Sonic Foundry Ships Vegas 4.0 and Vegas+DVD

MADISON, WI - Feb. 6, 2003 - Sonic Foundry® Inc. (NASDAQ: SOFO), a leading digital media software solutions company, today announced it has begun shipping Vegas® 4.0 and Vegas®+DVD, two new standards for professional video and audio production on the Windows® platform. The pre-release versions of the products were extremely well-received during a public beta period in January as a record number of users looking to get a sneak peek downloaded the software from Sonic Foundry's Web site.

Vegas 4.0 provides integrated real-time video and audio non-linear editing with comprehensive features that allow for mixing, compositing, color correction, titling, streaming media creation and surround sound production for multimedia professionals. Vegas+DVD not only includes Vegas 4.0, but also offers complete DVD authoring (featuring DVD Architect') and a Dolby Laboratories certified multichannel AC-3 encoder.

"With Vegas 4, Sonic Foundry has unleashed a feature-packed video editing system, optimized to take great advantage of the Intel® Pentium® 4 processor with Hyperthreading* technology," said David L. Brown, general manager, Software Enabling Division, Intel Corporation. "It makes complex effects processing even faster and more efficient, allowing professional video editors to accomplish more, in less time than ever before."

Already a top choice among digital video and audio professionals, the enhanced capabilities of Vegas 4.0 make it the most comprehensive software package available for professional DV and audio production. Some of the new features included are:

• Advanced Color Correction Tools
• Searchable Media Pool Bins
• Vectorscope, Histogram, Parade and Waveform Monitoring
• Application Scripting
• Improved Ripple Editing
• Motion Blur and Supersampling Envelopes
• 5.1 Surround Mixing
• Dolby® Digital AC-3 Encoding certified and tested by Dolby Laboratories
• DirectX® Audio Plug-In Effects Automation
• ASIO Driver Support
• Windows Media^TM 9 Support, including Surround Encoding
• DVD Authoring with AC-3 File Import Capabilities
• Integration with DVD Architect Via Chapter Marker Passing

"The worldwide response to the public betas last month far surpassed our initial expectations. Vegas now ranks among the very top requested products from our Web site," said Sonic Foundry's Brad Reinke, senior vice president and general manager of software. "This heightened amount of activity is a testament to the widespread following Vegas has garnered during the past year from production professionals and the industry at large, and speaks well to the future of this powerful upgrade."

About New Magic

New Magic Pty Ltd is a recognised leader in the distribution and marketing of multimedia hardware and software, representing a carefully selected range of innovative, leading manufacturers, and catering for both the professional and consumer markets. New Magic has been established for over 14 years, and is the Australian distributor of Newtek Inc, Hauppauge Computer Works Inc and Sonic Foundry(R) products.

About Sonic Foundry®, Inc.

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 Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.