The implementation of Soundbuzz's Windows Media-based, digital rights management technology at Hewlett-Packard's Singapore music site is a rehearsal for a region-wide rollout across MSN's Asia-Pacific portals.
Hewlett-Packard's Singapore music portal carries a mix of pre-paid and purchasable music content licensed through deals that Soundbuzz has negotiated with major record labels such as Warner Music, EMI and BMG.
Soundbuzz managing director Andrew Hoppe said that MSN would mimic aspects of the HP site's revenue and distribution model. When the music stores go live late March, Soundbuzz's distribution partnership with MSN will operate on a transaction-based revenue model. Profit from each sale will be split between all parties involved in bringing the content to the online market.
Hoppe is confident that Soundbuzz's technology can help reduce the illegal online trade of music on peer-to-peer, file-swapping services throughout the Asia-Pacific region.
"There needs to be a legal alternative to the peer-to-peer music swapping on the Internet," he said pointing out that US consumers have the choice to purchase music online.
However, choosing the legal alternative will hit consumers' hip-pockets hard and force them to jump through hoops demanded by record companies and suspended before them by Soundbuzz.
Audio content will be sold on a per-track basis and Soundbuzz estimates that each will cost around AU$2.50 to AU$3.00. This means online music consumers could pay in excess of $AU30 for an amount of audio content equivalent to that of a CD.
Unlike the MP3 format which has become a de facto Internet standard, the WMA file used in conjunction with Soundbuzz's digital rights management technology provides a means to control the way that consumers use their audio content post-purchase.
Although it offers comparable audio quality, consumers may not necessarily be granted the legal right to burn Windows Media content to a CD or move it to a digital audio player.
Further complicating things for Soundbuzz, its digital music distribution model must adhere to existing agreements signed by music labels offline. As a result consumer access to each MSN music store will be geography-restricted using IP-tracking technology.
"At this point in time it's the most accurate way of determining the user's location," said Hoppe after conceding that the condition may restrict the availability of music in some regions.
Commenting on the closure of US-based competitor LicenseMusic.com last week, Soundbuzz acknowledged some of the difficulties facing the collapsed music licensor.
A spokesperson for the company said that music labels have been dragging their feet when it comes to online music distribution and that MP3 still hadn't managed to match the success of CD audio formats, as it's still considered a lower quality alternative.
Yesterday, Hoppe clarified the company's comments.
He said that MP3 hadn't reached "critical-mass" in the marketplace and that bureaucratic friction within the major record labels slows the process of licensing music for online distribution.
"It's really only been in the last three months that anyone has been able to buy significant volumes of material," he said.
The company is currently in negotiation with and expects to announce more partnership deals soon.
