Capitol, AOL Plan Direct Music Sales Online

The direct sale of music over the Internet--until now mainly the province of garage bands and independent record labels--will be hitting the mainstream under separate deals involving Capitol Records Inc. and America Online Inc.

Beginning next week, fans of Duran Duran will be able to purchase and download onto their home computers two versions of the band’s new single a month before the Capitol album reaches stores.

Also next week, America Online--the leading Internet access provider, with 9 million subscribers--is expected to announce plans to sell downloadable music through the Hub, its popular music and entertainment site, according to a person involved in the deal.

The Duran Duran song “Electric Barbarella” will be available Tuesday at https://hollywoodandvine.com in a basic version for 99 cents and in a longer, Internet-only remix for $1.99, said Robin Bechtel, Capitol’s senior director for new media. The album, titled “Medazzaland,” is set for release Oct. 14.

It is believed to be the first time a major record label will sell music directly via computer, as opposed to taking online orders for CDs to be shipped by mail. Capitol plans online sales of five other new singles this year, Bechtel said.

Both Capitol and America Online are teaming up with tiny Liquid Audio Inc., a Redwood City, Calif., software firm founded just last year. Liquid Audio provides technology that enables music to be encrypted and digitally “watermarked” for copyright protection.

Major record labels still consider online sales to be mainly a promotional vehicle. But for obscure artists and small labels that lack access to national distribution, the Internet is becoming a means to get music to a wider audience.

N2K Inc., a New York-based independent label, has been a pioneer in Internet distribution. It began selling downloadable music in July over its Music Boulevard site, also using Liquid Audio technology.

The America Online deal may have special significance for independent labels and lesser-known bands, said Scott Burnett, vice president of marketing at Liquid Audio. Artists who buy Liquid Audio servers, at prices from $2,500 to $50,000, will gain a link to the Hub--and a much vaster audience than they could hope to reach through their own Web sites.

The servers and related software basically allow a band to become its own distributor, Burnett said.

Because it takes about 12 minutes to download a three- or four-minute single on a 28.8-kilobytes-per-second modem, selling full-length albums over the Internet is not yet practical.

By this Christmas, however, several electronics companies are expected to be selling CD recorder machines (CD-Rs) for about $300. The devices enable computer users to download music onto blank CDs and create their own selection of tunes.

Without a CD-R, customers are limited to listening to the downloaded music on their PCs.