Channelfly Partners With Magex To Offer Expanded, Quality Content Online.

Business, Technology & Entertainment Editors

NEW YORK--(BUSINESS WIRE)--April 17, 2000

Record Label, Music Site Known for Cutting Edge

New Music Targets U.S. College Radio Market

Channelfly, the music group known for discovering and promoting bands such as Oasis and Jamiroquai, today announced its online strategy in a move intended to put it on an equal footing with major labels. The company will partner with Magex, the new digital commerce service, to help it become a major force in the battle for the online music market, which is expected to be worth US $27 billion of the total US $275 billion by 2003.

The deal with Magex will provide Channelfly with a state of the art digital commerce platform that allows the company to sell and distribute music safely and securely on the Internet, while at the same time protecting the copyright of the artists. For Channelfly this equates to an opportunity to compete on a level playing field with the major labels and the company sees online distribution of music as its next important source of revenue for the company.

Channelfly's audience is considered early adopters of digital music with 77 percent using the Internet once a week. The music portal appeals directly to the U.S. college music scene and the label works closely with college radio stations throughout the United States.

"At Channelfly we have been looking for the opportunity to distribute and sell our music and videos online, while ensuring that we can protect the artists' copyright, and earn our royalties," said Adam Driscoll of Channelfly. "The explosion in online music is going to help us to rapidly increase our market share and grow our company."

"The Magex system is the first commercially available digital commerce service to offer a complete solution. It is one of many ways in which we can claim channelfly.com is where new music meets new technology, which will help keep us at the forefront of the digital revolution," Driscoll said.

Channelfly.com was launched in September 1999 and offers consumers a host of services. Visitors to the site can not only purchase music and videos both digitally and in traditional physical formats, but can also read the latest news and interviews with bands and interact with other music fans from around the world through bulletin boards. Additional features include a careers service and regular competitions to win band merchandise and more.

"The potential for digital commerce is overwhelming, and over the next two years the majority of those online will be able to retrieve music and videos digitally. The recent mergers between Time Warner and AOL and Time Warner and EMI are testimony to the fact that companies are recognizing the market potential for digital content," said Peter Beverley, CEO of Magex. "Until now, no one had developed a solution that protects the consumer and the content provider, and we are delighted to be the first to market and help companies like Channelfly to offer their content to consumers."

Channelfly is engaged in a number of different business activities that sit alongside the channelfly.com web site. These include the publication of the music magazine The Fly and production of the radio show, The Fly Live. In addition, Channelfly manages the Barfly Club, from which it already webcasts events at www.channelfly.com.

The Magex digital commerce service is built upon sophisticated digital rights management technology provided by InterTrust Technologies Corporation, a Silicon Valley company . It delivers persistent protection of content and rights alongside proven transaction and financial clearing capability. This allows consumers to pay safely and instantly for digital content purchased via an electronic wallet, a Magex software application resident on the user's PC.

About Magex:

Magex is a digital commerce service developed to create a secure and efficient environment for the trading of digital content on the Internet. The Magex technology addresses the security and payment problems surrounding digital distribution, enabling fast, safe and easy web transactions.

Incorporating Digital Rights Management from U.S. partner, InterTrust Technologies Corporation, Magex delivers the persistent protection of copyright products such as - music, information and games in any format alongside a simple, trusted payment process. Because businesses can now offer their best products for download with confidence their customers will appreciate the broader, richer choice on offer.

CSFB have estimated the market for the delivery of digital content, such as music or video, over the Internet at some US$27 billion of the total US$275 billion digital content market by 2003. Magex recently raised US$80 million in equity funding. Major shareholders are Goldman Sachs, Capital Z Financial Services, NatWest (now owned by Royal Bank of Scotland), Universal Music Group (a division of the Seagram Company Ltd (NYSE: VO), InterTrust Technologies Corporation (NASDAQ: ITRU), Reuters (NASDAQ: RTRSY), GE Capital, Europ@web, investment affiliates of Soros Private Equity Partners LLC, SLF Ventures, Westpool Investment Trust and Kistler Associates. For more information about Magex visit www.magex.com

About Channelfly

Originally born out of the Barfly Club, London's leading promoter of new rock, pop and indie talent, channelfly.com plc has evolved into a multi-discipline music group with interests in publishing, promotion and distribution across a range of media platforms. The company is specifically engaged in utilising emerging technologies to promote and deliver new music.

The Group's activities include the publication of The Fly magazine, 120,000 copies of which are distributed through music venues and Virgin Megastores around the country, the Barfly Club - which Radio 1 recently described as a `seminal London venue'- and the operation of the channelfly website which offers webcasts and digital downloads of the UK's best emerging music talent. Additionally, channelfly is the owner of SBN Limited, the Student Broadcast Network. SBN provides a `round-the-clock' sustaining service to 46 student radio stations around the UK. SBN broadcasts via the Astra 1C satellite and with each student station committed to taking at least 27 hours of nationally syndicated programming from SBN weekly, the service delivers the best in music content to its subscriber stations and a huge audience of student listeners.

Having been responsible for spotting and promoting the likes of Oasis, Jamiroquai, Kula Shaker, Skunk Anansie, Catatonia, Travis and The Stereophonics at early stages of their career, the channelfly team will now be recording and broadcasting gigs by today's emerging talent in addition to selling music by these artists over the internet. A key driver of the channelfly business is to take ownership of the recordings that the group make, in order to build a substantial intellectual property portfolio for future exploitation.