SPACE WIRE
Buy one, get none free: market heating up for (legal) music downloads
HANOVER, Germany (AFP) Mar 19, 2004
The recording industry is fighting back against the wild popularity of illegal music downloading with a rush of online services, but it must answer why customers would pay for something they have long gotten free.

The relative anonymity users enjoy online and the mass availability of download sites have long allowed consumers to "rip" copyrighted songs from the Internet with abandon, costing the music industry billions of dollars a year.

But at the giant CeBIT high-tech fair in Hanover, Germany, major entertainment and high-tech firms announced alliances to put offenders on the straight and narrow with alternatives they say are faster, easier to use, safer and priced affordably.

Following the popularity of Apple's iTunes Music Store and Napster's now legal service, what were once lone pioneers are now gaining some fierce competition in reclaiming market share robbed by free music-swapping sites such as Kazaa.

Sony Europe unveiled at the CeBIT "Connect," which will launch in June in France, Britain and Germany and allow users to choose from 300,000 titles from major and independent labels, priced at 99 euro cents (1.1 dollars) each.

Meanwhile Deutsche Telekom launched its new PhonoLine platform and won some free publicity when German Chancellor Gerhard Schroeder popped by its CeBIT stand to download his first song -- "Only if I" by Belgian pop singer Kate Ryan.

The "business-to-business" service developed by the telecoms giant's T-Com unit provides the technical infrastructure for new music websites by the major recording labels: BMG, Universal, Sony, Warner und EMI.

Each of the new services allows users to download the music onto home computers and burn a limited number of copies to CDs.

And with artists' CD sales down 10 percent 2003, in large part due to illegal copying, the industry says the long-delayed launch of such sites couldn't be more welcome.

T-Com product developer Carsten Scholz said the threat of viruses on swap sites, technical supremacy and a simple sense of decency among users would turn the tide toward legitimate sites.

"It may not work with all the technically savvy teenagers but older, more affluent users will come to us," he told AFP.

Apple started the iTunes Music Store in the United States in April 2003 offering 500,000 songs at 99 US cents a piece and has already sold more than 30 million songs.

And now legitimate Napster, which had previously been shut down by a federal judge for illegal swapping, has tallied five million downloads.

But those figures still pale in comparison to the eight billion tunes the music industry believes are copied illegally each year.

"We have a clear dual strategy on the Internet," said the chairman of the German phonographic association, Gerd Gebhard. "On the one hand, backing legal and safe music and on the other, cracking down hard on illegal offers."

As if timed for the services' launch at the CeBIT, German police said Thursday they had conducted their biggest ever crackdown on Internet piracy, launching a criminal probe against 126 members of an online hackers' forum thought to be part of a wider network of nearly 500 people in 33 countries.

The suspects hacked into Internet service providers to gain access to film, music, computer software and games, then offered pirated versions for downloading.

An analyst at Forrester Research, Rebecca Jennings, said these type of raids and the emergence of better alternatives would help the industry recover lost ground.

"Attempts to stop illicit downloading in Europe have failed so far," Jennings said.

"But commercial sites just need to be patient as the market gradually changes. In 2004, a combination of legal action by the music industry and expansion of legitimate services will cause a watershed in the download market."

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