Microsoft and Liquid Audio to Integrate Windows Media Into Liquid Audio’s Music Delivery Systems and Services

REDMOND, Wash., and REDWOOD CITY, Calif., Jan. 24, 2000 — Microsoft Corp. Nasdaq
“MSFT”
) and Liquid Audio Inc. (Nasdaq
“LQID” ) today announced they are working together to add support for Microsoft® Windows Media TM Technologies to Liquid Audio’s open, multiformat music distribution system and services. These efforts respond to the growing demand for Windows Media among consumers and the music industry, and reinforce Liquid Audio’s commitment to offering a wide range of music delivery technologies in its distribution system.

The companies are working together to add support for Windows Media in the following areas:

  • Liquid Audio plans to encode and distribute the Liquid TM Catalog of more than 50,000 downloadable songs and 1 million music previews in Windows Media format.

  • Liquid Audio will deploy Windows Media-based servers in its data centers to host and distribute Windows Media-formatted content to the hundreds of retailers in the Liquid Music Network. This will provide content owners with one of the broadest choices of music distribution formats in the industry.

  • Liquid Audio will establish and operate clearinghouse functions for Windows Media digital rights management (DRM) as part of Liquid Audio’s existing rights management and reporting services.

  • The companies will add support for Windows Media to Liquid TM Player software, allowing users to access the wide range of content available in the Windows Media format.

“Liquid Audio software and services simplify the user experience by bridging many music delivery technologies to make it easy for artists, labels and retailers to promote and sell secure digital music to consumers online,”
said Gerry Kearby, chief executive officer of Liquid Audio.
“By expanding the range of media formats we support in our open system to include the high-quality Windows Media format and DRM technology, Liquid Audio can provide customers with increased flexibility and choice for digital music distribution.”

“Today’s breakthrough announcement with digital music pioneer Liquid Audio is a strong validation of how delivering Windows Media as an open digital media platform is a win for the entire industry,”
said Anthony Bay, vice president of the Digital Media Division at Microsoft.
“Working with Liquid Audio is a major step in bringing digital media mainstream.”

“This new agreement between Microsoft and Liquid Audio is extremely significant because it provides consumers with a much easier downloading, purchasing and listening experience, while enabling BMG to include our many retail partners,”
said Kevin Conroy, senior vice president, Worldwide Marketing & New Technology, BMG Entertainment.
“BMG remains committed to providing music fans with the highest-quality digital downloads available on the Internet today, while ensuring that our artists’ music is protected.”

Liquid Audio plans to deploy Windows Media-based servers over the next few months to host and distribute content in the Windows Media format via retail Web sites. The companies plan to fully integrate Windows Media Technologies into Liquid Audio’s encoding, hosting, distribution, clearinghouse and music preview services over the next year. Liquid Audio plans to deliver support for Windows Media in the next major upgrade of the Liquid Player.

About Liquid Audio

Liquid Audio is a leading provider of software and services for the digital delivery of music over the Internet. The Liquid Audio solution gives musicians, record labels, Web sites and music retailers the ability to publish, syndicate and securely sell recorded music online with copy protection and copyright management. Using the Liquid Player software, available for free download at http://www.liquidaudio.com/ , music fans can preview and purchase downloadable music from the more than 300 affiliate Web sites in the Liquid Music Network. Traded on Nasdaq under the symbol LQID, Liquid Audio is located in Redwood City, Calif.

About Windows Media

Windows Media is the leading digital media platform worldwide, providing consumers, content providers, solution providers, software developers and corporations with unmatched audio and video quality. Windows Media Technologies, which includes the Windows Media Player, Windows Media Services, Windows Media Tools and the Windows Media SDK, is available for free* download at http://www.microsoft.com/windows/windowsmedia /. The Windows Media Player, available in 24 languages worldwide, is the fastest growing media player. More than 50 million copies have been downloaded to date – growing by more than one every second.

About Microsoft

Founded in 1975, Microsoft is the worldwide leader in software for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Liquid, Liquid Audio Inc., Liquid Audio, the Liquid Audio logo, Liquifier and Liquid Music are trademarks of Liquid Audio Inc.

Microsoft and Windows Media 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.

Certain of the statements above regarding deployment of Windows Media-based Servers in Liquid Audio data centers, plans to encode and distribute a music catalog in Windows Media format, the establishment of rights management and reporting services for Windows Media and the addition of Windows Media Technologies to Liquid Player software, constitute forward looking statements, which may involve risks and uncertainties. Actual results could differ materially from such forward looking statements as a result of a variety of factors, including, but not limited to, technology changes, competitive developments, industry and market acceptance of new products and services and risk factors listed from time to time in Microsoft’s and Liquid Audio’s filings with the Securities and Exchange Commission.

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. For more information about Liquid Audio software and services, call (888) liquid-0 (547-8430) or visit http://www.liquidaudio.com/ .

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