Companies to Start BTB Music Subscription Service

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AOL Time Warner Inc., Bertelsmann AG, EMI Group and RealNetworks announced plans yesterday to start a business-to-business music subscription service called MusicNet.


Each company will hold a stake in the venture. The media giants will license their music to MusicNet on a nonexclusive basis. RealNetworks will contribute its technology.


MusicNet will operate as an independent company and will license its services to third-party distributors on the Web. The company's goal is to distribute music profitably to as many outlets as possible.


America Online and RealNetworks are expected to start MusicNet subscription services this summer. MusicNet also will be available to other distribution outlets, "including Napster, provided such outlets satisfy legal, copyright and security concerns," RealNetworks said in a statement.


RealNetworks said the agreement marks the first time a majority of the major record companies have licensed music to a venture whose goal is mass subscription distribution over the Web.


Two of the big five record labels, Vivendi Universal and Sony Music, plan this summer to start Duet, their own joint subscription service.


"We hope that all the major and independent labels will join MusicNet," said Rob Glaser, MusicNet's chairman and interim CEO.


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