Best Buy Co., Inc.
(NYSE: BBY), Hastings Entertainment, Inc. (Nasdaq: HAST), Tower
Records, Trans World Entertainment Corporation (Nasdaq: TWMC)
operator of FYE Stores (For Your Entertainment), Virgin Entertainment
Group, and Wherehouse Music today announced the formation of Echo,
the industrys first retailer-driven digital music consortium
committed to bridging the gap between brick and mortar and digital
created through an investment in Los Angeles-based Echo, will seek
competitive licenses to enable its retail members to effectively
compete in the digital music marketplace and to launch a new era of
consumer-focused digital music offerings. Once licenses are obtained,
retailers will be able to deliver digital music products and services
through individually branded, or Echo co-branded offerings. The
consortium will build upon the in-store marketing capabilities of its
retail partners to drive consumer awareness of digital music
offerings, and will help drive adoption of new, advanced digital
music services as they evolve.
consortium was established to create a viable business strategy that
combines physical and digital music distribution, said Dan
Hart, CEO of Echo. With competitive licenses, music retailers
can utilize their long history and expertise in building customer
relationships, marketing music and breaking new artists to provide a
digital music experience that truly serves the consumer.
Best Buy is
focused on creating consumer-based solutions to digital entertainment
services. As part of the retail consortium, we will be better able to
articulate our message to consumers, to content owners and to those
involved in setting standards and legislation regarding this evolving
business, said Scott Young, Vice President of Digital
Entertainment at Best Buy.
of music retail is simple: we have always excelled at selling music
to consumers, and we plan to extend our consumer relationships from
the physical world into the digital world, said John Marmaduke,
CEO of Hastings Entertainment.
forty years Tower Records has held a deep commitment to providing
consumers with a breadth of entertainment choices. The formation of a
digital retail platform reflects Towers continuing commitment
to serving our customers, said Kevin Ertell, SVP Online
Operations at Tower Records.
closely monitored the evolution of digital music in recent years and
we feel that the timing is finally right for building a business
around it. Moreover, we feel the Echo consortium is uniquely
positioned to drive adoption and, ultimately, success," said
John Sullivan, CFO of Trans World Entertainment, which owns the FYE
(For Your Entertainment), Coconuts, Strawberries, Specs and Planet
Glen Ward, CEO of
Virgin Entertainment Group, concurred. Virgin has built its
brand and its business on providing great value to consumers. In the
digital world, we will do the same.
always been about more than simply selling CDs, added Jerry
Comstock, CEO of Wherehouse Music. We are in the customer
Hastings, Tower, Trans World, Virgin, and Wherehouse each own equity
in Echo and the retail founders collectively own a controlling
majority of Echo.
together with Echo enables each participating retailer the
opportunity to work for the benefit of consumers, said Arnie
Bernstein, former President of the National Association of Recording
Merchandisers, who will serve on the Board of Echo.
former CEO of BMG Entertainment and an investor in Echo through
ZelnickMedia, will serve on Echos Board as well. The bold
commitment of the music retailers makes Echo an attractive
alternative to label-backed initiatives such as MusicNet and
pressplay, said Zelnick. With the retailers music
selling experience, distribution capability, and existing trading
relationships with content owners, Echo and its retail partners are
poised to lead the digital music market to the next level of consumer focus.
Alan Malasky, of
Porter Wright Morris & Arthur, in Washington, D.C., antitrust
counsel to Echo, agreed. Under the terms of the venture, each
retailer participant will independently market and price the digital
entertainment products it offers, in the manner that will best serve
its consumers. This will, for the first time, bring real competition
to the digital music marketplace, said Malasky. For more
information on todays announcement, visit http://www.echo.com/.
Buy Co., Inc.
Best Buy (NYSE: BBY) is one of North Americas leading specialty
retailers of consumer electronics, personal computers, entertainment
software and appliances. The Company operates retail stores and
commercial Web sites under the names: Best Buy (BestBuy.com),
Future Shop (FutureShop.ca);
Geek Squad (GeekSquad.com);
Magnolia Hi-Fi (MagnoliaHiFi.com),
Media Play (MediaPlay.com),
Sam Goody (SamGoody.com),
and Suncoast (Suncoast.com).
The Company reaches consumers through nearly 1,900 retail stores in
the U.S., Canada, Puerto Rico and the U.S. Virgin Islands.