Press Release

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January 6, 2000

Sony and Liquid Audio Integrate Internet Music Delivery Systems

Sony's New Portable Audio Players Can Receive and Play Liquid Audio Digital Downloads; Multi-Format Liquid System Now Supports Sony ATRAC 3 and OpenMG

REDWOOD CITY, Calif., (Jan. 6, 2000) -- Sony Corporation and Liquid Audio, Inc. (Nasdaq: LQID) today announced they have joined forces to deliver digital music to portable audio players over the Internet. The companies have made their secure Internet music delivery systems interoperable to enable consumers to playback music downloaded via Liquid Audio on Sony's portable audio players. With added support for Sony's OpenMG copyright protection technology, Liquid Audio digital downloads can maintain security when played back on the wide range of Sony portable audio players. In addition, the Liquid(TM) System software's support for Sony's ATRAC3 as a primary sound compression format makes it possible for users of the Liquid(TM) Player to quickly and securely download ATRAC3 music content directly to their PC.

The enhanced Liquid System will begin distributing digital downloads in ATRAC3 later this month. Sony will make these Liquid downloads, and a custom-branded version of the Liquid Player software, available to customers of its new VAIO Music Clip and Memory Stick Walkman devices. Liquid Audio is showing live demonstrations of these new portable devices from Sony in its booth (#6740) at the Consumer Electronics Show (CES) in Las Vegas beginning today. Using Liquid Player and Sony OpenMG jukebox software, users can preview, purchase, download and playback secure, CD-quality music files that include lyrics, album art and liner notes.

"Liquid Audio's support of Sony's OpenMG in its leading open music delivery system enables customers to access and playback music by using Sony's portable audio players, including Memory Stick Walkman and VAIO Music Clip, while providing the industry with the security and flexibility it requires," said Keiji Kimura, vice president, Personal IT Network Company, Sony Corporation. "In addition, we believe the strong support of ATRAC3 by Liquid Audio will provide an environment where both customers and content holders can make use of the high quality digital music files in this format."

"Liquid Audio's music delivery system simplifies the consumer experience by enabling access to music in the widest range of digital music formats," said Phil Wiser, chief technology officer at Liquid Audio, Inc. "With the added support for Sony's ATRAC3 digital music compression technology, Liquid Audio is making it simple for consumers using new devices from Sony, a leading consumer electronics company, to access and playback a broad selection of CD-quality music."

"We're looking at ways to safely sell and provide music online to consumers, and Liquid Audio is one of the first companies to attempt to see that artists are compensated for their work," said Jay Samit, senior vice president of New Media at EMI Recorded Music. "We're excited about Sony's new portable music devices and know that through their collaboration with Liquid Audio, in making content directly available in SDMI compliant formats such as ATRAC3, our music will become even easier to access for music fans everywhere."

Sony currently offers the following technology to support the secure and flexible download of digital music:

  1. MagicGate: Copyright protection technology for "MG Memory Stick" and compliant products. Authentication technology ensures that protected content is only transferred between compliant devices and media, and protected content is recorded and transferred in an encrypted format to prevent unauthorized copying or playback.
  2. OpenMG: Copyright protection technology including Digital Rights Management which consists of three key functions: allowing music download through multiple electronic music distribution platforms, enabling to playback music files and CD ripping on PCs (OpenMG Jukebox), and transferring contents securely from PCs to portable devices.
  3. ATRAC3: This sound compression technology can achieve roughly twice the data reduction rate of the ATRAC sound compression used for the MiniDisc.

About Sony

Sony Corporation is a leading manufacturer of audio, video, communications and information technology products for the consumer and professional markets. Its music, pictures and computer entertainment operations make Sony one of the most comprehensive entertainment companies in the world. Sony recorded consolidated annual sales of over $56 billion for the fiscal year ended March 31, 1999. Sony's Home Page URL:

About Liquid Audio

Liquid Audio, Inc. 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(TM) Player software, available for free download at *this link is no longer active and a revised page does not exist. , music fans can preview and purchase downloadable music from the more than 300 affiliate Web sites in the Liquid(TM) Music Network. Traded on Nasdaq under the symbol LQID, Liquid Audio is located in Redwood City, California.

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Liquid, Liquid Audio, Inc., Liquid Audio, the Liquid Audio logo, Liquifier and Liquid Music are trademarks of Liquid Audio, Inc. For more information about Liquid Audio software and services call 1-888-liquid-0 or visit*this link is no longer active and a revised page does not exist.)
Memory Stick is a trademark of Sony Corporation.