Tokyo-based cable broadcaster and broadband supplier Usen Corp. has set up a new company with independent labels Avex Group Holdings Inc. and Victor Entertainment Inc. to produce on-demand music CDs over the counter at dedicated kiosks in Japanese music stores. The service will launch in spring 2009.

The new firm, Music Grid, will sell a system that will receive music data through the internet and allow retailers to produce CDs based on the online data. CDs will be created in two to three minutes using the system over the counter, enabling retailers to respond to diversifying needs from consumers without having excess CD inventories.

Music Grid is capitalized at 300 million yen ($2.82 million). It is owned 53.5% by USEN and the rest by the partners, Avex, Victor and investment firm Keidashu Inc.

Details, including the line-up of titles available for the service and prices, will be decided later. However, the major labels are not on board and this service will not sell new releases from Avex and Victor. Instead, the focus will be on buying the rights to back catalog from mainly Japanese artists from the 1940s to 1980s; the service is aimed at people who no longer buy music by offering them a cheap and quick way of purchasing music from artists they listened to in their youth.

The customer will go to a kiosk within a store and make the purchase, and the CD and artwork will then be printed like the original release, with the CD appearing to be vinyl if that is the way the music was originally issued. All liner notes, booklets and information will be included in the reproductions.

Prices of the CDs made through the system will likely be lower than those of standard CDs. Japanese label Columbia Music Entertainment also plans to begin a similar service in November.

Usen Corp. is the largest cable radio broadcaster in Japan with 1.2 million subscribers, as well as being a major broadband provider. The ISP side of Usen's business means that it already has the infrastructure to provide dedicated connections for the Music Grid service; all the data for the music and artwork will be stored centrally and then accessed when a customer orders a release.

It has not been confirmed whether retailers will lease the Music Grid Equipment or service, but the company says it will use consumer grade PC and printers to keep costs down.