Seagram, which owns the Universal Music Group, and Bertelsmann, which owns BMG Records, have formed an online joint venture to try and ready themselves for the digital revolution.
The "Get Music" Internet content and ecommerce alliance between Universal and BMG is estimated to be worth $10.4 billion and will combine Universal labels, MCA, Geffen, new acquisition Polygram NV, Def Jam, Mercury, Motown and A&M with Bertelsmann's entities, RCA, Arista, Elecktra Nonesuch and BMG Classical.
The Get Music Web site will consist of online music channels, communities for music fans and, most importantly in revenue terms, an ecommerce section.
Although the two companies did not specifically outline plans to distribute music over the Internet, analysts believe that this may follow once standards start to emerge. However, Seagram and Bertelsmann have also joined forces with Time Warner, while EMI and Sony have hooked up with IBM to test a system that will do just that.
According to market research company Market Tracking International, the market for music sales over the Internet will be worth $3.93 billion by 2005, up from $28.7 million in 1997.
Analysts also say that music companies are desperately trying to carve out a chunk of the digital distribution market for themselves because they are already coming under pressure from ecommerce sites such as Amazon.com and CDNow, which recently merged with N2K.
The EMI Group and Japan Sony Music have also set up a similar joint venture to Get Music. Time Warner Music and Sony Music now operate an etail site, Total E, which is managed by the Columbia House music club and coowned by the companies.
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