Sony Establishes Online Music Retailing Venture

TOKYO (04/06/2000) - Sony Communications Network (So-net), the Internet service provider (ISP) unit of Sony Corp., is furthering the company's push into network-based retailing with the establishment of a joint venture to sell music online, it announced today.

So-net, which is best known as a major Internet access provider in Japan, will establish Label Gate Co. Ltd. soon, it said in a statement. Initially wholly owned by So-net, the venture will take on board several major record labels as partners, the company said.

These will include Avex Inc., King Records, Johnny's Entertainment Inc., Sony Music Entertainment (Japan) Inc., Pony Canyon Inc., Tokuma Japan Communications Co., BMG Funhouse Inc., Zetima, For Life, and Pryaid Records Inc. Two additional companies, Vap Inc. and Warner Music Japan, will work with Label Gate in an unspecified way.

Sony Music Entertainment (Japan) is already offering music online. In late December 1999 it launched its BitMusic Web site that allows Japanese consumers to download selected hits by the company's domestic artists at 350 yen (US$3.30) per song using a payment system developed by So-net.

The system offers music in both Windows Media and EMMS (Electronic Music Management System) formats compressed with the Sony-developed ATRAC3 compression system, and the music downloaded can be played with any SDMI (Secure Digital Music Initiative) compliant player, according to Sony Music.

In addition to being a large provider of music content through its Sony Music unit, Sony has more than a passing interest in online music sales. The company developed its own copyright management technologies, MagicGate and Open MG, which it has already proposed to the Recording Industry Association of America (RIAA) as the industry standard content management system for digital audio.

Today's announcement is the latest move into online retailing by Sony.

Earlier this year it launched ventures to sell consumer electronics goods and computer software for its PlayStation 2 console online. [See "Sony Opens First Major E-Commerce Site," Feb.1 and "Sony's SCEI to Sell Games Online," Jan. 18].

Sony Communications Network, in Tokyo, can be contacted online at http://www.sony.co.jp/.

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