Microsoft Corp. (Nasdaq "MSFT") and The Walt Disney Company (NYSE "DIS") today announced a multiyear agreement to cooperate on several long-term digital media initiatives to improve the quality, security and reach of digital content within the home and on Microsoft� Windows� XP-based PCs as well as on a growing number of home and portable entertainment devices. As part of the agreement, Disney will license Microsoft Windows Media� Digital Rights Management (DRM) technology. Disney and Microsoft have identified three areas of joint focus that utilize effective rights management:

• The creation and secure delivery of compelling high-resolution digital content
• The overall acceleration of digital content flow to consumers -- over networks, on optical media and on devices
• Ensuring the seamless flow of secure content between devices, whether in the home or on portable devices

Under the agreement, Disney has licensed Microsoft Windows Media DRM software on a non-exclusive basis to enable the seamless delivery of secured digital media over the next several years.