///Corporate

BMG ENTERTAINMENT AND UNIVERSAL MUSIC GROUP FORM GETMUSIC -AN UNPRECEDENTED INTERNET CONTENT AND COMMERCE ALLIANCE

New Generation of Internet Music Channels to Create Unique Online Communities withUnparalleled Fan Access to Artists and Related Lifestyle Content

Seamless and Convenient E-Commerce Experience Available for Music Purchases



NEW YORK, NY, April 7, 1999—Universal Music Group and BMG Entertainment, two of the world’s leading music companies, today announced the formation of an unprecedented Internet content and commerce alliance to create online communities of music fans, promote artists and sell CDs online. The joint venture, to be known as GetMusic, will consist of online music channels and an e-commerce site, getmusic.com.

Through this new generation of interactive genre-based music channels, the alliance will create Internet communities with unparalleled fan access to Universal and BMG artists along with other related lifestyle content. The channels will establish a closer link between artists and music fans, create awareness of new music among fans, and help to drive sales through all channels of distribution. Visitors to Universal and BMG artists’ sites on the music channels will have the added convenience of a "one-click-away" opportunity to purchase those artists’ recordings for mail order delivery through getmusic.com. getmusic.com will also feature titles for purchase from all other music companies.

BMG, Universal, and their record labels will bring a wide-ranging and complementary array of superstars and emerging talent to this alliance. The two companies collectively have nearly 200 artists whose latest album releases have each sold more than 1 million copies worldwide. The companies’ rosters include such renowned artists as Alabama, Aqua, The Backstreet Boys, Beck, Mary J. Blige, Toni Braxton, Jim Brickman, Sheryl Crow, Vince Gill, Dru Hill, Hole, Whitney Houston, Alan Jackson, Elton John, K-Ci & JoJo, the Dave Matthews Band, Reba McEntire, Sarah McLachlan, No Doubt, N’Sync, Puff Daddy, Sting, George Strait, TLC, Shania Twain, U2, and Trisha Yearwood.

The channels will build on the foundation of BMG’s existing genre-based music Web sites, introduced less than three years ago. Each of these sites has built significant traffic, recording as much as 60% monthly audience growth. Launched in February 1996, peeps.com—devoted to R&B and Hip-Hop artists—was the first genre-based Web site created by a major music company and has become one of the most trafficked sites of its kind. The channels will be re-launched later this year, with content from both Universal and BMG.

Universal and BMG plan to extend this momentum by adding access to a deep roster of Universal artists, developing new channels, and equipping the sites with a full range of community-building tools including chat, interactive Webcasting, and message boards.

Strauss Zelnick, President and CEO of BMG Entertainment, said: "The time is right for BMG and Universal to create the most compelling online music communities, build strong bridges between our artists and music lovers, and make music available to consumers with a simple click of a mouse. With this worldwide alliance, GetMusic, we are ready to capitalize on BMG’s three-year-old online strategy initiated and overseen by Kevin Conroy and his team, and to create future online opportunities as fans increasingly come to our music channels for the artists, stay for the community, and—with getmusic.com—leave with the music they have come to know and love."

Doug Morris, Universal Music Group Chairman and CEO, stated: "The Internet represents an exciting additional outlet for music programming, promotion and distribution. We are committed to using the Web and new technologies to deliver unparalleled service to our artists—enabling them to reach more consumers in a personalized way. These music channels will allow fans to chat with or watch a Webcast of their favorite artists, discover new artists, and learn about new releases. With our two companies’ combined resources, marketing strength and unmatched artist rosters, our genre-based music channels will provide the most compelling and interactive music experience and make music available to fans with ease and simplicity."

Michael Dornemann, Chairman, BMG Entertainment and CEO, Bertelsmann Entertainment, commented: "By linking two of the world’s leading music companies, we will offer an unmatched experience to consumers. BMG and Universal will bring superstar artists directly to fans, nurture new talent online, and enrich the experience with a whole range of relevant content. Nowhere else on the Internet will music fans find a more comprehensive package of music content, access to artists, music for purchase and community-building features."

Edgar Bronfman, Jr., President and Chief Executive Officer of The Seagram Company Ltd., said: "Today, Universal and BMG have announced a pacesetting joint venture, GetMusic, that is a major step forward in building the interactive music channels of the future. The Internet offers tremendous opportunities to build the entire market for music by reaching new consumers and by offering deeper catalog that is hard to find in traditional outlets. The Internet’s interactivity and immediacy will change the way fans find, share and relate to music and artists. We are excited to join with BMG in this global venture as leaders in shaping the music industry for the next millennium."

Thomas Middelhoff, Chairman and Chief Executive Officer of Bertelsmann AG, stated: "At Bertelsmann, we have long believed in the potential of the Internet to transform the music experience, as it already has changed so much else in our world. We are thrilled to have a leading industry innovator like Universal as a partner in this mission to make music an even more powerful force in people’s lives. Together, BMO and Universal have the critical mass of artists, resources and expertise to turn this new network into the premier destination for music in cyberspace."

A New Generation of Internet Music Channels

Each of the channels will be based on building communities around music, and will feature lifestyle and interactive content. The initial focus will be on the North American market, and plans are underway to expand globally.

The channels will include:

· Peeps Republic (www.peeps.com): Over 300 R&D and Hip-Hop artists and information including video and audio clips, backstage footage and interviews, information about artists, contests, news and special features like interviews with professional athletes, motion picture and book information, and horoscopes. Among the artists whose current albums are featured on this channel are: Eminem, Dru Hill, Jay-Z, R. Kelly, Mya, Monica, Outkast, Jesse Powell, The Roots, TLC, Tyrese, and Usher.

· BUGjuice (www.bugjuice.com): Over 250 Alternative music artists featuring artist information, video clips, live concert broadcasts and footage, photos from the road, contests, action sports, new music news and more. Among the artists whose current albums are featured on this channel are: Beck, The Cardigans, Hole, Natalie Imbruglia, Jars of Clay, Limp Bizkit, the Dave Matthews Band, Sarah McLachlan, New Radicals, and Semisonic.

· Twang This! (www.twangthis.com): Country music channel with clips, videos and backstage footage from artists, Country music news, contests and other special features from country superstars with current albums like: Alabama, Clint Black, Brooks & Dunn, Vince Gill, Alan Jackson, Martina McBride, Shania Twain, and Trisha Yearwood.

· Rock Universe (www.rockuniverse.com): Rock channel bridging the gap between Pop and Alternative music and featuring artists including: Joe Cocker, Grateful Dead, Sammy Hagar, Jimi Hendrix, Iron Maiden, Judas Priest, Motley Crue, and Lou Reed.

· Connect2Music (www.connect2music.com): Adult Contemporary channel featuring exclusive performance footage, pre-release features and interviews from such artists as:

Blondie, Toni Braxton, John Denver, Bruce Hornsby, Kenny G, Annie Lennox, and Carly Simon.

Kevin Conroy, BMG Entertainment Senior Vice President for Worldwide Marketing, said:

"This venture will significantly expand the bridge we have been building over the past three years between artists and their fans. Through our new generation of interactive music channels, more artists will have greater access to music fans and more music fans will have greater access to the artists and music they enjoy."

Larry Kenswil, Universal Music Group President, Global Electronic Commerce and Advanced Technology, concluded: "We intend to build on the foundation already in place by providing community-building tools, customized offerings, exciting exclusive content, and a new level of interactivity on these sites. Our direction will be set by consumer feedback, advances in technology, and our commitment to providing the richest experience for consumers and the best service for our artists."

getmusic.com Offers Convenient Commerce Links

The network of genre-based music channels is seamlessly linked to getmusic.com, providing a convenient browsing and buying experience for consumers. For example, visitors to peeps.com who want to purchase R&D and Hip-Hop music can click on the "buy" button and be taken directly to the peeps.com section of the getmusic.com store. If consumers visiting a particular artist site on peeps.com want to buy that artist’s music, they are only one click away from the artist’s albums available on getmusic.com.

In addition, getmusic.com will offer a full range of music from all companies, with over 250,000 albums from which to choose across new and current titles, as well as a substantial repertoire of catalog. At getmusic.com, those hard-to-find recordings, rarely available through existing retail outlets, will be easily accessed through the store’s search function that classifies titles by genre, artist, and album.

For those who would prefer to buy through traditional retail outlets, getmusic.com will offer a search function of retail outlets located nearest to the consumer.

Online and Offline Promotions to Drive Traffic to Sites

BMG and Universal plan a number of initiatives to drive traffic to these sites encompassing both online and traditional marketing tools. These include: print and broadcast advertising; printing URLs for the appropriate sites on CDs; "connected CDs" that, once loaded into computers, will launch users directly to the artist’s site; and special events.

Black Friday