July 24, 2001 12:45 PM PDT
Radio Free Virgin partners with RioPort
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Under the deal, the companies will offer a co-branded digital store at Radio Free Virgin, which will let listeners purchase a single download or an entire digital album provided by RioPort, or a hard copy through the Radio Free Virgin store.
The announcement is the latest sign that companies and record labels are changing the face of online music by attempting to woo music fans from free file-swapping services. Last week, Scour.com, known as one of the early pioneers of controversial file-swapping services, partnered with online radio-programming provider RadioCentral to offer music fans Internet radio stations.
In addition, major record labels are launching online subscription services. RealNetworks, BMG Entertainment, Warner Music Group and EMI Recorded Music have created MusicNet. Meanwhile, Sony and Vivendi Universal Group have formed Pressplay and will use MP3.com to create its backbone technology.
Phil Benyola, research associate for investment company Raymond James, said companies and record labels are trying to "fill the void of some things that have gone away like Napster."
"The major record labels see the vacuum and the opportunity to kind of fill that space now before someone comes in and gets the kind of traction Napster had," Benyola said. "Napster itself is trying to fill that vacuum."
Benyola said that Radio Free Virgin has always been "ahead of the curve" vs. the rest of the major record labels in moving toward digital distribution, especially with its separate online radio service. But it remains to be seen whether the RioPort deal will help the company compete with some of the other major initiatives out there such as Pressplay and MusicNet. He said the deal may incrementally attract people or help provide an incentive for people to continue using the service.
The new Radio Free Virgin and RioPort service, which will be launched at the end of July, will give music fans access to a huge catalog of downloadable tracks from major labels and independent artists as they become available on both a promotional and "for pay" basis. RioPort said that while each record label will set its own pricing and usage rules, consumers can expect to pay between 99 cents and $1.99 for a song. Albums will range between $9.98 and $18.98.
"Consumers need a variety of choices in how they discover, try and buy their music online," Jim Long, chief executive of RioPort, said in statement. "Providing consumers with the ability to 'click and own' music while they are listening to radio is a great way to add value."
Los Angeles-based Radio Free Virgin, which is part of the Virgin family, launched its service last year, giving music fans a free downloadable digital music player to listen to various genres of music via streaming audio. Listeners can read album information, browse reviews and purchase music.
The company has been building partnerships--including deals with Music.com--and also working with the music industry to develop an alternative service that will protect artists' rights. Last month, Radio Free Virgin disengaged its record feature on its digital media player in an effort to work with the music labels and their artists. Radio Free Virgin added the feature in April, letting people record songs broadcast over the company's 42 online broadcast channels.
"Users of Radio Free Virgin's service are going to be able to listen to music and instantly purchase and download the songs that they can connect with on an emotional level," said Zack Zalon, general manager of Radio Free Virgin.
"Radio Free Virgin has always been dedicated to taking our content and utilizing the digital radio broadcasting space to the fullest in ways that the terrestrial space could never dream of. Being able to convert a listener into a purchaser is a very aggressive part of that."
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