Universal to offer digital music downloads

From...

by Laura Rohde

(IDG) -- Universal Music Group will soon launch a service offering digital music for download over the Internet, according to sources close to the project.

Universal City, Calif.-based Universal Music Group, a fully owned subsidiary of Seagram Co. and the world's largest record label, declined to officially comment on its plans for selling digital music downloads online.

According to one source, Universal has established a security system and encryption method it is comfortable with in conjunction with InterTrust Technologies and is ready to launch a limited version of the download program.

Santa Clara, Calif.-based InterTrust spokesman Oliver Mills said the company was unable to make any comment regarding Universal Music Group.

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Universal had originally entered into talks with Liquid Audio about securing downloadable music, but the two companies were unable to reach an agreement over royalties, with Liquid Audio requiring a third of all royalty revenue, sources said.

Home to such recording artists as Beck, Limp Bizkit, and Shania Twain as well as anti-Napster campaigners Metallica, Universal Music Group would become the third of the five major record labels to sell digital music downloads over the Internet.

Sony Music Entertainment was the first label to offer a limited number of digital music tracks, including single tracks from artists such as Jennifer Lopez, Pearl Jam, and Rage Against the Machine, for between $2.49 and $3.29 per download. In July, meanwhile, EMI Group began offering 100 of its titles for sale over the Internet.

BMG Entertainment, the music unit of Bertelsmann, is expected to start offering digital downloads sometime during the third quarter, with Time Warner aiming for a fourth-quarter launch of its digital music online store.

The move by Universal Music Group comes amid the legal wrangling between Napster and the Recording Industry Association of America (RIAA), which last month filed suit on behalf of the major labels claiming the music-sharing Web site was infringing copyrights held by the music industry.

On July 26, Chief U.S. District Court Judge Marilyn Hall Patel for the Northern District of California, forbade the exchange or use of the music companies' copyrighted material by Napster or Napster users. The company's emergency stay appeal was granted on July 28. The Washington-based RIAA said it plans to appeal the decision -- all this before the trial has actually started.

Napster's Web site has a catalog of MP3-format songs stored in the computers of thousands of users. A user looking for a particular song can search the Napster database and download the song for free from the user who has it on his or her computer.

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Steal this song
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Napster steals Universal exec
(The Industry Standard)
Music companies win injunction in Napster case
(IDG.net)
EMusic to start subscription service
(The Industry Standard)
RIAA: Have our cake and eat it too
(InfoWorld)
Portals hear the music
(The Industry Standard)
Study: Music downloading has broad appeal
(IDG.net)
Subscriptions to drive Net music
(IDG.net)
Pay the fiddlers
(The Industry Standard)

Universal Music Group
Sony Music Entertainment
BMG Entertainment

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