Terayon Announces Industry's First Applications for Localization of Content Within Compressed MPEG Domain

Terayon Announces Industry's First Applications for Localization of Content Within Compressed MPEG Domain

Graphic Overlays and SqueezeBack Create Wide Range of Solutions Such as Branding, Dynamic Ad Tagging and Customized L-Bars

SANTA CLARA, Calif., Feb. 20 /PRNewswire-FirstCall/ -- Terayon Communication Systems, Inc. (Pink Sheets: TERN.PK), an Emmy Award-winning provider of digital video networking applications that enable content localization on-demand, today announced the availability of landmark new applications that give video service providers the tools to create innovative solutions for crafting compelling advertising, strengthening customer retention and increasing revenue.

The Terayon Static Graphic Overlay, Motion Graphic Overlay and SqueezeBack applications allow video service providers for the first time to insert programming, information and advertising into content in real-time while remaining within the compressed MPEG domain. Working only within the compressed MPEG domain delivers sizable advantages by eliminating the cost, complexity and video quality degradation of current products that require converting the video back to analog. Using the Terayon applications, video service providers can now build solutions that include:

*On-screen "bugs" that identify networks and stations;
*Static overlays that localize commercials with specific pricing, retailer
information and promotions;
*Insertion of video "tags" at the beginning or end of an advertisement to
localize an ad originally designed for a broader audience;
*Regional or local sports and business information services utilizing
real-time, dynamically updated data
*Crawls, picture-in-picture displays, and other motion graphics
*Creation of on-screen "real-estate," including L-Bars and side panels,
that are populated with static and/or motion graphics for branding,
information or advertising; and
*Static or dynamic Emergency Alert System message slates

The Terayon applications run on the Terayon DM 6400 Network CherryPicker(R) platform with new firmware version 5.0. Please visit www.terayon.com/evolvefaster to view a demonstration.

"The Terayon CherryPicker is one of the most reliable and flexible machines I've ever used for both general and advanced multiplexing needs," said Eric Heitz with Comcast's Northern Division Regional Digital Services. "It's never failed us on our live channel shared broadcast of the Sacramento Kings HD production and has delivered dependable results with digital ad-insertion over ASI and GigE mediums. The new applications add the blend of refinements, technical advances, and creative edge that we're looking forward to exploring."

"We anticipate these new applications will be to advertising and branding what the CherryPicker is to video," said Jerry Chase, CEO, Terayon. "As the CherryPicker enabled a more targeted approach, Graphic Overlays and SqueezeBack allow our customers to begin to create an Internet-like experience on TV screens. We've entered a new era where consumers want information and content pertinent to them, making TV screen 'real estate' too valuable to serve only one purpose or deliver only one message."

Static and Motion Graphic Overlay and SqueezeBack are part of firmware v5.0 for the Network CherryPicker platform and require a DSP Processing card. Customers purchase software license keys from Terayon to "turn on" the applications. A Network CherryPicker fully equipped with two DSP cards can simultaneously process up to 16 unique channels using a combination of Static Graphic Overlays, SqueezeBack or Motion Graphic Overlays. A character generator device streams the motion graphic for overlay to the DM 6400 via a serial digital interface (SDI) on the DSP card, which has separate Key and Fill connectors.

CherryPicker firmware v5.0 also contains workflow automation solutions for Static and Motion Graphic Overlay and SqueezeBack as well as the existing ad insertion and program switching features. Other functionality available includes encrypted stream support, database replication for redundancy, and several security and networking enhancements. All of these new features build on Terayon's field-proven success in digital program and ad insertion, and are available as an upgrade for the large installed base of Network CherryPicker platforms.

About Terayon

Terayon Communication Systems, Inc. provides real-time digital video networking applications to cable, satellite and telecommunication service providers worldwide, which have deployed more than 7,700 of Terayon's digital video systems to localize services and advertising on-demand and brand their programming, insert millions of digital ads, offer HDTV and other digital video services. Terayon maintains its headquarters in Santa Clara, California; has sales and support offices worldwide and is on the web at www.terayon.com .

"Safe Harbor" Statements under the Private Securities Litigation Reform Act of 1995:

Except for the historical information contained herein, this news release contains forward-looking statements, estimates and assumptions by the Company and other parties that involve risks and uncertainties, including the deployment and use of the Company's products by video service providers to deliver targeted programming and advertising within the MPEG domain, the Company's ability to attract and retain video service providers as customers, the development of the market for targeted programming and advertising, and the performance and functionality of the Company's products. For additional risks and uncertainties, see the "Risk Factors" disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2005 and in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2006 . The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under the federal securities laws.

Note: Terayon and the Terayon logo are registered trademarks of Terayon Communication Systems, Inc. All other trademarks are property of their respective owners.

Source: Terayon Communication Systems, Inc.

CONTACT: media, Paul Schneider of PSPR, Inc., +1-215-702-9784, or
pspr@att.net, or investors, Kirsten Chapman, or Moriah Shilton Lippert,
mshilton@lhai.com, both of Heilshorn & Associates, +1-415-433-3777, all for
Terayon Communications Systems, Inc.

Web site: http://www.terayon.com/

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