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Sony Music Ventures Into Britain's Download Scene With Top Artists

The record label plans to sell its music on a subscription basis and may expand in Europe.

June 16, 2003|From Reuters

LONDON — Sony Music Entertainment said today it would begin selling music downloads in Britain for its top artists, making it the last among the major recording labels to jump on Europe's music download bandwagon.

But the long-awaited announcement comes with a hitch. Sony, home to such artists as Michael Jackson and Jennifer Lopez, will not sell song downloads to European Internet users outside Britain.

"We're in negotiation with Sony for the other territories," said Charles Grimsdale, chief executive of OD2, the technology provider that brokered the deal. "Hopefully, we'll be able to bring Sony on board across Europe fairly soon."

Over the next six weeks, Sony will supply music to OD2 partners, including BT Group's, Ministry of Sound, the British Web sites of Viacom Inc.'s MTV, Microsoft Corp.'s MSN, retailer HMV Group and Internet service providers Tiscali and Freeserve.

OD2 supplies roughly a dozen sites with infrastructure to run music download services. It is the only firm in Europe to have secured licenses from the five major music labels and a number of independents.

With Sony on board, OD2 has more than 200,000 tracks available.

As in the United States, the major labels have been backing subscription music downloads services in Europe to combat the proliferation of online song-swapping, a phenomenon eating into global CD sales.

But the nascent industry-sanctioned services have had little success in persuading Internet users to abandon file-sharing sites such as Kazaa and Grokster, which carry a larger selection of music and are free.

Grimsdale, however, said the recent media commotion around Apple Computer Inc.'s 2-month-old iTunes music download service, which is available only in North America at the moment, has created a lift for the privately held OD2.

"Revenues are growing rapidly and there's been a huge amount of activity on our partner sites. [Apple CEO] Steve Jobs is my favorite person right now," Grimsdale said.

Industry sources said the labels are in active negotiations with Apple to bring the download service to Europe. Apple's iTunes may launch in at least one European country later this year or early next year, the sources said.

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