Major music companies may have conspired to keep CD prices artificially high in the United Kingdom by limiting cheaper imports. That's the presumption behind an inquiry launched February 9 by the British government's Office of Fair Trade.
Real businesses are moving into territory explored by the upstarts. On August 2, Universal Music Group, the world's largest record label, announced that it will begin offering, on a trial basis, digital downloads of recordings from its massive catalog. The experiment is scheduled to begin this week, with an initial offering of about 60 songs from artists in several genres, including operatic tenor Luciano Pavarotti, jazz guitarist George Benson, and pop band Blink 182.
Have the format wars begun in earnest? Only a few days after Warner Brothers announced the DVD-Audio release of Paul Simon's You're the One, Universal Music Group announced its plan to release titles in the Super Audio CD format.
One of the music industry's "big five" will soon begin offering its wares as digital downloads. Seagram, Ltd. chief executive Edgar Bronfman, speaking on Friday, March 3 at the Jupiter Consumer Online forum in New York, said his Universal Music Group will start selling music online this spring.
Universal Music Group (UMG) may go on the auction block to help bail out debt-ridden Vivendi Universal. On March 6, Vivendi announced a record loss of $25.4 billion (€23.3 billion) for the 2002 fiscal year. The biggest loss in French corporate history followed a staggering $14.9 billion (€13.6 billion) loss for 2001.
Yet another major music company has joined the digital downloading stampede, in the wake of the Secure Digital Music Initiative's (SDMI) recent progress toward formulating copyright standards. On July 19, Universal Music Group announced its intention to make its titles available for downloading to the coming generation of portable audio players. New devices from Diamond Multimedia, Toshiba, and Panasonic—all expected to hit the market by the winter holiday season—will play encrypted tunes from Universal and other big labels.
An improved digital-audio compression standard has been adopted by the Bertelsmann Music Group (BMG) and the Universal Music Group for commercial music downloads. "Advanced Audio Coding" (AAC) is said to offer higher audio quality while occupying 30% less bandwidth and storage space than the popular MP3 format, according to an announcement from San Francisco–based Dolby Laboratories.
Is the consumer electronics business swimming, sinking, or simply treading water? It all depends on who's talking. Retailers don't appear to be suffering, despite widespread staffing cutbacks by large companies, but the gains are coming more slowly than they did last year.