Philips Makes Strategic Investment In Digital Watermarking Solutions Provider Digimarc

Philips And Digimarc Corp. Also To Create New Company To Bundle Synergies In Digital Watermarking Solutions For The Audio And Video Domain

10-Oct-00

Royal Philips Electronics (AEX: PHI, NYSE: PHG) of the Netherlands is to strengthen its activities in the field of digital content watermarking and rights protection technology by acquiring a 12 percent stake in Digimarc Corporation (NASDAQ: DMRC), the world leader in patented digital watermarking technologies and applications. Philips will also now have a seat on the Digimarc board as a result of this strategic investment. The companies intend to serve the growing demand for watermarking technology by founding a new company, dedicated to applications in the audio and video domain. Digital watermarking is a technique in which a highly discreet digital code is embedded in either digital content - e.g. video or audio - or even in printed material, such as magazine pages, financial documents or identity cards.The strategic investment enables Philips to maximize synergies between Digimarc and Philips Digital Networks, a division of Philips Consumer Electronics. Digital Networks currently markets a range of advanced digital solutions to content security through its CryptoTec businessgroup. Among CryptoTecís products are the CryptoWorksô system for conditional access, and the WaterCastô watermark embedding and detection system for the monitoring of video broadcasts. Digimarc has developed a portfolio of solutions for embedding imperceptible code for traditional and new digital media, from printed matter such as magazine pages, financial documents or identity cards to Internet and IT-based content. Philips and Digimarc have also already enjoyed close cooperation through the Millennium Group coalition, working with Macrovision to provide the DVD-Video content industry with a watermarking solution for copyright protection and DVD play control.The new company that Philips and Digimarc are to found will be based in the U.S.A. It will develop and market digital watermarking and rights management solutions for audio-video applications, and will explore further opportunities in the growing domain of audio and video distribution. Particular focus will be on new economy opportunities like e-commerce and digital distribution of audio and video, and the wider use of so-called ""metadata"" technology, in which discreet codes can be added to digital content in the form of imperceptible watermarks. This enables powerful functions like copyright violation monitoring, authentication, rights management and content cataloging. Details of this initiative, along with further financial aspects, will not be made public at this time.Commenting on the investment, Rob van Oostenbrugge, Executive Vice President of Royal Philips Electronics and CEO of Philips Digital Networks, said, ""Philips and Digimarc bring together formidable capabilities in providing solutions for digital security and rights protection, two key aspects underpinning the world of digitally prepared and distributed content.""""Todayís announcement is a natural evolution of the relationship Digimarc established with Philips through the creation of the Millennium Group coalition,"" said Bruce Davis, CEO of Digimarc Corp. ""We are incredibly excited to embark upon this new joint venture with Philips, a global technology leader and one of the worldís largest electronics companies. Philipsí market leadership and wide reach partnered with Digimarcís patented watermark technologies will provide the opportunity to establish the market standard for audio and video rights management and other related applications.""