AT&T, BMG, MATSUSHITA AND UNIVERSAL MUSIC GROUPJOIN TOGETHER TO DEVELOP AND TESTSECURE DIGITAL MUSIC DISTRIBUTION
May 26, 1999–AT&T, BMG Entertainment, Matsushita Electric Industrial Co. (Panasonic) and Universal Music Group today announced a joint agreement to develop and test technology for large-scale, secure music and media distribution.
Known as Electronic Media Distribution (EMD), this open technology would provide consumers with an easy and convenient way to obtain and play music in new and compelling digital formats, complete with related programming such as graphics, video, lyrics and links to Web sites. The EMD technology would also allow storage and retrieval of media on various consumer electronics products, from PCs to DVDs to new types of portable music playback devices.
The combined strengths of the four companies provide unsurpassed access to music, music consumers and networking and technology expertise. Universal and BMG today share more than 40 percent of the current album market in the United States, while AT&T offers leadership in both broadband and narrowband distribution as well as the technology expertise of AT&T Labs. Matsushita Electric is the world’s largest consumer electronics company and a leader in the transition to digital consumer electronics.
The goal of the companies’ joint development effort is to bring technologies together that can lay the groundwork for the creation of a robust, secure, flexible and scalable infrastructure for the distribution of digital music and other media. The development efforts will be consistent with the work–to-date and the standards to be established through the Secure Digital Music Initiative (SDMI).
The four companies are all founding members of SDMI, which brings together the worldwide recording industry and technology companies to develop an open, interoperable architecture and specification for digital music security. The specification will answer consumer demand for convenient accessibility to quality digital music, enable copyright protection for artists’ work, and enable technology and music companies to build successful businesses. Additional information about SDMI can be found at www.sdmi.org.
EMD Company Statements and Information
“Our customers want music at their fingertips, and that’s what we and our partners will deliver. AT&T and AT&T Labs have unique expertise in the technology, security, and networking skills needed to build a service with the quality our customers expect and demand.”
— Mike Armstrong, Chairman and Chief Executive Officer, AT&T
“Creating a networked digital music industry is akin to creating a new economy. We need to work together on the infrastructure – the roads, the airports, and the utilities – so that the new economy of digital music distribution can achieve explosive growth by creating a much better customer experience.”
— David Nagel, AT&T Labs President and Chief Technology Officer, AT&T
AT&T Corp. is the world’s premier voice and data communications company, serving more than 80 million customers, including consumers, businesses and governments. With annual revenues of more than $53 billion and 140,00 employees, AT&T provides services to virtually every country and territory around the world. AT&T runs the world’s largest, most sophisticated communications network and the largest digital wireless network in North America. The company is a leading supplier of data and Internet services for businesses and the nation’s largest direct Internet service provider to consumers. AT&T provides outsourcing, consulting and networking-integration services to large businesses. AT&T’s businesses are backed by the research and development capabilities of AT&T Labs, which is working to create the information services and communications network of tomorrow. AT&T Labs compression and encryption technologies are used in a2b music, AT&T’s initiative for secure delivery of digital music over the Internet.
“These four companies working together brings us another step closer to our goal of providing broad-based, secure distribution of digital music. As we move forward, we hope to include other strategic partners in order to develop the best possible solution for providing the best online music experience.”
— Strauss Zelnick, President and Chief Executive Officer, BMG Entertainment
“We are looking to provide the best possible online experience for music fans and consumers, while protecting the rights of our artists. We believe this partnership will help us to accomplish these objectives so that we can take advantage of the full range of opportunities in the digital world”.
— Kevin Conroy, Senior Vice President, Worldwide Marketing, BMG Entertainment
“Digital distribution to traditional retail, non-traditional retail, as well as direct to consumer’s homes, is a much broader puzzle than most realize and requires the expertise of many industries. These four multi-faceted companies bring to this effort the full slate of disciplines required to provide great music, packaged into easy-to-use formats and products, delivered conveniently to music fans everywhere.”
— Scott Dinsdale, Senior Vice President, Chief Information Officer and Chief Technology Officer, BMG Entertainment
BMG Entertainment is the $4.1 billion worldwide music and entertainment division of Bertelsmann AG, one of the world’s leading media companies, with annual revenues of $15 billion. BMG owns more than 200 record labels in 53 countries, including Arista Records, RCA Records and Ariola Music. BMG also owns the world’s largest music club, one of the world’s largest music publishing companies, and has interests in home video, television, and compact disc and cassette manufacturing. Bertelsmann’s North America interests also include Random House Inc., which includes the Random House and Bantam Doubleday Dell book publishing groups; and the Gruner+Jahr magazine publishing group, which includes McCall’s, Parents, Family Circle and YM magazines, among others.
Matsushita Electric Industrial Co. (Panasonic):
“Matsushita Electric has been at the forefront in the development of digitally networked home electronics products and systems in order to realize the digitally networked society in the 21st century,” said MEI President Yoichi Morishita. “With this agreement, the DVD world, which already has such wide-ranging applications as movies, music, car-navigation, games and computer software, will have the additional function of electronic music distribution through the network. Thus, the world of DVD will expand further.”
— Yoichi Morishita, President, Matsushita Electric Industrial Company, Ltd..
Matsushita Electric Industrial Co., Ltd. (NYSE/PCX:MC), one of the world’s leading developers and producers of digital electronic products for the home, the office, and in between, recorded annual sales of $63.7 billion in the fiscal year ended March 31, 1999. Based in Osaka, Japan, and best known by its Panasonic brand, Matsushita Electric has more than 275,000 employees worldwide, with overseas operations that include over 220 companies in 46 countries and regions. The company’s principal North American subsidiary is Matsushita Electric Corporation of America which, along with its affiliates, operates 24 manufacturing sites and employs 23,000 people.
The Seagram Company Ltd./Universal Music Group:
“We strongly feel that music will be the first commercial ‘product’ to fulfill the vast potential for digital on-line delivery. It is the perfect commodity for the Internet because it allows consumers to actually experience the art form before purchasing. As the world’s largest music company, we are dedicated to leading these efforts by creating a secure technology which will offer greater numbers of fans more and more music while protecting the rights of artists and copyright holders.”
— Edgar Bronfman, Jr., President and Chief Executive Officer, The Seagram Company Ltd.
“We are on the verge of a whole new world where consumer access to music will become virtually instantaneous. I feel that this will fuel the growth of the music business into the next millennium. It is a very exciting time for artists and music fans and I am pleased that Universal will be helping to make this a reality through our joint agreement with these prestigious companies.”
— Doug Morris, Chairman and Chief Executive Officer, Universal Music Group
“Each of these companies bring areas of expertise that will allow us to develop an open technology to deliver music directly into people’s homes, the first fruits of which will be delivered this year. It is our goal to protect the creative works of our artists while opening up new markets and broadening their reach to listeners around the globe. The promise of a new delivery system that knows no boundaries and makes an unlimited depth of catalog available has the potential to lay the groundwork for the music business of the future for consumers and all content owners.”
— Lawrence Kenswil, President, Global Electronic Commerce and Advanced Technology, Universal Music Group