BMG takes digital-download plunge

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by Andrew Morse and Kenneth Li

(IDG) -- BMG Entertainment has launched its digital download service, offering music by popular artists such as Whitney Houston, Christina Aguilera and Santana for sale through affiliated Web sites.

The company will make more than 100 singles and albums available in the initial phase of the program. BMG expects that number to reach 2,500 by the holiday season.

"This is a starting point, not a finishing point," says Kevin Conroy, BMG Entertainment's president of new technology. "As a start, it is the best user experience out there."

BMG's initiative comes as the music industry struggles to find ways to attract consumers to buy music online rather than use free file-sharing services such as Napster. The Recording Industry Association of America, which represents the Big Five labels, is locked in a legal dispute with the startup, based in Redwood City, Calif., over copyright infringement. Time Warner, the parent company of CNN.com, is part of that dispute.

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Whether consumers can be tempted to pay for music online remains to be seen. Some recent studies suggest that many Internet users don't see music downloading as theft.

What is beyond dispute, however, is consumer interest in online music. The number of people using Napster's software soared more than 500 percent to nearly 7 million between February and August, according to Media Metrix.

BMG has priced singles at $1.98 to $3.49 for a single, while albums are $9.98 to $14.98. The company also is pursuing other business models, including subscription services and secure peer-to-peer distribution platforms.

Affiliated online retail sites include Lycos, Alliance Entertainment's TheStore24, ArtistDirect, Wherehouse Music/CheckOut.com, GetMusic, RollingStone.com and Twec.com. Traditional retailers, including Best Buy, Musicland Group and Tower Records, are also part of the affiliate network.

Initially, files will be compatible with the MusicMatch player while the company adds other file formats, including Lycos' player. Files will comply with the Secure Digital Music Initiative guidelines. The SDMI is a recording industry initiative to develop technical standards for the protected distribution of digital music. About 200 companies, including content and technology firms, belong to the initiative.

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That's (digital) entertainment!
(PC World HK)
BMG offering digital music dowloads on Lycos
(IDG.net)
RIAA creating online royalty collective
(The Industry Standard)
Despite optimism, SDMI wavers
(IDG.net)
MP3.com settles with two record labels
(The Industry Standard)
MusicMatch updates Jukebox
(PC World)
The music makers
(SunWorld)

BMG Entertainment
Alliance Entertainment Corp
Lycos, Inc
Recording Industry Association of America

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