Bmg Sets Global Plan For Music On Internet

NEW YORK‹BMG, which has gone further than other major record companies in promoting its music over the Internet, has disclosed plans to expand that effort internationally and to offer music for sale online this fall in the U.S.
Executives at BMG say the latest online thrust is both an expansion and a reworking of a two-year marketing strategy in the U.S. that has focused on highly publicized World Wide Web sites for specific musical genres.
The worldwide push is viewed as part of the new mandate of Strauss Zelnick, who recently was promoted to chief executive of BMG's worldwide music operations from being head of its domestic music unit.
To spearhead the global Internet activities, Kevin Conroy was recently named senior VP of worldwide marketing for BMG Entertainment. He had been senior VP of marketing for BMG Entertainment North America.
The controversial aspect of BMG's plan is likely to be the sale of music online. Traditional retailers have decried attempts by music suppliers to compete with them in selling product. But BMG executives maintain that their intention is not to compete with their bricks-and-mortar accounts.
"We're looking to establish commerce on the sites we currently have in the U.S. within a few months," says Conroy. "We want to allow consumers visiting our sites to have the opportunity to purchase. But it's not about setting up an online store. We've already communicated this to all our key accounts."
BMG joins several other major-label groups in selling its own music online. Marcia Appel, senior VP of advertising and partnership marketing for Musicland‹which has 934 stores worldwide that sell music, the most of any chain‹says, "We continue to believe that the primary music consumer and the most influential one will continue to prefer the store shopping experience because they're not interested in just one label group or just one artist."
Conroy says BMG's online presence is "more about awareness generation" than direct selling. "The impact on sales we expect to be modest. We expect to be learning about consumer buying behavior."
He says that details of the E-commerce plan, such as the number of titles available, have not been worked out yet. Pricing, he says, will be "consistent with retail." The product will be from BMG's major-label groups, such as Arista, RCA, and Windham Hill, and from affiliated labels like Loud and Jive.
The existing Web sites, which have been widely advertised, are Bug Juice, for alternative rock; Twang This, for country; and Peeps Republic, for R&B. Peeps was the first genre site launched, in February 1996.
BMG will be rolling out three more genre Web sites later this year. One will be for Latin music; another for adult contemporary, which will include jazz, classical, and new age and primarily use the repertoire of BMG Classics and Windham Hill; and the third for classic rock.
The company is also expanding and forming partnerships with Internet companies. It has made a deal with the New York-based Internet advertising company Doubleclick to seek worldwide marketing deals with major advertisers of consumer goods and services. And it is expanding relationships it has already with online companies like Liquid Audio, which has technology allowing the downloading of music; RealNetworks, which provides for the streaming of music and video; a2b Music, which also handles digital downloading; and America Online, whose technology allows consumers to navigate from a computer-played CD directly to a BMG Web site.
BMG says it hopes to build "bridges" between online and offline retail through promotions involving its technology partners. It cites a promotion last year that featured an a2b-downloaded single from the Verve Pipe's latest album and opportunities to buy the recording from N2K's Music Boulevard online store and Trans World Entertainment stores.
BMG says that expansion of the Internet strategy worldwide will allow the creation of similar promotions in other countries involving local artists and local retailers. But Conroy says that Web sites in other countries will not be genre-specific, as they are here. The areas outside the U.S. where BMG has built an Internet presence include Europe, Japan, and Australia.
Conroy says BMG will be creating in the next two months a worldwide home page on the Internet that will direct consumers to the company's more than 100 music Web sites.
In July, BMG created a division, BMG Online, to coordinate all Internet activities within the company. Elizabeth Schimel is GM of the unit, which employs "about a dozen" people, according to Conroy. He declines to say how much BMG is investing in the Internet but asserts that the effort is "cost-efficient" because it is "leveraging assets we already have."
What the new program will not be about at present, executives say, is the digital delivery of music. But they make it clear that they are preparing for it. "Our hope and expectation is to be able to develop a standard to securely provide digital distribution in the near future," says Conroy. "But it's not here."