Kit Digital Signs Multi-Year Partnership to Deliver IPTV Set-Top Box Solution for Global Ethnic Programming in North America

Roll-out will focus on multi-dwelling units (MDUs) which are underserved by satellite TV, starting with Arabic Language content in the United States and Canada

DUBAI and CANNES — KIT digital, Inc. (OTC Bulletin Board: KITD), a leading global provider of IPTV enablement technology and video-centric interactive marketing solutions, announced today that it has been selected by TV2Moro, a new firm backed by several top-tier ethnic television aggregators and producers, to deploy a new IPTV set-top box (STB) service to deliver programming to ethnic consumers in North America. The TV2Moro/KIT digital partnership has a minimum term of 48 months, and involves platform development fees, ongoing platform licensing fees, and a revenue share model based on the number of subscribers adopting the service.

TV2Moro’s initial commercial roll-out will include a top-tier bouquet of Arabic language channels, and is scheduled for the beginning of 2009, with a test phase (or commercial “alpha”) taking place now. During the MIPCOM audiovisual conference taking place now in Cannes, France, KIT digital is performing live product demonstrations of the TV2Moro STB platform for prospective broadcaster and telecommunications partners.

“The TV2Moro partnership is a harbinger of the future for KIT digital,” commented Kaleil Isaza Tuzman, chairman and chief executive officer of KIT digital. “We are applying a network- and device-agnostic approach to all of our client partners — thinking through platform development and distribution across IPTV set-top boxes, mobile phones and the browser. We see ourselves as the only player in the market with this big-picture approach and capability – making us more relevant to our clients’ bottom-line than browser-only, video- player and online tools-focused companies.”

TV2Moro anticipates revealing its full content slate, as well as its financial and commercial backers, during the National Association of Television Program Executives (NATPE) conference in Las Vegas, starting January 26, 2009. TV2Moro anticipates launching the service with at least 20 channels, and expects to roll-out other ethnic packages (such as Russian and Spanish-language) through 2009 and 2010.

The Arabic language package launch is expected to make an immediate impact within the Arab-American and Arab-Canadian communities, as it will offer hard- to-get, TV-quality Arabic programming at attractive price points. The TV2Moro service will feature a company-installed, easy-to-operate set-top box which will “look” and “feel” like a standard cable box, and will work with all broadband Internet providers. The TV2Moro service will support live programming, video-on-demand, pay-per-view and digital video recording functionalities. Later versions of the TV2Moro set-top box may also function as an IP telephony device.

KIT digital was selected for its end-to-end service, complete product portfolio, enterprise customer service, and content acquisition expertise. KIT digital is managing the entire fulfillment, platform technology and IPTV broadcasting/streaming components of the TV2Moro system, including but not limited to: capture and ingest of satellite and IP-based content, transcoding and encoding, meta-tagging, configuration, programming interface and streaming (live and VoD/DVR). KIT digital will also manage, through an outsource service provider, the in-home installations of the product, and handle inventory management and tier 2 customer service support. Future versions of the TV2Moro STB service will be integrated with online and mobile offerings, in a seamless “home and away-from-home” entertainment solution.

Gavin Campion, president of KIT digital, continued, “For us, it’s all about developing AND monetizing IP-based video platforms for our clients. The TV2Moro deal is an enterprise deal for us by any definition-be it team effort, revenues, gross contribution etc. However, it is structured in such a way so that we are very motivated to see TV2Moro succeed commercially, and share in that success.”

Ethnic media is an enormous market that is well understood by the KIT digital management team. More than 65 million people in North America prefer to consume media in a language other than English, and about a quarter of all U.S. adults consume some type of ethnic media, according to a recent Knight Foundation poll. Today, satellite TV is the dominant modality in the ethnic television market in the United States, but satellite TV is richly priced and most often inaccessible in MDUs. Satellite TV is also one-way, lacking the interactive and social media components available through IPTV.

The TV2Moro “alpha” version is being demonstrated by KIT digital in booth a04.20 at the MIPCOM audiovisual conference in Cannes, France through October 16, 2008.