E-musical chairs

Wheels and deals in the turbulent online music business.

Strange bedfellows

A month ago, Microsoft angered the five major record labels when it announced plans to roll out its Windows Media 4.0 player. The software giant's technology was perhaps too good; in the midst of trying to settle on a standard for digital distribution, the music industry felt threatened by a Microsoft operating-system feature that was saying, in essence, "Come and get me."

The labels scoffed. Record and technology companies, including Microsoft, had supposedly been collaborating on a way to deliver music over the Web cleanly, in terms of both sound and copyright issues, as part of the Secure Digital Music Initiative (SDMI). Redmond had pulled a typical move, it seemed, sparring with the competition playfully before delivering a knockout blow. This might work in the tech business, but not in the high and mighty music world, where Microsoft was viewed as an intruder.

Yet Microsoft wasn't the first or the only one to break ranks. Many individual artists were jumping on the MP3 bandwagon, placing deliverable sound files on sites like MP3.com. One of the big five labels, Sony, unveiled a copyright protection format in February, while its two largest competitors, BMG and Universal-Polygram, announced in April that they would team up to launch a digital distribution site called Get Music. Clearly impatient with the SDMI proceedings, companies were scrambling to introduce products, sites, and technology that would give them an edge in the online music biz.

Microsoft had an advantage with its Media Player 4.0 in that it would be part of the Windows 98 package, but what was missing was a major music partner. But then, last week, Sony Corp. and Microsoft issued a joint announcement that the two giants will team up to market and promote music and music videos on the Web. No mention was made of Sony's previous copyright protection technology (though a Microsoft spokesperson says this doesn't preclude the partners from using it), which will likely take a back seat in order to help tout Windows Media 4.0's capabilities as a tool for digital downloads and streaming.

Who's no. 1?

Country crooner Tim McGraw may have beaten out the soundtrack to Star Wars: The Phantom Menace in first-week album sales at the brick-and-mortar retail stores, but the Empire struck back online. Last week, Billboard debuted its new Internet music chart based on data from Soundscan, which tracks sales on popular e-commerce sites like CD Now and CD Universe. The first no. 1 debut on the chart was The Phantom Menace.

But ghostly absent from the sales figures on Billboard's chart is that of the no. 1 online music retailer, Amazon.com. Because of the popularity of its own sales chart, and probably due in part to the fortress-like nature with which the book, record, and kitchen-sink retailer treats its figures, Amazon doesn't report to Soundscan, which means that any record bought on the site doesn't affect chart position at Billboard. So who's no. 1 on Amazon? Former Menudo man Ricky Martin.

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