HMV and Microsoft are developing a new music download service for U.K. consumers. HMV Group today (Dec. 22) revealed that it would launch the service in the second half of 2005.

HMV and Microsoft are developing a new music download service for U.K. consumers.

HMV Group today (Dec. 22) revealed that it would launch the service in the second half of 2005. The retailer says it is investing about £10 million ($19.28 million) in the launch, including capital investment and marketing costs. The store will be available at the existing U.K. Web site www.hmv.co.uk.

A spokesman says HMV has not begun negotiations with record companies about licensing repertoire for the new service. Accordingly, no information on pricing has been issued.

The new service will be based on software that will create a customized "virtual jukebox." HMV says this will enable customers to "find, buy, enjoy and manage their music online all in one place." The software is being developed by Microsoft and HMV; it will be available in stores on discs or from the Web site as a download.

Song downloads will be compatible with the Windows Media Audio standard.

HMV currently offers downloads on its U.K. site through a deal with digital-music service supplier OD2. However, OD2 has not been involved with the development of the new project. HMV says it is in talks with several companies to handle fulfillment and back-room functions.

HMV Group chief executive Alan Giles says in a statement that the service offers "a unique opportunity to leverage the HMV brand, customer base and store network to establish a strong position in the newly emerging market for paid-for music downloads."

Microsoft U.K. managing director/VP EMEA Alistair Baker adds: "I'm delighted that the partnership extends to the development of the player, which will be constructed by a joint team from Microsoft and HMV, combining the industry knowledge of the HMV team with the software development, product expertise and consulting skills of Microsoft."

HMV sells a limited number of digital players in its 200 U.K. stores and is looking at expanding that range. The new service will not be compatible with Apple's iPod players. Although HMV currently stocks iPods, the spokesman says that situation "will be reviewed."

Outside the U.K., HMV offers downloads on its Australian Web site through a deal with ninemsn, a joint venture between Microsoft and Australian media conglomerate PBL. The other HMV Web sites, in Japan and Canada, do not yet offer downloads. HMV will study the progress of the new U.K. service once it is up and running before making a decision on rolling it out into other territories.

London-based HMV Europe E-commerce director Stuart Rowe is heading the development of the new service.

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