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Monday, December 15, 2003 - Page updated at 12:00 A.M.
AT&T Wireless to offer music service
By Kim Peterson
AT&T Wireless will begin selling music downloads over cellphones sometime next year, the company is expected to announce today.
The Redmond company is one of the first wireless carriers in the United States to offer such a service, which allows customers to browse songs and listen to about 15 seconds worth of music before purchasing.
Once they buy a song, it will be sent to an online storage locker to be downloaded onto their computers. The price of the song would be included in AT&T Wireless' monthly cellphone bill.
The company has not announced pricing for the service or the launch date, although it is expected to start around the middle of next year and be available to subscribers of the mMode wireless data service.
AT&T Wireless' move is likely to be one of the first in an industrywide shift to selling music over cellphones.
Up to now, wireless companies have done a very good business selling ring tones, offering everything from the latest Top 40 smash hits to Christmas songs. The new service takes cellphones and music one step further.
"We've seen customer demand really spike on music," said Sam Hall, vice president of AT&T Wireless' mMode services.
Competition among the six national carriers has increased significantly since number portability went into effect, allowing customers to take their phone numbers with them when changing carriers. Some analysts speculate that carriers will have to roll out new products and incentives in order to keep customers from moving to another carrier.
Array of offerings
The company has also rolled out a music partnership with Warner Music Group and Amazon.com that lets customers buy a musical ring tone, get song clips, download an artist's image and order a compact disc, which is shipped in the mail. The offering does not sell downloadable songs, however.
In the latest venture, AT&T Wireless is partnering with Seattle-based Loudeye. It is the first venture using Loudeye's new Digital Music Store, designed for companies that want to offer a digital music business under their own name.
"We believe that this is a great way to help teenagers and those kids who love to sit on peer-to-peer networks and share," said Loudeye Chief Executive Jeff Cavins, referring to KaZaA and other file-trading networks where songs are often swapped illegally.
Loudeye will make money from its music store in two ways, Cavins said. It could charge companies to develop an end-to-end music service for them. For companies with a large customer base, Loudeye could build the service for a low price and then take a cut of the revenue from downloads or relevant merchandise sales.
The company is talking to other potential customers and is expected to launch additional music-store partnerships in the future. The music store is built on Microsoft's Windows Media 9 technology, although Cavins said Loudeye can work with any music format.
Loudeye is also announcing tomorrow a partnership with Gibson Audio, a new consumer-electronics division of Gibson Guitar, to sell a digital music jukebox that can play Internet radio.
Gibson Audio plans to debut three models of the jukebox in January at the Consumer Electronics Show in Las Vegas. The company has acquired the Wurlitzer brand, and is calling the product the Wurlitzer Digital Jukebox.
The jukebox can store up to 1,000 compact discs worth of music. Owners can also subscribe to Loudeye's online radio service, which has 100 channels of preprogrammed music, and download individual songs using a high-speed Internet connection.
"This isn't the old Wurlitzer jukebox," said Kris Carter, president of Gibson Audio. "This is an entirely new product."
Kim Peterson: 206-464-2360 or email@example.com. Seattle Times Eastside business reporter Tricia Duryee contributed to this report.
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