ArcSoft Licenses DivX Technology for Video Software Solutions

ArcSoft Will Initially Bundle DivX Codec with OEM Video Editing Software Product

SAN DIEGO & FREMONT, Calif.–Dec. 12, 2003–DivXNetworks, Inc., the company that created the patent-pending DivX(R) video compression technology, and ArcSoft, Inc., the leading provider of digital imaging software for consumer devices, today announced a technology licensing and marketing partnership. Under the agreement, ArcSoft will bundle the popular DivX video codec with its leading line of video software solutions, beginning with an OEM version of its video editing software.

ArcSoft will initially include the Windows and Mac versions of DivX with an OEM version of ArcSoft(R) VideoImpression(TM), a novice-level video editing and slideshow creation software. ArcSoft’s VideoImpression software is bundled with digital cameras and camcorders from leading manufacturers, enabling end-users to easily create and edit home videos on their PCs. The superior compression and visual quality of DivX will let ArcSoft users create high-quality CDs of home videos and easily distribute their videos over the Internet.

DivX, the popular video compression technology with over 100 million worldwide users, provides DVD-quality digital video at sizes 7-10 times smaller than MPEG-2. As part of the partnership, the two companies will work together to market DivX Licensed(TM) ArcSoft products to the international community of DivX users.

“DivX technology offers incredible visual quality and compression,” said Todd Rumaner, senior vice president of ArcSoft, Inc. “By bundling DivX with our popular VideoImpression software, we are offering our users an easy way to create and distribute high-quality videos.”

“ArcSoft is a leader in the video space and we’re excited to work together to bring the power of DivX video to the ArcSoft product line,” said Kevin Hell, chief marketing officer and managing director at DivXNetworks. “With their innovative product solutions, ArcSoft has shown proven strength in providing the ideal OEM software for the imaging market. The decision to license DivX software further validates ArcSoft’s ability to understand and provide the imaging features and functionality that consumers and hardware manufacturers need.”

For more information on licensing DivX software, write to licensing@divxnetworks.com. To learn more about ArcSoft, visit www.arcsoft.com.

About ArcSoft

ArcSoft, Inc. develops, markets and distributes innovative digital imaging and video solutions to companies and end-users around the globe. ArcSoft specializes in custom-built software for consumer electronic device manufacturers and infrastructure solutions for telecommunications companies. Established in 1994, ArcSoft is a privately held company headquartered in Fremont, Calif., with regional commercial and development facilities in Europe and the Far East. For further details, please visit the corporate Web site: www.arcsoft.com.

About DivXNetworks

DivXNetworks is a consumer-focused video technology company positioned at the center of multimedia convergence. The company’s core offering is the DivX(R) video codec, the popular video compression technology with over 100 million users worldwide. Often called “the MP3 of video,” the patent-pending DivX video technology offers DVD-quality at 10 times greater compression than MPEG-2 files, enabling full-length films to easily fit on a CD or be delivered over broadband connections. DivX video technology powers a range of applications that span the convergence value chain, from a secure, IP-based, video-on-demand solution to next-generation consumer electronics products and video software applications. DivXNetworks is headquartered in San Diego, with satellite offices in Los Angeles and San Jose, Calif.; Taipei, Taiwan, and Dortmund, Germany. For more information, visit https://www.divxnetworks.com.