, Pizza Hut Team for Music Promotion

Online music retailer CDNOW and Pizza Hut Friday
joined for a promotion that gives buyers of a New Yorker pizza a free
custom CD.

The promotional CD, with songs from the Dixie Chicks, the Chemical Brothers, Fatboy
Slim, among other, is aimed both at pushing the Pizza Hut product, and at
driving traffic to CDNOW’s Web site. For the length of the promotion, CDNOW
will try to monetize this new traffic by offering a 30 percent discount on
selected albums.

Consumers who order the New Yorker pizza between January 23rd and February
20th will receive a CD sleeve with a personal access code, which will allow
them to get the free, six-song CD on the music e-tailer’s site. They’ll be
able to select from more than 200 songs from more than 70 artists.

CDNOW offered a similar opportunity last year that featured only Beastie
Boys songs, and the company said it was very successful. Beastie Boys album
sales increased 265 percent at CDNOW during the three weeks following the
November. 23, 1999 start of the promotion, as compared to the three week
period prior to the promotion.

“The ability to customize and personalize music using
the Internet is one of the most exciting new developments in music today.

This unique promotion is the first time two leading brands, such as Pizza
Hut and CDNOW, have offered consumers a way to experience creating a custom
CD for free,” says Jason Olim, president and chief executive officer of CDNOW.

CDNOW enlisted EMI Music Distribution to provide most of the music for the
promotion. The company owns Capitol, Capitol Nashville, Virgin, Virgin
Nashville, Angel, Blue Note, Astralwerks, Hi Records, Chrysalis, Val,
Christian Music Group, Sparrow, Tooth & Nail, Forefront, and Pointblank
record labels.

CDNOW is in the process of merging with Columbia House, which is a joint
venture of Sony Corp. of America and Time Warner.

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