Matsushita, AT&T, enter 'Net music pact

The world's largest consumer electronics vendors into Internet music distribution., Matsushita Electric, has teamed with AT&T and the Universal Music and BMG record labels in a push into Internet music distribution. Matsushita says it will provide copy protection technologies and hardware for the system.

Matsushita Electric has teamed with AT&T and two leading record labels advancing a push by the world's largest consumer electronics vendors .

Osaka-based Matsushita, most famous for its Panasonic brand of products, says it will provide copy protection technologies and hardware for a system the partners say will be able to carry audio and video data securely over the Internet. In addition to AT&T, the partners include Seagram's Universal Music Group and BMG Entertainment, a subsidiary of German media conglomerate Bertelsmann AG, according to a release issued today.

The deal, rumored since early last month, adds Matsushita to a growing number of technology providers and record companies racing to set a foundation for Internet music distribution. The deal also pits the company against long-time rival and consumer electronics giant Sony which is using similar technologies in an Internet music trial with IBM.

Over the past year, music flowing over the Internet has quickly become a major concern for the world's largest record labels. Grass roots growth of a compression format called MP3 (Motion Picture Experts Group, Audio Layer 3) that makes it easy to send and receive audio, has rapidly spread pirated music online.

The four partners say they will develop what they call an Electronic Media Distribution (EMD) system that will be a secure platform for online media companies to sell their content over the Internet. The content, which could be a mix of music, graphics and video, could then be played back on PCs or future or memory chip-based portable players.

The proposed system is an almost carbon copy of one now being developed by Sony Corp. The company earlier this year announced its own set of distribution technologies called SuperMagic Gate, MagicGate and OpenMG.

Sony says it will use two of the technologies in a trial with IBM that should begin around September.

Matsushita and its partners did not disclose many technical details of their system. Matsushita will provide its copy right protection technology, playback devices and authoring equipment for media companies creating content for distribution. AT&T will provide compression technology.

The system will follow a framework now being laid out by an industry group that hopes to hammer out a specifications for selling music online by the end of this year. The group is called the Secure Digital Music Initiative (SDMI) and was set up last year by the Recording Industry Association of America. Today's partners are all SDMI founding members as is Sony's U.S. music subsidiary Sony Music Entertainment.

Matsushita's Tokyo office can be reached at +81-2-3578-1237 or on the World Wide Web at http://www.panasonic.com/. BMG can be reached at http://www.bmg.com/. Universal Music Group can be found at http://www.seagram.com/. AT&T, in Basking Ridge, New Jersey, can be reached at +1-908-221-2000 or at http://www.att.com/.

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