BMG Entertainment Plans Adoption of IBM Technology For Commercial Roll-Out of Electronic Music Distribution to Consumers; BMG Announces Support for IBM's Electronic Media Management System.

Business Editors & High-Tech Writers

SANTA MONICA, Calif./NEW YORK--(BUSINESS WIRE)--April 6, 2000

BMG Entertainment and IBM today announced that BMG plans to support IBM's Electronic Media Management System (EMMS). BMG intends to adopt EMMS as an electronic media distribution and digital rights management system for its online digital music downloading plans to be commercially deployed this summer. This relationship follows the successful completion of the AlbumDirect consumer music distribution trial in which BMG and IBM participated with other leading record labels.

"IBM has been working closely with BMG in developing and testing EMMS; this latest collaboration is a very satisfying result of our efforts and a significant advancement of the digital music marketplace," said Richard K. Selvage, general manager, IBM Global Media & Entertainment Industry. "We look forward to working with BMG in bringing the convenience of downloading music to consumers globally while protecting the intellectual property rights of artists."

"BMG is looking forward to continuing to work with IBM to implement EMMS as part of our overall strategy for digital downloading," said Kevin Conroy, Senior Vice President Worldwide Marketing and New Technology. "The technologies that BMG has selected, including EMMS, will enable us to provide the consumer with the best possible experience and protect our artists' rights."

EMMS is a comprehensive electronic media distribution and digital rights management system designed to support all types of media beginning first with music and audio content. EMMS' open architecture is capable of managing and distributing multiple types of media content over multiple networks. IBM has designed EMMS to be interoperable so it can evolve over time to integrate technology advances in music compression, encryption, formatting, and end-user devices and applications. The system includes five software modules that address security issues in every step of the digital music distribution process: Content Preparation, Content Hosting, Clearinghouse, Retail Software and Consumer Software.

Specifically, BMG will use EMMS' Content Preparation module in the mastering process to prepare its music content for distribution. BMG will also deploy EMMS' system for distributing its music content through third-party services such as hosting, distribution, clearinghouse and consumer playback applications and devices.

IBM has also established relationships with Reciprocal and Liquid Audio, Inc. Reciprocal plans to license EMMS to provide clearinghouse services for BMG's EMMS-prepared music content. IBM's relationship with Liquid Audio is expected to enable Liquid Audio to integrate the digital rights management technology in EMMS into the interoperable system that Liquid Audio is working on with BMG and will be making available to the music industry at large. These systems include the Liquid Audio Command and Control Applications which are expected to provide record labels with one unified view into multi-vendor solutions for publishing content, setting distribution rules, populating content, integrating content into retail, integrating clearinghouses and disseminating merchandising assets.

BMG plans to make EMMS-prepared content available by Summer 2000 with significant increases in the variety of music titles in time for the 2000 holiday buying season.

About IBM

IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. IBM is helping media and entertainment companies worldwide take advantage of the business opportunities made possible by digital technology. IBM offers a comprehensive portfolio of solutions, networking and service offerings that is transforming the traditional creative and business processes of media and entertainment companies and positioning them to leverage their intellectual assets into new commercial opportunities. For more information on IBM strategy for the media and entertainment industry, contact www.ibm.com/solutions/media.

About BMG

BMG Entertainment is the $4.7 billion worldwide music and entertainment division of Bertelsmann AG, one of the world's leading media companies, with annual revenues of $16.4 billion. BMG owns more than 200 record labels in 53 countries, including Arista Records, RCA Records, Ariola and Windham Hill. BMG has been a leader in using the Internet to bring fans closer to their favorite artists. In addition to establishing GetMusic, an online content and commerce joint venture, BMG's online presence includes more than 30 wholly owned music & lifestyle Web sites around the world, and strategic marketing agreements with and key investments in leading online companies ARTISTdirect, Riffage.com, Egreetings Network, Listen.com and Eritmo.com, among others. BMG also owns the world's largest music club, one of the world's largest music publishing companies, and one of the world's leading compact disc and cassette manufacturing companies. Bertelsmann's North America interests also include the Random House Inc. book publishing group; and the Gruner + Jahr magazine publishing group, which includes McCall's, Parents, Family Circle and YM magazines, among others.