[Editor's note: Over the holiday season, SonicNet is looking back at 1999's top stories, chosen by our editors and writers. This story originally ran on Tuesday, May 4.]
The world's biggest record company, Universal Music Group, is looking
to take the lead in online music sales via a plan announced Tuesday
(May 4) to begin selling tracks by download in late summer or early
UMG whose many labels are home to artists including DMX, U2, Nirvana,
Guns n Roses, Marilyn Manson, Nine Inch Nails, Sting, Sheryl Crow, the
Police, Tupac, Hole, Rob Zombie, Sonic Youth, Shania Twain and Beck, to name a few
will launch a pilot program with InterTrust, a company that has developed
"From what I can tell, artists are eager" to sell their work online,
said Larry Kenswil, Universal's president for global electronic commerce
and advanced technology.
The plan will put UMG months ahead of the industry as a whole, which is
seeking to begin the widespread sale of downloadable music next year.
The announcement comes amid a flurry of recent developments in the music
and technology industries.
On Monday, RealNetworks, maker of the RealAudio and RealVideo players,
unveiled its first software for playing MP3 files, with the goal of
putting the program in the 60 million computers that already use its
Last week, Alanis Morissette and her management company announced a
partnership with the website MP3.com, which major labels had largely
Here's how UMG's plan would work: A listener goes to a website and sees
a Universal song he or she wants, such as Sheryl Crow's "My Favorite Mistake"
excerpt). The listener downloads the track, which comes in
MP3 or another digital format packaged in InterTrust's "DigiBox" technology.
The cut can then be played on a product certified by InterTrust, such as
Microsoft's new Media Player, or Diamond's Rio portable MP3 player.
Depending on conditions set by the music label, the downloaded cut
could be played, for instance, two times for free, at which point the
listener would be asked to buy it outright for $1 or $2 or pay a quarter
for each subsequent listen. The user could also send the track via e-mail
to friends, who would be given the same options.
Universal plans to use the technology not only on the Net, but offline
as well, Kenswil said. A CD might come with an extra hidden track that
could be played a few times for free, but then would require payment. Or
a DVD version of an album could also include an artist's entire catalog,
which could be unlocked through an InterTrust payment.
InterTrust has spent nine years and $60 million creating the copyright
protection technology it hopes to sell not only to Universal but to the
entire music industry, according to Joe Jennings, senior vice president
"No one really knows what propositions consumers will accept,
and what will excite them," Kenswil said. "What we need is the flexibility
to try different things."
Jennings said, "MP3 has already proven that people are willing to do
Universal is also looking at giving away DigiBox songs at kiosks in
music stores, Kenswil said, but music fans should expect tracks to appear
first at Universal websites such as Getmusic.com and at online retailers.
Earlier this year, computer giant IBM announced a spring pilot program
to sell downloadable music from all five major record distributors
Universal, Sony, Time Warner, EMI and BMG to cable-modem subscribers
in San Diego. Unlike that proposal, Universal's program with InterTrust
will be available globally.
Meanwhile, the five majors and numerous technology companies are working
on the Secure Digital Music Initiative, which aims to have
copyright-protection standards in place for devices such as the Rio by
June, and for all online music by next April.
The Universal-InterTrust partnership "is a key milestone," said Mark
Hardie, who analyzes the entertainment and technology industries for
Forrester research. "The majors aren't sitting still, and SDMI is not
going to be the word from on high that they're all going to wait on,"