Wired In
Music sales sites gearing up to move into Napster's market

By John Yaukey
Gannett News Service

Online music fans, get out your credit cards.

Music and Internet companies are scrambling to attract music lovers to new paid Web-based subscription and download services as free music disappears from the popular file-swapping service Napster.

The last few weeks have seen a flurry of deals to produce four major new online music sales operations. Industry analysts say the trend will benefit consumers by providing more of the online music they have grown accustomed to finding on Napster, which is supposed to become a membership-based service in July.

"Eventually, you're going to be able to hear what you want, when you want, where you want and on whatever device you want,'' said P.J. McNealy, an analyst with Gartner research. "That's what digital music is supposed to be all about.''

Recent developments:

• Microsoft has launched MSN Music (music.windowsmedia. msn.com/) offering online music stations arranged by genre such as "space-age," "pop-exotica" and "lounge vibe." Listeners buy songs by connecting to retailers.

• In a similar move, multimedia company RealNetworks joined AOL Time Warner, Bertelsmann and EMI Group to develop an online music subscription service called MusicNet. That megadeal is still in the works.

• Web portal Yahoo! (www.yahoo.com) announced a partnership with Universal Music Group and Sony Music Entertainment to launch an online music-subscription service on the Yahoo site in the summer.

• MTVi Group, the Internet arm of the cable music channel MTV, and digital music distributor RioPort launched a service (www.mtv.com or www.vh1.com) that allows listeners to download songs.

Prices at the two services now selling music — MSN Music and the MTVi sites — typically range from 99 cents for a single to as much as $19 for a full album.

With its 71 million users, Napster vividly demonstrated the demand for online music.

But analysts say a few wrinkles need to be ironed out of the emerging commercial models if they hope to attract Napster-like numbers.

They point out the MTVi deal is the only one thus far that will provide one-stop shopping for recordings from all five major audio labels: Universal, Sony, Bertelsmann, AOL Time Warner and EMI. Consumers typically shop by artist, not label, so sites that limit selection could confuse or alienate customers.

"We realized early that this has got to be easy, or you're going to put customers off," said RioPort president Jim Long.

What's more, these new commercial services will have to compete with Gnutella (gnutella.wego.com) and Freenet (freenet.sourceforge.net/index.php), which allow users to share songs for free, but are more difficult to use.