Leading Digital Entertainment Companies Announce Support for Portable Media Centers at CES 2004

LAS VEGAS, Jan. 7, 2004 — Microsoft Corp. tonight announced at the 2004 International Consumer Electronics Show (CES) that leading digital entertainment companies CinemaNow Inc., EMI Music and Napster LLC( will support Windows Mobile (TM) software for Portable Media Centers, indicating that the new class of device will change the way people enjoy movies, recorded television, photos and music. In addition, in his keynote address at CES, Microsoft Chairman and Chief Software Architect Bill Gates unveiled and demonstrated the first working Portable Media Centers from Creative Labs Inc. (a subsidiary of Creative Technology Ltd.).

“Consumers increasingly want to have their media with them wherever they are. It does you little good to have music, videos or pictures at home when the majority of time you want to use or share them is when you are away,” said Rob Enderle, principal analyst for the Enderle Group. “Portable Media Centers, particularly when they are coupled with PC-based Media Centers, download services, personal video recorders and digital still/movie cameras, will change the way people acquire, use and share their multimedia experiences. As a result, Portable Media Centers are expected to be one of the hottest emerging products in the fall of 2004.”

“We’ve seen an explosion in recent years in the way that people use their PCs for enjoying digital movies, recorded television, photos and music,” said Todd Warren, general manager of the Embedded Devices Group at Microsoft. “Companies like CinemaNow, Creative Labs, EMI Music and Napster are helping us deliver on consumers’ increasing desire to transfer those experiences quickly and securely to portable devices to enjoy anywhere, at any time.”

Portable Media Centers, which will be available in the second half of 2004, are being demonstrated at CES in Microsoft booth No. CEN8323 and Creative Labs’ booth No. CEN13615.

“Devices like the Creative Zen Portable Media Center demonstrate that Microsoft is making great strides in ushering in a new era of digital entertainment,” said Sim Wong Hoo, chief executive officer at Creative Technology Ltd. “In minutes, people can transfer video, music and photos from a PC, allowing them to enjoy their entertainment in new and exciting ways.”

High-Quality Video

Portable Media Centers are the answer for any traveler who can’t stand to watch one more in-flight movie. To help ease the pain, CinemaNow will make available titles from its library of more than 4,200 feature films, for rent or “download-to-own.” The latter option is a new capability that will allow people to purchase and download a permanent copy of a digital file for unlimited playback on Portable Media Centers. The Portable Media Centers’ easy-to-view screen takes advantage of the quality of Windows Media®
9 Series.

New smart sync technology makes transfer from Windows®
XP-based PCs to Portable Media Centers fast and easy, and the small file sizes of Windows Media Video (WMV) let users travel with more videos, pictures and music than is possible on other formats, allowing them to store and play hundreds of hours’ worth of high-quality audio and video on the go. In addition, when coupled with Windows XP Media Center Edition, Portable Media Centers will allow people to easily and quickly record and transfer their favorite television programs and enjoy them on the go.

“People are hungry for an easy way to make movies as portable as digital music, and Microsoft has figured out how to make that a reality for everyone,” said Curt Marvis, chief executive officer of CinemaNow. “We will make our service available to people who own a Portable Media Center because we share the belief that a revolution in portable digital entertainment can only happen in an open environment where the protection of intellectual property is a priority.”

CinemaNow holds the Internet distribution rights to the most extensive and comprehensive library of feature films, from more than 150 licensors including 20th Century Fox Film Corp., The Walt Disney Co., MGM Inc., Miramax Film Corp., Warner Bros. Entertainment Inc., Lions Gate Entertainment Corp. and others. CinemaNow films are available on a pay-per-view, subscription basis, and its new download-to-own capability will allow people to buy the hottest new movie, transfer it securely to Portable Media Centers and view it forever.

More Than Music on the Go

Windows Mobile-based Portable Media Centers’ support for Windows Media Audio 9 (WMA) and MP3 digital media formats will enhance the way people enjoy their digital entertainment, allowing them to bring their entire world of music on the road:– music, album art, playlists, song ratings and, in the future, music videos. Because Portable Media Centers work with the widest variety of music download services, people will be able to easily transfer content using existing subscriptions with companies such as Napster.

Napster, which became the first music service to announce support of Portable Media Centers at launch, offers the world’s largest collection of digital music, with a personalized experience designed so music fans can easily access tracks at a low price. Napster’s support of Portable Media Centers ensures that customers will have access to all their purchased music away from their Windows XP-based PC. In the future, downloads of promotional music videos will give consumers an even better portable entertainment experience.

“Portable Media Centers will give Napster’s library of music tracks an even broader audience,” said Mike Bebel, president and chief operating officer of Napster. “Between our music service and the potential for a downloadable music video service, Napster will help artists be heard and even seen on portable devices, transforming the world of music yet again.”

Subscription services aren’t the only entertainment companies getting behind Portable Media Centers. At CES, EMI Music became the first major label to announce support of Portable Media Centers.

“We’re in the digital entertainment age, and EMI is committed to providing the best digital music available to people on the Internet,” said Ted Cohen, senior vice president of D3 — Digital Development & Distribution — at EMI Music. “Portable Media Centers will allow our customers to have secure access to their music and videos from EMI Music any time and anywhere.”

Using Windows Media Audio and Video 9 Series compression technology, consumers can quickly and easily transfer up to 175 hours of video, 10,000 songs or as many as 100,000 pictures* — enough to chronicle a lifetime — to Portable Media Centers from their Windows XP-based PC.

The Best Consumer Electronics Partners

Device manufacturers Creative Labs, iRiver International, Samsung Electronics, SANYO Electric Co. Ltd. and ViewSonic Corp. have agreed to build Portable Media Centers. Working prototypes from Creative Labs can be seen at CES.

More Access to Digital Media at Home and on the Go

One of the key pillars in Gates’ keynote address was the announcement of Windows Media Center Extender Technologies, software that will power a new generation of devices on which people can access their Windows XP Media Center Edition PC-based digital entertainment — recorded television shows, photos, movies and music — in more places around the home, including via set-top boxes, Xbox®
video game systems and televisions. Windows Mobile-based Portable Media Centers help extend this experience by allowing people to enjoy that same entertainment anywhere and at any time.

Windows Mobile software for Portable Media Centers is built on Windows CE .NET, the real-time operating system designed to power the next generation of smart mobile and small-footprint devices. Portable Media Centers are being developed on the Intel® XScale®
technology reference design.

About Windows Mobile Software for Portable Media Centers

Windows Mobile software for Portable Media Centers ( http://www.microsoft.com/windowsmobile/portablemediacenters/ ) is the platform that will power the next generation of portable digital media entertainment devices. As part of the Windows Mobile-based device family, Portable Media Centers make it easy for people on the go to enjoy their Windows XP-based digital videos, home movies, recorded television shows, photos, music and album art. Expected to be available in 2004 from Creative Labs, iRiver International, SANYO, Samsung Electronics and ViewSonic, 40GB devices will be able to hold up to 175 hours of video, 10,000 songs and as many as 100,000 pictures — enough to chronicle a lifetime.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies 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.

* Depending on bit rate and /resolution; based on Portable Media Centers with a 40GB hard drive.

Microsoft, Windows Mobile, Windows Media, Windows and Xbox 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.

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