BMG to launch digital music service next month

Company snubs subscription model for pay-per-download fees

Recording company BMG (Bertelsmann Music Group) will join fellow 'big five' music labels EMI, Sony and Universal when it launches its own digital music download service next month.

The service will initially provide 50 albums and 50 singles, according to BMG VP of business development Sami Valkonen, cited by Reuters.

Like the services offered by other music labels, BMG's service will operate through online retailers, essentially to prevent the company's existing retail partners getting annoyed at having to compete with it directly. And with the vast majority of a label's sales still being made on the High Street and through online CD sales, you can understand why BMG doesn't want to piss them off.

Interestingly, Valkonen - and, by implication, BMG itself - appears to be pretty dismissive of the much-mooted subscription business model. That scheme, whereby punters pay a monthly fee to download as many tracks as they like, is being widely touted by industry analysts as the way the music biz can beat the likes of Napster.

"We don't really believe in the all-you-can-eat model for a couple of reasons," Valkonen told Reuters. "One is that it doesn't give you the advantage of mass customization that allows you to target certain music to certain customers.

"Also, our research shows us that customers will download all the music they want in the first two months and then not use it very often after that. And unless they proactively cancel the service, they're being charged for something they don't get much value from. That's not very friendly to the consumer."

Not that that's really been a prime concern of the music biz - more likely the concern is simply that the music buyers get a better deal than the record companies.

Instead, BMG hopes buyers will be happy paying $1.98 to $3.49 per single and $9.98 to $16.98 for complete albums, which is what they'd pay in the shops anyway.

BMG's service will follow on the heels of Universal's recently launched bluematter trial run - soon to be expanded - and similar operations from Sony and EMI. The final 'big fiver', TimeWarner, has said it will announce its own plans in its fourth quarter - presumably once it has become part of AOL. ®

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