BMG counters Net threat with online music sales venture

BMG Entertainment, the Bertelsmann-owned record label giant, is to fight back against free music on the Internet by launching online sales of its current hits and some of its back catalogue this summer.

BMG has formed an alliance with digital clearing services company Reciprocal, which will provide it with digital clearing services for downloads, packaging, account and customer information management, financial clearing services and sales tracking.

BMG – which owns 200 record labels in 53 countries, including Arista Records, RCA Records and Ariola – intends to begin selling its current hits and catalogue music as downloadable files through as yet unnamed Internet retailers this summer.

BMG senior vice-president worldwide marketing and new technology Kevin Conroy says: “We are confident that our relationship [with Reciprocal] will enable us to provide consumers with the best possible experience while protecting our artists’ rights.”

Sony recently made a similar announcement about moving online. Neither company intends to offer music in the MP3 format.

The move indicates the mainstream music industry’s response to the Internet. Free digital music downloads accessed through MP3 technology have damaged labels’ ability to control and track sales, and maintain prices. In April 1999, BMG and Universal combined their online marketing and sales operation in a single Web outlet,

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