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Monday, 24 January, 2000, 20:35 GMT
The future sound of music

Keyboard player: Music sent straight to your PC

Pundits say the tie-up of EMI and Time Warner spells a revolution in the music marketplace. Record companies will tailor compilation albums to your individual tastes and zap them down the internet.

Sounds exciting but how will the consumer fare? Will colossal companies use the net to consolidate their hold and push out the small fry?

BBC News Online jumps forward 10 years and finds the future's not all it's cracked up to be.

Independent musicians have accused the entertainment giant Phoenix-muzak of unfairly using its popular search engine to restrict the distribution of their work.

Record shop Canned: Record shops have had their day
Some 500 unsigned artists, groups and independent labels have taken Phoenix to court, claiming the corporation breaches e-commerce competition laws by directing internet users only to bands from its own stable.

Phoenix-muzak is the world's second largest online music company, trailing its longtime rival Time EMI Warner.

Formed in 2003, Phoenix-musak represents 23,000 bands and sells more than 900 million tracks per hour to internet users worldwide.

The corporation's search engine is the fastest growing on the net. Some 25 million new users flock to the site each month - enticed by a deal which pays users $1 for every hour they spend within its "walled garden" of content.

Who pays the piper...

Music sales and company profits have soared in recent months.

The perfecting of customer profiling technology has helped Phoenix-muzak to create a massive database of users' tastes.

Industry observers claim this allows the company to accurately predict the next music track a user will buy from their site, once that customer has completed as few as 100 previous music purchases.

Conductor Passing the baton: The music consumer is king
Phoenix-muzak itself boasts that fewer than 1 in 200,000 of the custom-made "albums" of tracks it sends direct to its customers' computers are not bought.

A recent survey revealed that these compilation and greatest hits "albums" are growing in popularity - with fewer customers of the major music online companies choosing their own tracks themselves.

Following the phasing out of record shops, almost all music sales have taken place over the internet, with customers being billed for the albums or tracks they download.

The low cost of this method of distribution has made acts with a relatively small audience economically viable for music companies to offer recording contracts.

Music to our ears

It has also given customers access to works from the music companies' back catalogues.

However, consumer groups argue that the full benefits have not been passed on to customers.

They claim that by controlling both recording artists and the internet distribution network, major music companies have kept the cost of downloading tracks artificially high.

PM Tony Blair bangs his drum Will we miss out on different musical tastes?
Musicians who have resisted signing up to the music companies - preferring to sell music from their own websites at a discount price - say they are being squeezed out of the market.

The group taking Phoenix-muzak to court allege that has been designed not to take users to the independent site they are searching for, but to that of the most similar Phoenix-muzak artist.

Although is obliged by law to carry adverts from its other music companies, it has been criticised for placing them next to its own rival ads offering discount prices on similar music.

Campaigners say consumers are being prevented from widening their musical tastes or hearing challenging new artists.

Radio ga ga

Phoenix-muzak's latest online "radio" station has been particularly savaged. The downloadable software package plays only the songs the Phoenix-muzak database thinks users will immediately like.

Many users say they are delighted with the range of music on offer, and figures suggest the feature has helped consolidate Phoenix-muzak's market share of internet users and lucrative music downloads.

Luciano Pavarotti and Ines Salazar Opera: It's not over...
The company hopes to leave its rivals behind with its next project - the virtual artist.

Having secured full rights to the works of its conventional musicians, Phoenix-muzak is pioneering sampling technology which will produce composite songs.

These tracks will be different for each user and constructed to suit their tastes exactly.

The prototype "artist" has been called Kyoko - an androgynous name which apparently appeals to people worldwide, particularly in the large Chinese market.

Tracks "recorded" by Kyoko - whose sex and physical appearance is decided by the tastes of the customer - are expected to hit desktops later this month.
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See also:
24 Jan 00 |  Business
Music merger takes centre stage
18 Jan 00 |  Business
Internet 'transforms music industry'
25 Aug 99 |  The Company File
Don't write off the CD - yet
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