SOURCE: USA Video Interactive Corp.

January 10, 2006 09:00 ET

FilmMates Home Video Entertainment SmartMarks Films for International Distribution

OLD LYME, CT -- (MARKET WIRE) -- January 10, 2006 -- FilmMates Home Video Entertainment will be using USA Video Interactive Corp. (OTC BB: USVO) (TSX-V: US) (BSE/Frankfurt: USF) SmartMark™ anti-piracy technology to protect its films for distribution. FilmMates recently entered into a home video distribution agreement with Vivendi Universal Visual Entertainment, a wholly owned subsidiary of Universal Music Group.

"American Reunion," "Living Life," and "Rent Control" are the first three films scheduled for distribution. These three films will be made available for home video in early spring 2006, with distribution scheduled for the U.S., Puerto Rico, and Canada. In addition, FilmMates' "Sherlock a Case of Evil" will be SmartMarked for Internet and home video distribution in Japan.

"Taking appropriate precautions to protect our content is instrumental with so many options of delivery available and the potential problems of piracy rampant," said Jay Malla, Senior Vice President of Distribution and Business Strategy, FilmMates Entertainment. "SmartMarking our films before distribution sends a message our company will monitor how our content is sold and distributed."

"SmartMark technology is making a difference for copyright owners that want to realize profits on films distributed to the domestic and international markets," said Edwin Molina, President of USVO. "It is great to know that we are helping FilmMates and Vivendi Universal retain the value generated as they distribute their content throughout the world."

USVO's SmartMarks™ are invisible, unremovable, forensic "digital watermarks" embedded in every video frame to protect digital video from piracy. SmartMarks work with existing production and distribution technology to protect copyrighted material without requiring new equipment in the distribution or playback environment. Like embedding a forensics team inside video content, SmartMarks give enforcement agencies the proof they need to stop piracy.

The films will be SmartMarked at Lightning Media's facility in Hollywood, California, using USVO's MediaSentinel Workstation. Lightning Media is a post-production company and a Certified SmartMark Anti-Piracy Provider.

About FilmMates Entertainment:

FilmMates Entertainment, the Los Angeles based film finance, production and distribution entity acquires projects in various stages of production and assures their worldwide sales and distribution via its in-house sales department. FilmMates Entertainment, was founded in November 2001 as a fund acquiring films from promising, young directors. Its business model has quickly evolved as FilmMates Entertainment started acquiring film libraries, entertainment companies and theatrical feature film projects. For more information, visit www.filmmates.net.

About Lightning Media:

Lightning Media services duplication and new media needs from Hi-Def and video duplication to DVD authoring and replication, audio and video compression, and internet design and development. Three full service facilities cater to a vast client base ranging from leading motion picture studios, television production companies, independent filmmakers and web video producers to film students and an array of corporate and consumer clients. For more information, visit www.lightning-media.com.

About USA Video Interactive Corp.:

USA Video Interactive Corp. ("USVO") designs and markets technology for delivery of digital media. USVO developed its SmartMark™ digital watermarking technology to provide a robust means for producers and distributors to invisibly protect their content. USA Video Technology Corp., a wholly owned subsidiary of USVO, holds the pioneering patent for store-and-forward video, filed in 1990 and issued by the United States Patent and Trademark Office on July 14, 1992; it has been cited by at least 165 other patents. USVO holds similar patents in Germany, Canada, England, France, Spain, Italy, and Japan. For more information, visit www.usvo.com.

USA Video Interactive Corporate Headquarters Office: 83 Halls Road, Old Lyme, Connecticut, 06371 Telephone (860) 434 - 5535; Facsimile (860) 434 - 5782; Canada Office: 507 - 837 West Hastings Street, Vancouver, BC V6C 3N6. Trading symbol on the OTCBB: USVO; Trading symbol on the TSX Venture Exchange US; Trading symbol on the Berlin and Frankfurt Stock Exchanges: USF. CUSIP 902924208. For more information contact Blue-Sky Solutions, LLC, Jon Caserta, (877) 425-8347, usvo@blueskyir.com

The press release may contain forward-looking statements. Actual results may differ materially from those projected in any forward-looking statements. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which may cause actual results to differ from those described.

MediaSentinel and SmartMark are trademarks of USA Video Interactive Corp. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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