Iomega Joins Recording Industry Initiative to Create a Voluntary Digital Music Security Specification.

ROY, Utah--(BUSINESS WIRE)--Dec. 15, 1998--

Iomega Also Announces Results of Study Showing that

Record/Play(TM) Initiative Will Address Needs and

Interests of Today's Internet Users 

Iomega Corporation (NYSE: IOM) today announced that it has joined the recording industry's new initiative to create a voluntary digital music security specification by next fall.

Dubbed the Secure Digital Music Initiative (SDMI), the open specification will be designed to protect copyrighted music in all digital formats and through all delivery channels.

"Through SDMI, the computer and music industries are joining forces to meet consumers' desire to download digital content from the Internet, while protecting the intellectual property of artists," said Edward D. Briscoe, president, personal storage division, Iomega Corporation. "Iomega strongly supports the effort to agree upon standards that balance the consumers' and artists' interests. Iomega applauds the Recording Industry Association of America (RIAA) for taking a leadership role in this inter-industry effort and is excited about the technology developments that our Record/Play initiative may bring to this effort."

In a related announcement, Iomega released the findings of a study by Yankelovich Partners, Inc. to investigate Internet users' interests and needs in the Company's Record/Play(TM) initiative. The findings show that nearly eight out of ten Internet users surveyed (78 percent) are interested in using Iomega's Record/Play technology, which was introduced in November at Comdex.

Record/Play is a broad technology initiative designed to provide a secure channel for the distribution of content and intellectual property over the Internet. This initiative will allow developers to use the IomegaReady(TM) Toolkit to develop applications capable of delivering intellectual property securely from the Internet to Iomega media. Using Record/Play, developers will be able to encrypt any Internet data to Iomega storage products using a copy-protection technique that will bind the content to the disk. The content can then be replayed only from the disk to which it was recorded. Iomega anticipates that Record/Play will be extended to meet the standards set forth in the SDMI.

Interest in the Record/Play technology initiative is high, with one of the main benefits being the ability to try music, games and software before actually making the purchase. Through Record/Play, consumers will be able to download free material from the Internet, as well as copyrighted material including music, entertainment, software business applications, secure and confidential documents, games and game updates. And, the content developers will not have to worry about their data being copied.

Confidentiality (73 percent) and security (76 percent) continue to be concerns for the majority of Internet users, according to the study. Iomega's Record/Play initiative will allow developers to be able to create confidential debit card-like payment options that would address these concerns. When asked specifically about these aspects of the Record/Play technology, interest among survey participants became stronger. The confidentiality aspect increased the percentage of those responding with "strong interest" in Record/Play by 11 percentage points. The debit card-like payment option increased "strong interest" in Record/Play by an additional 16 percentage points over the technology when no payment option is offered.

"Media companies and artists continue to look for technology solutions which will protect their copyrighted material," said Melvyn T. Masuda, south west regional director of Ernst & Young LLP's technology, communications and entertainment practice. "Iomega's technology could be one of the solutions."

Who are the people interested in the Record/Play initiative? Though they tend to have an affinity toward technology, they're not all computer savvy. The study shows:

-- Only 23 percent are technology enthusiasts, while 31 percent

are entertainment enthusiasts

-- 60 percent say going online is part of their everyday life

-- 58 percent go out of their way to learn about and use

products that represent advanced technology

-- 95 percent enjoy watching a good movie or listening to good

music

-- 70 percent say commercials are the thing they hate most

about TV

-- 57 percent cannot wait for the day when they can have TV on

demand

The study shows this technology taps into a number of Internet users' current needs and practices. For instance, Internet users:

-- are open to the newest technology

-- have an affinity toward entertainment

-- have a need for more control over their lives in general and

over the entertainment portion of their lives as well

-- use their PC for entertainment purposes

-- understand and enjoy the benefits of downloading

Among Internet users, the study shows that interest in Record/Play is quite high, especially among younger, single users:

-- 79 percent are interested in the concept of being able to

play downloads on non-PC devices

-- 83 percent expressed interest in using Record/Play to

download items without having to give out any personal or

financial information

-- 63 percent would be interested, even if a fee was associated

"We engaged Yankelovich Partners to conduct a study of Internet users and we're pleased that almost 80 percent of them indicated that they would use this product," said Jim Taylor, chief marketing officer, Iomega Corporation. "Moreover, 72 percent of those Internet users already use Iomega technology (according to research commissioned by Iomega). Our solution is designed to protect the rights of producers and give control, privacy and, most important, content to consumers. And, it makes sense with the new SDMI specification as well." Interested developers should send requests for information about Iomega's Record/Play initiative to: [e-mail].

Iomega's parallel port Zip(R) drives are available at major retail stores for an estimated street price of $119.95 (U.S.) and the new 100MB Zip(R) USB drives are available for an estimated street price of $149.95 (U.S.). Zip 100MB disks are available for an estimated street price of $9.95 (U.S.) each when purchased in a 10-pack. Also today, Iomega began shipping its Zip 250MB drive and disks. Over 20 million Zip drives and 125 million Zip disks have been shipped.

Iomega genuine 100MB Zip(R) disks provide 70 times the capacity of traditional floppy disks, giving consumers virtually unlimited storage capacity, increased flexibility and a built-in back-up system for critical files. Iomega's Zip tools software, also included with the drive, makes it easy for users to manage and save their digital content. Iomega Zip drives and disks are available worldwide through retailers, OEMs, VARs, system integrators and distributors.

About Iomega Corporation

Iomega Corporation (NYSE: IOM) manufactures and markets the award-winning Zip(R), Jaz(R) and Ditto(R) drives and disks that help people to organize, manage, create, exchange and share their important information. Used in homes, businesses, government, education, and by creative professionals everywhere, Iomega storage solutions are the enabling technologies preferred by millions. The Company can be reached at 1-800-MY-STUFF (800-697-8833), or on the Web at http://www.iomega.com.

Special note: The study by Yankelovich Partners Inc. was conducted between October 26, 1998 and November 1, 1998. 503 random digit dial telephone interviews were conducted. The interviews were nationally representative and lasted, on average, 20 minutes. This study has a margin of error of +/- 4 percent at a 90 percent confidence interval. In addition, the statements contained in this release relating to SDMI being designed to protect copyrighted content through all delivery channels, Record/Play being a secure channel for distribution of content and intellectual property over the Internet, the ability to try music/games/software before purchase and debit card-like payment options that could expand the market for Iomega's Zip drive, provide new revenue opportunities for Iomega and new brand awareness for Zip disks and drives, and the availability and compatibility of Iomega's media with the Record/Play initiative are forward-looking statements. There are a number of important factors that could cause actual events to differ materially from those indicated by such forward-looking statements including, but not limited to, market acceptance of, and demand for, Record/Play, IomegaReady Toolkit and Iomega's Zip drives and removable disks, manufacturing, development and distribution issues, product pricing, competition, intellectual property rights and other risks described in Iomega's Annual Report to Stockholders for 1997 on Form 10-K, filed March 31, 1998 and its most recent quarterly reports filed with the SEC.

Iomega, Zip, Jaz, Ditto, and the stylized "i" logo are registered trademarks, and Record/Play and IomegaReady are trademarks of Iomega Corporation. All other product and brand names are the property of their respective owners. For maximum reliability, use only genuine Zip 100 disks featuring the genuine Zip 100 symbol in your Zip drive.