SOUTH SAN FRANCISCO -- Shanghai Media Group (SMG) is using Envivio(R) MPEG-4 IPTV video headends to encode digital video programming for approximately 80,000 subscribers in the Northern Province of Hei Long Jiang and the City of Shanghai. The IPTV services are delivered via China Netcom Company Limited and Shanghai Telecom Co., Ltd., respectively. To increase video quality and customer satisfaction, SMG has deployed 90 encoders from the Envivio(R) Broadcast Series.

SMG is a leading multimedia television content provider and the first and currently the only company in China to receive an IPTV and mobile TV operation license. Current subscriber packages include live broadcast television and video-on-demand content from SMG.

"As we take our content into a wide variety of media distribution outlets, preserving and protecting the quality is of the utmost importance for subscriber satisfaction and retention," said Ms. Minnie Huang, CTO of BestTV at Shanghai Media Group. "Envivio encoding systems have proven to be the best value for our MPEG-4 IPTV headends deployment. The broadcast quality video and encoding features surpassed their competition."

SMG's core business is television broadcasting and related media entertainment services including sports, showbiz, performance arts, science and technology, and finance. The television broadcasting media consists of 11 analog TV channels, 90 digital paid cable TV channels, a full broadcasting Internet TV service, along with 10 analog and 19 digital radio services.

"It's an honor to have been chosen by Shanghai Media Group to be part of the first licensed deployment of their content via IPTV," said Julien Signes, President of Envivio Inc. "The IPTV industry is exploding in China, with analysts predicting more than 4 million users by the 2008 Olympic Games. Envivio is committed to supporting efforts to expand the IPTV market in China and worldwide by offering well designed systems and solutions that provide the highest quality, reliability and robustness while reducing churn."

Envivio Inc. (NASDAQ: ENVI)