MusicNet Switches On Delivery System
In a step forward for legally sanctioned digital music on the Internet, MusicNet -- a joint venture of AOL Time Warner, Bertelsmann, EMI Group and RealNetworks -- on Thursday announced the launch of its music delivery system.
MusicNet, which will not offer content directly to consumers, is making its technology available to distribution partners AOL Time Warner and RealNetworks. The pair will incorporate MusicNets technology into future consumer offerings. MusicNet is providing music content from BMG, EMI, Warner Music Group and Zomba Recording.
Napster, the embattled music sharing startup, is also licensing content from MusicNet but it is still in the process of negotiating rights and settling lawsuits with the music industrys largest companies. Earlier this week Napster reached an agreement with associations representing U.S. music publishers and songwriters, under which Napster will pay $26 million in damages for past "unauthorized uses of music." Napster also will pay an advance of $10 million for future licensing royalties. Napster, which was forced by a court order to suspend its free file-swapping service in July, still faces copyright-infringement lawsuits by the major music labels, which CEO Konrad Hilbers said, the company is actively trying to settle.
MusicNets technology platform, developed largely based on RealNetworks software, will offer both streaming and downloading of content. MusicNet incorporates RealNetworks RealSystem Media Commerce Suite, a secure digital rights management system.
Pricing will be set by MusicNets distribution partners. None of the current distribution partners -- AOL, Napster and RealNetworks -- has announced pricing. MusicNet will offer about 100,000 songs by artists including Bjork, Eric Clapton, Madonna and Carlos Santana.
Rival online music service Pressplay, a venture owned by Vivendi Universals Universal Music and Sony Music, said this week that it would launch by years end. It was originally planning to launch this month.
But analysts said consumers have grown accustomed to scooping up free MP3 files from Napster and other peer-to-peer services and are slow to line up to pay for online music. EMusic.com, so far the most successful subscription-based online music service, has signed up only 25,000 paying customers more than a year after its launch.
"Its going to take a while for these services to become compelling consumer services," said Matt Bailey, an analyst with Webnoize, a digital entertainment research firm.