Waiting for the Jukebox.(digital music)(Brief Article)

There are two words that people in the record business love to hear: overnight success. When it comes to digital music, however, those words don't apply. Just ask Rob Glaser. Back in 1995, after launching the audio-streaming company RealNetworks, he wanted to build a celestial jukebox that contained every song ever recorded and that could beam music to users anywhere, any time, on any device. Now that Napster has tweaked the record establishment (and incurred its wrath) by enlisting 50 million fans in its digital-music-sharing club, there's not a soul left in the industry who isn't acutely aware of the technology's potential to revolutionize music distribution. That's made the tough job of putting together Glaser's jukebox a tad easier. After working at it for six years, he is now three fifths of the way there.

The breakthrough came at 5 o'clock on Monday morning last week, when Glaser and three of the five big record labels--AOL Time Warner, Bertelsmann and EMI--clinched a digital-music deal. They formed MusicNet, a joint venture, to provide music to other firms seeking to distribute it digitally to consumers. "It's been a long and winding road," says Glaser. "But it's also a historical moment."

That would be easy to dismiss as hyperbole were it not for two other deals announced last week. Online music firm RioPort agreed to distribute music in digital form for all five of the big record companies. And Yahoo said it will carry the music of Sony Music and Vivendi Universal, the other two big labels, on its widely trafficked portal. (Pricing wasn't revealed in any of the announcements.) "Everyone understands that CONTENT distribution is important for the future," said Vivendi Universal CEO Jean-Marie Messier. "With the penetration of broadband, music is going to be important today, and then movies and books will be important tomorrow." After two years of fighting Napster in court, the recording industry is finally taking steps to give music fans the digital music they so clearly want.

But a closer look at this flurry of dealmaking reveals fault lines in the music industry that digital music will only exacerbate. The ...