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SanDisk, Record Companies
Plan New Music Format

Posted: 09-22-2008 [Source : The Wall Street Journal]

In the latest attempt to shore up sales of music on physical media, SanDisk Corp. and the four major music companies plan to announce Monday a new format called slotMusic.

SlotMusic is be introduced in mid-October at retail outlets including Wal-Mart Stores Inc. and Best Buy Co. Each unit is to contain an album, plus extras, on a compact memory card that can be played on mobile phones, PCs and some portable MP3 players. The cards are inserted into vacant slots on phones and other devices. (The slots are increasingly common on newer phones, but the placement of the slot depends on the phone model.) SanDisk is a maker of flash data storage card products.

People close to the record companies and retailers said they view the effort as an experiment. The initial batch of releases is to comprise 29 albums, from all four of the big recorded music companies: EMI Group Ltd., Warner Music Group Corp. Vivendi SA's Universal Music Group and Sony BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG. The releases are mostly by current pop artists including Rihanna, Ne-Yo, Robin Thicke, New Kids on the Block, Weezer, Usher, Chris Brown, Akon and Leona Lewis. In a nod to older buyers, Elvis Presley is also represented.

The music is to be sold in the MP3 format, with no digital locks that prevent copying. An adapter is to be included allowing users to transfer their music to PCs via their USB slots. The albums are expected to cost about $15 and are likely to be stocked by retailers near CDs and portable devices such as MP3 players and mobile phones.

CD sales have been decimated in recent years, as consumers have migrated to digital downloads, whether they pay for them or not. Earlier this year Apple Inc.'s iTunes Store surpassed Wal-Mart to become the largest music retailer in the world. The record labels have tried various ways to prop up sales of albums, which are more profitable than the 99-cent single tracks that make up the vast majority of iTunes sales.

The music companies over the years have tried to persuade consumers to migrate beyond CDs to a range of new formats, including DVD-Audio -- all with limited success at best. But Daniel Schreiber, general manager of SanDisk's audio-video business unit, says slotMusic has a unique advantage, since it's compatible with a vast range of devices people already own, including hundreds of millions of mobile phones.

"I don't have to convince you to buy anything; you already own it," Mr. Schreiber says. "I don't have to convince you to carry anything; you're already carrying it."

- Ethan Smith at The Wall Street Journal