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Press Information – January 3, 2008 Philips’ groundbreaking watermarking technology aims to fight HD video piracy LAS VEGAS – Hoteliers have long enjoyed an early-release movie window allowing them to entertain their guests with box-office hits prior to release on DVD. But increasing concerns about piracy have led certain content owners to withhold high-definition media from this advance window. In an effort to deter unlawful copying of these movies, Philips is leading the industry by developing a digital watermarking solution for the hospitality market, showcased at the 2008 International CES Show. Philips Professional and Business Solutions products already utilize highly-effective Pro:Idiom™ encryption technology to secure data from the content source to the television. However, some unscrupulous viewers may aim a video camera at the screen and make a copy— but this new watermarking technology enables video providers and content owners to track the location and time of such piracy to aid in their content security enforcement efforts. The new Philips VTrack™ watermarking technology mitigates this content-protection ―Analog Hole‖. VTrack embeds video with an invisible watermark that identifies the time, place and location of the viewing. By making a (camcorder) copy of video material traceable and thereby decreasing the risk of piracy, Philips diminishes content providers’ concerns and is working to secure HD media for early release to hoteliers. Philips Professional and Business Solutions will introduce this technology in all of its new models. Studio executives have applauded this Philips initiative to introduce this additional layer of content protection, enabling HD Pay-TV enjoyment for hotel guests. VTrack does not interfere with the viewing experience and is imperceptible to the human eye. However, the watermarking data can be retrieved from the illegal copied material using a dedicated watermark detector— even if the video is camera-captured, compressed and severely degraded. The data pinpoints the time and even the individual television from which the video was recorded. Thus, if a video shows up on the internet or on pirated DVDs, content owners and law enforcement agencies may use the VTrack watermark data to determine where and when it was recorded — this way content pirates expose themselves to much greater legal risk. . Philips is working with pay per view providers in the hospitality industry to ensure that any watermarking solution will work seamlessly with their infrastructure. ―We are very pleased to see a market leader like Philips propose a new solution for an issue that is of increasing importance to the hospitality industry. VTrack represents the first commercially viable watermarking technology that we will utilize in our efforts to develop a solution that will meet the needs of the hospitality pay per view industry and the studios.‖ said Scott Young, Chief Marketing Officer for LodgeNet Entertainment Corporation. VTrack is part of Philips’ broad Content Identification product portfolio which is made up of state- of-the-art solutions and services to optimally sell share and distribute audio and video content with respect to copyrights. Philips watermarking and fingerprinting technology is being used by major Hollywood studios and Music labels for protecting their content assets. ―This is the first commercial integration of forensic watermarking in TV-sets in the industry,‖ says Wim Bus, Business Development Director of Philips Content Identification. This milestone will be followed by many others as VTrack is available for the whole hospitality and Pay-TV market. Philips will be the first manufacturer to offer a watermarking solution in its hospitality sets in early 2008. For further information please contact: Philips Manning Selvage & Lee Lindsay Woods Erin Hill 770-821-2392 404-870-6833 firstname.lastname@example.org email@example.com Philips Watermarking Page 2/2 About Royal Philips Electronics Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lighting and consumer lifestyle, delivering people-centric, innovative products, services and solutions through the brand promise of "sense and simplicity". Headquartered in the Netherlands, Philips employs approximately 128,100 employees in more than 60 countries worldwide. With sales USD 34 billion (EUR 27 billion)in 2006, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, as well as lifestyle solutions for personal wellbeing. News from Philips is located at www.philips.com/newscenter. ### Pro:Idiom is a trademark of the Zenith Electronics Corporation.