NEW MEDIA: SPOTLIGHT ON VIRGIN MEGASTORES - Virgin Megastore site aims for a slice of internet music sales. The threat posed by online sales led to Virgin creating its site, Alasdair Reid says.(Brief Article)

The Oasis CD you got free with The Sunday Times the other week was an interesting production - although, irritatingly, it was one of those free offers that turns out to be not quite as free as you first thought.

And the whole business was more elaborate than it needed to be. To get access to the disc's content you had to be connected to the internet too and you had to divulge lots of personal data (fair enough, data capture is the future, isn't it?) before you could get going. And then you realised that the reason you had to stay on the internet while the disc was playing was that you were only going to be allowed to play the thing four times before access was withdrawn.

It was a prime example of the way in which digital technologies both excite and scare the hell out of everybody in the music business these days. For individual artists the threats are as huge as the opportunities - these days you can be in closer contact with your audience if you choose, but, equally, that audience is increasingly likely to want to download your output for free.

The record companies are obviously trying to guard against that - which is why they've leapt into bed with erstwhile digital pirates, for instance, the Bertelsmann deal with Napster. As with the bands themselves, the record companies have got to believe there will be new and better ways of monetising their customer base.

However, there is surely one group of people for whom the digital cloud promises more darkness than silver-lining. They're the piggies in the middle of all of this. The retailers, especially the bricks-and-mortar retailers. Some of them have been running like hell just trying to keep up with the first phase of the revolution - online retailing, with order fulfilment in the form of old-fashioned CDs sent through the postal service.

And initiatives such as the Oasis one the other week must dismay them because they threaten to cut them out of the loop altogether.

But Virgin Megastores doesn't seem very scared. Last week the retailer had news for anyone who doubted its determination to stay at the leading edge of music retail in this country when it unveiled a new transactional website. It has an unforgettably catchy URL - virgin.com/megastores/uk - which is no accident, as it happens, because the strategy is to drive traffic from the busy concourse that is the main Virgin portal rather than trying to tough it out as a standalone brand.