Retailers to offer Digital Downloads

Hardly a business day goes by it seems without some kind of blockbuster announcement involving the music industry. Major retailers have been having as hard, or harder, a time as the labels: Wherehouse just filed for bankruptcy – again, Tower is reeling, the holiday season was a disaster with no end in sight.

Now six major chains are banding together to form their own digital download service, called Echo, which will

offer individual tracks for downloading to portable devices and computers.

The stores are Best Buy, Tower Records, Virgin Entertainment Group, Wherehouse Music, Hastings Entertainment Inc. and Trans World Entertainment Corp., operator of FYE, Strawberries and Coconuts stores.

“We’re trying to make digital music work in a mass market way, for millions of people,” said Dan Hart, chief executive of Echo. “That hasn’t happened yet.”

….The Echo consortium members hope to leverage their existing relationships with customers and the record labels to package off-line and online music.

Individual retailers will decide how to use the technology and music provided by Echo, Hart said. For example, stores could offer digital music tracks on a handout CD, allowing customers to access some of them for free and charging a fee to listen to the rest. Portable players could come pre-loaded with music that customers could listen to for a fee.

Retailers also could allow customers to download tracks at in-store kiosks or over Internet sites, such as Radio Free Virgin. [AP]

Yet more pressure on the labels to make everything available for a reasonable price.

UPDATE
Great minds think alike (see last sentence):

But some analysts suggest that no matter how much creative and marketing muscle is behind such efforts, they will not catch on unless the music is priced right. The average cost of a compact disc, according to the Recording Industry Association of America, the lobbying group which represents recording companies, is $14.21. Many critics say that is expensive when compared with other media, like DVD’s, which offer loads of extra features and programming.

“Any opportunity retailers have to find additional revenue in a time of falling sales is a positive,” said Michael Nathanson, an analyst at Sanford C. Bernstein. “Yet we continue to think that pricing has to come down to get pirates off of the free sites and onto legitimate ones.” [NY Times]