Coca Cola is planning another music venture to replace Mycokemusic.com, the music download site it is closing at the end of July.
A spokesman confirmed it was considering options, but would not be drawn any further on whether it was scheming, say, a music download service for mobile phones.
Coca Cola said in a statement the closure would allow it to "offer consumers the best experience" and allow it to "explore the best ways for our customers to access music".
Mycokemusic.com was one of the first corporate download sites to launch in the UK in 2004 and quickly gained a strong position. It dominated UK market share before the arrival of iTunes. A year after it launched, Mycokemusic.com had six per cent market share and held the number four market spot, after iTunes, Napster and Wippit.
Its share subsequently halved to three per cent, and it has been overtaken in the UK market by allofmp3.com, MSN and CDWow. Even Virgin and Tesco have gained as much market share as Coke, and all the entrants have taken a bite out of Apple's share, which fell 10 points in the four months to March.
Greig Harper, owner of XTN Data research, said Coca Cola had lost share because it had failed to understand its customers.
"The thing that the industry needs to wake up and realise is that music services are not meeting the demands in terms of price and restrictions," he said.
AllofMP3.com, a Russian firm, had taken second place because it did not sell music laced with software code that prevents people from copying it, and what it did sell is for very low prices.
The US has even threatened Russia with exclusion from the World Trade Organisation unless AllofMP3.com is closed down; while the British Phonographic Industry, a trade lobby, has threatened to sue the firm in the courts. All this has helped its sales no-end, according to Harper.
Coincidentally, on the day Coca Cola announced the closure, the European Union declared a partnership to snuff out "intellectual property pirates". A statement attributed to EU trade minister Peter Mandelson and other bigwigs said it is going to go after Russia and China first.
It is sending teams of diplomats round the world to persuade other countries to honour their IP laws. They would also share customs, intelligence and surveillance "responsibilities".
It would also collaborate more intensely with the private sector, it said, implying that the intention would be to do things like strengthen copy protection and stamp out music sharing once and for all.
There are areas of the private sector, which the EU/US IP police are presumably not so keen on consulting, that have taken a stand against copy protection and do well out of it. The legal British download service Wippit said it had poached customers who had gone to Mycokemusic.com with free vouchers they got from Coke cans, discovered the music was expensive and copy protected and then decided to go elsewhere for music in future.
"We were happy to sit in their slipstream and pick up their deserters," said a statement from Wippit. ®