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MINNEAPOLIS, Minn.-October 9, 2003 - Due to the crackdown on file-sharing networks by the Recording Industry Association of America (RIAA), the proliferation of high-speed Internet and the continued growth of consumer CD and DVD burning, U.S. Bancorp Piper Jaffray Senior Research Analyst Gene Munster believes that a significant portion of U.S. music sales will move online over the next several years. He expects the online music market to be approximately $240 million by 2006. In a new report released today entitled Stairway to Heaven or Highway to Hell: Picking Winners in the Online Music Market, Munster examines the players that are looking to take advantage of this shift in consumer behavior. He expects the competition to be intense and believes two or three leaders will emerge.

"We expect that over time 'illegitimate' file-sharing networks will see declining traffic due to record label lawsuits," said Munster. "It is our belief that the online music market is currently at an inflection point; we expect that the launch of several user-friendly music download sites will increase consumer awareness over the next several quarters. While we do expect a large competitive field by 2004, we believe that the primary beneficiaries of growth in this market will be Apple Computer Inc. (AAPL, not rated, $23.06, #) with iTunes and Roxio Inc. (ROXI, Strong Buy, $10.98, #>=) with Napster."

In addition, Munster believes that each major record label will partner with many different sites to have the broadest distribution possible. Other major players Munster expects to have an impact on the market include: Dell Inc. (DELL, Outperform, $34.74, #=), which announced that the Dell Music Store will open by the end of 2003; AOL Time Warner Inc. (AOL, not rated, $15.21), which is currently a distribution partner of MusicNet;, Inc. (AMZN, Market Perform, $55.70, #>); Microsoft Corporation (MSFT, Outperform, $28.82, #>=), which launched the MSN Music Club in the United Kingdom in August; and Yahoo! Inc. (YHOO, Strong Buy, $38.79, #>=), which has Launch online radio and partners with PressPlay for downloads.

The report also includes the results of Munster's recently published U.S. Bancorp Piper Jaffray Online Music Survey, a survey of 200 consumers that explores the power of various online music brands and the willingness of consumers to try this new distribution model. According to the results, several brands have already gained strong awareness in the marketplace. While awareness of Rhapsody and iTunes is still relatively small (15 percent and 30 percent, respectively), Napster had 92.5 percent brand awareness within Munster's survey sample.

To receive a copy of Stairway to Heaven or Highway to Hell: Picking Winners in the Online Music Market or the U.S. Bancorp Piper Jaffray Online Music Survey, clients and members of the media should contact Dana Wade at or 415-277-1556.

About U.S. Bancorp Piper Jaffray
U.S. Bancorp Piper Jaffray, a subsidiary of the consolidated group of U.S. Bancorp, is a focused securities firm comprised of two revenue-generating segments -- Capital Markets and Private Client Services. Clients of both segments are supported by Investment Research, an independent group reporting to the CEO. The firm provides a full range of investment products and services to individuals, institutions and businesses. The firm has over 124 offices in 25 states across the country. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, U.S. Bancorp Asset Management, U.S. Bancorp Investments and U.S. Bancorp Piper Jaffray. For more information on U.S. Bancorp Piper Jaffray, visit

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The following disclosures apply to stocks mentioned in this report if and as indicated: (#) U.S. Bancorp Piper Jaffray (USBPJ) was making a market in the Company's securities at the time this research report was published. USBPJ may buy and sell the Company's securities on a principal basis. (^) A USBPJ analyst who follows this Company or a member of the analyst's household has a financial interest (a long equity position) in the Company's securities. (@) Within the past 12 months, USBPJ was a managing underwriter of an offering of, or dealer manager of a tender offer for, the Company's securities or the securities of an affiliate. (>) USBPJ has either received compensation for investment banking services from the Company within the past 12 months or expects to receive or intends to seek compensation within the next three months for investment banking services. (~) A USBPJ analyst who follows this Company, a member of the analyst's household, a USBPJ officer, director, or other USBPJ employee is a director and/or officer of the Company. (+) USBPJ and its affiliates, in aggregate, beneficially own 1% or more of a class of common equity securities of the subject Company. (=) One or more affiliates of U.S. Bancorp, the ultimate parent company of USBPJ, provided commercial banking services (including, without limitation, loans) to the Company at the time this research report was published.

Nondeposit investment products are not insured by the FDIC, are not deposits or other obligations of or guaranteed by U.S. Bank National Association or its affiliates, and involve investment risks, including possible loss of the principal amount invested.

USBPJ research analysts receive compensation that is, in part, based on revenues of USBPJ Equities and Investment Banking, which include overall investment banking revenues. USBPJ research analysts who follow this Company report to the Head of Investment Research who, in turn, reports directly to the Chief Executive Officer of U.S. Bancorp Piper Jaffray.

This material is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracy and does not purport to be complete. This information is not intended to be used as the primary basis of investment decisions. Because of individual client requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. It is not a representation by us or an offer or the solicitation of an offer to sell or buy any security. Further, a security described in this release may not be eligible for solicitation in the states in which the client resides. Officers or employees of affiliates of U.S. Bancorp Piper Jaffray, or members of their families, may have a beneficial interest in the Company's securities and may purchase or sell such positions in the open market or otherwise.

Notice to customers in the United Kingdom: This report is a communication made in the United Kingdom by U.S. Bancorp Piper Jaffray to market counterparties or intermediate customers and is exclusively directed at such persons; it is not directed at private customers and any investment or services to which the communication may relate will not be available to private customers. In the United Kingdom, no persons other than a market counterparty or an intermediate customer should read or rely on any of the information in this communication.

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