Technology Companies and Music Industry Agree on Framework for DVD-Audio Content Protection

Agreement Opens Way for Development of DVD-Audio Products

BURBANK, Calif., March 3, 1999 -- IBM, Intel, Matsushita Electric (Panasonic) and Toshiba today jointly announced the development of a content protection framework for Digital Versatile Disk (DVD)-Audio. This framework has been in development over the last 12 months as a result of discussions among the four technology companies and the world's five leading music companies: BMG, EMI, Sony Music Entertainment, Universal Music Group and Warner Music Group.

In anticipation of the finalization of the DVD Forum's release of Version 1.0 of the DVD-Audio specification, several music companies encouraged the four computer and consumer electronics companies to define a framework for the copy protection of music released on DVD-Audio discs. The proposed framework was chosen to represent the best interests of content owners, consumers, PC systems integrators and hardware manufacturers in promoting the widespread support and development of products based on the DVD-Audio specification.

The new framework uses watermark and encryption technologies created or identified by the four technology companies to protect the music made available on the prerecorded DVD-Audio disc. The copy protected DVD-Audio discs can be played only on licensed players, in a way similar to that used for today's DVD-Video discs and players. The framework also includes a set of options which provide music industry content owners with the flexibility to address the needs of consumers as the market for DVD-Audio products develops.

"The framework was designed to satisfy both the music industry's copyright protection requirements and the consumers' need to protect their existing audio investments," said Alan Bell, IBM program director, Digital Media Standards, and co-chairman of the Copy Protection Technical Working Group (CPTWG).

The framework provides consumers with the ability to make one digital copy, per recorder, of the original audio content for personal use at a sound-quality equal to CD-Audio or less. For example, a consumer who purchases a DVD-Audio disc for a home player would be able to make one copy -- on recordable CD, MiniDisc or DAT media -- for existing automobile or other personal music players. Content owners will have the option of allowing additional copies at various levels of quality, up to and including the full quality of the prerecorded DVD-Audio original.

IBM, Intel, Matsushita Electric (Panasonic) and Toshiba have all actively contributed to developing methods to protect digital entertainment content from unauthorized copying. For example, they have participated in the efforts to develop the DVD Content Scrambling System (CSS).

IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. IBM is helping media and entertainment companies worldwide take advantage of the business opportunities made possible by digital technology. IBM offers an end-to-end portfolio of solutions, networking and service offerings that is transforming the traditional creative processes of media and entertainment companies and positioning them to leverage their intellectual assets into new commercial opportunities. The fastest way to get more information about IBM is through www.ibm.com.

Best known for its Panasonic products, Matsushita Electric Industrial Co., Ltd. (NYSE: MC) -- is among the world's leading producers of electronic and electric products for consumer, business and industrial use. Technics is the company's premier audio brand. Matsushita has more than 275,000 employees worldwide and had sales of $59.8 billion for the last fiscal year. Overseas operations include over 200 companies in 46 countries. For more information, visit www.panasonic.com.

Toshiba Corporation, with over 189,000 employees worldwide and annual sales of over $40 billion, is an integrated manufacturer of products spanning information and communications systems, information media and consumer products, electronic components, and power systems and industrial equipment.

Music Industry Executives Quotes "The DVD Audio framework provides a flexible solution which will enable us to provide consumers with a much higher quality audio experience, while protecting the rights of our artists. This framework is the result of a highly collaborative effort between the music, technology and consumer electronics industries and will result in music fans having more choices and the best sound ever available."

Kevin Conroy
Senior Vice President
Worldwide Marketing, BMG Entertainment

"We are very pleased to endorse this framework. It is a flexible and creative approach to meeting the needs of artists and content owners while opening up new and varied opportunities for consumers. If broadly implemented, the framework will certainly set the stage for a speedy and successful introduction of DVD-Audio."

Roger C. Faxon
senior vice president, Business Development
EMI Music

"With the inclusion of newly created watermarking and encryption technologies, the DVD Audio format successfully addresses one of Sony Music's key concerns: the protection of our artists' copyrights. We want our artists' music to reach the widest possible audience, and we plan to make their music available on formats that provide proper copy protection."

Al Smith
Senior Vice President
Sony Music

"Universal Music is excited by the opportunity that DVD Audio represents to bring the world's largest repertoire of recorded music to music lovers in yet a greater level of fidelity and multichannel sound. The content protection afforded by the medium will meet the needs of both the creators and consumers of music."

Larry Kenswil
Executive Vice President and Global Head of Electronic Commerce and Advanced Technology Universal Music Group

"This landmark accomplishment with DVD-Audio is the first time leaders in the music, computer and consumer electronics industries have worked together to develop a win/win solution addressing business, artistic and consumer interests. This sets the stage for future cooperation among these industries. We intend to release DVD-Audio titles this Fall."

Paul Vidich
Executive Vice President
Warner Music Group

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