July 31, 2002 4:42 PM PDT

Pressplay to offer unlimited downloads

Stung by tepid market reception to its online music subscription service, Pressplay plans to offer listeners access to an unlimited supply of songs for a set period for a single fee.

The company, backed by the major music labels, is expected to announce a new pricing plan and software package beginning Thursday, according to sources familiar with the plans. Under one section of the new plan, subscribers will be able to download or stream an unlimited number of songs to their computer for a single annual fee of $179.40, the equivalent of today's $14.95 monthly fee, according to a customer service representative.

Although other independent companies have offered unlimited access to music before, it's the first time one of the label-backed subscription plans has cracked the door this wide to its catalog. As such, it marks a concession that the "all you can eat" expectations of consumers reared on services like Napster or Kazaa may well be a permanent feature of the online music landscape.

"It's a recognition that their previous offering didn't resonate with consumers," said Michael Goodman, a senior analyst with research firm The Yankee Group. "And it shouldn't have--faced with the choice between unlimited content for free (through file-swapping services) or limited content that people couldn't do much with--it was a no-brainer."

Pressplay, along with rival MusicNet and independent companies including Listen.com, FullAudio and RioPort, has spent the last seven months trying to persuade consumers to pay for music subscription services instead of downloading them from peer-to-peer services. But to win licenses from the major labels, these services have imposed strict limitations on what consumers can do with their music, which heavily undermines their appeal.

Pressplay, a joint venture between Sony and Vivendi Universal, has gone the furthest in allowing some limited ability to burn songs to CDs and transfer them to portable device. But its model, charging $14.95 a month for just 50 downloaded songs and 500 streams, had drawn criticism from consumers and analysts.

The new plan eliminates that barrier. Along with the unlimited downloads and streams, consumers will be able to burn 120 songs a year to CDs after paying the annual fee. Packages that allow more songs to be burned will be available for individual purchase.

Sources familiar with the plans said other new features will be added or expanded, including the offer of downloads that can be permanently downloaded and transferred to portable devices.

However, sources said that some of the music available on Pressplay, which offers songs from Sony, Universal and EMI Music, will not be available under all of the features of the new plan.

A Pressplay representative did not immediately return calls for comment.

Analysts said the move indicates that Pressplay's parent music labels are beginning to take a more flexible approach to the digital market.

"There clearly has been a loosening of the (major music labels') business rules, and that?s a step in the right direction," Goodman said.

Pressplay's move to an all-you-can-eat model isn't good news for Listen.com, which had set apart its streaming-based subscription service from rivals by offering unlimited consumption. Listen does have access to all five major record catalogs, however, which Pressplay and MusicNet both lack.

Listen.com on Wednesday signed agreements to distribute its Rhapsody service through two high-speed Internet access partners, AOL Time Warner's RoadRunner and Hughes Electronics' DirecTV Broadband.

 

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