<Press Release>
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February 17, 1998
Philips Electronics N.V.
Sony Corporation
Philips, Sony Announce Licensing Plans for DSD, Super Audio CD


(Abbey Road Studios, London) Philips Electronics N.V. and Sony Corporation today announced plans to license the Super Audio CD. Licensees of the current CD format would have the option of expanding their agreements to include the Super Audio CD under the same royalty structure used for the audio CD; new licenses for the Super Audio CD will be issued under the same terms and conditions.

The licensing announcement was made during a press briefing and demonstration held at Abbey Road Studios in London on February 17, 1998. The event was the latest in a string of technological demonstrations and listening tests held worldwide to promote awareness of the superb sound quality achievable through DSD recording, editing, and playback technology, which can also be used to improve the quality of conventional CD recordings.

Philips and Sony plan to discuss the licensing of the Super Audio CD at the upcoming CD licensing meeting to be held in Tokyo on March 19, 1998. Release of Version 0.9 of the Super Audio CD specifications is scheduled for late March 1998. Once finalized, it will become an appendix to the "red book" specifications that define the CD format.

The Super Audio CD is uniquely positioned as a next generation audio carrier capable of succeeding the conventional audio CD as the world's most popular music format. The hybrid disc contains two layers- a fully-reflective layer in the conventional CD format and a semi-reflective layer in a special, high-density format. The high density layer offers ultra high-quality, stereo sound plus additional channels capable of producing multi-channel sound and carrying additional data such as text and graphics.

The Super Audio CD offers forward and backward compatibility with the conventional audio CD. Consumers and the music industry alike can embrace its superior sound quality with the reassurance that their earlier investments in CD hardware, software, and recording technology are safeguarded. Furthermore, retailers will be spared the expense of carrying duplicate inventory.

The Super Audio CD also features advanced protection against counterfeiting and piracy. The discs themselves incorporate visible and invisible watermarking features to discourage counterfeiting. The recording technology utilizes advanced encoding technology to prevent piracy.

The International Steering Committee (ISC), a group representing interests of the music industry, has identified both compatibility with the existing audio CD format and improved security features as critical elements of any future music format. Sony and Philips believe that their Super Audio CD format offers the solution which best addresses the needs of consumers, retailers, and the music industry.