“TAKE VST LIVE” CAMPAIGN

Buena Park, CA – January 19, 2012
Steinberg North America and Open Labs LLC are pleased to announce a live performance
solution that combines the power of the industry standard Steinberg VST Protocol (Virtual
Studio Technology) and Open Labs Music OS live performance software. Steinberg’s HALion
4 (VST Sampler and Sound Creation System), HALion Sonic (Premier VST Workstation) and
Yamaha Vintage Plug-in Collection are now easily accessible on any stage, leading the future of
VST development.

First launched by Steinberg in 1996, the VST Protocol creates a professional studio and
performance environment on any computer, allowing seamless integration of virtual effect
processors and instruments into the VST host application. All functions of a VST effect
processor or instrument are directly controllable and automatable, either with a mouse or with an
external hardware controller such as Steinberg’s CMC Series and CC121 USB Controllers. VST
also allows easy integration of external equipment, allowing you to put together a system tailor-made
to your needs.

Open Labs Music OS 3.0 or MOS is a music creation and live performance software designed
specifically to address the needs of both music creators and live performers. With over 7 years
of integrated touch screen experience, MOS was developed and optimized for touch screen use;
however, a touch screen is not required when installed on PC desktops and laptop
systems. Important to note, Open Labs will update Music OS to support the Mac platform in the
first half of 2012.
For more information and a list of solutions, please visit www.openlabs.com/

OPEN LABS ANNOUNCES MUSIC OS™ 3.1 Update

The first easy-to-use music creation and live performance software designed specifically for touch screen use just got easier!

Austin, TX. – January 19, 2012 – Open Labs, LLC. (openlabs.com), the industry leader and pioneer for nearly a decade in all-inone music production workstations and live performance software, is proud to announce Music OS™ 3.1 UPDATE. Music OS 3.1 features both technical and social updates to enhance the performance and user experience of the program. Music OS 3.1 takes creators and performers deep into true 64Bit power-crunching technology and allows them direct access to the cloud for professional publishing and further collaboration. Music OS 3.1 debuts the all new OL VST Suite Library with over 15 exciting and easy-to-use instruments and effects. Just as with every Open Labs product, Music OS will continue to develop and grow its feature set so that creators and performers alike can reach their outer limits of success. Important to note, Open Labs will be releasing an Apple OS X supported platform in early 2012.

Music OS 3.1 New Features Include:

• SoundCloud™ Direct Integration – With SoundCloud undoubtedly the ‘cloud standard’ for millions of online music creators, Music OS projects and session files can now easily be rendered and uploaded directly to all SoundCloud user accounts. Posting songs to the world from the studio or stage has never been easier!

• OL VST Suite Library – Music OS 3.1 delivers its first suite of VST instruments and effects for music creation and performance. 5 instruments including

Dubstar™, a bass synth designed for dubstep wobble and deep bass tones.
BUMP™, a straight forward drum module complete with Open Labs “bump” sample library.
IDM™, a creative synth for modulating soundscapes and atmospheric swells.
OL Remix™ allows you to load an audio sample and chop, screw, and rearrange the beat.
10 VST effects for midi devices or incoming audio signals including Reverb, Chorus, Delay, EQ, Distortion, Filter, Compressor, Limiter, Looper, and more.

• True 64 Bit Application – Music OS 3.1 takes full advantage of today’s powerful 64Bit hardware and software operating systems. With unbridged 64Bit technology, larger files, projects and VST’s can be loaded and handled more efficiently throughout the creation and performance process. Music OS 3.1 also allows backwards compatibility for 32Bit users.

Availability and Pricing:
Music OS 3.1 is now available for $299/USD. Current owners will automatically receive the 3.1 update for FREE with Open Labs ‘AutoUp’ feature included in 3.0. RiFF owners will also receive special upgrade pricing throughout the month of January for $79/USD.

Check with Open Labs directly for special discount codes and additional upgrade options.
• Music OS 3.1 can be Purchased and Downloaded here: http://shop.openlabs.com/music-os-3-0/
• Music OS 3.1 can be Downloaded FREE for 15 Days here: http://shop.openlabs.com/music-os-3-0-free-trial/
• Music OS 3.1 can be Purchased on SoundCloud here: http://soundcloud.com/apps/music-os-3-0
• Music OS 3.1 New Features Video can be seen here: http://www.youtube.com/watch?v=ovXbxjFARe8&feature=youtu.be
• Music OS Overview Video can be seen here: http://www.youtube.com/watch?v=rtVuyx-GPF0
• Music OS 3.1 Questions? Email: sales@openlabs.com or visit: http://www.openlabs.com/musicOS.html

About Open Labs, LLC.
Headquartered in Austin, Texas “the live music capital of the world,” Open Labs™ develops customized, computer music keyboards, laptops and software programs
suited to fit every studio and stage need imaginable. Founded in 2003, the core members of Open Labs bring together a wealth of experience in computer systems,
musical instrument design, live performance and application software. Open Labs is a musician oriented company that develops tailor-fit solutions for all its customers
by listening to their individual wants and needs. With the advent of Open Labs all-in-one products and the compiled A-list artists that use them worldwide, Open Labs
has become the industry standard for producers, composers and performers of every genre. Open Labs Music OS is the company’s first non-proprietary, touch screen
friendly music creation and performance software designed specifically to address the needs of musical creators and performers on any PC computer.

The good news is that we have a great partner who has not only allowed us to team up with them at the show, but has also signed a meaningful relationship with Open Labs. We are looking forward to a long and mutually beneficial relationship with them on a going forward basis.

Additionally, we will be making another announcement at NAMM about Music OS. Specifically, we will be releasing Music OS 3.1 with a list of new features. One of the features demanded by our customer base was integration with SoundCloud. Open Labs Music OS is now featured in their Desktop App Gallery and we are excited about our relationship with SoundCloud.

So, tomorrow look at our blog, Facebook page, Twitter account, etc to get the full scoop on our partner, as well as the details on Music OS 3.1.

- Small motivated teams are fun and can achieve huge endeavors. I have been involved in business for over 25 years. During that time, I have led organizations with two people and organizations with 900 people. The nice thing about a small team is that you can have a personal connection with each person and they can identify their contribution at a visceral level. The Open Labs team performed above and beyond all reasonable expectation on this project. It is fun to work with great people.

- Everything takes longer than you think and costs more. When I was in a venture capital firm the rule of thumb was divide by two on the revenue projections and multiple by two on the time to first ship and money needed. I am happy to say that we were only off by a couple weeks on the launch. Hopefully, we will be off even less on the revenue.

- Focus wins. Open Labs has an unbelievable number of opportunities and a limited set of resources. We spent as much time deciding what we were NOT going to do, as what we were going to do and that focus paid off with quality products that were able to ship within a week of announcement. However, it was, and remains one of the biggest challenges for us.

- We worked too much during the last four months. One of my friends said that sometimes I go into stealth mode when I get involved in a project; he does not hear from me and certainly does not see me. Undoubtedly, friends and family of all of the individuals involved in the launching of the two projects would probably say the same. It is challenging for me to find that work family balance in the middle of a compelling project. Apologies to all impacted parties. Next time we will have more people and less work.

- Software Is Ready to Ship……… When? This is a real dilemma that many others have faced. It is easy to define when a feature set is complete. It is also easy to say that we are not shipping when there are meaningful bugs that crash the system. Auto updating has made it easy (maybe too easy) to say that we will fix the small bugs in our next update. There is a dynamic tension between shipping something that is great and shipping something on time (for Christmas sales). This was a topic that generated a lot of discussion at Open Labs. The final decision was to send four of the employee musicians home and see if they could have fun making and performing music for two hours. I am pretty sure that this formula will not be found in any MBA textbooks, but it worked for us.

We hope that it will work for you as well. Download our software, make and perform some music. If it is fun; buy it.

Thanks,

Cliff

Today we want to address the remaining three items:
- Musicians want their live experience to be easy, flexible and stable
- Musicians want Open Labs functionality and quality at a lower cost
- Musicians want products today, not future product announcements

Musicians want their live experience to be easy, flexible and stable. That is a significant request. Some people believe ease of use is a relative term based on the amount of time and experience a musician has with a particular piece of software. Open Labs believes that ease of use is quantifiable by the number clicks and speed with which a task can be accomplished. Touch screens have been demonstrated to make many processes much easier and intuitive. This is part of the reason for the huge success of iPads and tablets, and it is good to see the rest of the world catching up. Open Labs products have used a touch screen for the last seven years.

Flexibility and stability are requirements that initially appear to be in opposition to each other. Although, it is clear that musicians performing on stage have absolute needs for both. Performers need the flexibility to be able to quickly change set lists on the fly to meet the demands of the audience. Artists also need to be able to count on the programs running backing tracks (yes lots of bands use them) in a reliable manner.

Musicians want Open Labs functionality and quality at a lower cost. This is the number one request from prospective Open Labs customers. There is no debate that when quality is the number one requirement, Open Labs products are the choice of professionals. Look at the artist list on the Open Labs website; Linkin Park, Timbaland, Maroon 5, the list goes on and on. However, most musicians live in a different economic bracket than the superstars. Historically, this has been a huge challenge for Open Labs as we focused on delivering the highest possible to value musicians, but the technology requirements have driven a significant cost as well. The good news is that technology’s declining cost curve has finally caught up with Open Labs. Touch screens have become mainstream. Processing power and operating systems have come on line that both address meaningful amounts of memory. All of this technology has matured to the point that one need not sacrifice quality for price.

Musicians want products today, not future product announcements. One of the largest show in the music industry is in January; NAMM (National Association of Music Merchants). Musicians bitterly joke that NAMM actually stands for Not Available Maybe May or Not Available Music Merchandise. Either way, performers are tired of music companies promising products that are months from delivery.

In the next 48 hours Open Labs will announce ground breaking products and partnerships that will address the requirements of musicians and there will not be a ridiculous wait. We will start shipping the products next week. Look forward to working with all of you on this new exciting journey for the company.

They want to make the music creation and performance experience process better.

During the past year we have gotten feedback from our customer base, as well as prospective customers about the music performance and creation process. The insights have reflected strong feelings about workflow as well as features. From the conversations and discussions a number of common elements have emerged:
- Musicians want the creative process to fun not technical
- Musicians want technology to manage their music, not them
- Musicians want their live experience to be easy, flexible and stable
- Musicians want Open Labs functionality and quality at a lower cost
- Musicians want products today, not future product announcements

At some level these are clichés that everyone can agree on. However, the specific detail behind these fundamentals makes for a real challenge. Let’s take a deeper dive on the first two particular areas that musicians want addressed.

Musicians want the creative process to fun not technical. The specific area of focus for musicians is the balance between complexity and capability. DAWs are extremely powerful tools for musicians to produce professional quality music. However, learning how to use most DAWs is a time consuming exercise with multiple windows and pull down menus. Many musicians are looking for an easy way to get an idea into a digital format prior to using a DAW to fine tune it. The frustration was best summed up by one producer, “Sometimes it takes so much time to get my system set up that I lose the creative idea in the process.”

Musicians want technology to manage their music, not them. There are an amazing number of sounds available to performers and producers. Although finding the sound you want and managing it on stage is very difficult today. Musicians need to be able to have seamless song transitions on stage. There is nothing worse for a performer than to have their music crash during a live performance. Musicians want technology to protect them from crashes, make finding sounds easier and managing set lists of songs seamless.

Tomorrow, we will examine the last three broad requirements below:
- Musicians want their live experience to be easy, flexible and stable
- Musicians want Open Labs functionality and quality at a lower cost
- Musicians want products today, not future product announcements

There is good news on the horizon….soon…..very soon.

Identifying the specific drivers of this musical surge is challenging. Although, the wide consumer use of games like Guitar Hero and applications such as Garage Band are surely part of the equation. Additionally, the popularity of televised talent shows American Idol, The Voice and X Factor have increased interest in music creation and performance.

It is much easier to identify the fact that music creation and performance has become mainstream with business successes. Companies like TuneCore, Bandcamp, CD Baby and Reverb Nation have become multimillion dollar companies servicing the new music creators with outlets to market and sell their music. SoundCloud, an audio sharing and collaboration company, has increased it’s customer base from one million users to eight million users in the past eighteen months as the music creative class wants to share their music and work with others regardless of geographies.

Open Labs has received feedback from many of the new music creative class and the feedback has been consistent. They want music creation and performance to become easier and less expensive. Check back next week to see how we are addressing the desires of this market.

Friends and family naturally asked the question; why? What was it about Open Labs that was so compelling to put down money, take on debts and the responsibilities of employees?

The employees are at least half of the answer. They are a smart, dedicated, passionate, committed group of musicians that literally want to change the music landscape. Open Labs products and support are redefining the way that music is created and produced. The employees want to make music creation and performance easy and seamless.

The good news is that mission is enthusiastically endorsed by marquee customers, which is another large part of the answer. Open Labs has been in business for over eight years and has thousands of professional artists and producers that use the equipment. The artists include superstar groups Maroon 5, Linkin Park, and My Morning Jacket, as well as MultiPlatinum Producers Timbaland, Polow Da Don and Scott Spock, in addition to Musical Directors Morris Hayes for Prince, Michael Bearden for Madonna and Jimmy Nichols for Faith Hill and Reba.

Open Labs products have been used at the Grammys, the Emmys, the Super Bowl Halftime show, multiple Saturday Night Live performances and in live shows to millions. The Open Labs products were even used at President Barrack Obama’s Inauguration. Open Labs customers are strong advocates for the product in YouTube videos, on line forums and even on the Open Labs website.

Passionate employees with a real sense of mission, professional musicians that are evangelists for the company and products that have been proven over time in demanding environments are all reasonable reasons to invest in the company. However, the final investment reason is the most important to the future. Open Labs has been working on a product offering that will allow the power of the Open Labs product to musicians with less cash than the marquee artists. It is a product that will allow musicians to get their idea down quickly and easily, as well as the ability to take it live, be that a backyard party or a stadium tour. It is a game changing product.

We’ve waited to communicate the excitement until we were certain that the product would be available and ready to ship. Check back tomorrow for more details.

Thanks

Cliff Mountain

We’re proud to be joining PMC Speakers, Prism Sound, and Dangerous Music at the 2011 ASCAP Expo.

Come see us present our hardware and software this Thursday thru Saturday at the Renaissance Hollywood Hotel.

Links to registration (for members and non members) as well as the schedule is below.

Registration

Schedule

Yours truly

-M

Join us at 5pm CST this Friday.  As usual well be doing product demos and answering your questions.

See you there!