///Corporate

UNIVERSAL MUSIC OFFERS CONSUMERS MORE CHOICE IN CD PACKAGING, PRICING

· Scissor Sisters, Killers launch Europe-wide Super Jewel Box©

· Improved CD packaging at no extra cost to music buyers

· "We’ve listened to consumers," says Universal Music Group International chairman

· Market leader unveils three-tier pricing across range of releases



LONDON, July 5, 2006 – To offer European consumers improved choice and value in their purchase of music, Universal Music Group International will introduce a fresh, three-tier system of packaging and pricing CDs – the physical discs which still account for more than 90% of recording industry sales.

For all new album releases as they roll out in future, Universal Music will use Super Jewel Box© packaging – a stronger, more durable replacement for the traditional "jewel box" CD case, at no additional cost to music buyers.

On Sep. 18, the first three titles to be released across Europe in the upgraded Super Jewel Box© packaging will be two highly anticipated follow-up albums, Ta-Dah! by Scissor Sisters and the Killers’ as-yet untitled set, plus the first solo album by Fergie of the Black Eyed Peas.

The upgrade means that UMG will ship more than 100 million albums in the superior-quality Super Jewel Box packaging during the first 12 months of the switchover. The extra manufacturing costs will be absorbed by the company.

Lucian Grainge, Chairman and CEO of Universal Music Group International, says, "As our digital business continues to accelerate, as we anticipated, this is also an exciting time to improve our physical CD offer – and at no extra cost to the fans. We’ve listened to their views about value and choice, and we’re giving them more music-buying options than ever."

Validated by extensive market research, the new Universal Music approach will enable music fans to make CD purchases in the following physical configurations:
DeLuxe – for major artist album releases, packaged with a bonus CD or DVD offering additional audio or video content by the featured artist(s), in an exclusive limited edition.

Standard – for all new album releases, featuring Super Jewel Box© packaging instead of the traditional CD jewel box case, with no accompanying price increase.

Basic – for older albums, offered in a new, streamlined slide-pack CD case, designed for "just the music" with minimum packaging – comparable to paperback books.
The three formats, which UMGI has successfully tested in select European markets over the past nine months, will begin to roll out across the region in September. Consumer reaction to the Super Jewel Box© was highly favourable during the test phase. Results from the earlier trials also proved the DeLuxe format to be highly popular as a gift item, as well as with the featured artists’ core fans.

Moreover, music fans responded positively to the Basic version, appreciating the new format’s value – particularly those buying music from non-specialist retail outlets. During one week last August, six Universal Music titles in the Basic configuration were in France’s top 20 album chart, including three in the top 10. More than 3 million slide-pack CDs were sold during the European market tests.

Universal Music Group International does not set retail prices for its products, but it is recommending the three formats be priced at, on average, €19.99 (DeLuxe), €14.99 (Standard) and €9.99 (Basic).

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