June 10, 1999
Sony Music Plans to Test Use of In-Store Digital Kiosks
By LISA NAPOLI 
ony Music Entertainment said
Thursday that it had struck a deal
that would let consumers buy music
through digital vending machines in
music stores.
The announcement follows a flurry
of deals and partnerships in recent
months that hope to capitalize on
public interest in the digital delivery
of music over the Internet. The Sony
deal is unusual, however, because it
shifts digital delivery out of the home
and into retail outlets.
In an agreement with Digital On-Demand, a company that has developed the in-store digital kiosks, consumers will be able to choose from
4,000 albums, about half of Sony's
music catalogue.
The digital files will
then be sent over a proprietary computer system and pressed to the customer's choice of format, including
CD, DVD, or minidisk.
The transaction, which would include the printing of art and liner
notes to match that of a prepackaged
CD, should take 10 to 15 minutes,
according to Scott T. Smith, president of Digital On-Demand, which is
based in Carlsbad, Calif. An initial
test of the kiosks is to take place in 50
stores in the New York and Los
Angeles metropolitan areas beginning this fall, he said.
The kiosks will also be able to
download music to digital music
players, once such a standard is created, Smith said.
A music industry coalition, including Sony and the
other four major music producers,
have said they will reach a digital
delivery standard by June 30.
Last month, even in advance of an
agreement on a standard, Sony said
it planned to begin selling singles by
its musicians this summer directly
through the Internet -- a move that
could bring it into conflict with traditional retailers.
Danny Yarbrough, chairman of
Sony Music Distribution, said yesterday that the kiosks would not eclipse
efforts at online sales, but make
music more widely available in more
formats.
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Indeed, several attempts this decade to sell music through kiosks have
failed.
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"We see this as an expansion of the
business," he said. "It offers the retailer the ability to offer titles they
wouldn't be able to physically carry
to that consumer in that environment."
Analysts were skeptical of the plan, citing problems with the operation and maintenance of kiosk devices in highly trafficked retail outlets, as well as the unwillingness of consumers to wait for their purchases to be prepared.
Mark Hardie, senior analyst with Forrester Research of Cambridge, Mass., noted a proliferation of "smoke and mirrors" announcements stemming from the eagerness of various industries to ride the mania surrounding digital-based production.
"There's so much noise being made about technology that glosses over the realities of poor products, bad interfaces, the true market," he said. "At the end of the day, I don't
think this is going to succeed. It's neat technology at a time when the world is ga-ga over neat technology."
Mike Dreese, founder of Newbury Comics, a New England music chain, said that his experience with earlier versions of kiosks in his stores had been troublesome.
"There's an enormous disconnect going on between technologists, the music industry, and the people who have tested these devices," he said. "There are very few in-store devices that work."
Indeed, several attempts this decade to sell music through kiosks have failed. Digital On-Demand is a successor to another kiosk business, Newleaf Entertainment, which was a
joint venture by I.B.M. and Viacom Inc.'s Blockbuster Entertainment unit. That venture, whose patents Digital On-Demand has licensed, was shelved because the companies could not create enthusiasm for the idea within the industry.
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Lisa Napoli at [email protected] welcomes your comments and suggestions.
