Home Music Music News

Music Retailers Go Digital

Suffering industry to offer downloading alternative with Echo

In response to a second consecutive year of sagging record sales,
six major music retailers announced today that they’re banding
together in a venture that will meld the online market for digital
music more closely with old-fashioned store-based sales. The group,
which includes industry-giants Best Buy, Tower Records, Virgin
Entertainment, Trans World Entertainment (which operates FYE
stores), Wherehouse Music and Hastings Entertainment, bought a
controlling interest in Echo Networks, a Los Angeles-based digital
music vendor that will lend technology to and serve as an umbrella
for the new initiative, called simply “Echo.”

Echo is an effort to stem what traditional retailers see as the
impingement of the impossible-to-regulate trade in pirated music on
their profits. The six participants, once they secure licensing
agreements from record labels, plan to take advantage of their
status as familiar destinations for music buyers to carve out a
piece of the digital music market by offering downloads to
customers online and at retail locations. Echo will also differ
from the major labels’ pay-for-play forays into the digital
marketplace — which haven’t been able to compete with the
continuing (if illegal) operation of free file-sharing sites — by
featuring value-added products like players with songs pre-loaded
and CDs that include free sample tracks with an option to buy the
rest.

One of the earliest investors in Echo Networks, originally a
Silicon Valley Internet radio startup, was Strauss Zelnick, former
head of BMG Entertainment, parent company for record labels RCA and
Arista and home to artists including Pink, TLC and Usher, as well
as Elvis Presley’s back catalog. Zelnick will now sit on Echo’s
board of directors, an important connection for the company’s
efforts to securing licensing agreements with labels, the first
step in any legal digital distribution venture.

Show Comments

Newswire

Powered by
Close comments

Add a comment