Fortune 500 Electronics Retailer Set to Deploy Platform via New ASP Model

 LOS ANGELES – October 24, 2006 – MOD Systems, a leading provider of digital media management and fulfillment technology for retailers, today announced at Fall Digital Hollywood the release of the MOD System 3.0 platform, an advanced distribution platform for retailers to provide in-store and online digital media merchandising and sales to consumers. MOD Systems also announced a new application service provider (ASP) offering for retailers.

 The latest platform release extends the existing in-store CD burning capability to include delivery of music and video direct to consumers’ mobile phones and portable devices within the store via USB or wireless connection, as well as future support for secure DVD burning of movies from kiosks. A Fortune 500 electronics retailer is slated to deploy the platform in early 2007 via MOD Systems’ new ASP model.

  “Our proven system gives shoppers more choices for finding and purchasing digital entertainment. Consumers will be able to fill up their devices with exactly the content they want within the retail environment,” said Mark Phillips, CEO of MOD Systems. “We’re also very excited about the tremendous opportunity ahead for shoppers to create custom DVDs from our in-store kiosks.”

New ASP Offering, Online Music Store Extensions

Retailers can now deploy the MOD System 3.0 platform via a new hosted service from MOD Systems, which includes the ability for retailers to add a secure online music store to their in-store systems. MOD Systems’ ASP model enables retailers to realize the benefits of its digital media delivery platform on a per store basis. The ASP offering is designed to reduce deployment costs by lowering retailer’s investments in additional corporate IT infrastructure and personnel.

 “Our offering is a great way for traditional retailers to capture the cross-channel sale – those shoppers that purchase entertainment both online as well as in the brick-and-mortar store,” said Anthony Bay, chairman, MOD Systems. “The new ASP model is a particularly compelling way for retailers to move to digital, as it reduces their deployment and ongoing maintenance costs.”

 MOD Systems handles licensing rights and payment to labels as part of its ASP offer, while the retailer sets its own prices and charges its customers directly. The MOD System 3.0 platform supports Windows Media™ DRM technology to protect the intellectual property of rights holders.

 CD Burning and Device Delivery 

The MOD System 3.0 platform supports all content types, including music and video, and is a complete end-to-end delivery platform that lets retailers manage, merchandise, and sell digital media within an engaging in-store experience.

 MOD Systems is in the process of completing license agreements with all major music labels and a number of independent music labels. Music enthusiasts in retail environments will be able to browse a growing catalog of 1.6 million independent and major label tracks, create customized list of singles, albums, or compilations, and burn files onto a compact disc or download them to a mobile phone or portable device. The platform also provides future support for secure DVD burning of movies from kiosks, a functionality slated to be available to retailers in 2007.

 “We see tremendous opportunity for retailers — from big box stores to neighborhood photo outlets — to generate additional revenue streams by offering consumers new services, such as customized content-on-demand,” said Dave Suden, chief technology officer for Rimage Corporation, the world’s leading provider of CD/DVD/BD publishing solutions. “MOD Systems is a great partner, and we’re very pleased with their momentum in the large enterprise retail space.”

About MOD Systems

MOD Systems provides retailers with a complete system for profitably managing, merchandising, and delivering digital media to customers. Founded in 2005 and headquartered in Seattle, MOD Systems’ unique approach is based on managing digital content intelligently and delivering it flexibly, with a focus on large scale deployments. With the MOD System, retailers are positioned for the next generation of retailing supporting a wide range of consumer devices and delivery options including CD burning, direct to device, and wireless. More information is available at www.modsystems.com.