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Major labels join IBM on Net music sales trial

Music industry leaders sing the Big Blues...

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Four of the music industry's six key players -- Sony Music, Time-Warner, EMI, MCA/Universal -- and IBM have announced the first major move in the business' bid to take command of the Internet music scene. The plan, dubbed the Madison Project, will see the participants co-operating on an experimental music distribution system set to commence operations next year, according the Financial Times. Madison is clearly being driven by Big Blue, which the FT reckons has invested some $20 million in the project so far. The work to date has centred on the development of a secure system that allows music tracks to be bought and downloaded but remain connected to the buyer through a serial number to prevent music being copied illegally. Anti-piracy measures are essential to winning the support of music companies paranoid about the threat the Internet poses to their sales, yet eager to take hold of the opportunities it offers. IBM is said to have spent months in negotiations with the US record companies persuading them that it has the right solution. Major label support is essential if any online music distribution system is to reap big rewards. So far, commercial sites have largely worked with individual bands or small, independent labels. Estimates for the money to be made from downloadable music range from Market Tracking International's prediction of $687,500 by 2000, a figure that represents just 0.0125 per cent of total US music sales, to three per cent of total US music sales by 2007, according to online music specialist the Internet Underground Music Archive. Of course, the real loser here is Liquid Audio, the digital music software developer that has a working music format that minimises music piracy right now. Liquid Audio has been working hard to build alliances with music vendors and storage suppliers (users are likely to want to be able to move their music from machine to machine) in order to put itself in a strong position to win the backing of the music majors as and when they turn to the Internet in earnest. IBM has yet to release specific information on its music distribution technology, but it seems unlikely that it will be based on Liquid Audio's work. That leaves Liquid Audio having to compete head-to-head with Big Blue. That's been done before, and done successfully. But its hard to imagine the music industry giants ultimately siding with the little guy instead of a multinational as conservative as they are. ®

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