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Bertelsmann and myplay Become the Latest Newlyweds to Emerge from the Record Label-Internet Dating Game
By Heather Johnson
(more articles from this author)
2001-06-03
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It appears as though Internet-based music companies are taking an "if you can't beat 'em, join 'em" approach with major music labels. The most recent example of the attitude shift can be seen in Bertelsmann eCommerce Group's (BeCG) $30 million acquisition of myplay, Inc. the pioneering music locker service with more than six and one half million registered users.

By adding myplay as their newest building block, BeCG can incorporate myplay's Locker and Subscription technology into some of their other properties, which means added services for consumers in the very near future.

Effective July 1st, BeCG will merge all of its online and offline music assets into its newly founded BeMusic Division, which includes Bertelsmann's CDNow and BMG Direct, to form what they predict will be the top global music service company.

BeMusic serves over 12 million subscribers, part of 23 million customers online and offline. It operates the world's largest music club and one of the largest US online music retailer, in addition to technology and DRM companies. BeMusic will continue its strategic alliance with Napster, which focuses on building a subscription-based filesharing service.

With myplay on board, BeMusic customers will be able to store and access their music from any location via any device, whether PC-based, handheld, at home or in the car through Internet, broadband or mobile networks. BeMusic will work closely with the myplay team to integrate its Locker and Subscription technologies into their wide-ranging brands so that consumers can seamlessly store, manage, download or stream the music they care about. BeCG can now cover all possible distribution technologies and platforms for music fans everywhere, ranging form retailing online and offline, subscriptions to downloads, filesharing and streaming music.

Bertelsmann executives hope the acquisition of myplay will build its subscription services and if they succeed, the company should be commended for its smart shopping skills. The company recently rejected a deal to acquire MP3.com, the Internet company now owned by Vivendi Universal. Bertelsmann rejected the MP3.com offering price of $350 million, deciding instead to pay less than one tenth of that price for myplay, which offers similar services. Vivendi Universal later picked up the San Diego, California-based company in a $372 million agreement.

myplay CEO Doug Camplejohn commented on the arrangement. "We share BeCG's commitment to provide consumers with the best digital music experience. From our launch day in October 1999 we hoped to change the way people experienced music on the Web. Now, as part of BeCG we will be able to realize that goal, bringing our tools, team and technologies to join the company that is creating the Web's best music distribution platform with the greatest flexibility and ease of use for the consumer."

David Pakman, President of Business Development and Public Policy and co-founder of My Play agrees. "As part of the BeCG multi-channel platform, the My Play Locker can become the cornerstone of new subscription offerings from a company clearly possessing the leadership and direct-to-consumer reach to credibly deliver on the promise of digital music," he said with enthusiasm. "With consumers clamoring for access to legitimate, convenient online music services, we are pleased to become part of a company so committed to innovation and the quality of the customer experience."

Now that the dust has settled from the Internet boom of 2000, music technology companies are either merging with each other, or looking for a way to exit the industry. Venture capital is harder to find this year, and some companies have found it difficult to reasonably license music from major labels and publishers, many of whom are developing subscription services of their own.

In time, what consumers and Internet enthusiasts call "throwing in the towel," or "selling out" to major record labels will hopefully lead to better customer service and access to more music than ever before.

Linkography

Bertelsmann AG - www.bertelsmann.com
CDNow - www.cdnow.com
MP3.com - www.MP3.com
myplay - www.myplay.com
Napster - www.napster.com
Vivendi Universal - www.vivendi.com
Yahoo - www.yahoo.com

Related MusicDish e-Journal Articles:
» Flycode: Another Napster Up for Sale (2001-05-30)
» Markets are funny. Ask MP3.com - Vivendi Universal Acquires MP3.com (2001-05-21)

Related News from Mi2N:
» Bertelsmann ECommerce Group Acquires My Play, Inc.


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