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Follow UsSarah Rose
NEW YORK: Record label Warner Music Group, making a belated first step into
the hotly contested online digital music space, said on Monday it would join
with streaming media company RealNetworks Inc. to distribute music on the
Internet.
Starting in November, Warner Music, a unit of media powerhouse Time Warner
Inc., will offer current singles and "Internet-only" tracks from
artists such as Paul Simon and Barenaked Ladies on Web retailing sites.
Amazon.com Inc. and Walmart.com, the online venture of the world's largest
retailer Wal-Mart Stores Inc., said they would support Warner's plans.
Warner is the last of the big-five record labels to announce a digital
distribution initiative in the midst of a heated court battle against Redwood
City, Calif.-based Napster Inc., a music downloading site the companies say
facilitates copyright infringement and online piracy.
Warner's proposed offering of 1,000 online tracks and albums is significantly
larger than those offered by other labels, which have numbered as few as 50.
"That's a pretty comprehensive library of music," said analyst at
market research firm Jupiter Communications, Aram Sinnreich, when asked why
Warner was the last to make a digital move. Warner's service took "maybe
six months of work on the back-end for lawyers and rights holders," all of
whom needed to be consulted before the music could go online, he said.
Recording companies have been accused by some industry analysts of moving too
slowly in the digital sphere as song-swapping programs such as Napster have
become some of the Internet's most popular sites.
But others say that the labels have room to catch up and make a profitable
dent in Internet music.
"There was less than $1 million spent in paid music online in 1999, but
in five years it will be a $1 billion industry," Sinnreich said.
Time Warner's proposed merger with the world's largest Internet provider
America Online Inc. could create a worldwide audience of more than 24 million
subscribers for Warner's service.
Warner Music and EMI Group Plc, which has its own online partnership with
Liquid Audio Inc. and Microsoft Corp., announced plans to merge their music
businesses earlier this year. That deal is being delayed by a European
Commission probe.
Seattle-based RealNetworks, which will host Warner Music's downloading
service, will offer a flexible infrastructure to support several popular digital
playback formats endorsed by the music industry. RealNetworks will also prepare
the music for online distribution, manage the digital rights and provide
customer support.
Retail integration for the service will be provided by Preview Systems Inc.,
whose shares closed up 2-5/8 to 11-5/8 on the Nasdaq.
Shares of RealNetworks closed up $1-3/16 at $50-5/8 on Monday on the Nasdaq
stock market. Shares of Time Warner were up 15/16 to $80-5/16 on the New York
Stock Exchange.
(C) Reuters Limited 2000.