Record giants join online revolution

Madonna's songs will be among the catalogue available through MusicNet

LONDON, England (CNN) -- Music fans will soon have more choice when it comes to downloading their favourite tunes from the Internet -- for a price.

Analysts say the decision by three global record giants to join an Internet software company in a subscription service will bring nothing short of a music revolution.

The companies -- EMI, AOL Time Warner and Bertelsmann -- have licensed their catalogues to RealNetworks to be downloaded and streamed over the Internet for a fee via its MusicNet service.

The artists available on MusicNet from later this year will range from Madonna to Whitney Houston, Robbie Williams to Santana, the Corrs to Red Hot Chili Peppers.

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Leading classical, jazz, opera and world-music releases will also to be included, EMI said.

Music from other major record labels as well as independent labels could eventually become available, as MusicNet also wants to license their music.

While details are not yet confirmed, MusicNet will probably offer consumers the right to download and listen to varying quantities of music for a fixed monthly fee.

The price itself and whether or not the database will incorporate new releases as soon as they are available remains to be determined.

"The launch of MusicNet will catalyse an exciting new era in digital music distribution," said Rob Glaser, chairman and interim CEO of MusicNet, and also chairman and CEO of RealNetworks.

"We look forward to working with the entire industry to make music subscription services a reality."

Artists, including the Corrs, will not have their copyright breached through MusicNet

MusicNet will not be a Web destination that provides music subscriptions directly, but will provide the technology and music files to other services -- including even the bane of the music industry, Napster.

"The day of using the Internet to distribute music safely, conveniently and legally to the mass market has finally arrived," said Dick Parsons, co-chief operating officer of AOL Time Warner. AOL Time Warner is the parent company of CNN.com.

"People have been saying, 'Is the music industry afraid of the Internet?'" Parsons said.

"It's not a question of fear. It's a matter of doing it in a fashion that respects the rights of the people who create the music. We think this partnership solves that part of the equation."

Napster allows Internet users to copy digital music files from other people's computers for free without the permission of artists, labels or publishers.

Five major music labels successfully argued for a court injunction that requires the California-based Napster to block copyrighted songs.

Napster says it has implemented an electronic filter system that prevents copyrighted songs from being downloaded through the service, but the labels have dismissed the company's efforts as ineffective.

But if Napster satisfies legal, copyright and security concerns, it could one day be an approved MusicNet distribution outlet.

MusicNet could face competition from a similar subscription service being planned by the other two major labels, Vivendi Universal's Universal Music and Sony Music Entertainment.

Universal and Sony's service Duet is expected to start as a streaming service and provide downloads soon afterwards.

Internet MP3 music site iCrunch, which says it pays royalties on music available, charges 99p per song.

ICrunch CEO Alon Harnoy told CNN Business International that consumers would use the MusicNet site if it was "cheap, easy to use, and with a wide variety."

He predicted that the lack of such big names as U2 and rapper Eminem would prevent MusicNet from becoming a "one-stop shop" for consumers.

Reuters contributed to this report.

RealNetworks confirm e-music bid
Apr. 2, 2001
Rock star applauds restraints on Napster
March 14, 2001
Napster filter welcomed by music industry
March 2, 2001

AOL Time Warner
RealNetworks
Bertelsmann
I C R U N C H

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