looking statements speak only as of the date of this release. The company is under no obligation and expressly disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.