Big Music Companies Plan Trial Sales on Internet

IBM and the five biggest U.S. record companies will soon sell albums directly
to consumers via the Internet–on a trial basis.

In part motivated by the rise in pirated recordings available free on the Net,
IBM, BMG, EMI, Sony Music, Universal Music and Warner Music said they will
experiment with allowing computer users to download albums for an as yet-to-be
determined fee.

The trial starts in San Diego, where later this year 1,000 homes wired for
broadband in San Diego will be able to download albums with CD-quality sound
in two-and-a-half to four minutes. Initially, more than 1,000 albums from
various musical genres will be available.

After the test is over, each company will decide whether to proceed with the
new distribution method.

In addition to trying to create a new revenue stream, the companies are trying
to catch up to the many people who illegally allow Internet users to download
albums and singles for no charge.

Larry Kenswil, executive vice president and global head of e-commerce and
advanced technology for the Universal Music Group, told Variety that to compete effectively with
pirates, the record labels will have to convince consumers that they are
getting something of value when they buy via the Internet the legitimate way.

Kenswil said profits from selling music via the Internet will be “proportional
to the broadband roll-out.” That’s because the system developed by IBM and the
music labels requires the use of a high-speed cable modem, or a technology
that is as fast.

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