Music Industry Gets Burned - Immediatek Jumps Into CD Protection Controversy with NetBurn Secure


RICHARDSON, Texas, Oct. 27, 2003 (PRIMEZONE) -- While the music industry is still reeling over the latest CD protection controversy, Immediatek (OTCBB:ITEK) is forging ahead with new ways of combating piracy. Immediatek's NetBurn Secure(tm) allows music consumers to legally download and burn a music CD over the Internet with built-in copy management that is burned directly onto the CD along with the music.

"We understand the reality of the industry and even though piracy may never go away, there is evidence to substantiate that combating piracy is working," said Zach Bair, CEO of Immediatek.

Bair cites the recent quote from BMG's Nathaniel Brown who says unprotected CDs typically see sales drop 35% to 45% in the second week, as pirated versions circulate. However sales of the copy-managed CD released by BMG's artist Anthony Hamilton fell just 23%. "That translates into real dollars being put back in the musician's pockets," said Bair. BMG utilizes MediaMax technology by SunnComm, Inc. (OTC: STEH.PK) for the Hamilton discs.

Although copy management is in its infancy, Bair believes improvements will continue to be made to first-generation software. The NetBurn Secure technology allows users to select, mix and match tracks and download an entire CD complete with cover art to their CD burner, leaving no leftover files on the hard disk. The music is accompanied with the burning software, DRM and copy management technology, and delivered in an executable which launches on the user's computer and burns the resultant disc -- which is protected with SunnComm's technology.

However, the recent issues highlighted by graduate student Alex Halderman regarding the shift key do not affect NetBurn Secure in the same way. The NetBurn Secure software utilizes MediaMax, but installs it after the user agrees to a EULA, and prior to the CD being burned -- as part of the NetBurn Secure process. Because of this method of deployment, the problem of the user bypassing the copy control by depressing shift key is effectively eliminated.

Bair believes that the recent controversy has actually helped the industry. "While I disagree with Alex Halderman's position that copy protection is a "dead end," I do think he can provide a service by helping companies identify limitations of existing software and to help create solutions that work well for both consumers and the artists who rely on their copyrights for income," said Bair. "The industry as a whole must think in terms of educating the public in concert with effective - but not overly restrictive - forms of copy management technology. Halderman has raised the awareness level another notch."

ABOUT IMMEDIATEK

Immediatek, Inc. is the leader in secure disc burning and media delivery technology, offering its patent-pending "one-click" NetBurn and NetBurn Secure solutions to record labels, content providers and artists. NetBurn Secure(tm) uses proprietary military-grade DES encryption techniques, and combines components from SunnComm, Inc. and Microsoft (NASDAQ: MSFT) to deliver a secure burn. Immediatek is helping to curb Internet piracy by offering legal downloading and burning options. For more information visit the company website at http://www.immediatek.com


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