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Business Impact

Report: Sony BMG developing an online music subscription service

BERLIN (AP) – The CEO of Sony BMG Music Entertainment says that the company is developing an online music subscription service that would give users unlimited access to its music and be compatible with a host of digital music players.

Sony BMG’s artist roster includes newcomers like Leona Lewis, along with stalwarts like Alicia Keys and Celine Dion, as well as country singer Carrie Underwood among others.

In an interview with the newspaper Frankfurter Allgemeine Zeitung published Monday, chief executive Rolf Schmidt-Holtz did not offer a timeline for unveiling the service.

As for costs to subscribers, the newspaper quoted him as saying that the ”simplest option would be a flat rate” fee per month of around 6 to 8 euros ($9 to $12) for unlimited access to Sony BMG’s entire music catalog and that the downloads would be compatible with all players, including Apple’s ubiquitous iPod.

He said that it was ”even possible that clients could keep some songs indefinitely, that they would own them even after the subscription expired.”

A Bertelsmann spokesman confirmed that the interview was accurate but declined to provide further details.

Schmidt-Holtz was quoted as saying the unit was in talks with other major music distributors but did not disclose with whom and added that it was possible mobile phone operators could be brought on board, with the aim of letting users download their songs to their cell phones.

Besides the book publisher Random House, Bertelsmann’s interests include music business BMG, which is comprised of its 50 percent holding in the Sony BMG Music Entertainment joint venture with Japan’s Sony Corp., and radio and television – including broadcaster RTL, magazines and media services.

Bertelsmann is headquartered in Guetersloh, Germany, but most of its 97,000 employees are scattered over its divisions. The company is controlled by the Mohn family, directly and through a foundation.

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On the Net:

http://www.bertelsmann.com

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