Bertelsmann Buys Myplay

By | May 30, 2001 at 12:00 AM

German media conglomerate Bertelsmann AG announced Wednesday it was buying Myplay, whose technology allows music buffs to store songs on the Internet, as part of an effort to consolidate its online music strategy.

With the $30 million acquisition, Bertelsmann plans to combine Myplay, a Redwood City, Calif. company, with its other music distribution businesses, which include the online retailer CDNow and its BMG music club, into a new entity called BeMusic.

Myplay, which launched in 1999 and has yet to turn a profit, recently laid off nearly half of its staff. Its 31 remaining employees will work for BeMusic.

Like other music companies, Bertelsmann has been feeling out methods of promoting and delivering music over the Internet in ways that will guarantee payments to artists and music companies.

Bertelsmann had broken ranks with other music companies in allying itself with Napster, the file-swapping service which is still being sued by major record companies for copyright violations.

Bertelsmann loaned Napster money to help it develop a legal version of its service, which the companies have said they hope to introduce this summer. It’s not yet clear how Napster, which has been crippled by the lawsuit, will fit into Bertelsmann’s other plans for online music delivery.

Bertelsmann has also backed online music distribution venture MusicNet, a subscription-based music streaming and download service scheduled to debut this year. MusicNet is also supported by music heavyweights AOL Time Warner Inc. and EMI Group.

Sony and Universal, the other two major music companies, are pursuing a separate online music venture called Duet. Universal, a unit of the French conglomerate Vivendi Universal, also acquired for $372 million.

Myplay, which claims more than 6.5 million users, offers users a free service of storing files of their own music on the Internet in digital “lockers” to listen to later.

‘ Bertelsmann hopes that this storage technology will allow listeners easier access to their own music on portable devices such as mobile phones and handheld computer devices.

“This is the final mosaic in our digital music delivery chain,” company spokesman Alexander Adler said. “Digital music storage has been the missing link.”

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