San Diego Business Journal

San Diego-based MP3.com, Inc. is teaming up with a Minnesota-based retailer to sell songs in a brick-and-mortar environment. Right now MP3.com lets computer users download tracks from its Internet site. It is among several Web music services that have challenged the conventional ways the recording industry distributes its product. The company announced last week that MP3.com songs will be available through the "Singles on Demand" program at The Outernet retail stores. Based in the Minneapolis suburb of Edina, The Outernet plans to open its first location this fall in another Minneapolis suburb, Apple Valley. It plans to open 20 more locations by July 2001.

The Outernet will feature an area for people to burn custom compact discs using MP3.com's technology infrastructure and songs posted on the MP3.com site. "This agreement creates an offline opportunity for digital artists to potentially increase their earnings through CD sales at a retail outlet," said a statement released by MP3.com. Touch-screen monitors in kiosks at The Outernet locations will not only provide customers music, but games, software and other content that can be burned onto CDs. Part of the store will be an arcade. "We think this relationship with The Outernet perfectly illustrates our resolution to give consumers access to the great music they want, while creating revenue possibilities for digital artists," said Steve Sheiner, executive vice president of sales and marketing at MP3.com. Lou Russell, owner of Lou's Records in Encinitas, said he expects the industry to try several retailing models over the next five years. He said he is not familiar with MP3.com's plan. Russell said the move could be an acknowledgement that to make money, one has to do it with a brick-and-mortar store. MP3.com says its Web site hosts the largest collection of digital music available on the Internet, with more than 562,000 songs and audio files posted from more than 87,000 digital artists and record labels.