Wizzard Software Letter to Shareholders

Business Wire,  July 16, 2008  

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PITTSBURGH -- Wizzard Software (AMEX: WZE), released a letter to shareholders today. The text of the letter is included below:

Dear Wizzard Shareholder,

We begin this letter in an unconventional way with a quote from a recent Price Waterhouse Coopers Annual Outlook Report which states that digital and mobile distribution will account for 24% of Entertainment and Media Growth in the next five years. The question one must pose is: do you agree with that projection from PWC? Based on our review of the industry and everything we are hearing from all of the major media and entertainment companies we are talking to, Wizzard's Management firmly believes this projection. Not only do we believe it, but we also believe we have positioned Wizzard to be a major force in the future of digital entertainment and media distribution.

In a very short time, Wizzard has surprised many people by becoming the largest distributor of digital media via RSS (podcasting). While many other companies took the route of launching online video websites and treating RSS distribution as nothing more than an add-on feature, Wizzard has focused its early efforts in this industry on dominating RSS delivery of media. Why you may ask? The quality of content and the reliability of podcasting publishers are head and shoulders above what you find on most video websites. In this new era of the digital lifestyle, content has immense value and consumers are using an expanding array of services on more devices, in more places and offered by more providers than ever before. Publishers and their content are the foundation of any successful digital entertainment and media distribution company. Our content publishers are dedicated to their audiences and depend on Wizzard to publish their shows at the highest technical quality available. Publisher expectations are on the rise and so is the complexity of the publisher's business with the explosion in the number of media web portals, media applications and devices and dynamic business models. In such an environment, success is with the companies that can provide a consistently simple and uniquely valuable publisher experience. We support the rapidly growing digital publisher demand by offering a turn-key media publishing solution that Management feels strongly is second-to-none and more feature-rich than any other platform of its kind available today. This combination of premium publishers and a powerful publishing platform results in quality content that entertains audiences and excites advertisers.

What we are doing on a daily basis is improving our operations in the near term, while positioning ourselves for long-term success. After our acquisition of Libsyn, we initially worked to improve our services by focusing on the basics such as building digital advertising "insertion" technology, expanding our content distribution platform, and signing our publishing partners to the newly created Wizzard advertising network. We have been rewarded with strong publisher growth from approximately 8,000 at the time of the acquisition to over 12,000 today. Our recently formed business development team is in talks with major television networks, movie studios, telcos and cable companies, all of whom are looking for the right professional platform to grow audiences and monetize their digital content while enhancing their brand and the consumer experience. Understanding the expectations of today's online publisher is what Wizzard Media does best as our ever-growing roster of publisher-partners clearly demonstrates.

In order to further leverage the expanding digital media and advertising marketplace, we have prioritized our resources to focus on increasing audiences for the shows we distribute by taking a longer-term view than most investors and business managers; the market demands the long-view because content consumption habits and advertiser adoption of new mediums do not evolve in response to quarterly earnings reports. We are focusing on growing distribution channels to expand audiences. We have highly coveted feature channels on YouTube, DailyMotion, Adobe, iTunes and a host of other destination points where audiences go to consume online entertainment. We recently closed a new high profile distribution partner and have several more in various stages of agreement completion. Our business development team is in talks with several major wireless networks, cable companies, affinity sites and a global online portal for expanded distribution. We have recently won digital media "launches" for SpikeTV (Viacom), music superstar Usher and iconic footwear company Puma. We have been given programming time on a leading English language European satellite provider, with a reach of 110 million viewers across 59 countries, through a four hour block of original programming solely created from podcasts. We will be launching a new service at our industry trade show on August 12, 2008 that we expect will expand our distribution reach across the Internet by more than 100% and at the same event we will be launching our much anticipated Wizzard (Flash) Player to the public. This Flash player delivers social networking integration and provides our publishers with a tool to make their shows "go viral" by embedding the player and content on web pages all around the world. This player will go into unrestricted public beta for publishers on July 18, 2008 and will work with MySpace, Facebook and most any other web site. We feel strongly that the Flash player will enable our publishers to defend their positions in the rapidly expanding digital marketplace and monetize their digital content. The Wizzard Media network received over 3,050,000 requests for shows per day in the first quarter of 2008, for a total of approximately 1 million hours of daily programming to 13 million unique audience members. We expect the Wizzard Player to increase our downloads/views rate by several hundred percent in the near term and grow audiences to over 30 million, rivaling many television networks in audience size. We base projections on publicly reported numbers from streaming media companies along with our publisher's online streaming numbers while using a Flash player currently in place. While we continue to see strong U.S. demand for the shows we distribute, we are seeing significant increased demand internationally with Canada, Great Britain and China leading the way.