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BT online music service fails whistle test

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Analysis British Telecom's Dotmusic on Demand (DoD) digital music subscription service, launched in London yesterday, isn't likely to persuade users of free services like Kazaa and Grokster that it's time to go legal just yet.

And it's not going to convince music buyers that online is a better value medium than CD either.

Part of BT's Dotmusic.com site, DoD offers two tiers of monthly subscription: a £4.99 ($8) service providing limited downloads and audio streams, and a £9.99 service offering - for the first time in Europe - unlimited streams and downloads and limited CD burning.

Downloads are limited to Windows Media Player format encoded at 128Kbps. Streams operate at a poor 32Kbps. Linux and the Mac OS are not supported.

Make that 'very limited'. Subscribers can burn ten tracks a month for free - further songs cost between 99 pence and £1.49 - but not if the artists they like belong to the EMI label. EMI has granted listening and download rights, but not burning privileges.

And if you're keen on Michael Jackson, Bruce Springsteen, Celine Dion, or any of Sony's roster, you'll be out of luck altogether. OD2 (aka On Demand Distribution), the music distributor whose service DoD is essentially reselling, has no distribution arrangement with Sony.

Of course, DoD offers "exclusive content", interactive charts, the guarantee that the track you're downloading is indeed what it purports to be and tracks that are easy to find - all attractive qualities - but it's still a costly way to build up a music collection that extends beyond a PC.

An admittedly unscientific sample of people we asked almost all said they prefer listening to music on CD. Not everyone wants to boot up a PC just to listen to music - they want to listen in comfort, or while they're in the car. Even folks who download music almost always burn songs onto CD for maximum listening flexibility.

That immediately makes DoD less attractive than the word 'unlimited' suggests. Equally, 155,000 tracks from over 6,500 artists may sound good, but there are plenty of names missing from the list, not all of them Sony artists. The Beatles, the Rolling Stones and Nirvana to name but three are missing from the catalog.

Neither Dire Straits nor Celine Dion - two artists singled out by speakers at yesterday's launch - appear in DoD's collection of songs!

Of course, for BT, it's all just an excuse to encourage users to upgrade to its broadband service, but for OD2 these issues are more important. Company executive Ed Averdieck was unwilling to give any indication of how many users the company has throughout Europe other than "a significant number", whatever that means.

That's not to say BT and OD2 can't make a business out of DoD. We're sure some music lovers will appreciate the opportunity it offers to build up a large PC-based music collection. It's just that we're not convinced that many will pay £120 a year to do so - you can buy ten CDs for that.

CDs are arguably overpriced, but at least there's some manufacturing cost there. OD2 has a set-up cost too, but across each track it's much smaller than the cost of punching out a disc. Why then do OD2's songs effectively cost more than their CD equivalents?

"The price can and will come down," predicted British Phonographic Industry (BPI) chief Peter Jamieson. Maybe, but it's going to have to do so soon if fans are to be convinced this is a better way to get music than rival offerings and media. ®

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