2004 may be year of online tune store


USA Today 

With consumers fast getting used to the idea of buying songs online, expect scores of companies to launch digital music initiatives this year.

Loudeye and Microsoft, both in Seattle, recently teamed up to take advantage of the trend. The crosstown partners are offering companies a way to instantly erect their own music-download services by accessing Loudeye’s music archive using Microsoft software.

Loudeye CEO Jeff Cavins said that the partnership could spur the rise of upward of 100 new digital music offerings worldwide in 2004.

‘It’s highly conceivable you’re about to see a bit of a gold rush around digital music,’ Cavins said.

Companies of all types have begun examining ways to make digital music downloads a centerpiece of online strategies, said Josh Bernoff, digital media analyst at research firm Forrester.

‘The frenzy for music downloads is like nothing we’ve seen since the dot-com insanity,’ he said.

Symptoms of mounting enthusiasm can be found in:

A proliferation of music stores. Tech players Microsoft, Hewlett-Packard, Sony and Dell, among others, will open online music stores this year. RealNetworks, which already runs a subscription music service, is also planning a song-download store.

Use of songs to drive device sales. Sony plans to promote songs downloaded in a proprietary Sony file format, intended for playback exclusively on Sony devices, aping Apple’s strategy. In terms of portable devices, its iTunes downloads play only on Apple’s iPod.

Pitching food and drink with music. Pepsi will place codes for one free iTunes download inside 100 million caps of Pepsi, Diet Pepsi and Sierra Mist. The promotion will be backed by a 60-day ad campaign that kicks off during the Super Bowl. Miller Brewing this summer plans to give away thousands of credits for free Napster downloads and portable music players.

Songs by cell phone. AT&T Wireless this summer will let subscribers listen to song samples, then purchase the song, all from a cell phone. A copy of the song then gets downloaded from Loudeye’s archive to a place on the Internet, called a locker, accessible by the buyer.