British Telecom launches music download service

Bernhard Warner

LONDON: BT Group, Britain's dominant fixed line telecom firm, is aiming to cash in on the music download craze, launching on Monday a subscription-based Internet service called "dotmusic on demand."

The venture, a partnership between BT and OD2, the British technology firm co-founded by musician Peter Gabriel, will enable BT to sell music downloads and audio streams of up to 120,000 songs on BT's new music site www.dotmusic.com.

The emergence of free file-sharing Internet services such as Kazaa, Grokster and the now-grounded Napster has triggered a massive illicit trade in copyright-protected songs, movies and video games. Now a variety of retailers, music labels and Internet firms want a cut of the action, hoping the introduction of regulated, subscription services will sway music fans to opt for "legal" music downloads.

With subscription services, the music labels and technology firms, such as BT and OD2, each share a percentage of the revenues, introducing a new compensation scheme into this emerging platform for distributing music.

Cheap on the net

BT acquired dotmusic.com, one of the UK's oldest music sites, earlier this year. Last week, as part of a larger reorganisation initiative, dotmusic.com and the Internet service provider Openworld were brought under the BT Retail division.

The venture with OD2 will greatly expand dotmusic.com's selection of songs for downloading and listening. Dotmusic has become a popular site for music fans looking for latest album reviews and information on concerts. Under the new deal, dotmusic.com will offer tracks from four major recording labels including Universal Music, Bertelsmann's BMG, EMI and AOL Time Warner's Warner Music, plus a host of independent labels. Artists range from Coldplay to Louis Armstrong.

Dotmusic.com will sell subscriptions for 4.99 pounds ($7.93) and 9.99 pounds, enabling consumers to listen to up to 500 songs or download 50 songs on the cheaper plan, and up to 2,500 listens or 250 downloads for the more expensive version.

OD2, which provides streaming and download technologies for dotmusic.com, has separate distribution deals with Microsoft Corp's MSN, Tiscali and music retailer HMV. BT and the other subscription download services face a tough task in getting Internet users to migrate from free services.

Ed Averdieck, marketing director for OD2, said consumers were still largely unaware that subscription services are available throughout Europe despite a number of household names already on the market.

"We think there is a long way to go here," he said. He added that a number of Internet service providers had begun offering free music downloads as part of a monthly Internet access subscription to reduce churn and attract new customers.

"My prediction for 2003 is that music download services will be a widely used marketing tool by ISPs," he said

© Reuters