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Monday, August 16, 1999 Published at 09:38 GMT 10:38 UK

Business: The Company File

Sony launches Internet music sales

Fans of Michael Jackson should be able to download future albums from the Internet

Sony is to start selling music via the Internet in Japan by the end of the year.

Music lovers will be able to download tunes using the Internet and record them on to mini discs, compact discs and a new generation Walkman, said a spokesman for Sony Music Entertainment Japan, a Sony subsidiary.

The first phase will see the choice of music available limited to Sony's Japanese artists. Songs are expected to cost up to £3 ($4.50), about half the price for CD versions.

[ image: Mariah Carey is another Sony star whose records may soon be online]
Mariah Carey is another Sony star whose records may soon be online
The significance of the move is that Sony will become the first of the major record labels to start the sale of music as downloadable digital computer files rather than on CD or other established formats.

Sony refused to say what technology it would use for the transmission of the music, but a key aim is for it to be recordable on to the Memory Stick Walkman it is planning to launch by the end of the year.

The new Walkman uses a memory chip to store music rather than a cassette tape or compact disc.

The memory stick technology was developed by a consortium of six Japanese electronics firms. Smaller than a stick of chewing gum, it has ten times the storage capacity of a 3.5" floppy disk.

Young rivals threaten sales

Established record companies have become increasingly concerned about the growing popularity of digital music broadcasts on the Internet.

Legal action to stop easily downloadable MP3 music broadcasts on the Internet have failed. MP3 is a way of compressing digital music so it takes up far less space on a computer's hard disk and can be sent more quickly over the Internet.

Now the big labels have been seeking secure ways in which they can sell material via the Internet.

[ image: The memory stick is already used in digital cameras]
The memory stick is already used in digital cameras
This has been given extra urgency with the launch of the handheld Rio MP3 player, which allows users to download more than an hour's worth of music to play at home or on the move.

Record companies have been seeking to agree on a common industry standard to make such broadcasts secure and recordable.

The consequences of launching competing systems was most infamously seen in the battle between the Betamax - developed by Sony - and VHS videotape systems, which were launched almost simultaneously.

In the UK, customers had the choice of two formats, with video shops often stocking Beta and VHS tapes of the same films. They ended up plumping for the more widely available VHS format despite a widely held belief that Beta technology was superior.

Michael Jackson

An example Sony would be keener on is the Playstation, which competes with rival games consoles and has so far been the clear winner.

Sony's will be the first online sales by a Japanese music company, which have been hit by a fall in compact disc (CD) sales as a result of the slowdown in the Asian economy.

[ image: MP3 players threaten record company profits]
MP3 players threaten record company profits
"This service is getting very popular in the United States, and we have decided to do this in Japan," the spokesman said.

Sony Music is expected to store about 200 music titles produced by its own artists for Internet distribution.

"This does not mean we have shifted our focus to non-packaged products from packaged. We will start new things as an add-on to our conventional services," said a Sony Music spokeswoman.

"We'll broaden our service line-up so users can make their own choice.

"We hope to see some synergies between the launches of online music sales and of the memory stick Walkman," said the spokeswoman.

Sony Music markets CDs from international stars such as Michael Jackson, Mariah Carey and Celine Dion.

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