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Sonic Foundry Develops Proprietary Audio Codec

Perfect Clarity Audio Provides Audio Compression Without Any Loss in Audio Quality

MADISON, Wisc.--(BUSINESS WIRE)--Nov. 7, 2000--Sonic Foundry® Inc. (NASDAQ: SOFO - news), the leading developer and marketer of digital media and Internet software tools, services, and systems, today announced Perfect Clarity Audio(TM), its new proprietary audio compression codec.

This technology allows users to compress music in a format that will not sacrifice the fidelity of the original source audio recording. While most audio compression technologies such as MP3 and WMA are considered ``lossy,'' Perfect Clarity Audio delivers audio output that is identical to the original source and supports both 16 and 24-bit audio. During the editing process, Perfect Clarity Audio files can be modified and re-compressed without degradation that lossy codecs add to every generation. Test files have shown compression ratios of 2:1 and as high as 5:1 with no loss in audio quality.

Perfect Clarity Audio is currently included in Sonic Foundry's award-winning SIREN(TM) Jukebox 2.0 and will be incorporated into all future Sonic Foundry product releases. Sonic Foundry is offering a free download of the demonstration version, SIREN(TM) XPress, with the Perfect Clarity Audio encoder included at www.sonicfoundry.com.

Additionally, Sonic Foundry's Media Services(SM) Division will be taking advantage of Perfect Clarity Audio. Clients can reap the benefits of storing their enterprise-based audio files in one-half to one-fifth the previously required space, decreasing the high costs associated with storing raw audio files. The Company is also offering licensing opportunities for those clients who wish to take advantage of Perfect Clarity Audio for software and hardware applications and internally managed enterprise initiatives.

``This is a very exciting advancement in the audio industry,'' stated Curtis Palmer, co-founder and chief technical officer for Sonic Foundry. ``We designed Perfect Clarity Audio so users can, in a compressed format, retain the identical audio quality of original audio content. As storage becomes cheaper and bandwidth becomes greater, lossless codecs will become the norm. Sonic Foundry is leading the way in the future of broadband. Users will experience a new realm of opportunity for their music playback, storage, and editing.''

About Sonic Foundry

Founded in 1991, Sonic Foundry® is the leading developer and marketer of digital media and Internet software tools, services, and systems. Sonic Foundry's award-winning products and services are used worldwide for multimedia and Internet applications; music, video, and broadcast solutions; and digital content creation.

Sonic Foundry's digital audio and video tools include the award-winning ACID(TM), Sound Forge®, Vegas® Audio, Vegas® Video, VideoFactory(TM), Stream Anywhere(TM), SIREN(TM) Jukebox, Viscosity(TM), and a variety of compatible music loop libraries and DirectX Audio Plug-Ins. For specific product descriptions, please reference the Products section of the Sonic Foundry Web site at www.sonicfoundry.com.

Sonic Foundry's Media Services(SM) Division is the preeminent supplier of digitization, management, and delivery solutions for audio and video content owners. Serving as the link between content and customers, the Company provides proven, comprehensive processes that enable content delivery to new and emerging distribution channels. The five key components that make up these solutions include: Media Distribution Fulfillment, Enterprise Content Management, Turnkey Systems, Consulting Services, and Encoding.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for the Company's products, the Company's ability to succeed in capturing significant revenues from media services, the effect of new competitors in the Company's market, integration of acquired businesses and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission.

Contact:

     Sonic Foundry
     Dawn Tappy, 608/204-8079 (corporate communications)
     dawnt@sonicfoundry.com
          or
     Strategic Growth International
     Richard Cooper/Rob Schatz, 516/829-7111 (investors)
     sgi@netmonger.net
 

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