Road Runner high-speed-data customers in Time Warner
Cable's San Diego system will help to determine whether there's a significant
consumer market for delivering full-length music albums directly over the Internet.
Last week, IBM Corp. announced that it had partnered with
five major record companies to conduct the San Diego trial, involving 1,000 cable-modem
The companies will test the new compression and
conditional-access technology to make sure that it has all of the needed functionality,
according to Rick Selvage, general manager of IBM Global Media and Entertainment.
Perhaps more important, the music industry wants to learn
from the test how consumers will behave and whether there's a viable business for
distributing music via Internet downloads to personal computers, Selvage said.
Selvage added that the record companies involved have not
yet determined how they will price their albums for download delivery, but they will be
"competitive" with other forms of distribution, such as retail and mail order.
Jeremy Kagan, president and CEO of Volatile Media
Inc.'s EZCD.com, which markets custom compact discs
over its Web site, predicted that consumers may not be willing to pay full ticket price
for albums if they have to invest in the time and technology to download and record their
"People are going to want to buy music in a format
where they can take it from point A to point B," Kagan added.
Howie Singer, chief technical officer of a2b music, a
digital music-distribution-technology company, said there's definitely a big market
for downloading music to PCs.
"People are doing that already," he said.
"The question is whether there's room for commerce in the equation."
Singer said some college students today already have about
1,800 songs stored on their PCs, "and they haven't paid for any of them."
He added that because many college dorm rooms have high-speed Internet access,
there's probably a larger market for music downloading on campus than in the typical
According to IBM, broadband cable-modem users will be able
to download 60-minute albums in less than 10 minutes.
Selvage predicted that online music distribution could be
worth $2 billion over the next few years if the music industry can come together and adopt
technology standards that will help to accelerate the marketplace.
He added that this type of online transaction will help the
cable industry to drive penetration of cable modems.
It's not yet clear how cable operators or
Internet-service providers like Road Runner and @Home Network will share in the revenues
from online music transactions.