Discovery Sponsor Cinema(tm) to Secure Advertising Presence on Emerging File-Served Television Systems

4/25/2002

From: David Leavy of Discovery Communications, 301-771-5101 or david_leavy@discovery.com

BETHESDA, Md. April 25 -- Discovery Communications Inc., (DCI) a leading provider of real-world entertainment, has announced the creation of Discovery Sponsor Cinema(tm), a new random-access advertising service which Discovery will rollout to all distributors who carry Discovery's video-on-demand services.

"Discovery Sponsor Cinema(tm) has been designed to occupy one to two hours of file-server capacity and will be packaged as menu item no. 9 on Choice 10 Discovery(tm), our free-on-demand video service which launches this summer," stated John S. Hendricks, Chairman and CEO of Discovery Communications Inc. "We estimate that, depending on server capacity, our sponsor messages will constitute approximately 10-15 percent of our file-served, video-on-demand content," continued Hendricks. "This is roughly comparable to the advertising load on our cable networks."

"Discovery Sponsor Cinema(tm) has been designed to bring our sponsors into the world of video-on-demand (VOD) and subscription video-on-demand (SVOD)," stated Judith McHale, president and chief operating officer of Discovery Communications Inc. "Advertising revenue has always subsidized the creation of great television content and our company intends to help our sponsors, in every way feasible, take advantage of the random-access, two-way interactive digital platforms that are scheduled for dramatic deployment by the cable industry over the next 24 months," said McHale.

"Just as our Animal Planet(tm) network created an enormous 'critical-mass' reach for advertisers through its rapid penetration into 78 million U.S. households, Discovery Sponsor Cinema(tm) has been designed to achieve critical-mass reach through Choice 10 Discovery(tm), the free-on-demand service which Discovery has created for the entry-level digital offering now being introduced by cable operators who are installing file-servers in their cable head-ends" stated Hendricks. "Discovery Sponsor Cinema(tm) will contain standard-length commercial spots as well as custom-designed, long-form product messages provided for consumers who are interested in more information about a car, computer, home electronics product, travel destination, health product, or other products and services. And commercial spots with high- entertainment value, such as those that currently precede movies in theaters, can now be available on demand in the home. Advertisers who have already developed longer-form video demonstrations (such as auto makers for car shows) can now utilize another delivery platform, Discovery Sponsor Cinema(tm), and achieve more return for their creative investment, " stated Hendricks.

Bill McGowan, Executive Vice President for Advertising Sales at Discovery Communications Inc., stated, "The advanced digital platform in which cable operators are investing will allow two-way interactivity which will enable consumers to not only 'drill down' into our sponsors' stored video messages, but also to communicate back upstream to indicate a request for more information... a test drive, a brochure, or someone to call. This is a powerful new advertising tool and we are delighted with the early support we've received from our advertisers concerning this development."

"Just as we have always crafted means for our cable and DBS distributors to share in the advertising revenue opportunities created by our networks through local avails, Discovery is likewise creating an advertising-revenue sharing plan for distributors of Choice 10 Discovery and its menu item no. 9, Discovery Sponsor Cinema(tm)" stated McHale. "We will also enter discussions with all value-added interactive services to build the critical-mass reach needed by our sponsors."

"Consumer-stored, and 'pushed' messages managed through the consumer-friendly navigation software developed by TiVo will be explored to assist in the rollout of Discovery Sponsor Cinema" stated Hendricks, who also serves on the TiVo Board of Directors. "In addition to serving as an independent time-shifting platform in the home, I personally believe that TiVo is likely to gain substantial presence in new digital converter boxes to assist in filed-served media management."

"During the next 90 days prior to the launch of Choice 10 Discovery(tm), we will be working with advertisers and distributors to finalize a system of measurement of file-served usage that is protective of consumer privacy but assures verification of advertising message exposure" stated Hendricks.

A number of advertisers involved in the initial discussions regarding Discovery Sponsor Cinema(tm) have made the following comments:

"Carat has been a long-time believer in the power of interactive television to fundamentally transform relationships between media suppliers, consumers and advertisers. The launch of Discovery Communications' video-on-demand service should be a win/win for all parties involved. We are hopeful that strong consumer interest will develop and that advertisers will take advantage of the opportunity to reach out and target the upscale, active consumer through this new media venue", commented David Verklin, CEO of Carat North America.

"As a leading media services company, we were pleased to have had the opportunity to input into the design of the Discovery Sponsor Cinema(tm). As new and emerging media technologies like random-access and high definition are brought to the market, we hope to bring the voice of both the consumer and the advertiser to bear in designing leading-edge media services to satisfy all interests. These are certainly exciting times to be in the media business" commented Verklin.

Chuck Fruit, senior vice president, Worldwide Media and Alliances, The Coca-Cola Company, "Early research indicates that digital households are information and entertainment friendly. It is vital that advertisers reach these households with messages that utilize the full capability of Discovery Sponsor Cinema's(tm) digital platform. Discovery is leading the way in making sure that advertisers are kept fully involved in this next development of television delivery and we applaud their efforts."

"We applaud Discovery's inclusion and sensitivity toward advertisers in this new arena", said Rick Sirvaitis, President and Chief Operating Officer of GM Media Works.

Discovery Communications, Inc. is the leading global real-world media and entertainment company. DCI has grown from its core property, the Discovery Channel, first launched in the United States in 1985, to current global operations in more than 155 countries and territories with over 700 million cumulative subscribers. DCI's 33 networks of distinctive programming represent 14 entertainment brands including TLC, Animal Planet, the Travel Channel, the Discovery Health Channel, Discovery Kids and a family of newer, targeted channels. DCI's other properties consist of Discovery.com and 167 Discovery Channel retail stores. DCI also distributes BBC America in the United States. DCI's ownership consists of four shareholders: Liberty Media Corporation (NYSE: L), Cox Communications, Inc. (NYSE: COX), Advance/Newhouse Communications and John S. Hendricks, the Company's Founder, Chairman and CEO.