Press Release



InterVideo Selects QSound's Technology for
Their WinDVDT Software Application



QSurround, Which Emulates a 5.1 Sound Environment Using Just Two Speakers, Will Be Offered to InterVideo's OEMs



CALGARY, CANADA - January 17, 2001 - QSound Labs, Inc. (NASDAQ: QSND), a leading supplier of audio software solutions, and InterVideo, Inc., a leading provider of PC video software, today announced that they have joined forces to offer QSound's QSurround technology as an option to InterVideo's WinDVD™ OEM customers, re-creating full movie theatre surround sound using only two speakers.

WinDVD has received praise from many leading trade magazines in the PC and DVD industry for its "remarkably pure DVD audio and video" and "impressive playback" capabilities and it is now available to OEMs with QSound's QSurround capabilities which had previously been available only in hardware decoding solutions.

"The ability to offer our QSurround technology to WinDVD's OEMs is significant for two reasons," said David Gallagher, President and CEO of QSound Labs, Inc., "First, InterVideo's leadership position in the PC DVD software market is unrivalled and second, this agreement provides a tremendous platform for showcasing our main competitive advantage, audio algorithms that deliver quality solutions efficiently and effectively."

"QSurround is a great addition to WinDVD," said Tom White, Sr. Director of Audio Product Marketing at InterVideo. "We are very pleased to be able to offer our OEM customers 5.1 channel digital surround audio from a 2-channel speaker system."

InterVideo's WinDVD is a software-only DVD player for personal computers, that allows users to playback DVD movies, interactive DVD titles, MPEG audio and video, and audio CDs without the need for an expensive hardware decoder card.

By creating 'virtual speakers' to reproduce the full sound of 5.1 audio signals, each in its proper location, QSurround's remarkable sonic rendering allows the enjoyment of surround-encoded material even in a two-speaker environment. While the technology greatly improves the PC multimedia experience, QSurround's flexible processing adds value to any configuration. Even with full five or six-channel systems it adds depth and dimension with specific effects tailored to each playback scenario. QSurround is currently available in DVD players from Sharp and AIWA and in the critically acclaimed Acoustic Edge™ Sound card from Philips.

About InterVideo, Inc. (IVI):
InterVideo is privately held, with headquarters in Fremont, and with regional offices in Europe, Taipei, Japan and Redmond, WA. The company's executive team is comprised of PC veterans instrumental in the formation of the PC multimedia industry, coming from industry pioneering companies such as NexGen, LuxSonor, Sigma designs, Chromatic Research, Conexant, Zoran, MetaCreations and E4. IVI will release a series of products in 2000 to cover the full spectrum of advanced video and audio software in areas including DTV, streaming video and video encoding. InterVideo's popular DVD playback software, WinDVD, has won a number of awards worldwide. For more information about IVI, contact InterVideo at 510/651-0888 or visit the Web site at

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, the anticipated introduction of new products and future financial results. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of the Company, or industry results, to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to risks associated with the carrying out of the Company's business plans and strategies, including availability of funds to do so timely and cost effectively, commercialization of the Company's technologies, dependence on the performance of third parties who have agreed to market the Company's technologies, dependence on intellectual property, uncertainties relating to product development and commercial introduction, rapid technological change and competition, manufacturing uncertainties, general economic and business conditions and other risks which may be detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of the Company's management, and the Company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made, for example to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.





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