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Subscription Services To Expand Selection Of Downloadable Music

4/30/2001 02:00:00 AM Eastern

NEW YORK — The five major music companies announced plans to greatly expand their selection of songs for authorized music downloads when two new subscription-based streaming/downloading services go into operation, but their plans — at least initially — won't make Internet portables more appealing for consumers to buy.

In one announcement, EMI, BMG, and Warner Music announced plans to open up their entire catalogs for streaming and downloading over the Internet through a subscription service that will, initially, lock downloaded music files to a PC's hard drive. As a result, the downloaded files can't be transferred to a recordable disc or to Internet-audio headphone portables.

The service will be operated and licensed to Internet sites by MusicNet, a new company owned by Real, AOL Time Warner (Warner Music's parent), BMG, and EMI. The service will be available in late summer or early fall through AOL, Real Networks, and possibly other Internet sites, said a Real spokesman.

In a separate announcement, Sony and Universal's Duet joint venture signed up portal Yahoo as its first nonexclusive distributor of Duet's subscription-based streaming and download service. Yahoo plans to launch service to consumers in the summer, but Sony and Universal said only streaming music would be supported at first. Authorized downloads will come "soon after," each company said.

Duet has rights to the entire catalog of Sony and Universal music, and a Universal spokesman said Duet will offer a greater selection of authorized downloads than currently available from either company.

Neither Sony nor Universal would reveal whether downloaded music would be transferrable to portables or recordable discs, but a Sony spokeswoman said that if transfers to portables were allowed, transfers might be limited to SDMI-compliant portables.

Although the MusicNet and Duet announcements won't have a significant impact on CE retailers in the short term, the announcements are significant in the short and long terms for music enthusiasts.

The MusicNet announcement marks the first time that the three participating music companies have opened up their entire catalogs for authorized downloads, said one music industry executive. Whereas the three music companies currently offer hundreds of songs for authorized downloads, the MusicNet service will offer tens of thousands of songs from the three at launch, the executive said. The three companies already make their entire catalogs available for streaming, he noted.

Authorized downloads would also be available for the first time through AOL to that company's huge subscriber base, the companies said.

The Duet announcement is significant for two reasons. First, Sony and Universal music will be available for download for the first time on the high-traffic Yahoo portal (although the precise timetable hasn't been announced). Second, Duet has rights to the two companies' entire catalog and expects to offer more songs for download than currently offered by either Sony or Universal.

To date, about 1,000 Sony songs are available for authorized downloads through various sites. Universal said "thousands" of its songs are available for authorized downloads.

Neither Sony nor Universal would say how many songs would be available at the launch of Yahoo's service. A Universal spokesman noted that "Duet expects to launch many more songs because in order to interest consumers in a subscription service and have them pay a monthly fee to gain on-demand streaming access, there has to be a great depth and broad selection of content."

Neither MusicNet nor Duet would disclose which Internet audio codecs or digital rights management (DRM) technologies they will support for downloads, thus making it unclear which existing Internet portables will be compatible with the service.

Referring to MusicNet service, however, a Real spokesman said "it's in everyone's interest to make the service as universal as possible." Similarly, a Warner spokesman said one of MusicNet's goals is to "bring coherency to codecs and DRMs."

To bring additional coherency to the Internet's codec fragmentation, a Real spokesman held out the potential for Sony and Universal to make their catalogs available through MusicNet.

Though MusicNet initially won't support transfers to portables or to recordable CDs, a Real spokesman said, "Our goal is to make digital music as user-friendly and portable as possible." Said a music company source, "I don't think the technology currently exists where, once music is off the hard drive, it can be monitored."

MusicNet partners declined to detail the technology behind a subscription download service in which music residing on a hard drive would be rendered unplayable once a subscription expires.

The Sony spokeswoman also declined to elaborate on how the Duet service would accomplish this goal. She noted, however, that the potential exists to allow for a service tier in which downloads don't time out when a subscription expires.

The subscription nature of the MusicNet service, however, is what prompted BMG, EMI, and Warner Music to open up their entire catalogs for downloads, one music company source said. "We're licensing our entire catalog because it's secure and because it's a timed-out subscription," the executive said.

This music company source also said BMG, EMI, and Warner will continue to support the codecs and DRMs that they currently support through other authorized download sites.

"We'll continue to license content to other music venues with existing and possibly future codecs," the executive said.

Sony said it would, too. Presumably, so would Universal.

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