BMG to sell digital downloads

Bertelsmann makes a move to sell hit songs online
Written by Margaret Kane, Contributor

BMG Entertainment, which represents artists including Carly Simon and Christina Aguilera, will sell digital downloads of songs and albums from its catalogue through a number of online sites in the US, the company said Tuesday.

BMG said it has linked up with Lycos, Best Buy, Musicland Group, Alliance Entertainment's TheStore24, ARTISTdirect, GetMusic, RollingStone.com, TransWorld Entertainment, Tower Records, and Wherehouse Music/Checkout.com.

The label will sell digital singles for $1.98 to $3.49, CDs for $9.98 to $14.98, and double CDs for $11.98 to $20.98.

Record labels have been struggling to find a way to convert their businesses to the online world, as companies like Napster help users swap digital music for free. BMG officials said last week that it has proposed several business models to Napster in an attempt to settle the suit. Napster chief executive Hank Barry had complained after an appeals court hearing that the record labels had rejected his proposals and made no counterproposals.

Another online music site, MP3.com has also been embroiled in lawsuits involving digital music. While it has reached settlements with BMG, Warner Music, Sony, and EMI, a federal judge recently ruled against it in a suit filed by Universal Music Group. The finding could cost the online music provider from $118m to $250m. The launch initially includes a 100 singles and albums from BMG artists. The company plans to eventually expand that number to 2,500 albums and singles by the start of the holiday season.

BMG, a unit of Bertelsman, will use a shopping cart system developed by Digital World Services and based on InterTrust Technologies's Digital Rights Management platform.

The company is also "actively exploring a number of new digital commerce models, including subscription services and secure peer-to-peer distribution," said Kevin Conroy, president of new technology at BMG.

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