Big Music Stores Squelch Download Plan

Echo, a joint venture launched with a splash of publicity in early 2003, was designed to give the big brick-and-mortar retailers such as Best Buy and Virgin Megastores an online foothold that would help them beat back file-swapping services and digital stores.

But mounting development costs, a glut of rivals offering bargain-rate services, and smaller-than-hoped-for sales across the online-music spectrum, even at Apple’s successful store, have led the big retailers to pull funding for the project, its founders say.

“The reality is that compared to all the retailers’ bottom lines, even Apple’s music sales are insignificant,” said Alex Bernstein, a co-founder and investor in the Echo project. “Our board repeatedly told us that.”

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