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You Might Be Hearing an Echo

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 industry’s first retailer-driven digital music consortium committed to bridging the gap between brick and mortar and digital music distribution.

The consortium, 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.

“The Echo 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.

“The message 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.

“For over 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 Tower’s continuing commitment to serving our customers,” said Kevin Ertell, SVP Online Operations at Tower Records.

"We have 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 Music brands.

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.”
“Retail has always been about more than simply selling CDs,” added Jerry Comstock, CEO of Wherehouse Music. “We are in the customer relationship business.”

Best Buy, Hastings, Tower, Trans World, Virgin, and Wherehouse each own equity in Echo and the retail founders collectively own a controlling majority of Echo.

“Working 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.

Strauss Zelnick, former CEO of BMG Entertainment and an investor in Echo through ZelnickMedia, will serve on Echo’s 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 today’s announcement, visit

About Best Buy Co., Inc.
Minneapolis-based Best Buy (NYSE: BBY) is one of North America’s 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 (, Future Shop (; Geek Squad (; Magnolia Hi-Fi (, Media Play (, Sam Goody (, and Suncoast ( The Company reaches consumers through nearly 1,900 retail stores in the U.S., Canada, Puerto Rico and the U.S. Virgin Islands.



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