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Settlement Satisfies Demands of Both Copyright Protection and Music Fans

BMG Grants Music License for Use in My.MP3.com

The settlement and license agreement together represent a significant step for BMG to enforce music copyrights and protect its artists' rights online. Furthermore, the development signals a new working relationship between BMG and MP3.com whereby consumers are certain to experience new and innovative ways to listen to their music from the vast pool of BMG artists.

``BMG vigorously enforces its copyrights. At the same time, we believe the best enforcement is the creation of legitimate alternatives for consumers. As we build our global digital distribution platform, we are interested in working with responsible Internet companies that help us create new avenues for music fans to access their favorite music in a way that protects our artists' rights,'' said Kevin Conroy, Chief Marketing Officer and President, New Technology, BMG Entertainment. ``This is a good settlement for both parties.''

``Our agreement with BMG creates tremendous value for consumers, artists and rights owners,'' said Michael Robertson, Chairman and CEO, MP3.com. ``There is value for all Internet companies to work cooperatively with the record industry to build new business models together.''

``This is a giant step forward for MP3.com, the Digital music space, artists and consumers,'' said Robin Richards, President and Chief Negotiator for MP3.com. ``Exercising their vision and Internet understanding, BMG is on the leading edge of this inevitable convergence and by so doing has put the digital music space one step closer to stability.''

BMG Entertainment is the $4.7 billion worldwide music and entertainment division of Bertelsmann AG, one of the world's leading media companies, with annual revenues of $16.4 billion. BMG owns more than 200 record labels in 54 countries, including Arista Records, RCA Records, Ariola and Windham Hill. BMG has been a leader in using the Internet to bring fans closer to their favorite artists. In addition to establishing GetMusic, an online content and commerce joint venture, BMG's online presence includes more than 30 wholly owned music & lifestyle Web sites around the world, and strategic marketing agreements with and key investments in leading online companies ARTISTdirect, Riffage.com, Egreetings Network, Listen.com and Eritmo.com, among others. BMG also owns the world's largest music club, one of the world's largest music publishing companies, and one of the world's leading compact disc and cassette manufacturing companies. Bertelsmann's North America interests also include the Random House Inc. book publishing group; and the Gruner + Jahr magazine publishing group, which includes McCall's, Parents, Family Circle and YM magazines, among others.

MP3.com is pioneering a revolutionary approach to the promotion and distribution of music. MP3.com uses the Internet and file formats that make music files smaller, which enables a growing number of artists to distribute and promote their music worldwide while enabling consumers to conveniently access this expanding music catalog. MP3.com's site contains over 424,000 songs and audio files from more than 67,000 artists. MP3.com believes this represents one of the largest collections of digital music to be found on the Internet. Consumers can search for, listen to and download music. In addition, MP3.com is recognized as the premier online Music Service Provider (MSP) which allows users to access, manage, and listen to their personal music collection anytime and anywhere in the world, using any web-enabled device or application. MP3.com shares are traded on the Nasdaq National Market under the ticker symbol MPPP. The company is based in San Diego, California. For more information on MP3.com, visit http://www.mp3.com.

SOURCE: BMG Entertainment