Loudeye, Microsoft Offer Online Music Store Set-Up

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Loudeye, Microsoft Offer Online Music Store Set-Up
Mon Dec 15, 3:09 PM ET

By Sue Zeidler

LOS ANGELES (Reuters) - Digital media firm Loudeye Corp. and Microsoft Corp on Monday said they will jointly offer businesses a fast and relatively cheap way to jump into the digital music game.

The aim of the software offering is to allow companies to create digital music services much more cheaply, capitalizing on the success of groundbreaking Apple Computer Inc. iTunes online music store without as much initial investment, officials for the companies said.

Initial customers for the application include AT&T Wireless Services Inc., Gibson Audio, a new consumer electronics division of Gibson Guitar Corp., and Eyetide Media.

ATT Wireless plans to be the first wireless carrier in North America to offer a mobile music offering in 2004, the companies said.

Analysts have estimated that Apple spent about $35 million to $40 million to build the iTunes technology platform.

Roxio's acquisition of Napster , Pressplay and its integration of these services, which resulted in the relaunch of Napster, cost the company over $65 million, according to public documents.

The Loudeye Digital Music Store, which is based on Microsoft's Windows Media 9 Series platform, provides the infrastructure for setting up a digital music offering.

"We offload the burden of capital expense for anyone trying to enter the digital music arena," said Jeff Cavins, chief executive of Loudeye.

Terms of the initial deals were not disclosed, but Cavins said the deals may be structured in such a way that customers could pay Loudeye to be an operator of the service, or Loudeye can serve as a revenue-sharing partner.

Cavins said Loudeye has early access to certain Microsoft technologies that are unique and necessary to launch these services.
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