Pop Stars Take to Net in Record Industry Revolution

By Paul Majendie

CANNES, France (Reuters) - David Bowie broke fresh ground when he took to the Internet to give fans a first bite at his new album.

Tori Amos's sales took off when a preview track from her new album was offered to retailers around the world.

A posthumous single by Australian singer Michael Hutchence was released to radio stations through the Internet.

Software wizards just keep coming up with cheaper, faster and more secure ways for record companies to appeal direct to their customers.

But Liquid Audio Inc, one of the leaders in a fast changing field, insisted on Wednesday that the Internet does not spell the end of the Compact Disc.

"The movie industry feared the worst when video came along, cable too. It actually helped to build new markets," said Dick Wingate, senior vice-president of the company based in Redwood City, California. "The same applies with the Internet. The music industry has to come to grips with it," he added.

"The record companies will now have to be good at market savvy," said Wingate, showing off the company's latest wares at Midem, the record industry's annual marketplace that attracts more than 4,000 firms from over 90 countries to this French riviera resort.

Forrester Research has predicted that the market for digitally downloaded music will grow to $1.1 billion by the year 2003 and the record industry is certainly undergoing a revolution in the new century.

"Music on Click" was very much the theme at Midem, dominated this week by the news that Britain's EMI Group Plc and Time Warner Inc are merging to form a $20 billion company with a powerful presence on the Internet.

New formats are constantly being produced and Liquid Audio stresses that the technological revolution will benefit the industry because increasingly more sophisticated systems can help to thwart the copyright pirates who have plagued the industry worldwide.

For instance, Liquid Audio joined forces this year with the Sony Corporation to deliver digital music to portable audio players over the Internet. "It provides the industry with the security and flexibility it requires," said Keiji Kumura, vice president, Personal IT Network Company, Sony Corporation.

And now more than 6,000 pop bands from 1,000 different labels are using Liquid Audio software to publish or syndicate music for retailers and consumers. The day of the "Net Browsing" record buyer has firmly arrived.