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Media Contact: media@relatable.com 703-212-4800 Related News Analyst Perspectives on Digital Music Separate reports released by Yankee Group and Forrester Research predict that consumer acceptance of paid digital music services depends on such services offering consumers large catalogs of music with the freedom and flexibity to enjoy it in a variety of formats and the ability to burn downloaded music to CDs and move it onto portable devices. Once such features are allowed, digital music services will generate revenues of over $2 billion by 2007 and account for 17% of total music revenues, according to Forrester Research. See the Relatable context below regarding Relatable ® TRM, the essential solution for copyright compensation for the next generation of digital music services. According to both reports, consumers will continue to embrace free services like Kazaa and Morpheus until paid services can rival the freedom and flexibility such services enable their users to enjoy. Yankee Group notes that unlicensed file sharing will exceed 7 billion transfers in 2005. The record labels' unwillingness to license adequate amounts of music and allow consumers freer and more flexible use of digital music is driving the popularity of free services. And it's a missed opportunity for the music companies themselves, whose sales are dropping. Yankee analyst Michael Goodman notes that the record labels' preoccupation with controlling consumers' use of music is undermining their own cause. As quoted in News.com , Goodman says, "In the end, record labels will have to share control of the content with the consumer..." Services allowing only streams and/or heavily restricting song copying have met with criticism and negative consumer reactions. Both analyst groups' reports prescribe necessary components to a legitimate digital music service that will meet with consumers' demands before they will be willing to pay for such services in substantial numbers. Here are highlights of the analyst reports and related links: Forrester Research Report: Downloads Save the Music Business , released August 2002 Related coverage: News.com , press release Forrester notes that 31% of consumers download music and burn CDs and 36% of music CD sales are purchased by these same digital music lovers. The slowdown in the economy explains the recent slump in CD sales, not digital downloading. But record labels can restore sales growth if they embrace a more open model for selling digital music to consumers over the Internet. In order to subscribe to music services, consumers require a feature set Forrester calls a "Music Bill of Rights" -- something current services fail to offer. It entails availabilty of a wider catalog of music (not just two or three major label catalogs), consumer control of the music to burn to CDs or copy onto MP3 players (ie, open formats required), among other features. Current Pressplay and Musicnet models simply won't entice consumers. Once music companies match the "Music Bill of Rights" legitimate digital music services will prosper, beginning in 2005, and will generate over $2 billion in revenues and account for 17% of all music sales by 2007. News.

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