Buy A Car Get Some Music - Digital Media Player With Pre-Loaded Music Installed Into New Vehicles

Audi and Volkswagen Dealerships Across the Country to Begin Offering New Car Buyers PhatNoise Digital Car Audio System With Music Tracks From Major EMI Recorded Music Artists

First New Vehicles to Feature Removable Hard Drives

LOS ANGELES, May 6 -- The digital music industry took a giant step forward today as Audi and Volkswagen emerged as the first automobile manufacturers to offer a digital media player as an option for all their new vehicles. The PhatNoise(R) Digital Car Audio System, "PhatBox(TM)," manufactured by Los Angeles-based PhatNoise, Inc., is the first factory-approved, high-capacity digital music player that is fully integrated with Volkswagen and Audi cars. Adding further strength to the alliance, major record company EMI Recorded Music signed on to pre-load tracks from several of its artists onto the digital media player.

Beginning this month, more than 250 Audi and 600 Volkswagen dealerships across the U.S. will be offering new car buyers the option of having the dealer-installed PhatBox, which has a suggested retail price of $795. The product is also available as an upgrade for most current Audi and Volkswagen owners.

The PhatNoise system is a digital music player that installs and operates very much like a CD changer. The system has a 20 GB hard drive that is able to store thousands of tracks, or up to 500 complete CDs. The system also includes the PhatNoise Music Manager software and a USB 2.0 cradle for fast, easy organization and transfer of music from PCs or audio CDs onto a palm-sized portable digital media storage cartridge (DMS). The cartridge is then inserted into the trunk-mounted player for instant access to thousands of music tracks simply by turning on the vehicle sound system.

Because the system operates in a manner similar to a CD player, the user controls the system through the existing CD controls on their car stereo. An on-board voice-enabled music search lets users browse their music tracks by artist, album or genre for easy access to thousands of tracks while driving so they never have to take their eyes off the road to find their favorite song.

"We have brought the automobile, music and technology industries together all at once to extend the digital distribution of music into cars," said Sharon Graves, Chief Executive Officer of PhatNoise. "For the first time, consumers will be able to use a hard drive-based platform to move music off the PC and enjoy it in the car in a fully integrated way, bringing a seamless digital entertainment experience into their vehicles."

The PhatBox overcomes long-standing barriers to introducing new technology and new content into the car by integrating directly with both the factory sound system and with the digital environment of the PC and the Internet. The flexible combination of hardware, software and media management has allowed the automobile industry to move forward with making digital entertainment more of a reality. "This is a milestone for us, and perhaps for the automotive industry as a whole," said Eric Johnston, Executive Director Parts, Volkswagen of America. "We can offer our customers this technology knowing the hardware will be capable of evolving and the content will be there to sustain it."

In successfully facilitating the first automotive-specific digital distribution deal for the music industry, PhatNoise leveraged a solid digital rights management system that made supporting the PhatBox an attractive first step in digital distribution for music labels.

"Getting our music to consumers in as many exciting new, secure platforms as possible is a major priority for EMI. A digital entertainment platform like PhatNoise, with a robust digital rights management system and designed exclusively for an automobile, is a perfect example," said Adam Varon, Vice President, EMI Music Special Markets. "This has tremendous potential for the music industry and it is another step forward for gaining acceptance for digital content distribution."

Artists representing genres from jazz to current and classic rock will be pre-loaded on the PhatBox.

Owners who have the PhatBox installed in their vehicles will also receive a complementary one-month subscription to Audible, allowing them to download licensed best-selling audio books as well as content from media outlets such as The Wall Street Journal and The New York Times, and transfer it to their PhatBox for in-car listening, another automotive industry first made possible by this product.

PhatNoise, Inc., is an innovator in the drive to create seamless automotive access to the digital world. The company's advanced platforms and software for digital media offer complete solutions for introducing digital content and technology into the automobile in intuitive and highly integrated applications to enhance the consumer entertainment experience. PhatNoise creates products and technology for license and distribution by leading partners in the automotive, consumer electronics, and multimedia industries. For more information on PhatNoise and its technologies and products, visit www.phatnoise.com .

Founded in 1955, Volkswagen of America, Inc. is headquartered in Auburn Hills, Michigan. It is a subsidiary of Volkswagen AG, headquartered in Wolfsburg, Germany. Volkswagen is one of the world's largest producers of passenger cars and Europe's largest automaker. Volkswagen of America and its affiliates employ approximately 3,000 people in the United States and are responsible for the sale and service of Audi, Bentley, Lamborghini, and Volkswagen products through retail networks comprising in total approximately 800 independent U.S. dealers.

PhatNoise and PhatBox are trademarks of PhatNoise. All other trademarks and registered trademarks are the property of their respective holders.