Music Labels Shun Online Distribution

Nwe York (Billboard) - Suddenly, the major labels have a new mantra about digital distribution: Let someone else do it. That's the lesson industry insiders are drawing from the surprise decision by Sony Music Entertainment and Universal Music Group (UMG) to sell their service, Pressplay, to Roxio.

"The marketplace has changed," Sony Music executive VP Robert Bowlin says. "We are in the content business. We don't have to own the highway necessarily unless it is strategic to do so."

Sources say that the move is neither a direct reaction to the early success of Apple Computer's new iTunes service nor a response to a recent court decision allowing the Grokster and Streamcast peer-to-peer (P2P) services to continue operating. But they agree that both the Apple launch and the court decision will likely influence the futures of both Pressplay and another Internet service, MusicNet. The MusicNet digital venture involves Real Networks, Warner Music Group (WMG), EMI Recorded Music, and BMG Entertainment.

Among other things, the move also should ease the concerns of independent labels, technology companies, and even some legislators on Capitol Hill.

News source: Yahoo! News

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