Microsoft Announces New Version of Windows Media Digital Rights Management Software

REDMOND, Wash., May 2, 2004 — Microsoft Corp. today unveiled the features of the next version of its Windows Media® Digital Rights Management (DRM) software, and announced early adopters of the platform, including leading online music and movie services, entertainment companies, consumer electronics manufacturers and chip makers. Microsoft’s next generation of Windows Media DRM technology will make new scenarios possible, such as protecting, delivering and playing subscription-based or on-demand digital music and video. These scenarios span Windows® based PCs and devices, including portable audio devices, Portable Media Centers, cellular phones and personal digital assistants (PDAs) such as Windows Mobile (TM) -based Pocket PCs and Smartphones, and networked devices connected within the home, including those that connect over a wireless network.

The promise of how this DRM technology enables these new scenarios has already attracted support from the following companies:

  • Content companies America Online Inc., The Disney Co. and OD2

  • Service providers CinemaNow Inc., Movielink LLC, MusicNow LLC, Napster LLC, VirginMega France and Yacast

  • Consumer electronic device manufacturers Archos SA, Creative, Dell Inc., Digital 5 Inc., iRiver International, PRISMIQ Inc., PURE Digital, Rio, Samsung Electronics Company Ltd., SimpleDevices Inc. and 2Wire Inc.

  • Chip makers BridgeCo AG, Equator Technologies Inc., Imagination Technologies, Micronas, Motorola Inc., Sigma Designs Inc. and SigmaTel Inc.

There is also support for the new DRM by manufacturers of Windows Media Center Extender Technology and Windows Media Connect devices, including Alienware Corp., Creative and Dell. This new version of Windows Media DRM reinforces Microsoft’s strong commitment to the digital media marketplace supporting the company’s vision of enabling the seamless flow of music and movies for consumers while ensuring that content owners are able to build robust businesses.

“Consumers are embracing online music with a passion, as evidenced by the nearly 20 million people that visit our music sites every month streaming up to 4 million songs and videos a day,” said Alex Blum, vice president of broadband, music, games and entertainment products for AOL. “Our goal has always been to offer music fans the widest range of options to experience leading content in the highest quality possible. Microsoft’s latest version of Windows Media DRM will help us continue to take legitimate digital music offerings, particularly for our rapidly growing broadband audience, to the next level, ultimately meeting the consumer’s goal of taking purchased or rented digital songs, games and movies with them wherever they want, on any device.”

“This is a positive development in the continuing effort to provide consumers with more choices for enjoying legitimate entertainment content on emerging digital platforms,” said Bob Lambert, senior vice president of New Technology at Disney. “Consumers, content companies and technology companies stand to benefit as content continues to migrate from analog to digital devices, and Microsoft’s ongoing commitment to create robust, flexible and secure media technology will help facilitate these new experiences and business initiatives.”

With the growth in popularity of portable media players and the emerging market for networked media devices, such as digital audio receivers, content owners want to make sure that their music and movies can be enjoyed by consumers in a variety of situations while still being protected from piracy. Microsoft’s new DRM will enable a more secure yet seamless flow of content to dozens of devices, and support the widest range of purchase and rental options for digital media ever available.

“The next generation of Windows Media DRM breaks new ground for music and video services so they can offer consumers more choices and an even better experience when buying, renting or previewing premium content,” said Amir Majidimehr, corporate vice president of the Windows Digital Media Division at Microsoft. “Imagine paying a low monthly fee to fill your portable music player with thousands of songs, or renting a dozen movies to take with you on a Portable Media Center when you go on holiday, perhaps watching them as you sit on the plane, or letting your kids watch them in the back seat of the car. This kind of flexibility is what our technology is designed to enable.”

New Features of Windows Media DRM

The next version of Windows Media DRM will offer new features designed to improve the user experience and offer music and video services the flexibility to implement new business models. These features cover a range of user scenarios. For instance, license chaining makes it easier for licenses to be renewed (a direct benefit for consumers with large content libraries filled with subscription content), and support for secure time clocks and metering make it possible for services to offer subscription content to portable devices for transfer and playback for the first time. In addition, improved license synchronization and license store performance make it easier and faster for consumers to manage and access their music. Microchip and device manufacturers can implement support for next-generation Windows Media DRM today through porting kits that include ANSI C code and other tools to help them rapidly integrate these new features into any device, including portable media players, set-top boxes, mobile devices or digital media receivers. Also available is the Windows Media Rights Manager Software Development Kit (SDK), which supports the new DRM functionality being delivered on the PC and devices.

“This improved Windows Media DRM opens the door for Napster subscribers to increase their value by putting the music they’ve paid for through their subscription onto their digital players without having to pay again for each song,” said Chris Gorog, chairman and CEO of Roxio Inc., parent company of Napster. “Microsoft’s technology might be the biggest step forward in the fight against digital piracy and should catalyze the recurring revenue model for record labels and artists.”

“The next generation of Windows Media DRM technology can enhance Creative’s customer experiences both on the go and throughout the home,” said Craig McHugh, president of Creative. “Creative is already enhancing digital entertainment with support for Windows DRM across various product categories and will continue to support the next generation of Windows DRM technology this year in a variety of products.”

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft, Windows Media, Windows and Windows Mobile are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft®
Web page at http://www.microsoft.com/presspass/ on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.asp .

Windows Media Digital Rights Management Software

Quote Sheet

May 2004

“Consumers are embracing online music with a passion, as evidenced by the nearly 20 million people that visit our music sites every month, streaming up to 4 million songs and videos a day. Our goal has always been to offer music fans the widest range of options to experience leading content in the highest quality possible. Microsoft’s latest version of Windows Media DRM will help us continue to take legitimate digital music offerings, particularly for our rapidly growing broadband audience, to the next level, ultimately meeting the consumer’s goal of taking purchased or rented digital songs, games and movies with them wherever they want, on any device.”

— Alex Blum, Vice President of Broadband, Music, Games and Entertainment Products, America Online Inc.

“As the pioneer in pocket-sized digital media solutions for mobile consumers, Archos is pleased to expand our product advantages with support for the new Windows Media Digital Rights Management technology. By combining leading-edge portable media solutions with secure Windows Media DRM content, we will ensure even faster market penetration for our devices and expand our content relationships worldwide.”

— Stefan Serwe, Director of Worldwide Marketing, Archos SA

“BridgeCo’s silicon and firmware platform for wireless audio allows consumers to enjoy digital music anywhere in their home. With Microsoft’s highly secure DRM technology, content owners have the security to offer a wide variety of digital audio on the Internet, and that means products built on BridgeCo’s platform will have legal access to a vast archive of popular entertainment. BridgeCo is working very closely with Microsoft engineers to make sure Windows Media DRM-based consumer products are available this year.”

— Christof Heidelberger, Chief Technology Officer and Founder, BridgeCo

“CinemaNow is very excited about Microsoft’s new Windows Media DRM because it allows us to offer portability to our users. Now people can take our movies off the PC, put them on a handheld device, and take them wherever they go: a business trip, a family trip, a hotel room. It’s a great development for us and one that we know movie fans are going to be very thrilled about.”

— Bruce Eisen, Executive Vice President, CinemaNow

“The next generation of Windows Media DRM technology can enhance Creative’s customer experiences, both on the go and throughout the home. Creative is already enhancing digital entertainment with support for Windows Media DRM across various product categories and will continue to support the next generation of Windows Media DRM technology this year in a variety of products.”

— Craig McHugh, President, Creative

“Microsoft Windows DRM gives Digital 5 the ability to offer more choices to our customers. We are able to add value to our technology and enable our premium content providers with a platform for the distribution of secure digital media files from the PC and across all their client devices.”

— Jodie Hughes, Chief Executive Officer, Digital 5

“This is a positive development in the continuing effort to provide consumers with more choices for enjoying legitimate entertainment content on emerging digital platforms. Consumers, content companies and technology companies stand to benefit as content continues to migrate from analog to digital devices, and Microsoft’s ongoing commitment to create robust, flexible and secure media technology will help facilitate these new experiences and business initiatives.”

— Bob Lambert, Senior Vice President, New Technology, The Disney Co.

“Equator looks forward to providing the next version of Windows Media DRM technology to consumer electronics manufacturers for use in network-connected video appliances based on the Equator BSP-15 chip and Windows Media 9 Series. This next-generation technology allows subscribers legal and licensed access to upcoming TV-centric content and VOD services. Microsoft leads the industry in providing a comprehensive and cohesive Windows Media 9 Series media ecosystem — from creation through delivery — driving innovation in a range of

consumer devices. Resulting devices are not defined by the operating system they run, but instead by the content they are able to carry, the providers they are able to serve, and the consumers they satisfy.”

— Rich Christopher, CEO and President, Equator Technologies Inc.

“As a leading digital audio decoding semiconductor provider, we welcome the introduction of Microsoft’s new security technology. This is an excellent technical symbiotic relationship. Microsoft provides security for the music content, and Freescale provides fast, feature-rich, high-quality audio for the listener.”

— Bill Pfaff, Vice President and General Manager, Digital Audio, Radio and Telematics Business Freescale Semiconductor Inc., a subsidiary of Motorola Inc.

“Effective rights management technology, and in particular the emergence of standards in this area, are key requirements to drive the next step in the digital media revolution. Imagination sees the new version of Microsoft’s Windows Media DRM as a key development and intends to support the technology in its video, audio and graphics IP solutions.”

— Hossein Yassaie, CEO, Imagination Technologies

“Windows Media DRM is fast becoming a uniting format that powers a growing array of music services. Our customers are embracing online music services that are simple to use and allow them to take their favorite songs on the go. We recognize that music services appeal to a growing number of our customers, and as a result we have included Windows Media DRM support in our wide range of flash-based portable audio players with plans to further increase support for Windows Media DRM in our expansive product line of portable entertainment devices.”

— Jonathan Sasse, President, iRiver America

“With the next generation of Windows Media DRM technology, Microsoft will bring about the consolidation option required to finally enable a long-standing consumer and industry need. This is a cohesive step to bring media content distribution and management to the next and, more important, an accepted level. Within Micronas we have embraced the need for the protection of legal rights at an early stage. In fact, our company has always participated in standardization activities and supported industry initiatives such as SmartRight and consequently implemented the respective security arrangements in our products. With the licensing of Microsoft’s new DRM technology, Micronas has expanded its data security portfolio with one which we expect will be shown to be a major catalyst to both the uptake of consumer services and the industry as a whole.”

— Shawn Richards, Director, Marketing Multimedia, Micronas

“By creating a more-secure bridge between the PC and TV, Microsoft’s most recent progress on DRM will enable Movielink to provide an even more compelling service.”

— Jim Ramo, CEO, Movielink

“Microsoft’s latest DRM technology holds the promise to revolutionize the consumer’s digital music experience. The tremendous value proposition of paying a reasonable monthly fee for access to a world of content that can be played on portable and other digital devices will spark a torrent of interest in services like MusicNow.”

— Scott Kauffman, President and CEO, MusicNow LLC

“OD2 continues to integrate Microsoft’s Windows Media technology into its service to deliver European music fans a truly flexible and user-friendly music service. The new Windows Media DRM technology heralds another step in the development of the European digital media industry and will allow OD2 to offer consumers a seamless and legitimate digital music experience with the added ability to take their music with them. This is a very exciting opportunity for the digital music industry.”

— Charles Grimsdale, CEO, OD2

“We are excited to be working with Windows Media DRM as it allows us to viably roll out Web-based movie services such as CinemaNow to our entertainment gateway set-top-box product line. Extending Web-based movie services from the PC to the TV through our home-networked set-top boxes is key to pushing our product category into the mainstream.”

— Brad Kayton, Vice President of Marketing and Business Development, PRISMIQ Inc.

“We recognize that our customers are looking for improved methods to buy music and enjoy it on their portable players. Rio will support the next-generation Windows Media DRM in our products as we believe it will be accepted industrywide, leading to a better consumer experience while creating more pricing options for purchasing digital music and spoken word content.”

— Hugh Cooney, President, Rio Audio

“This improved Windows Media DRM opens the door for Napster subscribers to increase their value by putting the music they’ve paid for through their subscription onto their digital players without having to pay again for each song. Microsoft’s technology might be the biggest step forward in the fight against digital piracy and should catalyze the recurring revenue model for record labels and artists.”

— Chris Gorog, Chairman and Chief Executive Officer, Roxio, parent company of Napster

“Samsung is very excited about Microsoft’s new DRM technology. It allows for the perfect marriage between legal content providers and Samsung portable devices in one easy-to-use, intuitive interface. It will at last enable consumers to enjoy music, movies and more through such products as Samsung’s YH-999 portable media center.”

— Mark Farish, Marketing Manager, Digital Audio Group, Samsung

“From the perspective of SigmaTel, the leading MP3 audio controller supplier for portable MP3 players, this new Windows Media DRM is an important step in propelling legitimate digital multimedia distribution into world wide channels. We applaud Microsofts endeavors and are proud to support this initiative.”

— Ron Edgerton, President and CEO, SigmaTel

“SimpleDevices is pleased to be working with Microsoft on Windows Media DRM to enable the distribution of premium content to portable devices within the home and car. With the rapid proliferation and acceptance of online music stores, playback of premium content is a necessity for PC-connected media players powered by the SimpleWare media distribution platform. To address this growing need, SimpleDevices is collaborating with Microsoft to provide this capability to our OEM customers.”

— Hanford Choy, Vice President, Sales, SimpleDevices Inc.

“2Wire will be using the new Windows Media DRM for distribution of content through its Component Management System, for delivery to our MediaPortal and Media Point set-top box family. It is the most robust solution available for distribution of secure media through the 2Wire platform, furthering our vision of providing the ‘triple play’ of data, voice and entertainment services.”

— Arthur Cinader, Director of Media Products, 2Wire

“Thanks to Microsoft’s Windows Media DRM technology, VirginMega has been able to build a robust, flexible and secure digital music download service. The new Windows Media DRM will allow us to improve it with new business models and full music portability to give our consumers the best value proposition possible.”

— Laurent Fiscal, Director General, VirginMega France

“Yacast will integrate the new Windows Media DRM into its platform and in its new professional Muzifast Service to secure the distribution of new music and video releases in broadcast quality. The technological progress of Microsoft’s Windows Media DRM has allowed Yacast to give to the music industry full transparency and control of its content. Muzifast and other Yacast Services will achieve with the new Windows Media DRM all the flexibility, quality and security required for the distribution of highly valuable music and video content to radio stations, television networks and end users.”

— Philippe Chron, Chief Technology Officer, Yacast