“A group of big music stores has mothballed a plan to join forces on the Internet to fight on-line services such as Apple Computer’s iTunes, a move that highlights painful choices brought on by a digital shakeout,” John Borland reports for CNET News. “Echo, a joint venture launched with a splash of publicity in early 2003, was designed to give the big brick-and-mortar retailers such as Best Buy and Virgin Megastores an on-line foothold that would help them beat back file-swapping services and digital stores.”
“But mounting development costs, a glut of rivals offering bargain-rate services, and smaller-than-hoped-for sales across the on-line-music spectrum, even at Apple’s successful store, have led the big retailers to pull funding for the project, its founders say,” Borland reports. “‘The reality is that compared to all the retailers’ bottom lines, even Apple’s music sales are insignificant,’ said Alex Bernstein, a co-founder and investor in the Echo project. ‘Our board repeatedly told us that.'”
“In January 2003, [a group of music store companies annoucned they would] use Echo-built technology to create a suite of digital music services backed by the giant retailers’ brand names. A seventh member, Borders Group, joined shortly afterward. It was Apple and its iTunes music store that genuinely shook up the market a few months later, however. From that point, Echo’s future slowly clouded,” Borland reports.
Full article here.
MacDailyNews Take: Shortsightedness is in copius supply in this case. All the better for Apple and the iTunes Music Store.