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New features include: Beatmapper(TM), Video Scoring, MIDI Playback, Powerful Effects Model, and New Loop Content

New features in ACID Music 3.0 include:

• Beatmapper(TM) remixing tool (patent-pending) -- helps users create custom remixes of existing songs.
• Video scoring -- allows users to create music beds for videos during playback in real-time.
• Powerful effects model -- gives users the ability to assign customizable effects to each track.
• Updated music content-- provides users with tons of new content -- over 600 royalty-free loops in multiple genres.
• MIDI playback -- allows users to import MIDI files and assign DLS Sound Files for output to the Windows DirectX® Soft Synth.

The MSRP for ACID Music is $99.95 and is available directly from Sonic Foundry for $59.97 (40% off) as a box or downloadable product. Existing ACID Music customers can upgrade to version 3.0 for $29.95. ACID Music is expected to be available this fall from major retailers such as Best Buy, Circuit City, Staples, Musicland, CompUSA, Micro Center and Fry's Electronics.

New features in the ACID Techno 3.0 and ACID DJ 3.0 genre-specific versions include:

• New loop content -- over 600 genre-specific loops in each product - all royalty-free.
• User Interface enhancements -- easier work flow, improved file management and more publishing options.
• New input and output formats -- adds support for Windows Media(TM) 7.0, RealAudio® 8.0 and Perfect Clarity Audio(TM).
• Volume and Pan envelopes -- allows users to control audio levels and panning over time, giving them the ability to perform custom fades and left-to-right stereo effects.
• Optional Expander Packs (sold-separately) -- these NEW additions to the Loops for ACID(TM) line include hundreds of additional genre-specific loops for ACID DJ and ACID Techno users (MSRP $59.95; Direct $47.96).

``ACID puts the power of a music and multimedia production studio into the hands of the up and coming professional,'' said Brad Reinke, Sr. Vice President and General Manager. ``We feel that with these new additions, our music creation tools will continue to be the best in the industry.''

About Sonic Foundry

Sonic Foundry®, founded in 1991, is a leading developer of digital media software products and services with locations in Madison, WI; Santa Monica, CA; and Toronto, Canada. Sonic Foundry's award-winning software products, such as ACID(TM) and Sound Forge®, as well as its first-class services are used worldwide for multimedia development, Internet streaming applications, broadcast solutions, and digital content creation. Sonic Foundry's Media Services Division is the pre-eminent supplier of digitization, management, and delivery solutions for various industries, with special emphases placed on service offerings to clients in the entertainment sector. These include the conversion, reformatting, and encoding of television, film, and audio content for multiple delivery platforms. Serving as the link between content and customers, the Company provides proven, comprehensive processes that enable content delivery through existing and emerging distribution channels.

For specific product descriptions, please reference the ``products'' section of the Sonic Foundry web site at www.sonicfoundry.com.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for the Company's products, the Company's ability to succeed in capturing significant revenues from media services, the effect of new competitors in the Company's market, integration of acquired business and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission.

Contact:

     Sonic Foundry, Inc.
     Heidi Elmer, 608/204-8253
     invest@sonicfoundry.com
     or
     Strategic Growth International
     Richard Cooper or Rob Schatz, 516/829-7111
     sgi@netmonger.net