IBM And Reciprocal Establish Strategic Relationship to Expand Digital Music Distribution

BMG Entertainment First Major Label to Make Music Available Through Reciprocal's Services on IBM's EMMS Platform

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SANTA MONICA, Calif - 06 Apr 2000: -- Reciprocal, a global leader in digital rights management (DRM) transaction services, and IBM today announced a strategic relationship in which Reciprocal plans to adopt and support IBM's Electronic Media Management System (EMMS), an electronic media distribution and DRM platform. Reciprocal plans to license IBM's EMMS technology and integrate it into its existing Digital Clearing Service, which is currently processing digital transactions for a number of content companies. This will enable Reciprocal to offer EMMS' management and distribution services in running and supporting music download transactions to consumers. The relationship between the two companies is a significant step in expanding the burgeoning online music industry.

BMG Entertainment is expected to be the first customer to use Reciprocal's services based on EMMS. By leveraging IBM's EMMS with Reciprocal's Digital Clearing Service, BMG will enable consumers to conveniently receive and enjoy music from top artists through next-generation software and hardware products. The companies plan to support the goals of the Secure Digital Music Initiative (SDMI)

"IBM has always been a pioneer in terms of technology innovation, and their EMMS solution continues in that fine tradition," said John Schwarz, President and CEO, Reciprocal. "Our strategic relationship with IBM furthers Reciprocal's ability to offer leading content companies the DRM platforms they feel best meet their business needs."

"We're enthused to be working with Reciprocal to accelerate the digital distribution of music," said Richard K. Selvage, general manager, IBM Global Media & Entertainment Industry. "EMMS is a proven platform and we welcome BMG's endorsement as our first joint customer with Reciprocal. We're confident that our relationship with Reciprocal enables us to quickly expand our collective services to other content providers."

After conducting extensive testing to ensure consumers will have the best possible experience, BMG is set to commercially deploy its digital music distribution plans this summer.

"The alliance of IBM and Reciprocal is helping BMG to take this important first step to make our music widely available through digital downloading," said Kevin Conroy, Sr. Vice President, Worldwide Marketing and New Technology, BMG Entertainment.

IBM's EMMS is a sophisticated electronic distribution and DRM system designed to support all forms of media beginning first with music and audio content. EMMS was successfully tested in a broadband music distribution trial conducted with the five leading record companies last year. The system combines scalability and security features within an open architecture. Major components of EMMS include a content mastering system, tools for hosting music content and promotional materials, and tools for online music retailers supporting the sale of digital music to consumers.

Reciprocal's Digital Clearing Service features a flexible and reliable clearing system that tracks the sale of digital content, and manages access and usage privileges as designated by the content owner. The clearing service is capable of conducting millions of financial and information transactions per day.

Added Reciprocal Music President, Larry Miller, "We're extremely enthusiastic to be working with IBM. EMMS has been embraced as an effective and proven DRM platform, and our new relationship greatly enhances Reciprocal's ability to deliver the highest quality DRM services to owners of valuable digital content."

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