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UNIVERSAL MUSIC GROUP AND REALNETWORKS FORM STRATEGIC ALLIANCE

Digital Music Downloads from the World’s Largest Music Company to be Made Compatible with the Internet’s Leading Digital Music Player



CONSUMER ELECTRONICS SHOW, LAS VEGAS, NV, January 7, 2000
- In a significant move to provide consumers greater access to the digital music revolution, The Seagram Company Ltd.’s Universal Music Group (NYSE: VO) and RealNetworks® Inc. (Nasdaq: RNWK) today announced a strategic alliance which will enable digital music from Universal’s vast collection of artists to be played on RealNetworks’ market-leading RealJukebox. Under the agreement, UMG and RealNetworks will join together in online and offline digital music marketing activities, including UMG’s distribution of RealJukebox. RealJukebox will seamlessly integrate a Universal-supported, rights-protected digital music distribution format, providing consumers familiar ways to download, store and enjoy music by a wide variety of artists from the Universal Music Group, the world’s largest music company.

The digital music format to be employed will provide protection for artists’ rights and allow for digital commerce by employing InterTrust's rich digital rights management (DRM) technology and NatWest Bank's Magex clearinghouse infrastructure.

In making the joint announcement, Edgar Bronfman, Jr., president and CEO, The Seagram Company Ltd. said, “By partnering with RealNetworks, Universal is taking another important step in achieving the secure delivery of digital music. This alliance augments our ability to reach music consumers and, in essence, it allows us to provide more music to more people. Additionally, the alliance underscores our commitment to provide the most compelling consumer music experiences and to protect our artists’ vision in the digital age.”

“This alliance further enables mainstream adoption of digital music, providing consumers more choice and control over their music experience, ” said Rob Glaser, founder and CEO, RealNetworks, Inc. “Building on the broad consumer base of more than 20 million RealJukebox users as well as the enormous fan base enjoyed by UMG’s artists, this agreement will have profound and broad impact on the digital music distribution market.”

About RealJukebox

With more than 20 million registered users since its release in May 1999, RealJukebox is the most complete digital music system on the market allowing consumers to play, record, organize, and search for music all from a single user interface. RealJukebox allows consumers to listen to their favorite music at their convenience, record CD collections to PC hard drives, find and download music from the Internet, organize and personalize music collections and take their music anywhere they wish through the use of portable devices. RealJukebox is currently supports the following portable music devices: RCA LYRA, Creative Labs’ NOMAD, Diamond Rio 500, and Philips (only SDMI compliant versions of these devices will have access to Universal’s content). RealJukebox is available for free download from http://www.real.com.

RealJukebox supports secure music download solutions including IBM's Electronic Music Management System (EMMS) and the SDMI framework. RealJukebox previously announced support for multiple secure formats including AT&T's A2B and Liquid Audio, as well as Serial Copy Management System (SCMS) support.

About RealNetworks

RealNetworks, Inc., based in Seattle, is the recognized leader in streaming media delivery on the Internet. It develops and markets software products and services designed to enable users of personal computers and other consumer electronic devices to send and receive audio, video and other multimedia services using the Web. Consumers can access and experience audio/video programming and download RealNetworks consumer software on the Internet at http://www.real.com. All RealNetworks systems and corporate information is located on the Internet at http://www.realnetworks.com.

RealNetworks continues to maintain a strong leadership share of the streaming media market. As of January 2000, there are more than 95 million unique users of RealPlayer and more than 85% of all streaming media Web pages on the Internet use industry leading RealAudio®, RealVideo®, RealFlash™, RealText® or RealPix™, and more than 350,000 hours of live RealAudio and RealVideo programming are available each week (Source: Hotbot).

Universal Music Group consists of record labels A&M Records, Decca Record Company, Deutsche Grammophon, Geffen Records, Interscope Records, Island Def Jam Music Group, Jimmy and Doug’s Farm Club, MCA Nashville, MCA Records, Mercury Records, Motown Records, Philips, Polydor, Universal Records, and Verve Music Group as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world. The Universal Music Group owns the most extensive catalog of music in the industry which is marketed through two distinct divisions, Universal Music Enterprises (in the U.S.) and UM3 (outside the U.S.). Universal Music Group is a unit of The Seagram Company Ltd., a global entertainment and spirits and wine company.

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