Sony Preps Online Music Service

Consumer electronics giant Sony on Thursday unveiled plans for a standalone online music service to deliver digital files to a number of electronics and mobile devices it manufactures.

At a press conference in Paris, Sony announced details of its planned online music service, which will compete with similar services from the likes of Apple Computer and Microsoft , according to a report in the Financial Times.

Beyond its tentacles in the consumer electronics, computing and mobile device markets, Sony Music is also a major musical content purveyor — and has been hit hard by online music trading and rampant online music piracy.

Sony said its “Net Music Download” will be introduced first in Japan and will launch in the United States and Europe by next Spring. Pricing details were
not available, but the service is expected to be competitive with existing
online music download services.

Howard Stringer, Sony’s vice chairman, said one of the reasons for the launch of the new online music service was to combat piracy. Stringer said that the music industry has lost close to $7 billion in piracy just in the past two years.

Sony Music has cut more than 1,000 jobs in the last year, in another sign the music industry is feeling the pain from online music pirates.

But just as a raft of new, copyright-sanctioned, online music downloading services come to market, several free downloading service continue to thrive, including Kazaa and Morpheus. While analysts expect there will be several new, legitimate online music services offering variety of service packages, it is also unclear if the market for free, pirated online music will disappear.

While Sony has plans for a major online music downloading service rollout in 2004, it is already months behind both Microsoft and Apple in bringing the service to market.

On Thursday, Microsoft said online users in western Europe will be able to start legally download from a library of 200,000 songs from 8,500 different artists for 75 cents per song.

Apple’s iTunes service, which has been a major hit in the U.S., charges users 99 cents for each track downloaded. In August, Apple said that more than 6.5 million songs had been downloaded by Mac users since the company launched the service back in April. Apple is planning to rollout a version of iTunes for Windows before the end of 2003.

Microsoft’s new online music downloading service is backed by OD1, Peter Gabriel’s digital music company.

With several new competitors expected to hit the online download music service market, it is expected there will be intense price pressure on all participants in the market.

Earlier this week, Forrester Research released a new report entitled “From Discs to Downloads,” which claims the music industry lost close to $700 million in CD sales from the growth of online music download and subscription services.

“Piracy and its cure – streaming and paid downloads – will drive people to
connect to entertainment, not own it,” Forrester said in the report.

“Music and studio executives are finally beginning to understand that they must create new media services through channels that consumers will pay for. Consumers have spoken — they are tired of paying the high cost of CDs and DVDs and prefer more flexible forms of on-demand media delivery,” Forrester said.

“Additionally, technology trends like increased broadband adoption and cheap, widespread storage have made it possible for consumers to easily manage their digital entertainment at home,” added Forrester.

News Around the Web