Warner Joins Music Download Parade

In the latest example of the impact that embattled song-swapping forums such as Napster and MP3.com have had on the music industry, Warner Music Group announced Monday it will release 100 recordings in downloadable format before Christmas.

Warner, the fifth largest recording company in the U.S., is also the last of the major labels to unveil plans to sell music directly to consumers over the Internet, essentially completing the industry’s shift to include online music sales.

The deal includes partnerships with Amazon.com and Wal-Mart.

More Recordings in 2001

Warner said that 100 singles will be available for download starting in early November and that up to 1,000 additional recordings, including full-length CDs, will be available over the next several months. Warner’s stable of artists includes best-selling superstars such as Madonna, R.E.M., Phil Collins and the Barenaked Ladies.

“As the digital music landscape continues to evolve, we remain dedicated to creating a flexible system focused on our consumers, artists and retailers,” said Paul Vidich, executive vice president at Warner Music Group. He said that Warner will offer consumers “an easy music downloading experience.”

Warner Music, which is a division of entertainment giant and America Online merger partner Time Warner (NYSE:TWX), followed the examples of Universal Music Group, the world’s largest record label, as well as Sony Music Entertainment, the EMI Group and BMG in announcing online music offerings.

Forrester Research analyst Eric Scheirer said music companies recognized early this year that the digital file-sharing being done on Napster and other underground formats could not be resisted.

“Peer to peer file exchange is here to stay no matter what,” Scheirer said.

In and Out of the Courtroom

The exploding popularity of digital file-sharing technology has been accompanied by a series of legal wrangles. Napster faces a trial later this year in a copyright infringement lawsuit filed by the Recording Industry Association of America (RIAA).

Late last week, lawyers for the U.S. Copyright Office filed briefs opposing the Napster defense that computers should be covered by the 1992 law allowing personal recording of copyrighted music.

Earlier this year, MP3.com, which uses similar technology as Napster, reached settlements in copyright infringement disputes with several major labels, including Warner. However, last week MP3.com learned it would be slapped with a penalty of at least $118 million (US$) in a copyright case launched by Universal.

We Have the Technology

Warner said it has worked with RealNetworks to develop the technology for the downloads. The music company already offers downloadable samples on its Web site using the popular RealNetworks streaming capabilities.

Meanwhile, Music Choice Europe, a London-based digital music provider backed by Warner and others, said it plans to raise about $64 million through a stock sale. Music Choice delivers music to set-top boxes over telephone lines.

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