Barry Willis

Retail prices of compact discs are likely to drop in the coming months, thanks to a <A HREF="http://www.ftc.gov/">Federal Trade Commission</A> action ending an industry-wide price-support policy begun five years ago. On May 10, the FTC announced that it had reached an agreement with the "Big Five" of the music business&mdash;Time Warner Inc.'s Warner Music, Seagram Ltd.'s Universal Music, Sony Music Entertainment, BMG Entertainment, and EMI Group PLC&mdash;that will effectively end the practice of "minimum advertised pricing" (MAP) instituted as a response to music-retailing price wars in the mid-1990s. Under MAP, retailers were forbidden to advertise CDs below an established minimum, at the risk of losing millions of promotional dollars from the record labels.

In early June, <A HREF="http://www.toshiba.com/">Toshiba</A&gt; will institute a new retailing program that embraces the Internet but favors traditional retailers. The electronics manufacturing giant will have "a defined group of Internet retailers" that will be built on a base of traditional retailers, according to an announcement made in late April. Later, the program will be expanded in stages to include Internet-only retailers. The announcement follows <A HREF="http://www.stereophile.com/news/10662/">an announcement by Sony Corp.</A> late in January that Sony would begin direct Internet sales this year.

It's mating season for entertainment-industry giants. <A HREF="http://www.sonymusic.com/">Sony Music Entertainment</A> and <A HREF="http://www.umusic.com/">Universal Music Group</A> are in talks to develop a jointly operated subscription music service for the Internet, according to a report the two companies issued in the first week of May. The news followed by only a week an announcement of a <A HREF="http://www.stereophile.com/news/10729/">possible merger</A> between record clubs Columbia House and BMG Music Club.

The world's two largest and most active music clubs may become one if preliminary talks between their parent companies bear fruit. <A HREF="http://www.timewarner.com/">Time Warner Inc.</A> and Germany's <A HREF="http://www.bertelsmann.de">Bertelsmann AG</A> have conducted discussions with that outcome in mind, according to several reports appearing in late April.

The numbers are looking better for <A HREF="http://www.mp3.com/">MP3.com</A&gt;, the music-archiving site under <A HREF="http://www.stereophile.com/news/10657/">attack</A&gt; by the Recording Industries Association of America and its <A HREF="http://www.stereophile.com/news/10708/">allies</A&gt;. Despite the legal pressure, MP3.com has seen its revenues surge as the popularity of downloadable music continues to grow. On April 20, the San Diego&ndash;based company reported that its revenue increased to $17.5 million for the first quarter of 2000 compared to $666,000 for the same period a year earlier. MP3.com now has 10 million registered users, according to CEO Michael Robertson.

A single standard for terrestrial digital radio is still somewhere over the rainbow. Despite pressure from broadcasters to form an industry alliance, leading developers of the new technology are intent on pursuing their own courses, attendees learned at the 2000 <A HREF="http://www.nab.org/">National Association of Broadcasters</A> convention in Las Vegas in mid-April. Executives from <A HREF="http://www.usadr.com/">USA Digital Radio</A> and <A HREF="http://www.lucentdigitalradio.com/">Lucent Digital Radio</A>, the two biggest players in the sector, told NAB members that their design and testing programs are still in early stages of development, too soon for accord.

Last year, Internet commerce schemes were the darlings of venture capitalists and small investors alike. For months, it seemed that almost any business plan, no matter how half-baked, could attract millions of dollars with the simple mention of "online retail sales"&mdash;otherwise known as "e-commerce" or "e-tailing."