Sound idea wins backing of IBM

IBM has thrown its weight behind a small London-based company planning to offer music, supplied digitally over domestic telephone lines, from a "digital jukebox" of CD-quality sound.

The company, Cerberus, has caused a stir in the music industry with its plan. Customers would call up the service, order menus of music and perhaps try out a few samples before downloading a single or album and paying a fee of a few pence.

In a letter to the managing director of Cerberus, Ricky Adar, IBM's British manager of new markets, Rob Arntsen, says the computer giant is "interested in exploring the potential for IBM to take a minority stake in Cerberus . . . or to construct some other form of long-lasting partnership". Mr Arntsen offers technical support and equipment and the possibility that IBM might allow Cerberus access to the computer giant's worldwide Internet connection.

The Internet - the global network of computer networks - would represent a huge potential market for Cerberus. Mr Arntsen's letter says one possibility would be for IBM to include the small company's software in IBM's latest OS/2 Warp operating system. This has an Internet connection as standard.

Several other computer companies have shown an interest, but Mr Adar said the IBM offer was the most attractive so far. "IBM has complementary skills to those at Cerberus, and we like their attitude. We haven't firmed up any deal yet . . . we are not that keen on talk of ownership but we feel the OS/2 link-up is a great idea."

Cerberus aims to collect payments electronically, perhaps using a digital payment system under trial at National Westminster Bank. The computerised jukebox would also supply video and graphic material to accompany the music.

The Cerberus plan represents a considerable threat to the existing music business. Mr Adar is talking to most of the major record companies to find ways to work together. He plans to let artists set their own price tag for tracks.