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New Rhapsody Lets Consumers Listen To And Share Music For Free, Legally

New Rhapsody Lets Consumers Choose Up to 25 Songs Each Month from a Library of More than One Million Songs from all Major Labels

Company Launches Three Tiers of Service: “Rhapsody 25,” “Rhapsody Unlimited” and “Rhapsody To Go”

SEATTLE, April 26, 2005 — Ten years ago, RealNetworks, Inc. (Nasdaq: RNWK), transformed the web by bringing sound to the internet for the first time with its groundbreaking RealAudio. Starting today, Real is again transforming the online world with the introduction of the new Rhapsody delivering free, legal access to a library of more than a million songs to anyone in the U.S. for the first time.

The new Rhapsody lets anyone* listen to and legally share songs, of their choosing, every month. Consumers simply download the Rhapsody jukebox software from www.rhapsody.com. Once downloaded, they can listen to 25 full tracks from Rhapsody’s library of over one million songs each month, and enjoy unlimited access to the jukebox’s other features at no additional cost. In addition, Real also announced significant enhancements to its critically-acclaimed Rhapsody Unlimited service, and added a new tier called Rhapsody To Go, designed to provide customers the ultimate experience in portable digital music.

“With the new Rhapsody, millions of people can now experience and share digital music legally, and with no strings attached,” said Rob Glaser, chairman and CEO of RealNetworks. “We think the new Rhapsody will transform digital music. What’s more, we believe that once consumers experience Rhapsody and share it with their friends, many people will upgrade to one of our premium Rhapsody tiers. We thank our partners in the music industry who worked closely with us to create an innovative and win-win approach that works for both the industry and consumers.”

This breakthrough is made possible by several factors: First, Real worked closely with the music industry to create a more flexible model for consumers to try Rhapsody for free. As part of this arrangement, the music industry is paid for each song played at a rate that is generally comparable to full on-demand subscription services plays. This works for Real and the music industry because the company believes that the new Rhapsody will drive significant increases in consumer usage, subscriptions and purchases of music. Real’s business relationship with Google and new sponsorship relationship with Chrysler will also help offset the music licensing costs.

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“RealNetworks is enhancing the web experience for users in compelling new ways,” said Sergey Brin, co-founder and president, Technology, Google Inc. “Providing free, legal music at such a large scale is an impressive accomplishment.”

Today’s news reinforces Real’s leadership position in the music subscription market. The company recently announced that it has more than one million subscribers for its Rhapsody and premium Internet radio services, giving the company a solid lead in the overall market for music subscription services.

“This is the kind of bold thinking that first catapulted Real to the top of the digital landscape ten years ago,” said Richard Doherty, Research Director at The Envisioneering Group. “Allowing anyone to have a Rhapsody jukebox at no cost and creating a network that lets people listen to and legally share music holds the promise of creating a huge appeal for Real and expanding the music subscription model like never before.”

Real is celebrating the launch of the new Rhapsody with a public concert at Radio City Music Hall featuring multi-platinum recording artists Good Charlotte. Tickets to the concert are being distributed to New Yorkers through a variety of local promotional activities.

The New Rhapsody: Rhapsody 25, Rhapsody Unlimited, Rhapsody To Go

Last year, Rhapsody was recognized as the “Best Downloadable or Subscription Music Service” by Billboard magazine’s annual Billboard Digital Entertainment Awards. In March, Rhapsody was honored with PC Magazine’s Best Buy award in a comparative review of leading online music services. The three tiers of the new Rhapsody, Rhapsody 25, Rhapsody Unlimited, and Rhapsody To Go, all include a rich set of compelling features that enable consumers to customize their online music experience including:

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  • More than 1 Million Songs: Users can choose their favorite music from a library of more than a million CD quality songs that they can search by artist, track, album, or composer.
  • Community/Sharing: The software’s web-based “Send Playlist” feature makes it easier than ever to e-mail playlists to others. In addition, consumers can publish their playlists to Rhapsody’s new Playlist Central a great place to find playlists from other users, celebrities, Rhapsody’s music editors, and the destination where users can rate each others’ playlists.
  • Personalization: The new My Rhapsody feature lets consumers customize their own homepage within Rhapsody to receive recommendations, new release information, and other content specific to their music tastes and listening history. In addition, with a touch of a button, they can now create “Instant Playlists” with recommended artists and albums based on their previous music selections.
  • Music Management: Rhapsody now allows users to manage their entire digital music collection with one simple application, from playing and importing CDs to making mix CDs and transferring downloaded music tracks to portable music players.
  • Parental Controls: Rhapsody provides parental controls, allowing parents to limit the music their children can access based parental advisory album ratings.
  • Download Store: Rhapsody now offers an integrated music download store, enabling consumers to purchase their favorite songs in pristine 192 kbps RealAudio 10 with AAC. Once downloaded, tracks can be transferred to a wide variety of portable devices.
  • Premium Radio Stations: All Rhapsody users have unlimited access to dozens of commercial- internet radio stations.

In addition, consumers can also choose to purchase two, new premium tiers of Rhapsody services:

Rhapsody Unlimited
Rhapsody Unlimited is a dramatically enhanced version of the highly acclaimed Rhapsody service. In addition to streaming an unlimited amount of music, Rhapsody Unlimited subscribers can now download an unlimited number of songs to their PC’s hard drive from Rhapsody’s library of more than one million songs, and enjoy them offline for as long as they remain subscribers. Rhapsody Unlimited subscribers can also create custom internet radio stations based on their favorite artists, access over 50,000 artist based radio stations or nearly 100 free pre-programmed Internet radio stations, and view more than 1,500 music videos within the application.

In addition, Rhapsody Unlimited subscribers get a 10% discount on purchased downloads through the integrated music store. Downloaded songs are only 89 cents and most albums are $8.99. Current Rhapsody All Access subscribers can convert to Rhapsody Unlimited at no charge. At just $9.99 per month, Rhapsody Unlimited subscribers can listen to an unlimited amount of music for less than the cost of a typical CD. Rhapsody Unlimited is available for download at www.rhapsody.com.

Rhapsody To Go
Rhapsody To Go is an innovative portable subscription offering that will give subscribers the convenience of enjoying their favorite music wherever they go. In addition to enjoying all the benefits of the Rhapsody Unlimited service, Rhapsody To Go subscribers can transfer an unlimited number of downloads to compatible portable music players. The Rhapsody To Go service costs $14.99 per month. Real recommends the iriver H10 and the Creative Zen Micro portable music players for use with Rhapsody To Go. Real is committed to providing consumers choice and will continue to add support for additional devices.

As a special promotion, consumers who sign up for one year of the Rhapsody To Go service will receive a $100 mail-in rebate on an iriver H10 portable player. Rhapsody To Go is available for download at www.rhapsody.com.

The company held a press conference announcing the new Rhapsody today which can be viewed after 2PM EDT at www.realnetworks.com/company/press. Photos of the new Rhapsody will also be available at the site.

* Service available for consumers in the USA only.

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ABOUT REALNETWORKS
RealNetworks, Inc. is the leading creator of digital media services and software including the award-winning Rhapsody Internet jukebox service and RealPlayer 10, the first product to integrate finding, organizing, buying, playing and managing digital audio and video in a single product. Consumers can access and experience audio/video programming and download RealNetworks’ consumer software at http://www.real.com. Broadcasters, network operators, media companies and enterprises use RealNetworks’ products and services to create and deliver digital media to PCs, mobile phones and consumer electronics devices. RealNetworks’ corporate information is located at http://www.realnetworks.com.[RealNetworks, RealPlayer, Rhapsody and RadioPass are registered trademarks of RealNetworks, Inc. All other trademarks are the property of their respective owners.]

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