Cos. Make Strides In Net Music Delivery

NEW YORK--Electronic delivery and sale of recorded music is on a faster track now with new deals forged by music, computer, online, and telecommunications companies.
Technology giants Microsoft and AT&T have announced, separately, alliances that should hasten the development of standards for the distribution of music over the Internet.
One venture from AT&T kicks off with a technology trial tied to a rock act. An online promotion featuring RCA Records' alternative rock act the Verve Pipe will make available to consumers a free downloaded single, as well as opportunities to buy the band's album at retail stores, World Wide Web sites, or through an 800 number.
This marketing plan--a venture of RCA; its parent, BMG; AT&T; traditional music retailer Trans World Entertainment; and online music merchant Music Boulevard--is said to be the first in the music industry that incorporates the various avenues of selling product along with the free digital delivery of a full track of music.
The promotion was unveiled Nov. 3-4 at the Musicom Convention in Beverly Hills, Calif., at which a number of labels, computer technology firms, and online providers announced new alliances to bring CD-quality music to consumers for sampling, downloading, and purchasing (see related story, page 1).
Liquid Audio, a software company that develops technical tools for the preview and distribution of music online, also revealed two important ventures. One, with BMG, provides for the downloading of 30-second samples from the major record company's three genre-specific Web sites. The other, with Microsoft, is a strategic alliance by which the two companies will jointly develop marketing plans and standards for the delivery and sale of music over the Internet.
The Verve Pipe promotion is a trial of technology developed by A2B Music, a new company formed by telecommunications giant AT&T to deliver CD-quality music over the Internet using encryption features that provide copyright protection.
Larry Miller, COO of A2B, says, 'AT&T has been doing research on sound quality networks for 80 years. In the last two years it's been working in a coordinated fashion to pull together an integrated platform solution for the record industry to be able to securely ship music to consumers that is the best quality bit-for-bit available in the world . . . in such a way that copyright holders feel absolutely secure it will not hurt them but actually help them.'
RCA and the Verve Pipe are making available for free downloading a live version of 'Reverend Man,' a track from the act's recent RCA album, 'Villains' (Billboard Bulletin, Nov. 4). Miller says AT&T's compression technology will make it possible to download the single in less than 10 minutes. The song and the software enabling users to play and download it will be available on three Web sites: A2B's (www.a2b.com); the band's (www.thevervepipe.com); and BMG's (www.bugjuice.com). The trial will begin Nov. 18 and run for a limited time.
Kevin Conroy, senior VP of BMG Entertainment North America, says, 'The object is to increase awareness of the Verve Pipe and drive sales of 'Villains.' ' He adds, 'The band wanted to pick something unique and exclusive and different. It was their choice together with RCA what to offer.'
The A2B trial provides three ways in which consumers may buy the album. There is an 800 number at its Web site for mail order, which will be fulfilled by a wholesaler. There is a link to a Web page of online music merchant Music Boulevard for direct order over the Internet. And there are 'digital discount coupons' provided at the band's site that can be redeemed at the Trans World Entertainment-owned music stores Coconuts, Record Town, and Strawberries.
Miller says, 'The key thing is to provide the consumer with a degree of choice.'
Conroy adds, 'The goal is to continue to do promotions that tie together partnerships online and off-line. Over time we may work with a number of different retailers.'
A new company specializing in online ventures, Electric Artists, is handling the marketing of the trial. EmeraldNet designed the Web pages for A2B.
Miller says that AT&T is developing 'microbilling capabilities' for A2B, which would allow for efficient consumer transactions involving relatively small amounts of money. 'One of the barriers to rapid adoption of the use of electronic commerce is reluctance to give credit card numbers over the Internet,' says Miller.
The standards that AT&T is developing for the encoding and distribution of music over the Internet are likely to be in competition with those that are to be jointly developed by Microsoft and Liquid Audio.
These two companies will be adopting and cross-promoting each other's technology, in addition to working on standards for previewing and downloading music and billing consumers.
Liquid Audio has agreed to adopt Microsoft's Active Streaming Format technology for online music streaming and its NetShow server software.
David Britton, Microsoft's group product manager for the Internet platform group, says, 'What it means for us is the ability to offer our overall Internet platform to the music industry.'
For Liquid Audio, it means that its Liquid Audio Player, which allows consumers to access music through their computers, will be available on Microsoft's Web sites. The Liquid Audio technology could also be bundled with other Microsoft software in new computers.
Scott Burnett, VP of marketing for Liquid Audio, says, 'What Microsoft provides for us is to get more players in the market. And it moves us closer to standards for the delivery of music on the Internet.'
The other deal Liquid Audio announced was to provide the music format for BMG's three genre-based Web sites: BugJuice (pop, rock, and dance), TwangThis (country), and Peeps Republic (R&B, hip-hop, gospel). Visitors to those sites will be able to download 30-second samples. So far, BMG has been streaming samples only--meaning the music could be listened to but not stored and saved.
Liquid Audio was the company that provided the technology for the downloading of the first commercially available Internet single, Duran Duran's 'Electric Barbarella,' for Capitol Records last summer. The promotion created problems for the label with retailers because the single, sold online for 99 cents, was believed to be obtainable over the Internet before it was in stores.
'Liquid Audio's not here to put retailers out of business,' says Burnett. 'We want to complement them with an online presence.' He says that the company is 'talking with a few retailers' about the use of its technology on retail Web sites.
Music Boulevard currently uses Liquid Audio's technology for the distribution of Internet tracks.

(c) BPI Communications, 1997 ALL RIGHTS RESERVED
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