Online music market begins to boil

Sounds' entry into the online music market yesterday looks set to be the first of a flock of local Internet music ventures.

Sounds entry into the online music market yesterday looks set to be the first of a flock of local Internet music ventures.

Sounds managing director Sean Coleman said yesterday that as "the best bricks-and-mortar retailer" Sounds had decided "we should get our fair share of the online business".

Competition for share in that market may be keen.

The online-only retailer CDStar is gaining some traction through its presence on Xtra's site; CD Direct is undergoing a rebranding for a relaunch early next year, possibly in alliance with a major bricks-and-mortar retailer; and FlyingPig has already been discussing its planned Amazon-style expansion with local record companies.

@IDG understands that at least two digital music delivery sites have secured funding - and possibly even the co-operation of local music companies and artists.

Any future entrants will have to contend with Sounds, which, along with its consulting and developing partner Hyperactive, has greatly raised the bar on the quality of online music offerings.

Sounds' new Flash 4-based site incorporates comic-book style agents to flesh out the now-familiar relationship strategy of online retail, an online music magazine based on content from Auckland's Lava, and a built-in "radio station" using QuickTime streaming.

The site, at www.soundsnz.com, appears to still be fairly light on catalogue, and there is presently little evidence of Coleman's promise that online prices will be cheaper than those in stores - especially once delivery charges are added. But the audio streaming and Flash features appear to be working well. An HTML version of the site, aimed at a slightly older demographic, will be launched soon.

Hyperactive's Mark Tierney said yesterday that the second phase of the project, set for March 1 next year "will blow what we have now out of the water," and would include eight streaming stations.

Yesterday's launch was notable for videotaped endorsements from all the major record companies, and from artists ranging from Stellar and Jordan Luck to Silver Scroll Award winner King Kapisi.

The other notable element was that the Sounds project represents yet another key stake for New Zealand Post in the local e-commerce environment.

Wellington-based Hyperactive is 75% owned by print management company Comm Arts, which is 40% owned by New Zealand Post subsidiary Datamail.

Tierney said that while orders placed with the site would initially be mailed out, it was likely that CourierPost would - as it has with FlyingPig - pick up the site's fulfilment business, meaning customers will be able to request delivery "in 15 minutes - if they want to pay for it," according to Tierney.

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