September 26, 2003 12:40 PM PDT

MusicMatch, Dell to launch music stores

MusicMatch plans to jump into the digital song-selling business next week, with Dell promoting the company's new download service, sources familiar with the plan said.

The Internet music software company's service, which will provide a new online rival to Apple Computer's iTunes and BuyMusic, will use the popular MusicMatch Jukebox software and will distribute music in Microsoft's Windows Media format, sources said. The announcement is expected as soon as Monday.

Planned retail prices for songs were not immediately available, but record industry sources said MusicMatch would have access to the same catalog of music, at the same wholesale prices, as other companies offering similar services. Apple's iTunes offers songs for 99 cents apiece, while BuyMusic offers a range of single-song prices starting at 79 cents.

MusicMatch declined to comment except to say that it does plan an announcement next week, according to a spokeswoman. The company announced in July that it was planning a download service, but it did not give details on timing or partners.

MusicMatch's entry into the song-download business marks the beginning of an expected flood of Windows-based music services over the next few months, all inspired by the initial success of Apple's iTunes service.

CD-burning software company Roxio plans to relaunch Napster as a song store and music subscription service by Christmas. A Windows version of Apple's iTunes is expected by the end of the year. Sony has announced plans for a song-download service that is scheduled to operate in Japan, Europe and the United States early next year. Other companies, including RealNetworks, Amazon.com, Microsoft and possibly Yahoo, are all expected to start download services before long.

Apple has helped pave the way for these services, pouring unprecedented marketing dollars and sparking considerable industry buzz about its 99 cent online store. The company sold more than 10 million songs in roughly the first four months of operation, executives said earlier this month.

Moreover, the high-profile lawsuits launched by the Recording Industry Association of America (RIAA) appear--by some accounts--to have driven some file swappers toward less legally questionable services.

According to executives at BuyMusic, sales rose nearly 30 percent at their song-sales site shortly after the lawsuits were filed early in September.

A Dell representative declined to comment on the company's music strategy for this story. But its role in the promotion of the new service comes just days after the computer maker announced that it would begin selling consumer electronics equipment, including home media players.

Dell said at the time that it would have its own branded service, called the Dell Music Store, as a component of this new consumer electronics product strategy. In that earlier announcement, the company did not give details on pricing or partners, however. Sources said the company's store would be a separately branded version of the MusicMatch service.

Dell CEO Michael Dell said on Thursday that Dell has had discussions with a number of major music labels in the course of building its new service.

"There are no reasons why there won't be a broad selection of music," he said. "Within a short period of time, the labels will want to be on as many of these (online music sites) as they can."

Dell is hoping the service will be attractive to customers considering both its forthcoming Dell Digital Jukebox music player hardware and its PCs. The new service will allow customers to download music to the jukebox or one of its PCs and will be able to analyze a customer's song-playing history to recommend new selections, he said.

He added that Dell's price would be competitive with other such services.

MusicMatch's service would be the first Windows-based service in the United States to have a song store built directly into the software used to play the music. Several music-purchasing services have launched as channels inside Microsoft's Windows Media Player in European markets.

That's an important aspect of the business, insiders believe. Even BuyMusic, which currently sells music as a download from its Web site, says it's building a jukebox-style piece of music software to house its song store in the future.

"I think the seamless experience is important," said BuyMusic Vice President Liz Brooks. "A Web store is great. You can access it anywhere...But I think the more steps you can have in one place, the more intuitive experience you have."

 

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