Landmark Theatres and Microsoft Create the Largest Digital Cinema Circuit in the United States

LOS ANGELES and REDMOND, Wash. -- Today Landmark Theatres andMicrosoft Corp. announced that they are equipping 177 screens in all 53Landmark Theatres across the United States with digital cinema playbacksystems based on Microsoft Windows Media 9 Series. This unprecedentedagreement represents the largest digital cinema theater circuitinstallation to date in the United States.

For the first time, a critical mass of the independent filmindustry's infrastructure will be wired for digital distribution. Thishelps address the escalating costs of releasing theatrical films, whichweighs heaviest on the independent sector, as it must pay the samecosts to release a film as the major studios. The creation of acomplete digital alternative represents a major breakthrough in theseeconomies that will help guarantee greater diversity and access to themarketplace for independent filmmakers and distributors alike.

"Landmark's mandate has always been to build an alternativeinfrastructure dedicated to the enhancement and proliferation ofindependent film," said Bert Manzari, executive vice president ofLandmark Theatres. "We exhibit over 250 films a year, and all too manyof these films succeed or fail due to market economics rather thanartistic accomplishment."

The newly outfitted theaters will be able to screen films encodeddigitally in Windows Media 9 Series, which enables high-resolution,theater-quality experiences with up to 7.1 channel surround sound. Thenetwork rollout is expected to be completed by the end of thisyear.

"Landmark Theatres' commitment to specialty film and its establishedleadership in the independent exhibition space offers Microsoft theperfect opportunity to demonstrate its ongoing commitment to theindependent film community," said Dave Fester, general manager of theWindows Digital Media Division at Microsoft. "Moviegoers get thehigh-quality theatrical experience of Windows Media 9 Series, whileproducers and distributors benefit from the cost savings associatedwith mastering and releasing films digitally."

Landmark President and CEO Paul Richardson was a featured presenterat a symposium on digital cinema at this year's Sundance FilmFestival.

"What has impressed me most is the enormous breadth of interest indigital cinema that has been generated since the festival. I've beencontacted by key distributors, investment bankers and members of thecreative community, all of whom want to know when we can deliver acomplete solution to digital distribution," Richardson said. "I believethat we will look back at this moment as one when we were able tofundamentally change the business model in a way that will allow farmore of these films to compete successfully."

Working with Microsoft and Landmark to deploy the network will beDigital Cinema Solutions (DCS). DCS will supply its solution, theCinema System, which has powered the BMW Films Digital Cinema Series in25 theaters since November 2002. The DCS Cinema System employs anetworked PC architecture that integrates into existing theaterinfrastructure. Once the network is in place, Windows Media 9 Seriesallows films to be sent to theaters over private networks, on CD-ROM oron DVD-ROM, all protected with Windows Media Digital Rights Managementtechnology.

"The independent film space has largely been ignored by digitalcinema," said Jim Steele, president of DCS. "The small, current base ofdigital cinema installations targets the largest screens andmultiplexes focused on mainstream Hollywood blockbusters. The programannounced today by Landmark and Microsoft will change all that becauseit creates a nationwide network of independent digital cinemas,effectively solving the 'chicken and the egg' problem for theindependent film community by allowing them to move forward for thefirst time with wide-scale digital distribution."

About Landmark Theatres
Founded in 1974 and headquartered in Los Angeles, Calif., LandmarkTheatres is the nation's largest specialized film exhibitor with 53theatres and 177 screens in 20 markets across the U.S. Landmark hasbeen dedicated to exhibiting first-run independent, foreign language,documentary and restored classic films for more than a quarter of acentury. Landmark recently opened new theatres in Minneapolis, MN;Bethesda, MD; and New York City (Lower Manhattan) and has recentlyannounced the largest specialized cinema complex in the country: the14-screen Westside Pavilion Cinemas in West Los Angeles. Moreinformation about Landmark Theatres is available at www.landmarktheatres.com.

About Microsoft
Founded in 1975, Microsoft is the worldwide leader in software,services and Internet technologies for personal and business computing.The company offers a wide range of products and services designed toempower people through great software - any time, any place and on anydevice.