The latest digital music alliance

AT&T, Matsushita Electric Industrial, Bertelsmann's BMG Entertainment unit, and Seagram's Universal Music Group form an alliance to jointly develop a system to distribute music online.

AT&T, Matsushita Electric Industrial, Bertelsmann's BMG Entertainment unit, and Seagram's Universal Music Group have formed an alliance to jointly develop a system to distribute music online, Matsushita said.

The alliance is designed See news analysis: Which Net music technology will win? to take advantage of technology allowing consumers to easily obtain music in digital formats. The companies also will study how music can be stored and retrieved on devices ranging from personal computers to new types of portable music playback machines, Matsushita said in a statement.

The announcement comes three weeks after the companies were reported to be close to forming an alliance.

The move also is meant to protect the music companies against illegal copying as they try to develop ways to distribute music online that protect their copyrights and royalties.

The record industry is trying to counter piracy on the Internet, where technology known as MP3 allows people to download CD-quality digital music for free. Illegal copying "is becoming a serious social problem," Matsushita said.

Seagram already has See news analysis: Microsoft hears the sound of music a history with Japan-based Matsushita, which sold 80 percent of Universal parent MCA to Seagram in 1995 for $5.7 billion. Seagram changed the unit's name to Universal Studios the following year.

Matsushita, which makes Panasonic and Technics brand products and others, owns about 8 percent of Universal Studios, with Seagram owning the rest.

Matsushita gets the bulk of its revenue from its communications and information equipment divisions, with products ranging from personal computers to CD-ROM and DVD-ROM drives.

Separately, EMI, the world's third-largest music company, said that within a few weeks it will unveil plans to sell digital versions of some of its extensive recording catalog for downloading over the Internet, the Financial Times reported, citing the company's chairman Colin Southgate.

EMI said it plans to have downloadable music available by the end of the year, and is in the process of digitizing old recording and publishing copyrights, the Financial Times said.

The record company's music catalog includes the Beatles, the Spice Girls, and the Beastie Boys.

Copyright 1999, Bloomberg L.P. All Rights Reserved.

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