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HMV to explore digital music distribution

Deal with IBM will ready retailer to exploit the results of the Madison Project

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UK-based worldwide music retail chain HMV today announced it is to work with IBM on the development of Web sites to sell music over the Internet. But while the retailer was keen to stress the sites will initially be used as a cassette and CD sales mechanism, expanding the service to provide digital distribution can't be far behind. HMV said it will open a sales site in Canada in the second quarter of the year, followed by sites in the UK and Japan. However, the company's UK site already allows visitors to order from a selection of best-selling recordings. That suggests the sites will quickly expand the range of titles they cover to offer a complete selection of 'in print' discs -- the company claims around 250,000 recordings will be offered. By the time that's up and running, the results of the first public trials of the Madison Project should be in (see Big Blue, Big Five to unveil Net music system). And which company connects the HMV announcement to Madison? IBM. Big Blue will work with the retailer on its Web sites, and is currently readying its digital music distribution system for a Spring trial in San Diego. Two components make Madison particularly interesting: first, the backing of the world's top five record labels -- Sony, EMI (which, incidentally, owns a goodly portion of HMV; beginning to see how it all fits together, yet?), Time-Warner, Universal and Bertelsmann -- and, secondly, the very real prospect it offers for allowing retailers to use the Internet to turn their stores into custom CD plants -- why hold a limited stock when you can use the majors' Internet music archives to provide customers with almost every recording ever made? (see IBM's Project Madison: the music industry's Manhattan Project?). Clearly, HMV, which, as a High Street based retailer, stands to lose the most from Internet-based sales and, ultimately, direct digital delivery of music, sees things that way too. At today's announcement, the company wouldn't say when it will offer digital downloads, but Duncan Bell, HMV's director for business development and IT, did admit that "as the technology becomes available for music downloading, we will explore it". With Madison's trial so close, that exploration is set to begin very soon. ®

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