MakeMusic! Inc. Announces Deepening Alliance with Hal Leonard Corporation and Music Sales Limited

Business Wire, Sept 30, 2002

Business & Entertainment Editors

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 30, 2002

Companies Partner in Digital Sheet Music Based on Finale(R)

Technology and Distribution of Finale Notation Software

MakeMusic! Inc. (Nasdaq:MMUS) announced today that it has signed a Memorandum of Understanding (MOU) with Sheet Music Direct, the digital sheet music e-commerce website jointly owned by Hal Leonard Corporation and Music Sales Limited, the world's two largest sheet music publishers.

As part of this agreement, MakeMusic!(TM) will close its digital sheet music operation at www.net4music.com on October 1, 2002 and promote the use of Sheet Music Direct by Net4Music's customers. Sheet Music Direct will also purchase and transition selected customer lists and sheet music files belonging to the Net4Music operation, where approval of customers and publishers has been given. Sheet Music Direct has also agreed to integrate MakeMusic!'s digital publishing package which includes a new licensable version of the Finale(R) Viewer, allowing the online sheet music provider to make available large archives of Finale files for the first time on its website.

In addition to the Net4Music announcement, MakeMusic! has further expanded its collaborations with these leading music publishers through a number of strategic agreements. These agreements include the affiliate partnership supporting the publishers' Sheet Music Direct digital sheet music operations; a licensing agreement for the use of Finale Publishing Solutions for the digital distribution of sheet music, and distribution agreements for MakeMusic!'s industry leading Finale(R) notation software.

"Having focused our strategy and operations on music education technologies based on Finale notation software and the SmartMusic(R) practice system, we are happy to enter into an affiliate partnership with Sheet Music Direct," stated Sean Lafleur, MakeMusic!'s chairman and chief executive officer. "We have decided not to focus on the digital sheet music business as a distributor ourselves and prefer to offer competitive sheet music services to our customers as well as the best long-term business solution to the publishers with whom we have contractual relationships for distributing digital sheet music. Our customers will benefit from a special offer to encourage them to discover Sheet Music Direct. Those of our publishers who are not already under contractual license with Sheet Music Direct will benefit from an offer from Sheet Music Direct to distribute all of their Net4Music catalog if they enter into an agreement with Sheet Music Direct before October 31, 2002. Sheet Music Direct's leading position will be strengthened by its launch of the Finale Viewer."

Hal Leonard President Larry Morton said, "Beyond our recent licensing agreement with MakeMusic! to allow SmartMusic to support our Essential Elements elementary band method, this agreement means that we can now move forward with a much closer working relationship allowing for cooperative development of digital tools, such as the Finale Viewer and Finale Digital Publishing Solutions. Our extensive archives of band and choral educational music are primarily in Finale. This music, combined with the additional catalogs from Net4Music, will significantly expand the breadth of high-quality, licensed sheet music available online for musicians."

Chris Butler, director of Music Sales, said, "We are excited about this relationship and the positive impact it will have on our online business. Finale is a respected and established brand that attracts a large number of music makers around the world. We now look forward to consolidating the position of Sheet Music Direct as market leader in the supply of digital sheet music.

MakeMusic! also announced that Hal Leonard and Music Sales have concluded agreements with the company to distribute Finale music notation software. "Finale is a market leader and is in high demand from our retail customers," said Morton. "The fact that Finale products are available in a wide range of price points make them appealing to a variety of customers. We believe that our extensive distribution network will expand the sales of all Finale software, particularly in the educational music retailer market."

"This agreement completes the repositioning of our business activity and gives us the very best opportunity to focus on the parts of our operations that are excelling, such as our continued development of the Finale product range, and our SmartMusic subscription business," said Lafleur. "In these areas, we are bringing new exploitation opportunities for publishers and rights owners, while at the same time, taking content directly into the music education and home environments with SmartMusic, where we continue to add repertoire under license. SmartMusic now has more than 1,000 schools subscribing, all accessing new ways of practicing and learning musical instruments."

"We are excited about how our business is progressing. We look forward to continuing to develop relationships with our existing publishers and to creating new ones, too. We are delighted to have taken our relationships to the next level with both Hal Leonard and Music Sales."