RealNetworks Files Suit Against Hollywood Studios re: RealDVD

SEATTLE — Digital entertainment services company RealNetworks (Nasdaq: RNWK) and its subsidiary, RealNetworks Home Entertainment, Inc., issued the following statement:

"In response to threats made by the major movie studios, RealNetworks this morning plans to file an action for a declaratory judgment against DVD Copy Control Association, Inc., Disney Enterprises, Inc., Paramount Pictures Corp., Sony Pictures Entertainment, Inc., Twentieth Century Fox Film Corp., NBC Universal, Inc., Warner Bros. Entertainment, Inc., and Viacom, Inc., in the United States District Court for the Northern District of California. The lawsuit asks the court to rule that RealNetworks Home Entertainment, Inc.'s RealDVD software, made available to consumers today at http://www.realdvd.com, fully complies with the DVD Copy Control Association's license agreement.

"RealDVD allows consumers to securely store, manage and play their DVDs on their computers. It does not enable users to distribute copies of their DVDs. RealDVD not only maintains the DVD's native CSS encryption intact, it also adds another layer of digital rights management encryption that effectively locks the DVD copy to the owner's computer to ensure that the content can not be improperly copied or shared. RealDVD provides consumers with a great solution for the playback and management of their DVD collections while adding security that is more robust than CSS.

"RealNetworks took this legal action to protect consumers' ability to exercise their fair-use rights for their purchased DVDs. The DVD CCA, which represents numerous parties including all of the major studios, previously sued another company over the same issues. The trial court ruled against the DVD CCA and allowed the distribution of a product similar to RealDVD. (See DVD Copy Control Association, Inc. v. Kaleidescape, Inc., Santa Clara Superior Court Case No. 1-04-CV031829, available online at http://www.kaleidescape.com/company/pr/PR-20070329-DVDCCA.php. Having lost the case once, the major studios are now trying to get a different result by going to a different court.

"We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases.

"For nearly 15 years RealNetworks has created innovative products that are fully legal, great for consumers, and respectful of the legitimate interests of content creators and rights holders. RealDVD follows in that tradition. We expect to successfully defend our right to make RealDVD available to consumers and consumers' rights to use it."