VIVENDI, SONY TO INTRODUCE "SUPER AUDIO CD"

Vivendi Universal chief Jean-Marie Messier called the move a prelude to further cooperation agreements between the two companies.

According to The Wall Street Journal, Vivendi's Universal Music Group will initially be investing "several tens of millions dollars" in the project, while Sony and Philips are to sponsor UMG with another double-digit million figure. UMG, which claimed a 23% global market share in 2000, will release some of its biggest hits as well as new releases on the new format, the company said in a press release Saturday.

According to Messier, the Super Audio CD, or SA CD as it is to be known, will be rolled out in time for Christmas and ultimately replace the CD as the standard for music delivery devices.

The SA CD offers better quality of sound than existing CDs and, most of all, could solve one of the music majors' main concerns as it is relatively sheltered from piracy, said Messier, although the company was a little vague on that last point, as the phrase "relatively sheltered from piracy" may indicate.

Messier sees the SA CD taking over the market the way the CD replaced vinyl discs in the late 1980s and, thus, will help revive a stagnant music market in that time-honored way: By making consumers pay for the same music they already own all over again. Recorded music sales declined 1.3% in 2000 and are expected to grow only marginally this year.

"The music market will again be one that grows more than the national economies, at 5% to 6% a year in two to three years' time," Messier said.

UMG's commitment to the SA CD project is the latest joint move from Vivendi Universal and Sony, who also banned together to create online music delivery service Pressplay.

"It's one more step in our soft alliance," said Messier. "There is no absolute need to merge two companies for them to do things together," he added. "There will be more agreements in months to come."