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Wednesday, January 24, 2001
Recording labels warm to digital music distribution


"...Heeding the wake-up call placed by millions of users of MP3.com and Napster.com, the major record labels are moving their musical catalogs online and are crafting business models involving digital music files. The companies hit the ground running with digital distribution services, tools and products at the Midem 2001 international music conference this week in Cannes, France.

Bommel's company provides a Web hosting and digital content distribution network that distributes audio, music videos, artist information, interviews and live streaming video over a global private network. The content is protected via digital rights management software from InterTrust Technologies and Microsoft.

Meanwhile, independent label Road Runner Records has signed a deal to make its hard-rock and heavy-metal catalog available for digital download in the United States via Liquid Audio, which uses an internally designed content-protection scheme. And Zoom-zic.com announced it will be the first digital music provider to allow customers to download music to PCs, Macs or portable MP3 players using a DRM-based subscription model or prepaid cards, starting in the second quarter. Zoomzic.com will use the DRM technology of Digital World Services.

"The labels have demonstrated a high degree of confidence in [DRM] technology," said Ken Colgan, vice president of partner development at InterTrust Technologies, which claims to have hundreds of partners in the entertainment sector. The DRM software provider this week announced a deal with Virgin Records (London) and French band Daft Punk to pursue a business model that bridges the purchase of physical media (CDs) to downloads of digital content via the Internet. Colgan said the move proves that record labels want to "embrace, rather than alienate" customers.

Virgin Records and Daft Punk will use InterTrust's DRM software to develop an infrastructure for a combination online fan club and customer loyalty program. Fans who purchase the band's new CD will receive a Daft Club ID card and digital wallet software that will give them access to music, chat rooms, special photos, video clips and information posted online..."



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