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Monday, June 16, 2003
Sony to offer music downloads in U.K

Sony Music said Monday that it would begin selling music downloads in Britain for its top artists, making it the last among the major recording labels to join 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 the United Kingdom.

"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 onboard across Europe fairly soon."

During the next six weeks, Sony will supply music to OD2 partners that include BT Group's, Ministry of Sound, the U.K. Web sites of MTV, Microsoft's MSN, retailer HMV Group, and Internet service providers Tiscali and Freeserve.

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

With Sony onboard, OD2 has more than 200,000 tracks on offer.

As in the United States, the major labels have been backing subscription music download 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 though said the recent media commotion around Apple Computer's two-month old iTunes music download service, which is available only in North America, 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 told Reuters the labels are in active negotiations with Apple to bring the download service to Europe. iTunes may launch in at least one European country later this year or early next year, the sources said.

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