BMG GETS DIGITAL STIMULATION

Let's get digital.

BMG Entertainment is taking a sweeping approach to digital distribution, judging by today's announcement of pacts with Liquid Audio, IBM, InterTrust, Microsoft's Windows Media, Digital World Services and Reciprocal. These alliances, the company declared, would allow the content-rich conglom not only to sell secure downloads, but also to track the flow of digital music from creation to delivery. Following a testing phase slated to begin this summer, official multi-codec download sales will begin around Christmastime.

The focus, for the time being, will be on singles, due to the slow connection time of many users.

The company will make downloads available through online retailers with heavy Digital Rights Management (DRM) assistance from IBM's Electronic Media Management System, InterTrust's “Metatrust Utility” and tools provided by DWS and Reciprocal.

Liquid has been asked to bring the various codecs and technologies into one larger system.

“BMG really didn't want any one company to have the whole end-to-end solution. They called up the big guys and said, ‘If you want a place at the table, you can supply one component, and we'll make it all work together,'” explains Andrea Cook Fleming, Liquid's VP of Corporate Marketing. “The challenge that provides is that none of these systems work together today. Liquid has been asked to take these five companies' component products and make them work together in one interoperable system. It wouldn't work without Liquid Audio.”

Liquid's multi-format player—the company offers tracks in its proprietary codec, MP3 and Windows Media and has a deal in place for Sony's ATRAC—is indicative of the company's determination to eschew format allegiance in the name of versatility and consumer choice.

Now, the tech company will design “command and control” applications to help BMG keep track of the various technologies utilized in its digital distribution business. These include a “digital asset management tool,” RIMS, which is now in development based on the technology used by Liquid itself, and a system for retailers, RIFFS (Retail Integration and Fulfillment System), which provides vendors one unified view to pull content from the BMG catalog and offer it in online stores.

Download transactions, BMG insists, will be in full compliance with the guidelines forged by the Strategic Digital Music Initiative (SDMI), an embattled industry coalition struggling to provide security for digitally delivered music.

Yet the explosion in free file-sharing technologies like Napster, Gnutella and I-Mesh (as well as Scour's new SX application) on the Web has cast some doubt on the viability of a secure, transactional download model. Some observers wonder if users who've invested the time and expense into familiarizing themselves with MP3s and other digital file transmission will be prepared to pay for individual songs when so much music is traded for free—especially when the pay files are loaded down with security features that restrict what can be done with them.

At the same time, others applaud the media company's comprehensive approach for its open-endedness and dedication to tracking use for artist compensation.

In related news, outgoing Arista President Clive Davis is now claiming credit for inventing digital downloading, discovering the Internet and building the first computer while attending Monterey Pop.