IBM’s New Spin on Music

Adopting a code name worthy of the CIA’s best spooks, IBM has sought the involvement of the world’s largest record labels in a trial for the Madison Project, a software initiative launching this fall that could lead to the widespread digital distribution of music. Both Sony Music and Time Warner’s Warner Music Group, along with other members of the so-called “Big Six” recording labels, have been pegged as wary participants in a trial that is intended to launch a massive attempt to make music directly available to consumers as downloads off of the Internet.

Until now, labels and their advocacy representatives at the Recording Industry Association of America (RIAA) have been reluctant to engage in or endorse such programs for fear of piracy (see “The Sound of Money,” Sept. ’98, p114), which now constitutes $300 million dollars lost every year in domestic record sales alone, according to the RIAA.

IBM executives insist that the “very high” level of security safeguards built into its Madison Project software should assuage any fears of copyright infringement that record-biz major-domos may have. But concern over the hastening of free, pirate Internet jukeboxes is secondary to industry anxiety over missing out on a burgeoning market. Considering that RIAA estimates of Internet distribution accounted for 0.3 percent of the total $12.2 billion spent in 1997 on music sales, and that these figures mark the beginning of an exponential growth in this sector, labels understand that they had better stake their claim soon — especially with such agile marketers as Music Boulevard and CDnow nipping at their heels.

But if the turbulent relationship between the recording industry and ecommerce boosters provides any historical lesson, this stroll down the Madison Avenue won’t be a cakewalk.