Broadcast International Licenses Flash e-publishing and IPTV/WebTV Technologies

Broadcast International Inc. ("Broadcast") (OTCBB: BCST) today announced that it has entered into a perpetual, worldwide, non-exclusive license agreement with Yang Lan Studio Ltd. ("YLS") for its flash-based, e-publishing reader technology in exchange for 4,000,000 shares of Broadcast's common stock. Broadcast also purchased an exclusive, worldwide (excluding Peoples Republic of China) distribution license for Internet Protocol TV ("IPTV") and WebTV platforms from BroadVision Global LTD., China's leading solutions provider of IPTV and WebTV solutions, specializing in integrated streaming platforms for service providers, multimedia/streaming media software and related services, in exchange for 2,000,000 shares of Broadcast common stock.

YLS' technology is a publishing and editing software for flash electronic magazines that operates under peer-to-peer technology, enabling the exchange of files between users without the interface of servers. The system was built on a Linux platform and uses object-oriented programming languages such as C and Java. A significant advantage of YLS' flash e-magazine systems is that it eliminates the need for multi-session downloading of files from centralized servers. Instead, file sharing and downloading is decentralized to the efficiency of a peer-to-peer session.

BroadVision's solutions include a leading-edge content management system designed to manage multimedia content and endow ownership of the Internet publishing cycle directly with the enterprise. The company's streaming media business platform (BroadVision-SOSS) provides standardized interfaces between business applications and data exchange. The SOSS platform provides broadband movie, video communication, on-line tutoring, network TV and other high-speed transmission solutions within an advanced managed framework. BroadVision's IPTV/WebTV solutions have been deployed by some of China's leading telecommunications companies, as well as government and military agencies and educational institutions.

"The addition of flash-based, e-publishing reader technology and IPTV and WebTV platforms are natural extensions of the robust content and delivery solutions Broadcast has perfected over the last 22 years. These technologies immediately transition Broadcast into an Internet based, enterprise, multimedia network service provider with a truly scalable revenue model and a more cost-efficient operating model," commented Rod Tiede, Broadcast's president and CEO. "In addition to Broadcast's legacy satellite network services, our technology portfolio now includes Internet application services that provide interactive capabilities and low cost of ownership for our clients. Our online publishing effectively puts them in control of their content, while providing the efficiencies of decentralized, peer-to-peer exchange. These additional technologies, coupled with our mature delivery and content solutions, should position Broadcast as the world's leading WebTV Enterprise Multimedia Networking."

The Company also announced that it has completed a private placement pursuant to a Securities Purchase Agreement with YLS, a Hong Kong corporation with headquarters in Shanghai, Peoples Republic of China. According to the terms of the agreement, YSL purchased 666,667 shares of Broadcast common stock and warrants to purchase 5,500,000 shares of its common stock generating initial gross proceeds of $1,000,000.

The warrants were issued in four series with exercise prices ranging from $1.60 to $3.00 per share, with the majority of warrants exercisable at prices between $2.10 and $3.00 per share. The warrants are callable by the Company when and if the market value of its common stock reaches certain price targets and is sustained at those prices (or higher) for a period of 30 consecutive days. The potential gross proceeds from exercise of the warrants aggregate approximately $12.7 million. The company has agreed to retire its existing convertible debt when and if it receives at least $10 million of proceeds from the exercise of the warrants, if the debt exists at that time.

Broadcast also entered into a stock exchange agreement with Sun Media Investment Holdings Ltd. ("SMIH"), the leading, privately held media company in China, in which Broadcast exchanged 3,000,000 (restricted) shares of its common stock for 1,515,544 (restricted) shares of common stock of Sun New Media Inc., one of SMIH's equity holdings. Sun New Media is China's leading multi-media powered marketing and channel management company building e-enabled distribution systems, transaction platforms and business communities in China's fastest growing verticals. This transaction makes SMIH the single largest shareholder in Broadcast.

In conjunction with this share exchange agreement, Broadcast agreed to add Dr. Bruno Wu, Sun Media Investment Holding's chairman, to Broadcast's Board of Directors, and to include Dr. Wu in its slate of directors for re-election at Broadcast's annual meetings over the next three years. Dr. Wu replaces Reed L. Benson, who resigned from the Board to allow the Board to appoint Dr. Wu. Mr. Benson will continue in his positions as vice president, secretary and general counsel for Broadcast.