Music To The Ears As Europeans Vote To Download Their Tunes

Creative Labs Publishes Much Awaited Results of Pan-European Independent Survey into the Future of Digital Audio Technology

Creative (Nasdaq: CREAF), the world-wide leader in digital entertainment products for the personal computer and the Internet, has completed extensive and groundbreaking research into digital music and the Web including the likely impact these technologies will have on the lives of those living in ten European countries. This detailed and comprehensive research has been published as a report in each country. A compilation report of the Pan-European findings entitled 'Digital Entertainment Technologies and Trends Across Europe' is also available.

Creative Labs commissioned MORI, the UK's most respected and largest independent research house, to examine the relationship between people, their audio entertainment and the tools they use to access, store and play music. In order to do this, MORI co-ordinated a network of local and similarly independent institutes in France, Germany, Great Britain, Italy, The Netherlands, Poland, Portugal, Russia, Spain and Sweden. Over 23,000 Europeans were interviewed in total.

"The message coming from Europe is clear," says Riccardo de Rinaldini, European Marcoms Manager with Creative Labs Europe. "Downloading music from the Internet is not only cheap but it has a host of convenient features when compared against the traditional method of buying CDs. It's a widely held belief that the status quo will have to change as the trend towards 'virtual' record collections continues to grow."

The research gives a fascinating insight into consumer opinions and current use of digital music technology. For instance:

• A third of Portuguese Internet users regularly download music, most of whom do so every other month. In Italy and France the figure is one in five.
• Germany has four times more music downloaders than any other European country in the survey. A figure, which stands around 9.5 million people.
• All Swedes registered dissatisfaction with CDs and said they would prefer not to tolerate all of the listed negative features of CDs in the future. The Russians (interviewed in St Petersburg and Moscow) were similarly impatient with CDs and 69% of respondents are looking to new methods of obtaining their music.
• 40% of all Internet users in Spain regularly download their music, the highest proportion in Europe.
• Although Poland has the most modest number of Internet users in Europe, those who do are acutely aware of the advantages of downloading music. One quarter download because it is a cheap way of owning music and lead the Netherlands, Italy, France and Great Britain.
• Over a quarter of those from Great Britain and the Netherlands expect to store their music on compact portable electronic devices soon.
• Over 90 million adults across the ten countries surveyed have access to the Internet and around 65 million adults in Europe are looking towards storing their music collections on their portable devices.

Simon Duke, Project Director at MORI says:

"There is high dissatisfaction with compact discs at the moment, with jumping and skipping the key problems. In addition, many people are starting to download music from the internet and are reaping the benefits of building music collections cheaply and being first among their peer group to obtain new music. The consequence of this, recognised by around three-quarters of all downloaders, is that music companies will have to change the way they do business."

About the Survey:

This research was conducted in ten European countries on behalf of Creative Labs. Fieldwork was conducted by telephone or face-to-face omnibus in each country, except in Russia where interviewing was undertaken in Moscow and St. Petersburg only.

A nationally representative sample of adults (except in Russia, where research was limited to Moscow and St. Petersburg) aged over 15 (Germany aged over 14 and GB aged 15-65) were interviewed. This included:

• A total of 23,628 interviews
• including a total of 2,006 downloaders

Fieldwork in Great Britain was conducted between 6 July and 7 August 2000. Fieldwork in the additional nine European countries was conducted between 20 November 2000 and 29 January 2001.

Data have been weighted to reflect the known population profile in each country.

About Creative Labs:

Creative (Nasdaq: CREAF) is the worldwide leader in digital entertainment products for the personal computer and the Internet. Famous for its Sound Blaster and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed D.A.P Jukebox. The company's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.

Founded in 1981, Creative Technology's corporate headquarters are based in Singapore, with its European head office based in the UK. Creative Labs Europe was established in 1993 to capture a bigger share of the growing European Market potential. A fully fledged European operation was put in place by General Manager, Michael Sullivan, with headquarters in Berkshire, UK. Creative Labs Europe has grown nine-fold in the past three years with subsidiaries in France, Spain, Portugal, Italy, Germany, UK, Benelux, Denmark, Sweden and Poland. Creative's European Operations and Technical Centre (EOTC) facility was officially opened on 19 July 1995 in Dublin, Ireland. The EOTC acts as the central hub to Creative Labs' fast growing European business, providing an efficient localised and customised product supply for the European market and customer support to complement the subsidiaries' activities in the several countries. The European operation currently employs around 570 staff.

For further information, visit www.europe.creative.com