Can Cisco save the music industry?

 

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By Reuters

Posted on 13 Aug 2009 at 08:24

Cisco chief executive John Chambers claims the company's expansion into the online music business could help record labels finally keep pace with emerging technology.

The company was announcing its new Eos media software that helps build and maintain websites featuring music and video as well as social networking. Chambers said it could help music companies find more profitable business models amid a shift to online music sharing and downloading.

"We face a transition that is a paradox in many ways. The consumption of music is up almost in double digits in terms of demand and yet the revenue generation is down about the same," Chambers told reporters over the company's Telepresence video conferencing system.

Media companies like music labels have had a tense relationship with Silicon Valley companies in recent years as their web technology has enabled consumers to bypass traditional media's established business models.

Many in the media world have felt that technology companies have not done enough to protect the digital media copyrights of everything from songs to movies.

"Instead of Silicon Valley and the entertainment industry almost working against each other, how do we work together to capture these tipping points," Chambers said.

Because the service will use Cisco's servers, media companies don't need to worry about maintaining the service themselves.

Warner Music was the first major entertainment company to sign up for Eos, and now has a host of artist websites on the platform offering content to users.

Cisco, better known for making routers and switches, has expanded over the past several years into new businesses including software design, servers, video conferencing, and consumer products such as cable set-top boxes and video cameras.