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InterTrust Announces Internet and In-Store Kiosk Music Vending Solution; New Commerce 1.0 Addresses Music Piracy, Sales Channel, and Commerce Model Issues.

NEW YORK--(BUSINESS WIRE)--July 13, 1998--InterTrust Technologies Corporation today announced support for Internet and in-store kiosk music vending using InterTrust(TM) Commerce 1.0, a digital commerce system. The recently announced system enables artists, producers, and retailers to package, sell, and deliver music over the Internet or in-store music kiosk vending machines. Commerce 1.0 solves three music industry problems relating to online distribution of music - piracy, distribution channel support, and new commerce models for the online sales channel.

InterTrust Commerce 1.0 is a digital commerce system that enables music and other digital information to be packaged, sold, and delivered via the Internet or any digital medium with persistent protection, distribution channel support, superdistribution, and easy commerce modeling.

The system with music vending capabilities will be publicly shown for the first time at the Jupiter Plug.in Conference on July 15-16, 1998, at the Crowne Plaza Hotel in New York. In a related announcement, InterTrust announced receipt of an export license for its Commerce 1.0 and Enterprise 1.0 products.

"Internet music sales and fulfillment require positive, satisfying user experiences, superior economic value, and effective securing of all participant interests," said Victor Shear, founder and chief executive officer of InterTrust. "All relevant parties must be paid, and commercial processes must be transparent and trivially easy to use."

Shear added, "Today's announcement by InterTrust sets the stage for successful Internet, DVD, and in-store music distribution models. With Commerce 1.0, the industry will be able to profoundly increase its sales and profits while simultaneously reducing the risks of piracy, fraud, and security breaches."

Addressing Music Industry Issues

InterTrust Commerce 1.0 addresses three fundamental music industry problems associated with digital music distribution:

-- Piracy: InterTrust's persistent protection is the result of

industry leading technology inventions that prevent widespread theft and copying, such as posting of digital music masters on the Internet.

-- Distribution Channel Support: InterTrust's value chain capability

allows distribution channel partners to be included in the sales and commissions from Internet-based sales and fulfillment.

-- New Online Commerce Models: InterTrust's Commerce Modeler(TM)

product enables music industry developers to readily incorporate elements associated with cross-merchandising, promotion, direct response marketing, and event coordination related to the sale of music.

Internet Music Market

Internet music sales were $37 million in 1997, according to the Recording Industry Association of America (RIAA). Sales for 1998 are forecast to increase to $179 million and then grow to $2.8 billion in 2002, according to Jupiter Communications, a New York-based market research firm.

The growth in sales will be fueled by the transition from physical fulfillment to Internet-based fulfillment of music sales. Internet-based fulfillment will require increased consumer Internet bandwidth and the adoption of software to protect the rights of music creators, publishers, distributors, and sellers.

"Music companies can take advantage of Commerce 1.0 now to market to college students and upscale consumers with high-bandwidth Internet access at home, school, or work," said Joseph W. Jennings, senior vice president, Marketing, InterTrust Technology Corp. "Whether you want to sell through in-store kiosks or over the Web, Commerce 1.0 allows music vending to be protected, efficient, and highly flexible."

Commerce 1.0 for Internet and In-Store Kiosk Music Sales

Using Commerce 1.0, consumers will download an InterRights(TM) Point, establish their RightsWallet(TM), select music from both websites and kiosks, and receive music in a DigiBox(TM) container on a purchase, pay-per-use, pay-to-own, or rental basis. They can save their music, for example, to a hard drive, Recordable CD, flash RAM, or DVD-RAM disc, while maintaining persistent protection of creative, publishing, and distribution rights.

Consumers can receive incentives to pass along music to friends for purchase and use, and can receive cross promotions for other music, merchandise, tickets, or music videos. Payment and usage information is collected either online or through passing aggregated micro-transaction information to an InterTrust payment and usage processing partner. Payment is then disaggregated and parsed to value chain members: stores, distributors, record companies, artists, agents, etc.

The Commerce 1.0 system uniquely delivers the persistent protection, easy business modeling, usage auditing, and payment processing necessary for efficient digital commerce on the Internet or in-store music kiosk. It is compatible with, and makes safe, music industry encoding standards, including AAC, MP3, Twin-VQ, AVI, WAV, AC3, and Red Book.

Music industry developers can use, if desired, third-party payment and usage processing center partners such as Rights Exchange, Inc. (formerly SOFTBANK Net Solutions) or Mitsubishi Corporation for information and payment processing services, allowing fast time-to-market.

Consumer systems currently require Microsoft Windows(R) 95 or NT(R) 4.0 and 5 MB minimum disk space. Commerce infrastructure and processing requires Microsoft NT 4.0 or Sun Solaris(TM) 2.5.1. Platforms under development include Windows CE, Windows 98, Microsoft NT 5.0, and Java.

"If your developers can use Visual Basic, they can readily build sophisticated music marketing, selling, and fulfillment systems," said Richard Landsman, InterTrust vice president of engineering. "Whether creating a vending application for the Internet or in-store kiosk, InterTrust is the only software available that can persistently protect your content, pay your partners, and track usage over a wide range of consumers worldwide, as well as generally automate asset management."

The Company

InterTrust is the digital commerce and information security company. It has shipped digital commerce systems for building commerce, enterprise, and extranet solutions. InterTrust enables partners and customers to quickly respond to new business conditions, digital distribution channels, and enterprise business relationships with protected, efficient, and flexible systems. The InterTrust Strategic Technologies and Architectural Research Laboratory (STAR Lab) is the leading digital commerce and information security research lab.

Contacts

Public Relations: Barry Strauss, InterTrust, 408/222-6252, barrys@intertrust.com Drew Lane, ACI, 415/923-1660, dlane@alexander-pr.com Sales: William Jordan, InterTrust, 408-222-6100, bjordan@intertrust.com International: Douglas Armati, InterTrust, 44-1473-738-400, armati@intertrust.com Technology: David Van Wie, InterTrust, 408/222-6100, vanwie@intertrust.com

-----

Copyright (c) 1998 InterTrust Technologies Corporation. All rights reserved. InterTrust, Commerce Modeler, RightsWallet, DigiBox, and InterRights are trademarks of InterTrust Technologies Corporation which may or may not be registered in certain jurisdictions. All other brand or product names are trademarks or registered trademarks of their respective companies or organizations.

 CONTACT: InterTrust Technologies Corp.
 Barry Strauss, 408/222-6252, barrys@intertrust.com
 or
 Alexander Communications
 Drew Lane, 415/923-1660, dlane@alexander-pr.com


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Date:Jul 13, 1998
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