page 2 The success of file-trading companies
brought the go-go days of the late
'90s to a halt. Free music was blamed
for the several high-profile digital
music failures, Musicmaker's in-store
kiosks and the Musicbank locker
service. Remaining executives
became gun-shy about promoting
new products meant to overturn the
$40 billion recording industry.
That has made tracking the success
of pay models difficult, since
companies are reluctant to discuss
facts and figures. Invariably, any new
service will be compared to the 80
million people Napster attracted, and
right now, the well of customers is still
shallow.
That has especially been true for
high-profile companies. The two
major label-backed services, MusicNet
and PressPlay, declined to discuss
how many people used the service,
citing the short time each has been
available. Listen.com, another
independently owned business,
declined to say how many paying
customers its streaming Rhapsody
service has.
That silence gives the impression
that online music isn't moving
forward. But that perception appears
misguided, even as rogue,
peer-to-peer, file-trading networks
facilitating billions of song-swaps
siphon off customers. Numbers might
not be skyrocketing, but business is
growing.
RealNetworks, which distributes
MusicNet, has 500,000 paying
customers, far and away the most for
any online service. However, RealOne
includes news and sports radio along
with music. The company doesn't
break its customers down into
separate subscriptions, so it's unclear
if MusicNet boosted sales.
The other end of the spectrum is
Emusic, a digital download business
that has attracted 40,000 subscribers
despite its lack of popular music. The
company, owned by French media
conglomerate Vivendi Universal, uses
unique affiliate programs with ISPs
and individual websites as well as a
lucrative deal with Hewlett-Packard to
attract users.
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