AOLTW, BMG, EMI, REAL TO OPEN UP THE MUSICNET

AOL Time Warner, Bertelsmann AG, EMI Group plc and RealNetworks today announced the launch of a joint online music subscription venture, called MusicNet, which will combine an extensive collection of downloadable and streaming music. Word of the joint venture was first reported on Friday (hitsdailydouble.com, 3/30).

Under the agreement, RealNetworks, EMI, Bertelsmann and AOL Time Warner will each own a minority stake in MusicNet. The companies' music subsidiaries—EMI Recorded Music, BMG Entertainment, and Warner Music Group—will each separately license their music to MusicNet on a non-exclusive basis.

MusicNet will operate as a standalone independent company and will license its platform, initially, to America Online and RealNetworks, each of which plans to launch branded online subscription services later this year. MusicNet will also license its platform to other distribution outlets, including Napster, provided such outlets satisfy legal, copyright and security concerns.

"MusicNet will offer consumers an easy, simple way to get the highest-quality music while also protecting the intellectual property of record companies and artists," said RealNetworks Chairman and CEO Rob Glaser, who will serve as the Chairman and interim CEO of MusicNet. "Looking ahead, we hope that all the major and independent labels will join MusicNet to create one-stop music subscription offerings with unbeatable consumer momentum. We look forward to working with the entire industry to make music subscription services a reality."

EMI Group Chairman Eric Nicoli concurred, saying, "We are dedicated to giving fans the greatest possible access to our artists' music. In pursuit of that mission, throughout our history, we have been keen to embrace new technologies—with the exception, naturally, of peer-to-peer technology."

Bertelsmann Chairman and CEO Thomas Middelhoff may have been taking a poke at Nicoli when he added, "As the first company to address important issues surrounding media distribution, such as peer-to-peer file-sharing, Bertelsmann is the leader in charting a course for the future of digital distribution. We give consumers the content they want, how and when they want it, through accessible and easy-to-use technology of which MusicNet will play a leading role."

"This agreement ushers in the era of secure, convenient, interactive mass music distribution," said AOL Time Warner Co-Chief Operating Officer Dick Parsons. "It will transform how consumers discover and experience music in their everyday lives, and is an important step in our strategy to use the Internet to give music consumers significantly more choice, convenience and flexibility. By licensing the Warner Music catalog to MusicNet, we create new outlets for our artists and their work, and by distributing a MusicNet-powered subscription service on AOL as part of AOL's overall music strategy, we advance our goal of creating the best interactive music experience for our online members, and ultimately achieve our goal of world-domina… I've said too much."

Artists of the companies participating in MusicNet include: Christina Aguilera, Bjork, Eric Clapton, D'Angelo, Dave Matthews Band, Everclear, Faith Hill, Whitney Houston, Madonna, matchbox twenty, Red Hot Chili Peppers, Santana and Robbie Williams, in addition to leading classical, jazz, opera and world-music releases.