Sony Music Entertainment Grants MP3.com License for My.MP3.com Service

SAN DIEGO and NEW YORK -- Aug. 21, 2000 -- MP3.com, Inc. (Nasdaq: MPPP) and Sony Music Entertainment (SME) announced today that they have settled the copyright infringement suit brought by Sony Music Entertainment in connection with MP3.com's My.MP3.com system. In addition to a payment by MP3.com for past acts, the companies announced that MP3.com has entered into a non-exclusive, North American license with SME for use of SME-controlled recordings with the My.MP3.com system, including the "Beam-It(TM)" and "Instant Listening(TM)" software services. These services are designed to require, among other things, users to verify the CDs they own in order to access that music in their My.MP3.com Music Manager (i.e. personal digital locker).

"It is clear that Sony Music Entertainment understands and embraces the Internet and values responsible technologies that excite consumers and reward content owners," said Michael Robertson, chairman and chief executive officer of MP3.com. "MP3.com respects the rights of copyright holders, and now, with this settlement and license, we can offer consumers an avenue to access music online from CDs they have purchased."

"Sony Music Entertainment strongly enforces its copyrights. This settlement affirms and upholds the right of copyright owners to be paid for the use of their works on the Internet," said Al Smith, Senior Vice President, Sony Music Entertainment. "Sony Music has always understood that changes in technology create new ways for consumers to experience entertainment. This licensing agreement with MP3.com is one of a number of initiatives that we have underway to enhance music fans' experience in an environment that protects intellectual property rights."

"This settlement and licensing agreement is a business resolution that we believe will positively impact the future of online digital music," added Robin Richards, president of MP3.com and who has served as chief negotiator during settlement talks. "The leveraging of MP3.com's technology infrastructure with Sony Music Entertainment's tremendous content means that consumers are closer to getting what they've been asking for -- a powerful, easy-to-use online listening experience."

About MP3.com
MP3.com, Inc. has created what it believes is a unique and robust technology infrastructure for the storage, management, promotion and delivery of digital music. As the Internet's premier Music Service Provider (MSP), the company is dedicated to providing consumers with anytime, anywhere access to their music using any web-enabled device. The company's web site hosts what it believes is the largest collection of digital music available on the Internet, with more than 562,000 songs and audio files from over 87,000 digital artists and record labels. Dedicated to growing the digital music space, the company's products and services include on-demand Subscription Music Channels, an innovative Retail Music Program, a Syndicated Radio Division and others. Additionally, through the company's MSP initiative, MP3.com is partnering with a variety of forward-looking technology companies to expand its digital music strategy. MP3.com common stock is traded on the Nasdaq National Market under the ticker symbol MPPP. The company is based in San Diego, California. For more information on MP3.com, visit www.mp3.com.

About Sony Music Entertainment
Sony Music Entertainment (SME), a leading global producer, manufacturer, and marketer of recorded music and video, has a presence in 60 countries. In 1994, the company created the New Technology and Business Development division, which operates companies, directs investments and provides incubation facilities for early stage digital media companies from three principal locations in San Francisco, New York and Los Angeles. The group's holdings include over 30 companies in the digital media infrastructure, technology, wireless, service and digital content areas, reflecting SME's strategy for the broadband era. These companies include AllStarCharity.com, AudioBase, C4, Digital On-Demand, Emazing, Exactis/ 24/7 Media, Gig.com, Indimi (the parent company of AdTools and InfoBeat), i3 Mobile, lastminute.com, Launch Media, Listen.com, MongoMusic, NetGen, Palm, Inc, Quintus, Reciprocal, Redband Broadcasting, Spinner.com, T-10, Urbanworld and Yupi.com.

Statements in this press release that are not strictly historical are forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include references to activities expected to occur in connection with MP3.com's settlement and license arrangement with Sony Music Entertainment. These statements involve a high degree of risk and uncertainty, are only predictions, and actual events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include risks related to: implementation of MP3.com's license arrangement with Sony Music Entertainment; MP3.com's current litigation proceedings, including without limitation the inability to reach settlement with all parties to such litigation proceedings; MP3.com's new and uncertain business model; acceptance of MP3.com's products and services; MP3.com's limited operating history, and MP3.com's rapid growth, as well as other risks detailed from time-to-time in MP3.com's reports to the Securities and Exchange Commission, including its report on Form 10-K for the year ended December 31, 1999 and its most recent report on Form 10-Q.