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[Charlemagne 8]

AOL Offering Music Catalog for Downloads
By SAUL HANSELL

In the strongest attempt yet to create a legitimate alternative to free music-trading sites, America Online will introduce a service today that lets users download and listen to a large catalog of songs.

For $8.95 a month, users will be able to listen to a catalog of music, now at 250,000 songs and growing, on their computers. Moving songs to CD's or portable players will cost more.

AOL is selling a version of a service from MusicNet, which is a consortium of RealNetworks; the BMG unit of Bertelsmann; EMI; and Warner Music, which like America Online is a unit of AOL Time Warner. AOL refused to introduce MusicNet's first product a year ago, arguing that it was too hard to use and did not have enough music.

Now AOL says that the service has improved enough to offer it to its 27 million members. That represents the most important test yet for the concept of selling music as a subscription service rather than as discrete discs.

For AOL, MusicNet also represents a crucial part of its strategy to increase its tiny share of the market for Internet users who connect over high-speed, or broadband, connections. AOL is already promoting its free music content, which includes hundreds of songs, videos and original recordings of musicians.

In the next few weeks, AOL is going to introduce an improved $15-a-month service, with a bundle of content and services meant for people who already buy broadband connections from their cable or telephone companies. That offering will include a limited version of MusicNet that will let users download 20 songs a month and listen to another 20 one time. Others can buy this limited version for $3.95 a month.

The standard $8.95 version of the service will allow users to listen to an unlimited number of songs on demand while they are connected to the Internet through a technology called streaming. They can also download the songs to their computers for higher sound quality and the ability to listen to them when not on the Internet.

Unlike music downloaded from Napster, the defunct free music sharing service, and its successors like KaZaA, a subscriber can listen to MusicNet's downloads on no more than two computers. They also cannot be copied to other devices or sent to other people.

But a premium version of the service, for $17.95 a month, gives users the right to burn 10 songs a month onto a recordable CD. These will be in the standard, unprotected format used by all music CD's, and thus those songs could be copied, converted to a popular format like MP3 and sent over the Internet at will.

So far, legitimate music download services have not been a success with consumers, not only because they charge a fee but also because the first versions had very limited numbers of songs and even more draconian rules about what users could do with them.

MusicNet initially had songs only from its owners and some independent labels. Its main rival, PressPlay, was formed by Sony Music and Universal Music.

By late last year, MusicNet and PressPlay each reached agreements with all the major labels and many independent labels as well. An independent service sold by Listen.com, called Rhapsody, also allows users to listen to songs from all the major labels and to burn some of them to CD's for $9.95 a month. Rhapsody is trying to attract attention with a limited-time offer that allows users to download individual songs at 49 cents, half its regular price.

With its $8.95 standard tier, AOL is undercutting the $9.95 basic price of PressPlay, which is mainly sold by Yahoo and Microsoft. The only other version of MusicNet, offered by RealOne, costs $4.95 a month for 100 downloads and 100 one-time streams.

So far, none of these services have attracted more than a few tens of thousands of subscribers. Somewhat more popular are online radio services that let users pick the style or even artist they want to listen to but not the actual song. MusicMatch, for example, has 120,000 subscribers to its radio service at $2.95 to $4.95 a month.

Kevin Conroy, the AOL senior vice president for entertainment, said its version of MusicNet would be far more popular because it would be integrated into the AOL service. Users will simply add the MusicNet fee to their existing AOL account and credit card numbers. And for those who subscribe to the MusicNet service, AOL's music programming, which attracts 12 million users a month, will be laced with links that will start songs playing.

Mr. Conroy added that he thought that even some users of KaZaA would be attracted because AOL's service downloads faster and does not have the errors and delays of the free music trading services.

" Right now it takes 8 or 10 searches to find what you are looking for on services like KaZaA because so many files are mislabled," he said. "We have forced people to do illegal things because we have not offered an easy, convenient mainstream way for them to do what they wanted."

AOL said that it had rights to another 80,000 songs that it would add to the service in coming months. This represents about half the popular music that is now in circulation. Much of the most popular material, from artists like Madonna and the Beatles, has not been made available on these downloading services, however.

But new artists generally sign deals that give labels the electronic rights to their works. For example, "Come Away With Me'` by Norah Jones, which won the Grammy for album of the year on Sunday, is available on the service for listening and downloading, but it cannot be burned to a CD.

The labels, artists and music publishers are paid a share of the monthly fees on all of these services in proportion to how much their songs are listened to. They also get a share of the fee paid when songs are burned to CD's.

Paul-Jon McNealy, the research director for media at Gartner G2, said that with the latest releases of MusicNet and PressPlay, the music industry has eliminated most, but not all, barriers to creating an online service that will attract music fans.

"This is close to what people will find palatable," he said. The MusicNet on AOL service, he said, will be a good introduction to online music for a mainstream audience, but the limitations are still significant.

"People want to buy their music once and own it forever," he said.

Personal Opinions:

AOL = Yuck

"One time" streaming is ridiculous.

And a note: Norah Jones CAN be burned to disc on Rhapsody ... or it could as of last night.

CVIII

[Charlemagne 8]

And another on the horizon:

http://www.napster.com/

Roxio has purchased Napster and hired Napster inventor Shawn Fanning and plans a subscription service. No more details as yet. As Roxio is a "CD Creator", I would expect some burning capabilities.

CVIII

[KingSparta]

AOL = Yuck

Diddo

This maybe the death OF AOL, AOL has draged down Time-Warner and it looks like it will fail at this also.

Roxio has purchased Napster and hired Napster inventor Shawn Fanning

Interesting.

Napster was not all that good however.

[Charlemagne 8]

Napster was not all that good however

In retrospect, you're right. But it was the only game in town at that time. I was new to the internet thing and it was the only way to listen to on-line music that I knew of. It started me on my journey to Media Center.
I also suppose it will have nothing in common with THAT Napster except the name.

CVIII