October 15, 2002 3:56 PM PDT

MusicNet, Pressplay closing in on labels

MusicNet and Pressplay are close to rounding out their music offerings with deals that would allow them to provide songs from all five major labels.

Pressplay announced Monday that it has signed a deal with BMG and said it is close to reaching an agreement with Warner Music Group. The service, which is backed by Sony and Vivendi Universal, already has a deal with EMI Recorded Music.

Meanwhile, sources close to MusicNet said it's completed a deal with UMG and is within days of striking an agreement with Sony. That service is backed by AOL Time Warner, EMI and Bertelsmann.

Although the moves won't provide the services with all songs offered by the labels--big-name bands such as the Beatles and The Rolling Stones still won't allow their music on the services--the agreements are a major step toward delivering a more robust roster of music.

Pressplay CEO Michael Babel said in a statement that the deal with BMG is "another important step forward" for the company.

In the past, visitors to each site could only find music from certain labels, a distinction that's often irrelevant to even the most music-savvy consumer. What's more, the paid services have faced competition from underground peer-to-peer services such as Napster and Gnutella, which have allowed people to swap a wide variety of songs from all of the major, and many independent, labels for free.

Now that both label-backed services are on their way to offering similar song selections, they will be forced to compete on other criteria such as business model and price. Both sites have been slow to take hold among consumers, not only because people can get such music for free elsewhere but also because underground services haven't put restrictions on what people can do with their songs.

Both sites currently offer subscription models that allow people to download a certain amount of music and use it in specific ways. The sites are hoping to offer less restrictive services, but the labels, fearing piracy, have clamped down on how people can use, store or transport the songs they've bought.

In a nod to consumer demand for fewer restrictions, Pressplay in August unveiled a plan to allow people to download an unlimited amount of songs for a $179.40 annual fee. It also let people burn some of the songs onto a CD.

The move by the labels to license more of their music also comes as they're under investigation by the U.S. Department of Justice, which is examining their online practices for possible antitrust violations.

 

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