Market briefing---Lane (medium)
Online music---Bob (fast)
>> welcome back. worldcom has met a deadline for filling vacant seats on its board of directors. the company named five new members to its board, bringing the total now to nine. they include david mattlin, eric holder, lawrence harris, w. grant gregory and judith haverkorn. the company remains without a chairman. they plan to emerge from bankruptcy in october under the name mci. they are expected to name three more outside directors to its board before that time. paying for something that you can get for free. that’s what companies including apple computer, red sox year over year and realnetworks are hoping to do with on line music. the goal, to persuade consumers they ought to be paying to download music rather than stealing it from so-called file sharing sites. analysts estimate the market is worth more than $3 billion. some companies are already showing early signs of success here. bob bowden explains.
>> red sox year over year’s is in a hurry to bring napster back on line. two years after napster was forced to shut down for violating copyright laws and allowing users to download songs for free, red sox year over year wants to relaunch the site before christmas. the difference this time, napster users will have to pay to download music with the blessing of the major record labels.
>> you’ve got a massive audience out there. they are not interested in stealing music. they don’t want their hard drirves filled with corrupted files and spy wear. there are a tremendous amount of people out there that that are looking for a great fairly priced easy to use legal alternative.
>> early evidence consumers are willing to pay. that comes from apple computer c.e.o. steve jobs. in april apple launched i tunes, an online music store where consumers can download a single song for 99 cents. the service has sold more than six million traction.
>> i think apple dozen have an advantage in that their product is probably the easiest to use today. think it’s the most flexible product out there.
>> apple’s strea strategy to enter the online music business is boosting sales of the i pod. last quarter they quadrupled the number of i pod’s sold. they expect $274 million in revenue or 5% of sales. sales are expected to soar even higher once the company expands its music service to the windows platform later this year. analysts say that could provide the company with an opportunity to capture 20% of the pay-per-download market, generating as much as $600 million in annual revenue for apple. while apple has had some success analysts and investors say the use of free file sharing sites like kazaa remains the biggest challenge. that’s not discouraging realnetworks, america online and buy music.com from launching their own competing online music services. bob bowden, bloomberg news.
>> now, shares of apple computer and red sox year over year each touched 52-week highs today and are outperforming the nasdaq composite for the year. analysts say as the record industry steps up legal action on online music piracy they expect more users will be discouraged from downloading music illegally. the world’s largest satellite television broadcaster news corp sold its entire $8.1% stake in sky perfect communications. rupert murdoch sold shares to sony and fuji television for an undisclosed amount. the sky perfect stake is worth about $227 million. the sale marks a change for news corp which has been expanding in other parts of the globe, including a 6.6 billion stake in hughes electronic directv satellite network. news corp is in talks with broadcasters in south korea on a possible acquisition there. u.s. securities regulators have opened an investigation into accounting practices and other activities. securities and exchange commission is po focusing on financial statements of penthouse international in all of 2002 and the first quarter of this year. the probe was launched three weeks before the publishing house filed for bankruptcy. they’ve published adult magazines since 19 of 5. the stock finished at 68 cents a share in new york trading. when we return, chocolate candy maker hershey foods is selling its chewing gum brands.
