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Disaggregating digital distribution

Ioda_logo The Independent Online Distribution Alliance, better known as IODA, launched itself in 2003 to help independent labels, artists and others in the music industry make the leap from physical to digital. One of its functions has been to act as a conduit to online retailers, such as Apple's iTunes Store, eMusic, Napster and Rhapsody. Now it's giving its members the option of being retailers, too.

Specifically, IODA is supplying labels and artists the technology to plug downloadable music stores into their websites. Unlike some earlier efforts to sell downloads, the stores integrate seamlessly into the sites with other e-commerce efforts (e.g., t-shirt and CD sales). That's important, IODA founder and CEO Kevin Arnold said, because it means consumers will be asked only once to give up their billing information -- a step that prompts many impulsive buyers to change their minds. It should also help that the request will be coming a label or artist the consumer likes, rather than an unfamiliar merchant or middleman.

Speaking at a conference for music retailers in San Francisco Tuesday, Arnold said he didn't think the stores would compete with iTunes and other retailers with broad selections. Instead, it's a way to give music fans more opportunities to buy songs, to push paid downloads into more places on the Net where fans go. That's an important element of the music industry's transition into an era with much tougher competition for the consumer dollars. Plus, many indie labels have a taste associated with their names, a sound or personality that their customers have come to know and appreciate. Unlike a Columbia or a Capitol, indie labels often develop a following of their own. That's all the more reason to add downloadable tracks to the CDs, hoodies and chotchkes for sales on those sites.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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