Online retailer CDnow has ambitious plans to build country specific portal sites to sell music and videos in Europe.
CDnow is developing "virtual shop fronts" for the UK, France and Germany which will go live this year. Other countries are to follow. CDnow is about to combine with Columbia House, a music and video club that is jointly owned by Time Warner and Sony.
"When a customer comes through the store front there will be a set of preferences," Clive Mayhew-Begg, vice president international for CDnow told VNU Newswire. "If you are from the UK, for example, you can pay in pounds, check out UK artists and content and look at genres that are specific to the UK, such as dance for example."
Product will be purchased from UK record labels and all orders through CDnow will be fulfilled in the UK, Mayhew-Bigg confirmed. Other European countries will follow the same model.
"CDNow will be a portal," Mayhew said. "We don’t see ourselves as an ecommerce site, we’ll provide country specific content, community and entertainment - you’ll be able to buy, listen, download and sample. CDnow plans to create its own content for europe and also buy it in from outside content providers."
The portal strategy is the core of CDnow’s plans for conquering the European music and video market, which is very lucrative. CDnow currently sells and ships to over 150 countries, but it is still very US centric and 80 per cent of its business is currently in the US.
By the end of this year, CDnow will offer music that can be downloaded directly from the Internet. The companies did not release any information on the technology it plans to adopt for downloading music from the Internet.
CDnow, which has around 2.3 million customers, had revenues of $98.5 million in 1998 and estimated revenues of $71 million in the first half of this year, the companies said. The online retailer is still far from profitable. It reported a loss of about $19 million in the first three months of the year. In contrast Columbia House had revenue of $1.4 billion last year.
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