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IBiquity Approves Surround Sound Technology for HD Radio

IBIQUITY DIGITAL APPROVES SRS LABS’ CIRCLE SURROUND 5.1 AS COMPATIBLE SURROUND SOUND FORMAT FOR THE HD RADIO SYSTEM

SRS Labs’ Circle Surround Technology Enables Radio Stations To Broadcast Digital Surround Radio To Millions Of Listeners Across The United States

SANTA ANA, Calif., June 29, 2004 – SRS Labs, Inc. (NASDAQ: SRSL), a leading provider of innovative audio, voice and semiconductor technology solutions, and iBiquity Digital Corporation, the sole developer and licensor of HD Radio technology today announced the completion of the joint testing of SRS Circle Surround technology as a compatible surround sound format for iBiquity’s HD Radio broadcast technology. HD Radio technology is the digital broadcasting system for terrestrial radio, and is the only digital technology authorized by the FCC for broadcasting in the AM and FM band in the United States. Circle Surround technology allows FM radio stations nationwide to deliver digital quality surround sound content to millions of listeners through their home theater systems or car audio entertainment units. More than 300 radio stations in 100+ U.S. markets across 38 states reaching 67 percent of the US population have already licensed HD Radio technology. This announcement marks the completion of the joint testing process announced in January 2004 at the International Consumer Electronics Show (CES) where the two companies announced their strategic technology partnership.

iBiquity has developed and patented HD Radio technology that transmits digital audio and data alongside existing AM and FM analog signals, allowing listeners to enjoy CD-quality sound and virtually eliminating the static, hiss, and pops associated with today’s analog radio signals. Implementation of the Circle Surround encoding solution for the HD Radio platform allows radio stations to encode any multichannel content into two-channel output for broadcast over the HD Radio system, which can then be decoded into full-bandwidth surround sound with any decoder found in millions of home theater and automotive systems. Up to a full 6.1-channel surround sound experience can be realized with a CS II decoder, which can be found in a wide variety of home theater products from Kenwood, Marantz, Accuphase and Theta Digital. For those listening to HD Radio receivers in their cars, Circle Surround Automotive technology also includes the latest CS decoder along with several specifically designed technologies that overcome the challenges of speaker placement and other obstacles specific to the automotive environment to deliver the best available surround sound in cars.

Mike Lyons, Vice President, Aftermarket Business Development for iBiquity Digital said, “We are extremely pleased that SRS has proven Circle Surround sound compatibility with iBiquity’s HD Radio system. We feel that SRS Labs’ surround sound technology will accelerate the growth and adoption of the HD Radio system across the country and we encourage our broadcast and consumer electronics partners to realize how powerful Circle Surround can be for radio.”

One of the most powerful features of CS encoding is that it is 100 percent compatible with mono and stereo. For radio stations, this means a competitive advantage in the ability to offer surround sound to their listeners.

“As Circle Surround reaches beyond home theater-based products to automobiles and other HD Radio-enabled receivers, broadcasting in surround sound will quickly become the standard,” said Mike Canevaro, director of sales and business development for SRS Labs. “We are working hard to bring the best available surround sound technologies to HD Radio digital broadcasting and their tens of millions of FM listeners. Broadcasters, automakers, retailers, manufacturers and consumers alike will benefit from the teamwork of Circle Surround and iBiquity, as radio transforms into a full-blown home theater-like experience whether it’s in the home or on the road.”

SRS Circle Surround is an advanced and patented, encode/decode multichannel system that is rapidly gaining worldwide support among audio professionals and product manufacturers alike. The Circle Surround encoding system accepts any multichannel source, encodes it to a two-channel output, which can then be transmitted over any existing stereo analog or digital broadcasting infrastructure, such as the HD Radio system. The Circle Surround-encoded two-channel signal can be decoded back into thrilling 5.1 or 6.1 surround sound by any consumer with a multispeaker system that includes a matrix decoder, such as Circle Surround or Dolby Pro Logic. The best results are achieved from the Circle Surround decoder, which currently can be found in a wide variety of home theater products from Kenwood, Marantz, Motorola, Accuphase, Orion Studios and Theta Digital among others. SRS Labs is also working with several leading auto makers, automotive entertainment manufacturers and platform partners to provide a version of Circle Surround that is optimized for an automobile, Circle Surround Automotive.

For information regarding SRS technologies, contact Mike Canevaro at (949) 442-1070 Ext. 3216 or mikec@srslabs.com. Additional information is also available from the company’s website at www.srslabs.com.

About Circle Surround Encoding & Decoding
The patented Circle Surround technology is a highly versatile, multichannel audio encode and decode system capable of supporting a wide range of surround sound creation and playback applications. CS hardware and software encoders can encode up to 6.1 channels of discrete audio for distribution over existing two-channel carriers such as broadcast television, cable, streaming media over the Internet, CDs and VHS tapes. Over the past year, SRS Labs has cultivated relationships with major broadcasters and content providers, such as ESPN Productions, Paramount and ABC Sports, to telecast their sporting events and television programs in Circle Surround.

Circle Surround and Circle Surround II decoding is capable of delivering up to 6.1 channels of audio from mono, stereo, matrix-encoded or CS-encoded source material. CS II features patented post-processing techniques to enhance the surround sound experience, including SRS Dialog Clarity, which improves the intelligibility and clarity of center channel information such as dialog, and SRS TruBass, which uses patented psychoacoustic techniques to increase bass performance from any playback system, including a subwoofer. CS has been adopted by many of the leading electronics companies as a surround decoding option, including Kenwood, Marantz, Theta Digital, Accuphase, M-Audio, Jaton, and Smart Devices. It is the most powerful, flexible and feature-rich surround decoding format available today.

About iBiquity Digital Corp.
iBiquity Digital is the sole developer and licensor of HD Radio technology in the U.S., which will transform today’s analog radio to digital, enabling radically upgraded sound and new wireless data services. The company’s investors include 15 of the nation’s top radio broadcasters, including ABC, Clear Channel and Viacom; leading financial institutions, such as J.P. Morgan Partners, Pequot Capital and J&W Seligman; and strategic partners Ford Motor Company, Harris, Texas Instruments and Visteon. iBiquity Digital is a privately held company with operations in Columbia, MD, Detroit, MI, Redwood City, CA and Warren, NJ . For more information please visit: http://www.ibiquity.com.

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About SRS Labs Inc.
SRS Labs is a recognized leader in the advancement of audio and voice technology. The company works with the world’s top manufacturers to provide a richer entertainment experience through patented sound techniques. SRS Labs’ technologies can be heard through products ranging from televisions, flat panel displays, DVD players, mobile phones, car audio systems, headphones and notebook and desktop computers. The company also offers hardware and software tools to professionals and consumers for the creation, production and broadcast of content featuring SRS Labs’ technologies. SRS Labs’ wholly owned subsidiary, ValenceTech, is a Hong Kong-based semiconductor company that designs and sells custom ASICs and standard ICs to leading manufacturers worldwide. Based in Santa Ana, Calif., the company also has licensing representation in Hong Kong, Japan, Europe, and Korea. For more information about SRS Labs, Inc. please visit www.srslabs.com. The information on the aforementioned website is not incorporated by reference into this press release.

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