HMV Group Plc, the U.K. operator of HMV music stores, said it is joining forces with Microsoft Corp. to open an online music store that will challenge Apple Computer Inc.’s iTunes downloading service and iPod music players. Maidenhead, England-based HMV will invest 10 million pounds ($19.2 million) in the digital downloading service, which will start in the second half of 2005, Paul Barker, head of corporate communications, said.
MacDailyNews Take: 19.2 million? Dollars?! That’s it? Apple’s annual toilet paper budget is higher.
“HMV is to develop a digital downloading service with software giant Microsoft, tapping into demand for online music. The applications, which the music store chain hopes to launch in the second half of next year, include a customised ‘jukebox’ where customers can find, download and buy music online at home and through terminals in HMV stores,” Reuters reports.
“Shares in HMV leapt 3.7 percent to 255 pence, valuing the company at around 1.3 billion pounds. HMV customers will be able to listen to the digital downloads on over 75 portable players currently in the market, like the Philip’s MP3 player, the firm said,” Reuters reports. “However, the software is not compatible with Apple’s iPod, and when the service is launched next year, HMV stores will stop selling iPods, a spokeswoman for HMV said.”
Full article here.
“‘IPods are not compatible with Windows Media at the moment,’ an HMV spokeswoman said. ‘However, while Apple has been incredibly successful, products based around Windows are going to push up their market share. It is going to be important that the service is compatible with Microsoft.’ The initiative will be developed by a joint team ‘combining the industry knowledge of HMV with the software development product expertise and consulting skills of Microsoft,’ Alistair Baker the managing director of Microsoft UK, said. Alan Giles, the HMV chief executive, said this morning that the company was ‘delighted’ to be working with Microsoft. ‘We have a unique opportunity to leverage the HMV brand…to establish a strong position in the newly emerging market for paid-for downloads,'” Mike Verdin reports for The Times Online.
MacDailyNews Take: The “consulting skills of Microsoft.” Oh, so that’s what MS does well, consulting. MS consulted HMV right into a format that won’t play on the player with over 90% of the market. The player that’s sold somewhere between 3-6 million unit, depending who you ask, in the past 90 days. Or 3-6 million more non-HMV customers. Sheesh, we almost feel badly for HMV. Almost.
Perhaps there is logic to this move: HMV must not want the hassles of selling music online and digital music players in their stores.