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EMI picks partners for Euro digital music trial

Takes a cautious approach to Net music market

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British 'big five' music company EMI is to bring its digital music distribution trial to Europe, signing two further partners to offer its content.

EMI's latest signing emerged over the weekend. DX3 (which is short for Digital Distribution Domain, apparently) and On Demand Distribution will separately take EMI's digital content and sell it to online retailers.

The deals follow a similar one with the Tornado Group, and alliances with the likes of Liquid Audio in the US.

Essentially, it's an old economy model: the manufacturer (EMI) ships to resellers (e-tailers) via distributors (Tornado, DX3 and On Demand). Since Net-based commerce is largely about cutting out middlemen, we wonder why EMI is so keen on bringing them into the equation. Clearly, old habits die hard with old economy companies.

That's not how EMI's fellow 'big fivers' are tackling the business. BMG's deal with Napster is the most obvious example of a music label getting to the heart of digital distribution, but the others all appear to be targeting e-tailers directly.

EMI's approach does bring with it some important benefits. For a start, it should ensure that its content is made available in as wide a range of formats as possible. After all, no one wants to be forced to use software they don't much care for simply because that's the only way they can hear their favourite band's latest single.

It also ensures EMI takes relatively little risk. It has stakes in both DX3 and On Demand, so it can share in their success, but it doesn't lose as much if one of them goes titsup.com. And if they do phenomenally well, it's in a better position to snap one or more of them up as its digital distribution division.

Still, it's a very cautious, tippy-toe approach to Net-based sales that contrasts markedly with Bertelsmann's 'dive straight in' strategy, and makes us wonder if EMI really understands this Internet thing.

Meanwhile, over in the US, EMI has signed up Streamwaves to stream its music content to subscribers. Streamwaves will offer EMI's music early next year. Punters will pay a monthly fee - in return, they get to listen to as many tracks as they like, when they like and as often as they like.

It's not quite Napster, but it's as close as it gets, and a model for emerging online music rental services loosely modelled on the video rental sector. Why buy a CD when you can listen to it via the Net for a fraction of the cost? Sony favours a similar approach, but one based on pay-per-listen rather than monthly subscriptions, which favours hardcore music buffs, not casual listeners, who are more likely to be interested in a rental service. ®

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