New music joint venture??

This just came in as 'breaking news' from Billboard. Can someone shed some light on just what is happening here


In an effort to combat plummeting CD sales, six of the largest music
retailers have formed a joint venture, dubbed Echo, to ensure their
survival in a world where consumers are spending less and less of
their entertainment dollars on physical music products.


Not really sure what is going on here.

 

In short it probably means we are gettin' ready to get screwed again...pucker up!

 

Here's a little more....

LOS ANGELES, Jan. 27 (UPI) -- The retail side of the music business announced a joint venture Monday that will seek to carve out a major role for itself in the growing market for online downloads of popular recordings.

Faced with sagging CD sales over the past two years, a consortium of six well-known record store chains launched Echo, a joint venture aimed at catering to the growing download market in a manner that complements their network of traditional brick-and-mortar record stores.

"Echo was established to create a viable business strategy that combines physical and digital music distribution," explained Dan Hart, CEO of the new Los Angeles-based enterprise. "Music retailers can utilize their long history and expertise in building customer relationships, marketing music and breaking new artists in order to provide a digital music experience that truly serves the consumer."

The digital music experience envisioned by Echo is one in which music is licensed and sold over the Internet, however the six individual chains will be able to price and advertise music as they see fit.

"This will, for the first time, bring real competition to the digital music marketplace," Alan Malasky, Echo's anti-trust attorney, said in a press release.

Echo's six partners each hold an equal stake in the venture. They include Tower Records, Wherehouse Music, Virgin, FYE Stores, Hastings Entertainment and Best Buy.

Echo is not the first attempt by mainstream music companies to crack the digital market that grew up around Napster, the renegade file-sharing Web site that literally allowed millions of users worldwide to sort through and download songs stashed in MP3 computer files free of charge.

While wildly popular with a generally youthful and cash-poor audience of computer-savvy music fans, Napster became the bane of the established recording industry. The company was knocked out of commission last year by the recording industry, which successfully argued in federal court that Napster was abetting record piracy and cheating companies and musicians out of their rightful royalties under copyright law.

New file-sharing technologies have popped up to fill the Napster void, while the music industry has found limited success in its own attempts to market its wares online.

The companies that own Echo believe that they can succeed where the record labels struggled in their attempts to market downloads because they have name recognition and the ability to sell products from multiple labels. They will also be able to offer in-store specials and the technological means of downloading music into customers' personal MP3 players in the store.

"Retail has always been about more than simply selling CDs," said Jerry Comstock, chief executive officer of Wherehouse Music. "We are in the customer relationship business."

Wherehouse earlier this month filed for bankruptcy protection, attributing a 15-percent decline in sales to online piracy and increasing competition from discount retail outlets.

Although the record labels have yet to be approached about granting licenses, it is expected that they will quickly agree since Echo offers them a means of blunting the piracy problem while at the same time giving them a digital relationship with the record store chains that now sell the lion's share of their CDs.

Some analysts have cautioned that digital retailing depends to a large extent on the price offered to online devotees who are unwilling to pay $15 or more for a CD, however would be drawn to the selection and stability of a familiar brand name.

"Any opportunity retailers have to find additional revenue in a time of falling sales is a positive," Michael Nathanson, an analyst at Sanford C. Bernstein, told The New York Times. "We continue to think that pricing has to come down to get pirates off the free sites and onto legitimate ones."

 

Re: Re: New music joint venture??

Well...I take that back...at least for now...

 

I guess the reason the forum has shown so little interest in this so far is because it means mp3, or some other compressed format, and a few of us probably believe that it will fail just like all other industry attempts to succeed in online downloading, especially after their aggressive attacks file-sharing programs and user of those programs.