| Dolby Laboratories Demonstrates New AAC Consumer Encoder 
 NEW YORK--(BUSINESS WIRE)--Nov. 30, 2001--
 
 Liquid Audio Signs On as First Licensee, Plans to Implement
 New Technology in Liquid Player Software
 Dolby Laboratories demonstrates its new Advanced Audio Coding (AAC) consumer encoder at this year's 111th AES Convention, booth no. 124. Dolby's AAC consumer encoder, which complements its professional AAC encoder, enables AAC licensees to incorporate high-quality AAC encoding into CD-rippers, hard disk-based jukebox products, Internet-based music distribution systems, portable players, and other digital audio products for consumers.
 
 Dolby also announced that Liquid Audio, a leading provider of software, infrastructure, and services for the secure digital delivery of media over the Internet, has signed on as the first licensee of the new AAC consumer encoder. Liquid Audio plans to implement this new technology in the next version of its Liquid Player software, scheduled to be released early next year.
 
 "Our continued alliance with Dolby, the leader in audio encoding technology, helps us continue to deliver the highest quality software and audio tools to our customers," said Gerry Kearby, CEO of Liquid Audio, Inc. "Now Liquid Player users will be the first consumers to have access to technology based on the high-end encoding tools used by professionals, giving them the ability to rip or encode music with superior audio quality, in less time using less storage space."
 
 Considered the next-generation successor to MP3, AAC perceptual encoding technology delivers digital audio quality far superior to MP3 while requiring approximately 30% less bandwidth or data storage space. AAC achieves this by eliminating over 90% of the original audio signal without affecting the perceived sound. AAC has been designated an international standard as part of the MPEG-2 and MPEG-4 specifications.
 
 "To the ear, the sound quality of program material encoded in AAC is as brilliant as the original recording, but it uses only a fraction of the data," said Andrew Fischer, director of Business Development for Electronic Music Distribution, Dolby Laboratories. "Now, with the introduction of the AAC consumer encoder, AAC's reputation for highest-quality digital audio is matched by its capacity for encoding speed."
 
 Dolby's AAC consumer encoder achieves over 13x real-time performance, according to Fischer. "For example, a 4-minute, 30-second track would encode in 21 seconds on an Intel Mobile Pentium III running at 1.13 GHz. With this consumer encoder, AAC licensees will be able to develop very competitive products for PC-based jukeboxes or music-on-the-go portable players."
 
 Dolby Laboratories serves as worldwide patent license administrator for AAC licenses on behalf of the technology's co-developers, which include Dolby, AT&T, Sony Corporation, and the Fraunhofer Institute for Integrated Circuits.
 
 AAC has been deployed in a wide array of digital audio applications, including Internet streaming and downloading, portable players, digital radio and television broadcasting, and audio storage and archiving. AAC has been utilized for Internet music distribution by Bertelsmann Music Group (BMG), Universal Music Group (UMG), and Warner Music Group. Toshiba, Panasonic, Philips, and Sanyo have introduced AAC-based portable audio products.
 
 Both the AAC professional encoder and the new AAC consumer encoder implementation consist of C/C++ source code (floating point) as well as documentation in the form of a functional description of encoder operations.
 
 Dolby's AAC professional encoder supports a wide variety of input sample rates and output bit rates for professional applications, such as audio-editing software, broadcast encoding hardware, or mass encoding solutions for content preparation applications.
 
 The new AAC consumer encoder achieves maximum encode speed from algorithmic optimizations as well as Intel-architecture specific processor optimizations. The consumer encoder produces AAC bitstreams over four times faster (depending on input material and target bit rates) than the professional encoder and is recommended for companies creating consumer products. A new application programming interface (API) allows developers to easily integrate Dolby's AAC consumer encoder code into their Microsoft Windows-based products.
 
 Dolby's AAC encoder implementation licenses are available to AAC patent licensees. For more information about AAC, please visit the AAC website, www.aac-audio.com or send email to aacla@dolby.com
 
 About AAC
 
 AAC is high-quality, audio-coding technology with broadcast and electronic music-distribution applications. Independent tests have proven the coding efficiency of AAC to be superior to MP3 and other perceptual audio coders, providing superior audio reproduction at lower bit rates. AAC provides up to 48 channels of audio and sample rates of up to 96 kHz, and it can achieve ITU-R broadcast quality at 320 kbps for a 5.1-channel audio program. An ISO/IEC standard, AAC is supported by a growing number of hardware and software manufacturers.
 
 About Dolby Laboratories
 
 Dolby Laboratories is the developer of signal processing systems used worldwide in applications that include motion-picture sound, consumer entertainment products and media, broadcasting, and music recording. Based in San Francisco with European headquarters in England, the privately held company also has offices in New York, Los Angeles, Shanghai, Beijing, and Tokyo. More information is available at www.dolby.com.
 
 Note to Editors: Dolby and the double-D symbol are registered trademarks of Dolby Laboratories. All other trademarks remain the property of their respective owners.
 
 CONTACT: Dolby Laboratories
 Jim Arnold, 415/645-5116
 Director of Public Relations
 jja@dolby.com
 or
 Keith Hatschek & Associates
 Robert Anbian, 510/792-2644
 robert@hatschek.com
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