PC Music On the Way

I don't mean "politically correct":

A legal dispute that threatened to derail Gateway Inc.'s groundbreaking plan to load music on its computers has been quietly resolved amid growing interest in such offerings by rival PC makers, executives and analysts said on Thursday.

Months after announcing a first-of-its-kind deal in December to preload 2,000 tracks from music subscription service Pressplay onto its PCs, Gateway withdrew the offering for several weeks due to a dispute between Pressplay and music publishers, representatives of both sides said.

The publishers, who own copyrights on songs, had sent a cease-and-desist order saying Gateway's deal did not fall under an October 2001 deal covering publishers' digital royalties.

The crux of the issue was that the earlier agreement between music publishers and labels had been limited to online delivery, on-demand streaming and limited downloads. Gateway's deal to load songs onto a computer was a new form of delivery that required different licensing, the publishers argued.

...."I would be surprised if a major PC company was not offering a music service toward the critical Christmas buying season in the fourth quarter," said Peter Kastner, chief research officer at the Aberdeen Group.

"I really think that with Apple shooting off the starting gun ... the rest of the year will be a catch-up scramble to get product to market and grab Windows PC market share at all costs," he said.

....in a tough market, analysts said that the computer industry had found a way to boost revenues with new music offerings, even if the services do not drive new PC sales.

"This is not the kind of thing that companies of that size live on, but it's promising and it seems like it might go further," said Roger Kay, a PC analyst at market research group IDG. [Reuters]

Article Author: Eric Olsen

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