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MSN Europe re-loads Loudeye/OD2 for digital music

Handy, given song seller's shift away from US

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Microsoft's European MSN operation has re-signed Loudeye subsidiary OD2 to run its digital music downloads service. OD2 currently sells music on MSN's behalf in 13 European countries, where MSN Music has attracted "hundreds of thousands" of buyers.

Earlier this month, Loudeye announced quarterly sales of $8.4m, $6.4m of which came from its digital media store services, most of it from the OD2, which feeds around 75 European, South African and Australasian music stores. Digital media sales were up 76 per cent year on year, from $4m, but down ten per cent on the previous quarter's $7m.

Such is the importance of the OD2 operation to Loudeye's business - it acquired the company in June 2004 - that Loudeye recently sold off its US operations and services to a local rival, Muze. OD2 itself was co-founded by musician Peter Gabriel and sold its first download in August 2001, long before Apple entered the scene.

OD2 focused on providing white-label music store services other companies, including MSN, a range of ISPs, a number of radio stations, MTV, Oxfam, the Coca Cola Corporation, Packard Bell and others. It's built a solid but small - compared to Apple, anyway. As of April 2006, MSN had six per cent of the UK digital music market, according to market watcher XTN Research.

That compares to Apple's 44 per cent, Napster's eight per cent and Wippit's six per cent. OD2's other top-ten placed stores, MyCoke and CD Wow, had shares of three per cent and five per cent, respectively, for a total share of 14 per cent with MSN's share added. XTN's numbers are based on a survey of 1,000 music buyers. ®

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