RealNetworks' Stake in MusicNet Sold to Private Equity Firm

RealNetworks' Stake in MusicNet Sold to Private Equity Firm

Company to Focus on Expanding Its Leadership in Music Subscription Services

SEATTLE, April 12 /PRNewswire-FirstCall/ -- RealNetworks(R), Inc. (NASDAQ:RNWK), the leading creator of digital media services and software, announced today that its shares in MusicNet have been sold to Baker Capital. With its critically-acclaimed Rhapsody(R) internet jukebox and premium radio services, RealNetworks is the market leader in online music subscription services with more than 700,000 paying subscribers at the end of 2004.

"While we're certainly proud of our history with MusicNet, we are quite pleased with the sale of our legacy investment in the company," said Rob Glaser, CEO of RealNetworks. "When we founded MusicNet in 1999, it provided a catalyst for opening up the digital rights vaults and access to legal online music for all consumers. However, once we acquired Listen.com in 2003 and started offering services directly to consumers, MusicNet was no longer of the same strategic importance to us."

RealNetworks has long been the leader in digital audio and video technology and services. In 1999, RealNetworks created MusicNet as a wholly-owned subsidiary, incubated it, and then brought in Time Warner, Bertelsmann, and EMI Group as shareholders. RealNetworks created the joint venture to accelerate access to rights necessary to build legal music services and satisfy the needs then being met by illegal services. MusicNet's primary strategy then was to supply technology, content and services to the suppliers who provided music directly to consumers, including to RealNetworks.

In 2002, however, RealNetworks decided to accelerate plans to offer its own music subscription services to consumers. The company recognized that in addition to offering the best service, it needed to have a direct relationship with the labels and direct control of the digital music consumer experience. This strategy led to its acquisition of Listen.com, and its award winning music subscription service Rhapsody in 2003. Since that time, RealNetworks has become the leading provider of digital music subscriptions.

RealNetworks received approximately $7.3M of proceeds in connection with today's closing and expects to receive up to an additional $2.7M upon expiration of its additional escrow arrangements. Additional details about this transaction will be discussed as part of RealNetworks earnings call on May 4, 2004.

ABOUT REALNETWORKS

RealNetworks, Inc. is the leading creator of digital media services and software including the award-winning Rhapsody(R) Internet jukebox service and RealPlayer(R), 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 Real's consumer software at http://www.real.com/ . Broadcasters, network operators, media companies and enterprises use Real's products and services to create and deliver digital media to PCs, mobile phones and consumer electronics devices. Real's systems and corporate information is located at http://www.realnetworks.com/ .

FORWARD LOOKING STATEMENTS: This release may contain forward-looking statements regarding impact of the transaction on RealNetworks. Some of the factors that could affect the impact of the transaction include the strategic direction of MusicNet and Rhapsody, the competitive dynamics in the digital media services market, the accounting treatment of the transaction and whether RealNetworks receives all of the consideration that it could potentially receive in the transaction. Actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause our actual results to differ materially from those contained in the forward-looking statements can be found in RealNetworks' filings with the Securities and Exchange Commission ("SEC"), including but not limited to the most recent reports on Forms 10-Q and 10-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Copies of filings made with the SEC are available through the SEC's electronic data gather analysis and retrieval system (EDGAR) at www.sec.gov. RealNetworks assumes no obligation to update the forward-looking statements included in this document.

Source: RealNetworks, Inc.

CONTACT: Matt Graves of RealNetworks, Inc., +1-415-934-2159, or mgraves.com

Web site: http://www.realnetworks.com/

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