Sony Gets Tighter with RealNetworks

Sony Corporation took a 1 percent stake in RealNetworks Inc. , and the companies Wednesday
agreed to continue bundling each other’s technologies for Sony’s home entertainment devices.

Sony will continue marrying its ATRAC3 sound compression format and OpenMG copyright protection with RealNetworks’ products,
including RealPlayer and RealJukebox. In turn, Sony will continue to add the aforementioned RealNetworks software to networked CE
devices. Sony will carry the marketing flag to appeal to PC users, and will distribute the combined products with its hardware
products, such as its wildly popular PlayStation 2 video console.

A refreshment of their more than two-year-old relationship, first forged at Winter CES 2000, RealNetworks and Sony
said the reinforced deal symbolizes the rapid expansion in network distribution of digital audio and video content to PCs, along
with a new generation of networked consumer electronics products.

As for further integration, RealNetworks’ RealOne will also be integrated with Sony’s portable audio players and OpenMG devices such
as NetMD. The firms said consideration will be paid to adding Sony’s OpenMG technology into RealNetworks digital content
distribution solution for digital music distribution and digital video distribution services.

“Sony is extremely pleased to enhance the level of our technical collaboration with RealNetworks and to make an equity investment in
order to expand business opportunities in relation to digital content distribution,” said Mr. Kunitake Ando, President and COO, Sony
Corporation. “With the power of RealNetworks’ distribution software and its technical expertise, we are confident that this
agreement will help make Sony’s ATRAC3 and OpenMG an industry standard for digital content distribution.”

Wednesday’s announcement isn’t the first time the firms have expanded their liaison. In May 2001, Sony’s PlayStation parent — Sony
Computer Entertainment Inc. (SCEI) recruited
in its fight against Microsoft Corp.’s Xbox, adding momentum to RealNetworks long-standing duel for digital
software supremacy with the Redmond, Wash. software giant. Sony went on to embed RealPlayer 8 and other RealNetworks client
technologies on the PlayStation 2 and the consoles Software Development Kit (SDK).

Sony and RealNetworks expanded on that agreement the
next month.

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