Nippon Telegraph & Telephone (NTT), JVC and a trio of partners will later this year begin testing a system for distributing music via satellite to retail shops in Japan.
The "Waveless Radio" system will feed digital music to record stores kiosks where customers will be able to download and pay for compact disc-quality music tracks. The customers will use an electronic wallet, or debit card system, to pay for the music, according to the companies.
In addition to JVC and NTT, trial participants include the FM Tokyo Group and Osaka-based Dynaware Corp. The trial will be managed by Japan Digital Contents (JDC), a joint venture backed by trading giants Itochu Corp. and Marubeni , in addition to NTT Data and Toyota.
Few technical details of the trial have been finalised, according to Hirobumi Doi, a spokesman at JDC. The trial, which will run between August and December of this year, will offer copy-protected music to six locations in metropolitan areas, he said.
The trial backers will develop a portable device for receiving music from the kiosks. The electronic wallet system will automatically charge a user when he or she copies a track onto another device, Doi said. He couldn't confirm a report that the system will offer music at one-third of the cost of a CD.
The trial is just one of what by year-end will be several similar projects testing methods for distributing music over networks. IBM and five major record labels earlier this month unveiled a pilot scheme that will offer music to 1,000 cable television subscribers in San Diego, California.
The common goal of the IBM and NTT/JVC trials is to test online distribution of music while protecting copyright relating to that music. The recent rise of a compression format called MP3 (Motion Picture Experts Group, Audio Layer 3) that makes it easy to download audio over a network has spurred a rash of World Wide Web sites offering pirated music, a practice record companies hope to curb with security technology.
But many backers of MP3 say the music industry has no choice but to rework its business models and embrace the open nature of the Internet where they have less control.
One model might be to offer music free over Web sites that gain revenues from advertising, said Hassan Miah, president and chief executive officer of Xing Technology, a compression technology provider in San Luis Obispo, California.
"It's a viable business model though not the only model that should exist," he said in a phone interview today. Overall, "the idea of (record companies) focusing on security is not quite hitting the mark," Miah added.
JDC, in Tokyo, is at +81-3-3434-5651.