From...

June 14, 1999
Web posted at: 3:44 p.m. EDT (1944 GMT)

by Lessley Anderson

(IDG) -- Sony and Digital On-Demand Thursday inked a deal that will allow consumers to burn Sony-label CDs from Digital On-Demand's kiosks, beginning this fall in select retail stores. The deal will allow consumers to create and purchase complete CDs that might be out of stock, as well as eventually download music onto portable devices.

The kiosks are based on patents that Carlsbad, Calif.-based Digital On-Demand licensed from IBM, as part of a failed project called New Leaf that Big Blue tried to launch with Blockbuster in 1995. Unlike Digital On-Demand, New Leaf's plan for the technology would have allowed for the creation of compilation CDs – an idea that record labels traditionally have not liked, since it would allow customers to cherry-pick their favorite tracks rather than purchase multiple albums.

Digital On-Demand's business model made more sense to the labels – but not without some coaxing from entertainment lawyers Fred Goldring and Ken Hertz, who represent big name artists like Alanis Morissette and Will Smith, as well as technology companies like MP3.com.

MORE COMPUTING INTELLIGENCE
	IDG.net home page
Industry Standard home page
Industry Standard email newsletters
Industry Standard daily Media Grok
Industry Standard financial news
Reviews & in-depth info at IDG.net
IDG.net's personal news page
Year 2000 World
Questions about computers? Let IDG.net's editors help you
Subscribe to IDG.net's free daily newsletter for computer industry cognoscenti
Search IDG.net in 12 languages
News Radio
	Fusion audio primers
	Computerworld Minute

"DOD was looking for someone to help them navigate their relationships with the labels," said Goldring, who said that talks with other labels to license their catalogs for the kiosks were underway. "The labels are understandably cautious about the commitment they make to some of these technology ventures."

Goldring explained that, among other things, Sony saw the deal as an opportunity to bring the advantages of online purchasing to consumers who don't have Internet connections at home and are used to buying their music in record stores. DOD's database of Sony's inventory will be accessible through the kiosks via high-speed, broadband network. And like an online retailer, the kiosks will allow consumers to order CDs that may not be stocked in the bins. The CDs will be sold with on-the-spot silk-screened images and laser-printed booklets that staff will insert into the CD jewel cases.

Transactions will not be handled through kiosks themselves. Rather, customers will be allowed to sample clips of songs on each CD, then push a "buy" button on the kiosk. A slip of paper containing the CD's bar code will be issued, which the consumer can take to the retail store's counter to pay for the CD while it is being burned.

The plans for digital distribution of Sony's catalog onto portable devices, like the Rio, are a bit less hammered out. Currently, the label, along with the other majors, is waiting until a standard for secure player architecture emerges. Until then, it is not clear whether entire albums or single tracks will be made available for purchase and download through the kiosks. It also remains to be seen whether consumers technologically savvy enough to have a portable digital device would want to drive to a record store to buy and record music they could get off their home PCs.