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Tuesday, August 11, 2009, 10:05 am PT (01:05 pm ET)

Record industry to pit proprietary CMX against Apple's Cocktail

Four of the world's largest record companies have come together to create a new digital album format that will give customers lyrics, artwork and videos, in an effort to compete with Apple's own similar project, code-named "Cocktail."

The record companies reportedly approached Apple with their concept, but the iPod-maker allegedly rejected the proposal. In a report from The Times in the U.K., Sony, Warner, Universal and EMI detail CMX — their own independent response created by Apple's supposed rejection.

"Apple at first told us they were not interested," an unnamed record label insider reportedly said, "but now they have decided to do their own, in case ours catches on."

He continued: "Ours will be a file that you click on, it opens and it would have a totally brand new look, with a launch page and all of the different options. When you click on it, you're not just going to get the ten tracks, you're going to get the artwork, the video and mobile products."

The four record companies reportedly approached Apple about their concept 18 months ago, but they were rebuffed by the Cupertino, Calif.-based company. The report does not state whether the record companies' new format would work with iTunes or on iPods.

Apple's alleged response, under the codename "Cocktail," also aims to bundle special extras with downloads, in an effort to rekindle sales of entire albums, which have given way to purchases of digital singles. The effort is purportedly a multi-party collaboration between Apple, EMI, Sony, Warner and Universal — the same four also behind CMX.

Cocktail is rumored resemble an app, and will include both the usual notes but also separate lyrics, photos and other material that listeners could navigate outside of the usual iTunes player. It would even be possible to play all the songs from this environment. Reports suggest Cocktail could be ready by September, when Apple is expected to debut new iPods.

The record companies' own CMX will see a soft launch with a small number of releases in November. Reportedly, one of the first offerings could be a new U2 album.

"We are not going out in force,” the source told The Times. “What you are going to see is a couple of releases thrown out there to see what people like. We are working with the retailers now."