Toshiba to Begin Distributing Music Over the Internet
--From AOl News.-- Cooters
Tokyo, Sept. 19 (Bloomberg) -- Toshiba Corp., whose record company is set to merge with Warner Music Japan, said it plans to sell music for download over the Internet next year, joining Sony Corp. in competing for a market estimated to exceed $900 million within three years.
Toshiba plans to open a new Web site early next year through which users of personal computers and cellular phones can download music stored as digital files. Each download will cost consumers 350 yen.
Toshiba is a late entry to the Internet music download business. Record companies have been reluctant to sell via the Internet because of fears consumers could copy songs without paying for them and that record stores would object to being bypassed by direct sales. Companies are working to improve security features to protect against piracy and encourage more online distribution.
``We are preparing for the operations steadily,'' said Tsutomu Kawada, vice president of Toshiba's iValue Creation Company division, in an interview. ``We hope we'll clear any problems by next year.''
Toshiba's betting customers will download music from the Internet for listening on a variety of devices such as portable music players, cellular telephones and notebook computers. E- Research Japan Co., an independent information technology forecaster, estimated in April the market in Japan for downloaded music will expand to 100 billion yen ($934 million) by 2003.
Toshiba's shares fell as much as 57 yen, or 5.8 percent, to 927 and closed morning trade down 4 percent to 945 yen. They were the most active by volume on Japanese exchanges, with 9.2 million shares trading, compared with a six-month full-day average of 9.7 million. The shares have risen 21 percent since Jan. 1.
Online Music
Toshiba joins a growing list of Japanese companies using the Internet to distribute music. Sony's Internet unit, Sony Communication Network Corp., formed a joint venture earlier this year to sell music over an Internet site with links to the online stores of 10 record and entertainment companies.
Separately, Sony and Matsushita Communication Industrial Co. are now working with NTT DoCoMo Inc., Japan's largest mobile phone company, to develop services to deliver music to Personal Handyphone System handsets, similar to cellular phones.
Toshiba also plans to allow mobile phone users to download music. The Tokyo-based company is working with DoCoMo to develop a cellular phone that will act as a music player.
Kawada said Toshiba and DoCoMo are now developing a cellular phone terminal for music distribution services, which will have a slot for an SD memory card, a postage stamp-sized digital data storage device jointly developed by Toshiba, Matsushita Electric and SanDisk Corp., a U.S. maker of flash memory chips.
Record Label
Toshiba's plans for digital distribution comes as its joint venture with EMI Group PLC prepares to merge with Warner Music Japan, Time Warner Inc.'s music subsidiary in Japan. The two companies are slated to merge after the music units of their parent companies are combined.
Kawada said Toshiba will need to tie up with ``major (record label) companies'' when it starts Internet music download operations.
``It is not attractive enough for users to offer only Toshiba EMI label music,'' he said.
Still, Kawada said there's also the possibility the distribution plan will be scrapped should European Commission antitrust regulators block the planned merger of music units between Time Warner and EMI.
The two companies yesterday offered unspecified concessions to win regulatory clearance for the merger of their music units, the European Commission said.
Sep/18/2000 23:53 ET |
