BERLIN, JANUARY 22, 2003 – A major new marketing and promotion structure at Universal Music Germany was announced today by company Chairman/CEO Tim Renner. The changes are intended to expand the group’s artists & repertoire capabilities, create synergies in marketing and promotion, and adapt to the current demands of consumers and market conditions.

The four label divisions which were previously part of market-leading Universal Music Germany – Island Mercury, Motor Music, Polydor and Urban/Def Jam – have been merged into two new divisions, Motor Urban Def Jam and Polydor Island.

“In the current market circumstances,” said Tim Renner, “we must define clearly where we can pro-actively change the shape of our music business. We depend on the government for seeing through amendments to the country’s copyright law, and the same is the case with radio quotas. Through targeted lobbying, the music industry has already managed to set clear points of emphasis on such issues.

“But we still have to solve our major problem ourselves. Dynamic content is the only option for shaping and improving this difficult market. The A&R work is, and will remain, the core of our business. We have to build on this and make investments. Cutbacks cannot be the answer. Instead we have to restructure in order to strengthen what are the core competencies of a record company: music, artists, marketing and promotion.”

Motor Urban Def Jam will focus intensively on A&R and promotion, with four separate, independent departments responsible for the music genres of Dance, Urban, Rock and Progressive. These divisions, each with their own A&R and Promotions team and a clear musical orientation, will work on the development and marketing of exciting new domestic and international artists.

Petra Husemann is Managing Director, overseeing Motor Urban Def Jam. The four departments will report to Thorsten Konig, still General Manager, Motor Music, and Neffi Temur, General Manager, Urban. Andrea Frahm will lead the Urban division as Director, R&B, Hip Hop & Soul, while Neffi Temur will be responsible for Dance. Daniel Lieberberg will lead Rock as Director, and Verena Vehling has been appointed Director, Progressive. Four new A&R posts will be created.

Ms. Husemann commented on the restructuring: “New and authentic concepts are becoming more important in the promotion of artists, and our new structure reflects this. We are focusing clearly on strengthening our A&R capabilities, and are doubling our resources in that area.”

Polydor Island has been created by merging Polydor and Island Mercury, and will concentrate on all aspects of pop music. Under the overall leadership of Managing Director Tom Bohne, the new division consists of three departments: two covering domestic A&R and Marketing, and one overseeing International.

The first of these, Polydor National, will be responsible for domestic pop and mainstream repertoire. Johannes Cordes has been appointed as Senior Director, and is joined by Joe Chialo as Director, A&R.

The second is newly created Island / Zeitgeist, which will oversee domestic progressive repertoire. Tim Dobrovolny has been appointed as Senior Director, and is assisted by new Marketing Director Milijana Gojic.

Lars Grewe, Senior Director of International, will be responsible for the International repertoire of Polydor Island. Grewe and his team will supervise the marketing and promotion in Germany of the international repertoire sourced from Polydor, Mercury, Island, A&M and other labels.

Polydor Island will have two Promotion Divisions at its disposal. Michael Kucharski, Director, will lead the promotion activities for Polydor National and the international signings of Polydor and A&M. Sven Kilthau-Lander, also appointed Director, will lead the promotion for the newly created progressive department Island / Zeitgeist and the international Mercury and Island signings.

Tom Bohne added: “With the newly created Polydor Island as Germany’s largest pop company, we will attend to our core of artists with unprecedented drive and set new accents with our local and international repertoire. I am sure that the merging of two labels so rich in tradition will create something great and new.”

Sina Farschid, formerly General Manager, Island Mercury, has decided to leave the company. Paying tribute to him, Tim Renner said, “Sina has brought about a turnaround in Mercury, particularly in local A&R – an area that had long since been its weakest point. I understand his reasons for leaving, and at the same time I am saddened by his decision.”

Detailed below are the FORMER executive titles under the old structure.

Petra Husemann MD, Motor & Urban/Def Jam

Thorsten Konig General Manager, Motor Music

Neffi Temur General Manager, Urban/Def Jam

Andrea Frahm Director Marketing, R&B, Hip Hop & Soul, Urban / DJ

Daniel Lieberberg Director Marketing, A&R Rock, Motor Music

Verena Vehling Director Marketing, A&R Alternative/Pop, Motor Music

Tom Bohne Managing Director, Polydor

Johannes Cordes Director Marketing, National, Polydor

Joe Chialo Director A&R, Urban/Def Jam

Tim Dobrovolny Director A&R, Polydor

Milijana Gojic Director Marketing, Dance/Pop, Urban/Def Jam

Lars Grewe General Manager, Island Mercury

Michael Kucharksi Director Promotion, Polydor

Sven Kilthau-Lander Director Promotion, Island Mercury