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No shrink-wrap: MP3.com sells digital albums

The online music company introduces a new service to let consumers purchase digitally encoded albums through its site.

Online music company MP3.com on Thursday introduced a new service that will allow consumers to purchase digitally encoded albums through its site.

Dubbed NetCD, the service gives MP3.com a new way to capitalize on distributing music directly to a customer's PC hard drive.

"It's another conduit for music that they have existing rights to distribute, and I think it makes a lot of sense," said Aram Sinnreich, an analyst at Jupiter Media Metrix.

When someone buys a NetCD, the album is automatically added to his or her personal My.MP3 online storage locker. Customers can transfer the album, digitally coded in the MP3 format, onto their hard drives. From there, songs can be transferred onto a portable device using MP3.com's Transfer2Device service.

Each NetCD will range in cost from $3.99 to $30. Only artists who have distribution deals with MP3.com will be offered. Musicians offering NetCDs include a hodgepodge of some pre-'90s favorites, such as glam-rockers L.A. Guns, easy-listening legend Christopher Cross and former Byrds front man Roger McGuinn.

MP3.com Chief Executive Michael Robertson trumpeted the NetCD effort as another way the company will offer albums both digitally and physically. The company also said that NetCDs would benefit consumers and the environment by eliminating the need for shipping and for nonperishable CD cases.

The NetCD launch becomes another avenue that MP3.com is pursuing to diversify its revenue sources after losing a costly lawsuit from the recording industry. These efforts include introducing a subscription service, piping Web-based music to retail chains (a la Muzak), and offering a paid version of its controversial My.MP3.com.

The company sparked a legal firestorm soon after it launched My.MP3.com in January 2000. The Recording Industry Association of America sued MP3.com for copyright infringement on behalf of the Big Five record labels.

MP3.com has since settled with four out of the five and reached a consent judgment with Universal Music Group, the world's largest music company, for $53.4 million.