Microsoft Radio – For a Fee

MSN launched its Radio Plus service Monday night:

Radio Plus marks a significant departure for MSN in that it is the first entertainment content to get a paid version. That’s an indication of things to come, according to Microsoft.

“We look at it as a first step in a much broader strategy that we hope to deliver in time,” said Lisa Gurry, Microsoft’s group product manager for MSN. “I can’t go into details, but this is the first of an array of offerings that we hope to deliver in the subscription space–not just in entertainment, but across the board there will be more subscription services. This is an example of how we’re going to deliver on that vision.”

For $29.99 per year, MSN Radio Plus subscribers will be able to hear content without interstitial advertisements. Currently, listeners see a banner ad for every song they hear and an audio advertisement after every sixth song. MSN estimated that on average its paying listeners will listen five times longer each session than free listeners.

Paying listeners will also be able to search for different kinds of music based on criteria such as tempo, genre, artist and other favorites. That capability derives from technology Microsoft purchased in September 2000 with its acquisition of Internet music start-up MongoMusic.

A final bonus for paying listeners is technology that eliminates the buffering delay that usually precedes streamed audio content.

….Microsoft’s competitors in paid radio include RealNetworks’ RealOne RadioPass, which costs $5.99 per month; Yahoo’s Launchcast Plus, offered at $3.99 per month or $39.99 per year; MusicMatch’s Listen.com’s Rhapsody Radio Plus, $4.95 per month or $9.95 per quarter. RealNetworks late last month agreed to buy Listen.com for $36 million.

In the market for online radio, Microsoft competes with itself, too–its Windows Media Player has a radio tuner that offers content through relationships with ad-supported, third-party radio sites.

Another competitor, MusicMatch, on Tuesday is launching Version 8 of its MusicMatch MX radio service and jukebox.
According to MusicMatch, the experiment of paid radio subscriptions has proven successful. The company, which launched its subscription service in June 2001, counts more than 138,000 active paying subscribers and nearly 2 million listeners to its free radio service.

“From the business model perspective, we’ve made it work well,” said Christopher Allen, MusicMatch’s senior vice president of marketing and strategic planning. “We’ve been competing with Microsoft for quite some time, and they have nowhere near the depth of personalization technology that we have.” [CNET]

So there.