AT&T Digital Music Employees Jump Ship

AT&T knows firsthand how quickly the digital music scene is changing — more than half the employees who were working on the company’s A2B digital music download service are defecting to another firm.

The New York Times reports that 14 of the 26 employees involved with AT&T’s music initiative have left to join Reciprocal Inc., a privately-held company that delivers managing rights to digitally distributed products and in which Microsoft has a $15 million stake. The team is set to create a specific music division.

Included in the outgoing group are Larry Miller and Howie Singer, who co-founded A2B 18 months ago. Miller told the Times that the employees were leaving to work in a “better place that will allow them to accelerate their work” in the digital music industry.

The A2B format is a rival to the popular MP3 digital music format, and although considered more secure and technically sound than MP3, has not received the widespread acceptance of its competitor.

To account for the mass exodus from A2B, AT&T told The New York Times that Chris Varley, a former executive at CompuServe, will take over as managing director of the digital subsidiary.