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It sounds like a codeword for a secret military maneuver, but it's really a coalition of heavyweight retailers who have teamed up to offer music online. Best Buy, Tower Records, Virgin Entertainment Group, Wherehouse Music, Hastings Entertainment Inc. and Trans World Entertainment Corp. (owner of the FYE, Strawberries, and Coconuts record stores) have formed a partnership to deliver "non-physical product" to consumers via the Internet.

Still in the planning stage, the online move comes as a concession to the Internet's inevitability as a major source of entertainment, and as a hedge against the continuing decline in sales of CDs. It requires a huge conceptual change by retailers who have long thought of music as a packaged-goods business. "We are in the customer relationship business," said Wherehouse Music CEO Jerry Comstock, perhaps acknowledging the Darwinian nature of the free market. Students of business have long noted that the railroads fell into decline as the trucking and airline industries ascended because they conceived of themselves as being in the railroad business rather than the transportation business.

As a prelude to Echo's launch later this year, the partners will distribute thousands of free "starter" CDs that consumers can use to become members, much the way that America Online built its subscriber base through mass circulation of its operating software. Echo software will let consumers download or stream recordings and will also track what they play in their computers or networked devices. (Implied, but not stated, in the Echo announcement is that it will also "anticipate" music that might be of interest to subscribers based on their preferences, much the way ReplayTV digital recorders can record movies and TV shows based on user patterns.) The service will offer some free downloads as deal sweeteners, and will include promotional offerings and mass emailings about artists' tour schedules.

The essential tie-in with the partners' retail outlets will be special in-store offerings available only to Echo subscribers, who will have to swipe their membership cards at installed readers to take advantage of the specials. "We have always excelled at selling music to consumers," said Hastings Entertainment CEO John Marmaduke. "We plan to extend our consumer relationships from the physical world into the digital world." Retailers may also bundle portable players with download credits, and install Internet kiosks with music available only to Echo members. "I think the in-store experience is going to be really important," said Kevin Ertell, senior vice president for Tower Records' online operations.

Analysts and observers of the music industry have long stated that its future lies in embracing the Internet rather than fighting it. Music industry–backed download services haven't won much success, because of excessive constraints on how the downloads could be used by subscribers. Echo CEO Dan Hart acknowledged this, saying, "I believe in the huge market potential of legal digital music, but most of what's gone on has not gained consumer traction." Echo software will include step-by-step tutorials for Internet and computer novices, an enormous untapped market largely ignored by most online enterprises. Echo expects to reach this group as well as the millions who "download just because they can't get it anywhere else," Hart said. Echo partners are now in negotiations with music labels to sign licenses for the new service.

In other online music news, Yahoo! music service "Launch" now comes in an upgraded version called "LaunchCast Plus," said to offer many improvements not available on the free version, such as letting users customize their own stations or choose among scores of preprogrammed music channels in many different genres. "It just seems logical to offer a value-added version of LaunchCast to our heavy users," stated David Goldberg, general manager of music at Yahoo! "This is part of Yahoo!'s overall strategy to combine services and revenue." Advertising-free LaunchCast Plus will cost $3.99 per month or $35.99 per year, and will be included at no extra charge for SBC Yahoo! DSL subscribers, according to an announcement in late January. The free service will go unchanged.

In the nation's capital, telecommunications giant Verizon Communications Inc. is appealing a judicial order to reveal the identity of one of its DSL subscribers targeted in a copy infringement case. The subscriber, a heavy downloader and source of hundreds of pirated songs to his comrades on the Internet, is claimed by music industry plaintiffs to be a habitual violator of the Digital Millennium Copyright Act. On January 30, Verizon's attorneys asked US District Judge John Bates to wait until a federal appeals court hears the case before the company is forced to disclose the subscriber's identity.

"Verizon will use every legal means to protect its subscribers' privacy," said Verizon lawyer John Thorne. "The recording industry brought this case as a 'test case' of its aggressive legal theories. We are seeking a stay so that the Court of Appeals can issue a final ruling on the critical legal issues before we are required to turn over our subscriber's identity." Bates agreed that the case is an important test of subpoena powers granted to copyright holders by the DMCA.

"If this ruling stands, consumers will be caught in a digital dragnet not only from record companies alleging infringement of their copyright monopolies but from anyone who can fill out a simple form," Thorne stated.

"I have never seen a provision like this," said Peter Swire, the Clinton administration's top privacy official. "There's no due process, no judicial supervision. If the court's order stands, these subpoenas will become a new form of spam." Former President Bill Clinton signed the DMCA into law in 1998 at the urging of the entertainment and software industries.