Warner Music Group Launches Digital Music Initiative

Warner Music Group today announced plans to offer their music via digital distribution, beginning in November 2000. Warner Music Group (WMG) has partnered with RealNetworks to develop a platform-neutral infrastructure to facilitate the downloads thru various retail partners.

RealNetworks will provide digital distribution services including content preparation, hosting and delivery, digital rights management, billing services and customer support. Preview Systems will provide retail integration for the service. The initial retail outlets will include walmart.com ( http://www.walmart.com) and amazon.com (http://www.amazon.com).

Initially, WMG will release several current singles and exclusive Internet-only tracks from artists such as Barenaked Ladies, Collective Soul, Mana, and Manhattan Transfer amongst others. The selection is expected to expand thereafter to 1,000 digitized albums and singles from artists signed to WMG's labels, including Atlantic, Elektra, London-Sire, Rhino, and Warner Bros Records. WMG's independent distribution arm Alternative Distribution Alliance, will also offer several releases from its family of independent labels.

Now you hear it. Now you don't.

Also today, Lycos Inc announced a special promotion on their music destination site (http://music.lycos.com) in conjunction with BMG Entertainment. Toni Braxton, a multi-platinum artist on BMG's LaFace label, has made available her hit single "Spanish Guitar" as a no-cost digital download. The file can be replayed for 14 days after which the digital rights management (DRM) software prevents the song from being replayed.

On the Napster Front.

WMG is the last of the major labels to make their music available for digital download on a limited scale. And as the executives ponder their options for cashing in on the download craze, the number of Napster users is continually growing. Media Metrix today announced that Napster is the fastest growing software application they have ever tracked.

Media Metrix reported that the Napster application climbed from 1.1 million unique users at home in February 2000 to 4.9 million unique users in July, a 345 percent increase. According to the study, about 6% of all home PC's currently run the Napster Application. Napster's popularity also grew at work, with its use growing from 417,000 unique users in May 2000 to nearly 887,000 U.S. users in July.

"The key to Napster's success is that its users represent the full spectrum of PC users, not just the youth with time on their hands and a passion for music," said Bruce Ryon, Senior Vice President of the New Media Group, Media Metrix.