Imagine walking into Tower Records and seeing posters on the wall for Musicland. Not likely, you say, and you'd be right. No company would voluntarily promote buying from a competitor. And yet, that very thing is going on in thousands of retail establishments at this very moment.

Don't believe me? Go grab any recent release and inspect the packaging. Chances are that somewhere in the packaging there's a URL listed for both the artist and the band. No big deal - artists have been promoting fan clubs in the packaging for years. So this is simply taking advantage of the promotional opportunities of the Internet, right?

Next, open up the new Ricky Martin CD. The first thing you'll see is a blow-in card not for Ricky's fan club, but for AOL. Sony didn't ask retailers if they wanted to advertise AOL in their stores, and I don't think any retailers are getting a promotional fee for helping AOL get new customers - but I bet Sony is. Now, pop the Ricky Martin CD into the ROM drive of your computer. It contains a hyperlink to Ricky's Web site ( www.rickymartin.com) where in addition to his bio, photos, interviews, and videos, there's a "buy now" button which links you to www.sonymusic.com. (or for those of you who might like to buy in Europe, www.iMVS.com ). Next month, if retailers want coop dollars to advertise the Ricky Martin CD, Sony will make them put these URL's in their ads too.

Of course, Ricky and Sony aren't the only ones trying to steal the next sale away from retail. The new Missy Misdemeanor Elliot connects you to www.missy-elliot.com which responds to your "if you want to buy" query by connecting you to www.Electra.com and the Time Warner store. The new Biohazard release from Mercury connects you to the band's web-site, where the "buy" button connects you to www.getmusic.com (which is the joint venture of BMG and Universal). The Mirrorball CD by Sarah McLachlan connects to a variety of places, including Nettwerk's site, Arista's site, and BugJuice, the site run by BMG. Sarah gives you a choice of buying directly from her or from Getmusic.com. EMD has cut a deal with Amazon for its online fulfillment….so you get the idea.

This isn't the battery business. The retailer who doesn't like EverReady's policies can switch to Duracell. The consumer who wants Ricky Martin won't just substitute something else. Few retailers are happy about having to stock Ricky Martin CD's with hyperlinks to Sonymusic.com., but Sony hasn't provided any alternative. In fact the labels engaging in these practices haven't even informed their accounts about the blow-in cards or the hyperlinks during the solicitation process, so some retailers may not even be aware that these products promote their competition from within the store. Soon hyperlinks won't just be in CD's, but will be in DVD-Audio and downloads as well. When the buying choice is just a click away, the implications of these practices will grow exponentially.

This past week, NARM sent letters to all the major labels, their distribution arms, and their parent companies expressing our concern about the growing practice of forcing retailers to steer their own customers to competitive sites. We certainly understand that record labels (and artists) are free to choose to enter into direct competition with retailers by selling directly to the consumer. We also understand the tremendous opportunity presented by the Internet to cost-effectively target market to consumers. But building a database of consumers on the backs of the current retail base, and then using that database to cut the retailer out of future sales is highly anti-competitive and is a strategy that should not go unchallenged.

The fruitful partnerships between retailers, labels, and artists have allowed our industry to grow into a multi-billion a year business, which serves a diverse array of consumers. The Internet offers the possibility of growing our business even more. Promoting the limited offerings of label or artist-specific sites will not help grow the Internet business as much as promoting the offerings of the full service retailer. We should be looking for ways to work together on using databases to sell more music so that the next millennium can be as prosperous as the last.

Note: Originally Appeared In Billboard Magazine