The Next Step

MusicNet and Pressplay appear to be close to offering music from all five majors:

THE DEALS WILL FILL one of the major gaps that both operations have faced in competing with free, unlimited peer-to-peer song-swapping outfits. Despite their ties to the top names in the music business, the two services have been unable to offer full catalogues of artists from all five companies. MusicNet is backed by AOL Time Warner Inc., EMI Group PLC and Bertelsmann AG, along with RealNetworks Inc. Pressplay is owned by Sony Corp. and Vivendi Universal SA, and it has already had a licensing deal with EMI.
MusicNet has completed a licensing agreement to use music from Universal, the biggest music company, and is close to a deal with Sony, according to people with knowledge of the matter. Pressplay said Monday it had signed a deal with BMG, Bertelsmann’s music unit. People with knowledge of the matter say the service also is close to reaching terms with Warner Music Group.
“We are close to announcing that we will have music from all five majors as well as several new independent labels,” said a spokeswoman for MusicNet. “Pressplay continues to deliver to our members the features and music they want,” said Michael Bebel, president and chief executive of pressplay.
People familiar with the matter said the new deals are expected to include several features that online-music users favor, including permanent downloads. These songs also can be “burned” onto compact discs. In addition, MusicNet is expected to secure similar rights from its current three label backers and aims to roll out a new version including those features by year end.
The new offerings are the latest signs of progress from the authorized, fee-charging online music firms as they strive to better compete with renegade peer-to-peer services that can deliver unlimited, free songs because they aren’t licensed. Record labels, as well as movie studios and other entertainment firms, are battling those song-swapping operations on a variety of fronts. Besides suing the services themselves, they have taken steps toward going after individuals who offer up large troves of free songs online. Unlike Napster Inc., the popular song-swapping service put out of business after legal challenges from the music industry, most current renegade services don’t run works through a central server.
Despite the new agreements, the major-label-backed online services will still lack some popular tunes, because of the complex structures of rights surrounding some major musicians’ works. Music publishers and artists often have veto rights.