Six of the biggest music retailers in the US have joined forces to sell music via the Internet.
The joint venture, called Echo, is to fight back against the damage the Internet is alleged to have caused the music industry.
Best Buy, Hastings Entertainment, Tower Records, Trans World Entertainment, Virgin Entertainment and Wherehouse Entertainment hope to obtain licences from record companies to sell music online. Both the companies' own Web sites and a collective site will be used to market the service.
Over the past two years, US music retailers have suffered from falling sales. Last year alone, sales were down about 9 per cent, according to Nielsen SoundScan data.
The decline has caused retailers to shut some stores, and closures are forecast to be in the hundreds this year. Last week, Wherehouse Entertainment filed for Chapter 11 bankruptcy protection. It has already shut 30 shops and said it plans 120 more closures.
Wherehouse chief executive Jerry Comstock said the increase in illegal downloading of music and CD burning, coupled with continued pressure from big discount retailers to sell product below cost, have resulted in sales declines.
'The retail music environment has changed dramatically over the past three years and through the Chapter 11 process we believe Wherehouse will be able to restructure its operations and shed underperforming stores,' he added.
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