SONY BMG SALES DEPARTMENT ISSUES "IMMEDIATE" CD RECALL LETTER

Sony BMG has just released the following letter—included below in its entirety—to its vendors, requesting immediate product removal of all SBMG product featuring the XCP content protection software from their shelves. Also included was a downloadable list of all affected CDs. The company also announced an immediate consumer exchange program for all product named on the list.

It is not yet clear how many retailer will immediately take Sony BMG up on their offer and clear their shelves of the offending product.

November 16, 2005

Re: Request for Immediate Product Removal

Dear SONY BMG Music Entertainment Account:

You may be aware of the recent attention given to the XCP content protection software included on some SONY BMG CDs. This software was provided to us by a third-party vendor, First4Internet. We are writing to provide you with information about the XCP technology. In addition, we are asking for your cooperation in removing these CDs from your inventory and supplying consumers with new copies of the same titles without the software.

Security concerns have been raised regarding the use of CDs containing this XCP software. It is important to note that the issues regarding these discs apply only when the CDs are played on computers, not on conventional, non-computer-based CD and/or DVD players. For consumers who wish to play these CDs on their computers, we have issued a software update that we believe addresses the security concerns. Shortly, we will provide a revised and secure uninstall procedure for the XCP software.

Attached to this letter is a list of the titles containing the XCP software. Please note that this issue does not affect any titles not on the list which may have employed a different content protection technology.

We want you to know of the steps we are taking, and ask for your cooperation in supporting them:

1. Please immediately remove from your store shelves and warehouses the titles on the attached list and return those titles to us. We will, of course, give you credit at the price paid for returned merchandise. We are currently manufacturing replacement titles. Your account representative can give you instructions on how to ship the product to us at no cost to you.

2. We are commencing a direct consumer exchange program whereby consumers may return product containing the XCP software for a replacement version of that title without the software. The details of this program, as well as an FAQ and other information, will be posted shortly on: http://cp.sonybmg.com/xcp. At this website, we will also make available a printable fact sheet that you may provide to customers who have questions about this situation. A copy of the fact sheet will also be available on SONY BMG Central.

3. In addition to alerting your customers to the direct exchange program, if they ask to exchange titles at your retail outlet(s), we encourage you to fulfill their request using the new CDs made available to you. We will credit you for opened and unopened XCP content-protected compact discs returned to us.

Thank you for your understanding and cooperation. We strongly believe these steps are beneficial in ensuring our and your continued goodwill with consumers and artists. SONY BMG remains committed to the goal of producing a safe and enjoyable music experience.

For questions regarding this program, please contact your account representative.

Sincerely,


SONY BMG Sales Enterprise

CD’s Containing XCP Content

Protection Technology

Note: We will shortly be releasing new versions of these titles without the XCP software. You therefore need to check this list for both the name of the album and the item number (which can be found on the spine of the CD). If the item number is not listed below, your CD does not contain XCP content protection.