| Playing by the rules: Subscriptions for
downloaded music begin to emerge
10/11/2001
Over the next 30 days, consumers will see the first for-fee
alternatives to free Internet music file-trading –
subscription services.
This week, music publishers and songwriters agreed on basic
licensing fees for commercial Internet music distribution. Now
the music industry is poised to ask the ultimate question:
Will consumers pay for what they've been getting free?"It's a
new era," said Ric Dube, a Webnoize research group analyst.
Although studies have shown repeatedly that consumers are
willing to adopt subscription services, the first models being
rolled out by the Big Five record labels will be far from
Napster's wide-open music bazaar. None of the new services – all scheduled for opening by the
end of the year – will allow copying of downloaded music to
CDs or portable media players. Tracks will be encoded to
prevent those practices. None of the new services will contain
all the available music from every company's catalogs. RealNetworks and America Online are likely to be the
pioneers in this new era by virtue of their alignment with
MusicNet (www.musicnet.com), one of two major online music
subscription initiatives. MusicNet's suppliers represent three
of the top music catalogs – Warner Music Group, BMG
Entertainment and EMI Recorded Music. Leading MusicNet's stable of musical talent are Christina
Aguilera, Eric Clapton, Faith Hill, Whitney Houston, Madonna,
Dave Matthews and the Red Hot Chili Peppers. MusicNet – a partner with RealNetworks, AOL and a revamped
Napster – will distribute its download software, then let
distributors set pricing. RealNetworks will roll out its RealOne Music program within
60 days with a basic tier of limited MusicNet-owned music
streams and downloads for about $10 per month. Popular media players RealPlayer and RealJukebox – both
embedded in America Online 6.0 and installed on more than 35.5
million Internet-connected computers as of July – are being
phased out to make way for RealNetwork's new RealOne Player.
It is available as a preview download at www.real.com. MusicNet has begun limited trials of the download software
underlying the services that will market its music. When
subscribers open up the software, they can search all
available catalogs from Warner, BMG and EMI. Unlike the old Napster, only one copy of each digitized
song is viewable in the search results. With Napster, users
had a choice of connections and recording qualities for each
title. Mr. Dube and trial participants say the downloading process
is now faster, but troubling limitations persist. Songs can't
be queued up in a streaming playlist or burned into a CD for
play on standard home and car players. MusicNet spokeswoman Ann Garrett said MusicNet distributors
could add features such as song queuing as they build on the
company's basic technology. MusicNet will compete with Pressplay (www.pressplay.com),
another online subscription service started by Sony Music
Entertainment and Vivendi-Universal. EMI recently announced it
would also license its catalog to Pressplay as well as to
MusicNet. No announcements have been made by Pressplay about the
availability and pricing of its services except that the
company plans to launch its technology by the end of 2001.
Music from Pressplay labels, which include artists such as
Mariah Carey and Julio Iglesias, will be distributed through
Internet portals including Yahoo and MSN. The owners of the old Napster, whose file-sharing service
has been out of operation since copyright rulings in July,
said they will soon begin showing off their new subscription
model. It will feature independent artists as well as MusicNet
content, the company said. As the subscription concepts come to fruition, the
Recording Industry Association of America has stepped up legal
attacks on file-sharing services that continue to allow free
distribution of copyrighted content. The most popular are members of the FastTrack network:
Kazaa.com, MusicCity.com and Grokster.com. According to
Webnoize researchers, the network is expanding: Consumers
transferred more than 1.5 billion digital media files during
September using the network. As subscription services become available, the legal
pressure to shut down free alternatives will only intensify,
said Mr. Dube. "I think it's important for any enterprise to protect its
turf," he said. "If they're going to build a legitimate online
market, they're going to have to be serious about eliminating
piracy along the way." Catalogs represented: MusicNet
labels, plus a variety of independent jazz, blues, bluegrass,
country, zydeco and world music labels Where to find it: www.napster.com When service will be available: Late 2001 What's happening now: About to open a free trial
program Subscription costs: No pricing has been released by
the company. Catalogs represented: Sony Music
Entertainment, EMI and Vivendi-Universal Music Group Where to find it: Pressplay will be more like a
chain than a franchise. Its technology will be used to power
music services at Internet portals, including Yahoo and MSN.
What's happening now: The company is mum on any
definite launch plans. When service will be available: By the end of 2001,
although previous deadlines have been consistently pushed back
Subscription costs: Pressplay will set pricing for
all its outlets, but a pricing structure has not been
announced.Catalogs represented: BMG, EMI and Warner
Music Group Where to find it: The company (www.musicnet.com) is
franchising its technology to multiple distributors.
RealNetworks and America Online are expected to offer
subscription streaming and downloads first. What's happening now: Beta trial is under way When service will be available: Within 60 days Subscription costs: Basic service of limited streams
and downloads will be available for about $10 a month from
RealNetworks; other distributors have yet to release pricing
information.
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