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Last week, BMG Entertainment, the music and entertainment division of Bertelsmann AG, revealed that it will join several other major labels (see previous stories EMI and Universal) by bringing its own digital downloads to the Internet this September. The company says that it will start with approximately 50 songs and 50 complete albums, to be made available via several retail Web outlets at prices ranging from $1.98 to $3.49 per song and from $9.98 to $16.98 per album.

Of the big five music companys—BMG, EMI, Universal, Sony, and Warner Bros.—only Warner has not announced an online strategy. Time Warner, still trying to merge with AOL, says it will detail its plans later this year. BMG's record labels—Arista, RCA Music Group, RLG, etc.—are expected to be offered online, with artists represented including Whitney Houston, Santana, and Toni Braxton, among others.

BMG's Sami Valkonen explains why his company is using a pay-per-song/album system and not a subscription model (see previous article) for online downloads: "We don't really believe in the all-you-can-eat model for a couple of reasons. One is that it doesn't give you the advantage of mass customization that allows you to target certain music to certain customers. Also, our research shows us that customers will download all the music they want in the first two months and then not use it very often after that. And unless they proactively cancel the service, they're being charged for something they don't get much value from. That's not very friendly to the consumer."

BMG has also announced that it will work with Digital Island—which bills itself as an "e-business delivery network" for hosting, networking, and content-delivery services—for digital distribution of their music to retailers and consumers. BMG says it will host its music content in Digital Island's secure data centers, which, Digital Island claims, are capable of simultaneously serving 7.5 million users.