Forecast 2008

Happy New Year!

2007 will go down as the year of the “Falling of the Berlin Wall” — the industry’s formal movement to embrace and support MP3 files without digital rights management (DRM). PassAlong Networks is proud to have taken the first bricks out of the wall, leading in this cataclysmic event that will forever change the landscape of digital media. We were the first to take the entire independent catalog (over 2 million tracks) to the MP3 format while also managing a catalog with all four major labels (over 3 million tracks in the total catalog). EMI followed suit and again PassAlong led, being the first to offer EMI’s catalog in the MP3 format. And this summer we worked with Universal Music Group as they started with 3,000 albums in the MP3 format in a short-lived test of MP3 versus WMA with DRM… One week into the test they scrapped it and immediately moved to offer the majority of their catalog in MP3 format. Since that time we have also added ADA in MP3 format (ADA is the independent distribution arm of Warner Music Group) and also licensed the catalogs of Sub Pop, Epitaph, Saddle Creek, Downtown Records, Razor and Tie and IRIS. More signings actually occurred in 2007 and will be announced in the coming weeks. Consumers have spoken and PassAlong has spent the past year and a half working with all labels to offer their catalogs in the open MP3 format on our StoreBlocks platform.

When 2008 draws to a close we expect 100% of the catalog to be available in the MP3 format. We are also continuing to work with the finest labels around the world to ensure we maintain our catalog’s quality as we expand our business worldwide. DRM will continue to exist, yet only where it serves a specific purpose to enable a business model and a true benefit for a consumer, versus acting as a lock on your wrists as you seek to enjoy music and media.

2008 will also see us announce several relationships that have been in development for several years. Just like the music industry we serve, we understand that today’s “overnight success” is often built on years of foundation-building hard work.

2008 will be the year of the Connected Consumer™. We have invested in the entire ecosystem of digital media. In an “always connected” world we understand that you will want to get your music and media on any device when and where you choose. Our Connected Consumer initiatives have us working with leading consumer electronic device companies, in-car systems, as well as new leading mobile device companies. Our widget wizards have delivered great tools to ensure you “Never miss a concert again™” and to let you share your musical tastes and influences – more on this in a few days at New devices, our rich MP3 catalog and our rich set of services enable you to have a great experience, discovering and acquiring music on the device of your choice and moving as needed throughout your connected world.

PassAlong and our wholly owned subsidiary, Speakerheart, are a team of over 60 people worldwide that are passionate about music and media. We wish you and yours the best in 2008! It will be a great year. We are stepping into 2008 with great excitement. The foundational years of our company, from 2002–2007, have paved the way for 2008’s “overnight successes”. Our customers and their customers have provided us with great feedback. We are taking that feedback and our innovative tradition to continue our mission – inspiring and equipping our customers with digital media solutions. That means providing world class technology to connect Artists and Fans.

We enter 2008 with great anticipation and look forward to serving you. Happy New Year!

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