One-Stop Grooving - Bertelsmann's BeMusic Web site - Company Business and Marketing

Industry Standard, The, July 23, 2001 by Michael Learmonth

German media giant Bertelsmann announced a new portal strategy last week. No, this isn't 1999, but Bertelsmann e-commerce chief Andreas Schmidt has been busy assembling an array of music sales and distribution businesses, and now he wants one place to put them all. The new site will bear the company's new BeMusic moniker and provide a single point of entry for its BMG Music Service record club, Net retailer CDnow and MyPlay, a service that gives consumers online access to their CD collections.

All told, the BeMusic properties boasted 23 million members and customers, and $1 billion in sales in the fiscal year that ended June 1. "BeMusic stands to deliver music through any possible channel, including music-club purchasing, e-retailing, digital downloads and streaming," says Schmidt.

The one thing not included on that list is file sharing. Schmidt's division oversees Bertelsmann's relationship with Napster, which is developing a paid version of its service. Should Napster stumble in its attempt to remake itself (and a federal judge's order shutting down the service last week can't help), there's always MusicNet, Bertelsmann's joint venture with Warner Music Group and RealNetworks.

Bertelsmann lags way behind AOL Time Warner, Disney, Viacom and Vivendi Universal in revenues. But Schmidt has constructed a vast machine for selling music and has the cash to do it online. Last week Bertelsmann raised $2.5 billion from its option to sell its stake in AOL Europe.