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CDNow & Atlantic Records Team With Microsoft On Digital Music Offerings

By Robert Conlin & James Hollander
Jul 9, 1999 12:00 AM PT

The major record labels have already vowed to fight back against MP3 digital music compression. So, Friday's announcement that leading online music retailer, CDNow (Nasdaq: CDNW), and major record label, Atlantic Records, have paired up with Microsoft to offer secure promotional downloads comes as no surprise.

CDNow & Atlantic Records Team With Microsoft On Digital Music Offerings

CDNow said it was introducing a "groundbreaking" music download from the chart-topping band, Sugar Ray, in its first promotional download from a major artist.

The download is powered by Microsoft's Windows Media Audio, which the company says provides equally good quality sound as MP3 -- but at half the storage space. The CDNow site will provide access to a free download of the Microsoft software.

CDNow will also feature downloads from folk artist Martin Sexton and two upcoming bands. All of the downloads will time out after 15 days, the company said, with the exception of the Sugar Ray cut, which will be given away with any purchase of the band's available CDs.

Next Step In Digital Technology?

Major Record labels have vilified the MP3 technology as nothing short of a complex pirating device and many have signed contracts with artists prohibiting them from releasing material via MP3.

Atlantic Group CEO Val Azzoli said the promotion with CDNow and Microsoft gives the labels a leg up in technology.

"We have been an acknowledged pioneer in the exploration and utilization of cutting-edge technologies, while at the same time working to ensure that the rights of our artists and their music are fully protected. Today, we are taking what we believe is an historic next step in the evolution of digital music distribution," Azzoli said.

A recording industry association recently formed a Secure Music Digital Initiative to develop technology to keep the $40 billion (US$) a year industry on the edge of the cutting edge. IBM is also testing a system that is said to be capable of delivering an entire album over cable-modem networks -- in just minutes.

CDNow and other online music retailers will apparently go with whatever technology is in the forefront. Last month, the company announced a promotion with a company utilizing MP3 technology, proving that a month is a long time in the lightning-quick world of cyberspace.

Battling Amazon.com, Wal-Mart, the upcoming e-commerce site by VH1 television and a number of others for online music supremacy, CDNow was recently the subject of speculation that it would be bought by German communications giant, Deutsche Telekom AG. The German company didn't put out the rumor fires, saying it could neither confirm nor deny the speculation.


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How do you feel about Black Friday/Cyber Monday this year?
I'm excited to find great deals and plan to do some serious shopping on BFCM.
I'll watch for BFCM sales, but I intend to drastically curb my spending this year.
BFCM has become a season -- I no longer feel driven to look for bargains on those specific days.
I plan to have most of my holiday shopping done *before* BFCM.
I detest the holiday sales hype and will avoid shopping on BFCM.
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