IBM and Sony Show First Results of Collaboration With Electronic Music Distribution; IBM's "EMMS" and Sony's "OpenMG" Technologies Become Interoperable.

LAS VEGAS--(BUSINESS WIRE)--Nov. 15, 1999--

IBM and Sony Corporation today announced they have advanced their collaboration in making their respective copyright management technologies for electronic music distribution interoperable.

Earlier this year, the two companies announced their initiative to enable future Sony audio products, featuring "OpenMG" and "MagicGate" copyright management technologies, to play music content secured with IBM's Electronic Music Management System (EMMS). EMMS is a comprehensive e-business solution for the sale and secure downloading of music.

The first result of this collaboration will be available in Sony's next generation portable audio players packaged with Sony's OpenMG software - the "Memory Stick Walkman (NW-MS7)" and "VAIO Music Clip (MC-P10)." These new Sony products will securely play music content that is prepared, sold and downloaded using IBM's EMMS solution. The combination of EMMS, OpenMG and Sony's portable devices will enable record companies to give consumers new freedom to enjoy digital music away from their personal computers, while maintaining a comprehensive, secure system for copy protection and rights management.

IBM is also announcing today its plans to support for "ATRAC3," an audio compression technology developed by Sony. ATRAC3 compression technology is used by Sony's Memory Stick Walkman and VAIO Music Clip. A record company securing its content with an electronic music distribution system can optimize playing on Sony products by choosing ATRAC3. As part of their initiative to enable future Sony consumer products to play music securely delivered with IBM's EMMS technology, IBM Japan and Sony are participating in a wireless music distribution trial together with NTT Mobile Communications Network (NTT DoCoMo), a leading Japanese mobile communications service operator. This trial will enable consumers to receive and play music content over NTT DoCoMo's PHS 64K bps data communications network, using Sony's Memory Stick as a recording media for portable devices. The trial is expected to begin in the first half of 2000.

"IBM and Sony have been working to develop products that will assist the music industry in its digital evolution while enhancing the music experience for consumers," said Rick Selvage, general manager, IBM Global Media and Entertainment Industry. "As we work to move our technology from the laboratory into the real world, we look forward to continued collaborations with Sony in driving innovation in the digital music market, both by protecting rights of artists and record labels, and by providing consumers with new ways to purchase and enjoy music."

"Sony has been always an innovative company to propose new types of audio-video entertainment to consumers and industries. It is our belief that, by combining IBM's strength in security and network system integration technologies and Sony's expertise in consumer-oriented AV/IT technologies and products, both companies will be able to create a new market of music distribution in the digital network era," said Kunitake Ando, president and COO, Personal IT Network Company, Sony.

"In our experience during the music industry market trials, IBM's EMMS is an excellent system for digital download services. Sony Music is confident that the combination of these technologies will contribute a great deal to establishing a secure and user-friendly electronic music distribution market," said Al Smith, senior vice president, Sony Music Entertainment.

"Japan is the second largest music market in the world, and Sony Music Entertainment (Japan) Inc., as a leading record company in Japan, believes that electronic music distribution will offer new ways of promoting our vast catalog to consumers in our territory. We are pleased that IBM and Sony together will have the opportunity to present an unprecedented model of electronic music distribution to the music industry, as we look for viable business opportunities secured by a high degree of copyright management," said Shigeo Maruyama, president and COO, Sony Music Entertainment (Japan) Inc.

"NTT DoCoMo is pursuing new services over mobile communications devices, and I believe mobile music distribution will be one of the killer applications in Japan, where most young people own a cellular or a PHS phone. I look forward to working with IBM and Sony to create this new market," said Shuichi Shindo, executive vice president, NTT Mobile Communications Network, Inc.

1. MagicGate: Copyright protection technology for "MG Memory Stick"

and compliant products. Authentication technology ensures that

protected content is only transferred between compliant devices

and media, and protected content is recorded and transferred in

an encrypted format to prevent unauthorized copying or playback.

2. OpenMG: Copyright protection technology including Digital Rights

Management which consists of three key functions: allowing music

download through multiple electronic music distribution

platforms, enabling to playback music files and CD ripping on PCs

(OpenMG Jukebox), and transferring contents securely from PCs to

portable devices.

3. ATRAC3: This sound compression technology can achieve roughly

twice the data reduction rate of the ATRAC sound compression used

for the MiniDisc.

4. EMMS combines an open architecture, scaleability and security

features. Major components of the EMMS architecture include a

content mastering system, tools for hosting music content and

promotional materials, and tools for online music retailers

supporting the sale of digital music to consumers. The system

features a clearinghouse that tracks the sale of digital music

content and manages access and usage privileges as designated by

the music owner.

It is the intent of IBM and Sony to make their respective EMMS, MagicGate and OpenMG technologies comply with the guidelines of the Secure Digital Music Initiative (SDMI). Each company has designed its technology to meet the needs of the recording industry for robust and secure solutions for the management of digital music.

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.

Sony Corporation is a leading manufacturer of audio, video, communications and information technology products for the consumer and professional markets. Its music, pictures and computer entertainment operations make Sony one of the most comprehensive entertainment companies in the world. Sony recorded consolidated annual sales of over $56 billion for the fiscal year ended March 31, 1999. Sony's Home Page URL: http://www.sony.co.jp/