May 12, 1999 7:45 AM PDT
Sony, Microsoft to retail music online
The companies said the collaboration will allow them to cross-market and promote each other's online properties as well as streaming audio and video events. As part of the agreement, Sony Music said it would make protected downloadable music content from its extensive catalog of artists available when Microsoft launches its Windows Media Technologies 4.0 this summer.
The move comes as many offline media firms are turning up their online efforts to challenge the growing popularity of MP3 (MPEG 1, Audio Layer 3), an audio compression format that lets users easily download content to a computer hard drive or portable MP3 player. Critics, which include many in the mainstream record industry, hate the format because it allows for the spread of unauthorized copies of copyright-protected songs online.
Because of the rapid pace at which MP3 has taken off and become a de facto standard for music downloads online, analysts have stressed that record labels need to act quickly and offer compelling content for download in order to steer fans toward authorized, for-fee music online.
Sony Music and Microsoft are both active members of the Secure Digital Music Initiative (SDMI), a consortium of record company and technology executives that is looking to develop specifications for secure music downloading that ostensibly could be part of any download technology.
Many smaller music companies, such as some Internet firms, and members of the MP3 community are not part of the consortium. Some have cited the $10,000 per year membership fee as prohibitive.
Today's partnership comes just a month after BMG Entertainment and Universal agreed to boost their online efforts to sell CDs through a venture to be known as GetMusic, which will consist of music channels and an e-commerce site, GetMusic.com. In addition, Universal, AT&T, BMG, and Matsushita are negotiating an alliance to offer digital music via an array of channels including the Internet.
Sony and Microsoft hope their alliance will allow wider distribution and promotion of Sony Music's Web efforts as well as increased exposure for Microsoft's new Windows Media 4.0, which is currently in public beta testing with the final version planned for release this summer.
"The Internet has proven to be an amazing tool for marketing and promoting our artists," Fred Ehrlich, senior vice president for new technology and business development at Sony Music, said in a statement. "More and more music fans are anxious to access music from their favorite artists via the Internet, and this agreement will provide a way for them to do just that."