The German recorded music industry is transferring its B2B online music distribution platform from Deutsche Telekom's T-Com division to its T-Online subsidiary.

The German recorded music industry is transferring its B2B online music distribution platform from Deutsche Telekom's T-Com division to its T-Online subsidiary.

Effective today, T-Online will operate Phonoline alongside its own Musicload download platform. The German music industry has taken steps to ensure that all merchants using Phonoline will have offers to use the new T-Online-powered platform, according to Gerd Gebhardt, chairman of labels body BPW. Concert promoter CTS Eventim is among Phonoline's current clients.

Phonoline was initially heralded as an industrywide solution to Germany's crippling illegal download problems. But its entry into the German online music market was marred by a belated launch; the service went live March 18, almost a year after its scheduled debut, due to technical problems. The decision to shift platforms is seen as a way to try to recover from the damage done to Phonoline's reputation by the postponement. Industry sources say Deutsche Telekom stands to pay damages to the BPW in the region of €3-5 million ($3.67-$6.10 million) due to the late start.

A T-Online spokesman says the company aims to boost Phonoline catalog to 500,000 titles by the end of the year. The service went live with an estimated 250,000 titles.