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Sony USA CEO Sees Glimmers Of Hope In Music Sector

Efforts by the music sector to curtail online piracy and develop digital music services like Apple’s iTunes are the first glimmers of hope for the battered industry, the head of Sony Corp.’s U.S. operations said Wednesday.

U.S. Chief Executive and Chairman Howard Stringer said at a media breakfast that the April launch of Apple Computer Inc.’s online music service, iTunes, which lets music fans download some songs from all five major record labels for less than a $1 each, was a “sea change” and a “wake-up call.”

“Steve Jobs (Apple CEO) has liberated us,” Stringer told media executives and journalists at a breakfast hosted by The New Yorker and Syracuse University’s Newhouse School.

“We’re all doing the same things and providing our own solutions… In the technology age, everything can be duplicated quickly.”

Electronics giant Sony is also home to Columbia Pictures, which is also combating high-tech piracy to protect recent movie hits such as “Spider-Man.”

Stringer thinks the music business will evolve in the next two years, but the industry needs more than iTunes to get people to break the habit of stealing music and to shake off the industry-wide slump created by piracy and the absence of any major new break-out acts.

The International Federation for the Phonographic Industry or (IFPI), which represents the international recording industry, estimated global music piracy was a $4.3 billion problem in 2001 and that 40 percent of all CDs and cassettes sold around the globe were pirated copies in that year.

Addressing the complaints about the music business that have led many music lovers to embrace the free downloads made popular by song-swapping firm Napster is essential.

Stringer said the industry is beginning to make headway with lower CD prices and offering the ability to download music and get compilations online from a broader library.

Litigation will also help.

“I think you’ll see a large number of suits aimed at individuals that are not just beating the system, but devouring it,” Stringer said of people who upload thousands of songs and send them to strangers online.

On Wednesday, the Recording Industry Association of America said it planned to sue hundreds of individuals who illegally distribute copyrighted songs on the Web.

But even with the recent improvements, several major music players have been contemplating mergers.

Vivendi Universal is selling its U.S. entertainment assets and, while it has said it wants to keep Universal Music, it has not ruled anything out. AOL Time Warner Inc. and Bertelsmann AG have explored merging their recorded music divisions, just one of the many discussions in the industry as players scramble for a solution to their woes.

“Buying a music company is hard right now. How do you value it because you don’t know where the bottom is,” Stringer added.

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