Sonic Foundry Signs Agreement To Acquire Intellectual Rights To Asset Management System Technology

Sonic Foundry[R] Inc. (NASDAQ: SOFO), a leading provider of rich media software, systems and services, today announced that its Media Services subsidiary has signed a definitive agreement to acquire all the intellectual property rights to the Media Taxi[TM] asset management system from Los Angeles based Digital Savant, Inc. No terms of the transaction were disclosed although the Company expects it to have an accretive impact on fiscal 2002 results. Media Taxi is a widely deployed browser-based media asset management system focused on streamlining and reducing the cost of managing and distributing marketing and publicity materials for the entertainment industry. Media Taxi's creator and Digital Savant's CEO, Alex Shohet will join Sonic Foundry Media Services, Inc. The Company anticipates it will close on the asset purchase within 1 month.

Launched in 1998, Media Taxi is currently used at Warner Bros., Fox Domestic TV, Fox Latin America TV and USA Films, among others. Customers have realized savings up to 60% on the cost of duplication, storage, and distribution of their marketing and publicity materials. The system currently stores the largest catalog of entertainment product advertising support materials on-line, covering over 50,000 hours of entertainment programming information, offering a comprehensive catalog of entertainment product information as well as secure access to various media assets for on-line servicing of advertising and publicity requirements worldwide. Media Taxi compliments, and will become part of, Sonic Foundry Media Services' existing MediaWorks[TM] applications, which consist of a roster of digital content management tools and solutions used by MGM, Alliance Atlantis Communications and Corus Entertainment. Together, the applications create a broader solution and greater revenue opportunity.
Aimed at simplifying the task of managing, storing and distributing feature film and television content on a worldwide basis, MediaWorks addresses an important and critical need for the Company's entertainment clients. By digitizing labor intensive, time consuming processes, together with streamlining their workflows, major Hollywood studios benefit from dramatic cost savings and improved efficiencies in marketing their vast libraries.

"Our future strategy is based on the inevitable migration of the distribution of entertainment assets from costly and labor intensive handling of physical media to the streamlined and efficient movement of electronic data files," states Ted Lingard, Senior Vice President and General Manager for Sonic Foundry Media Services. "Our clients are showing strong interest in having our MediaWorks asset management tools help them reduce the cost of doing business. While most programming is still distributed via tape, our entertainment clients are realizing that our digital technologies provide them with immediate savings by simplifying the management of tape-based programming distribution. Media Taxi takes them a step further by also simplifying the distribution of their advertising and publicity materials associated with the programming. It is the solution our customers have been asking us for."

"I am extremely pleased with the prospect of joining one of the most innovative and technologically gifted companies in the software industry," stated Alex Shohet, CEO of Digital Savant." I share Sonic Foundry's vision of creating industry specific media asset management applications that emphasize usability and ease of implementation. Media Taxi has gained rapid acceptance because it is easy and cost effective to deploy while providing scalability and leading-edge technology. We make it easy for customers by hosting the application in an ASP environment. Our revenues scale with the customer's dependence on the tool. Going forward, Media Taxi clients will realize increased benefits from the depth of technological expertise and excellence in customer service that is the cornerstone of Sonic Foundry's success."