FixTag/ This is good - note bold excerpts
Liquid Audio Gets a Buyer for Its Assets
By LAURA M. HOLSON
LOS ANGELES, Jan. 23 — In a move that could make it easier for record companies to sell and promote songs online, the music distributor for Wal-Mart has agreed to buy some of the assets of Liquid Audio, the troubled digital music pioneer.
Anderson Merchandisers, a privately owned company that is also the largest magazine wholesaler in the United States, is buying Liquid Audio's technology as well as other assets, including computers, for an 'undisclosed sum, according to company executives. Liquid Audio was at the forefront in developing technology to deliver music securely online but has been in financial straits recently and has suffered through a nasty boardroom fight. The new company, which has not been named, will be run by a Liquid Audio founder, Gerry Kearby, who said the company had licenses to distribute over 350,000 songs.
[A new more embedded co. to be named]
The acquisition, which is expected to be announced on Friday, signals that recording companies, distributors and retailers are taking the first steps toward working together to come up with ways to combat declining compact disc sales, which have been hurt by free online music-swapping. Anderson, based in Knoxville, Tenn., hopes to distribute music downloads through the Web sites of retailers, including Wal-Mart, though no deal has been worked out yet, an Anderson executive said.
Of course any new online music venture, like many that have preceded it, seems more like a gamble than a sure bet these days. Bertelsmann, the parent of one of the major record companies, invested in Napster several years ago with the hope that it might be a paid service one day. That effort failed. And the music companies' own online efforts have gotten less than rave reviews so far.
Still, Charlie Anderson, the company's chief executive, said, "This will strategically position retailers to participate in the industry's legitimate downloading future."
The company has relationships with all the major record companies largely because its job is to make sure that Wal-Mart shelves are stocked with music. The new venture is supported by the Universal Music Group, the world's No. 1 music company, which is aggressively trying to sell more of its music online through major retailers, like Best Buy and Circuit City. So far, 60,000 Universal songs are available.
[Remember 'At retail Outlets' PR befor xmas]
It is a drastic shift in attitude from two years ago, when music companies saw themselves as at odds with retailers regarding online music. But now retailers, distributors and music companies realize that they need one another more than ever, both in stores and online. "Anderson's announcement is similar to the first flicker of an electric light bulb," said Doug Morris, the chief executive of the Universal Music Group. "The music business has always been a packaged goods business, and now it will be complemented by electronic distribution."
In the past, music was sold in several forms: vinyl albums, cassette tapes and compact discs. But albums and cassettes have all but disappeared, leaving only one option — CD's.
[NO - Personal-Juke-Boxes]
Not surprisingly, the fallout from declining CD sales has forced record companies to cut costs and is starting to affect almost every aspect of the music industry. Wherehouse Entertainment, a large music retailer, said this week that it was filing for bankruptcy protection in part because free online music swapping had cut deeply into its sales.
Some retailers are already offering music online but with little fanfare. Best Buy sells music that can be downloaded from its Web site through Liquid Audio. But Best Buy executives say it is a developing business that they have not marketed aggressively. Scott Young, vice president for entertainment at Best Buy, said, "Everyone is trying to figure out how to make the business work."
[note my CNN post.. ]
Mr. Kearby said he planned to expand the digital downloading business in several ways. Universal already has several projects in the works, including one to persuade consumers to download more music by entering them in a contest each time they do.
Companies could better use downloaded music as a promotion, Mr. Kearby said. For example, he said, in any of the magazines distributed by Anderson, companies could include a card for a "buy one, get one free" downloading offer. Or they could find a partner, a company like Coca-Cola or Pepsi, to include stickers on their cans for free downloading.
[To portables at any retail]
Mr. Kearby said that one day such promotions might be as ubiquitous as the toys given away at franchise restaurants to market blockbuster movies. "It's like, `Do you want a digital download with that?' " he said, laughing. "I'll have Doug Morris call McDonald's right away."
[We do lqid sp3, n rio-p,d2d, wma, could be toshibas new distribution system by 05...
emit...
Copyright 2003 The New York Times Company
AI
