Record labels make online music safe
AOL, EMI, BMG create online music service MusicNet
By Nadja Hahn, FTMarketWatch
Last Update: 10:37 AM ET Apr 2, 2001
LONDON (FTMW) - AOL Time Warner (AOL: news, msgs, alerts) , EMI (UK:EMI: news, alerts) , Bertelsmann (DE:522990: news, alerts) and RealNetworks (RNWK: news, msgs, alerts) said on Monday they're teaming up to create an online music subscription service, providing a platform for the secure distribution of music over the Internet.
The new venture called MusicNet will offer a collection of downloadable and streaming music, using advanced technology, which helps to distribute contents of record labels EMI, BMG and Warner Music on a non-exclusive basis on the Internet, while securing the artists' copyrights.
Realnetworks, which provides content, such as broadcasts over the Internet for a fee, will provide the distribution technology. All four companies will own a minority stake in MusicNet.
MusicNet, which is to become an independent company, will initially license its platform to AOL and Realnetworks and extend its offers to other distribution outlets, including Bertelsmann-funded Napster, provided that they meet security requirements.
"Hey Mr. DJ"
The online music platform will combine the works of artists, such as Madonna, Robbie Williams, Red Hot Chili Peppers, Bjork and Santana.
"MusicNet will offer consumers an easy, simple way to get the highest-quality music while also protecting the intellectual property of record companies and artists," said Rob Glaser, Chairman and interim CEO of MusicNet, in a statement. Looking ahead, we hope that all the major and independent labels will join MusicNet to create one-stop music subscription offerings with unbeatable consumer momentum."
The move is a response to online music downloading service Napster, which offered music downloads for free until it was sued by the world's major record labels for jeopardizing their artists' copyrights.
Last autumn, Bertelsmann e-Commerce then struck a deal with Napster, dropping its lawsuit and agreeing to take a stake in the company in return for it becoming a subscription based service.
Bertelsmann and EMI are currently in merger talks after the planned combination of EMI and Warner Music failed last year to clear the way for the merger of AOL and Time Warner.
Nadja Hahn is a reporter for FTMarketWatch in London.
