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After several rounds of lawsuits and rulings against dot-com scofflaws, Real decided to use its technology and large database to "develop a great consumer service," that would combine "the world’s most popular music," respect for rights-holders and "ease of use" for consumers.
SUB SERVICE GETS REAL, PUB PROBLEMS REAL BIG
Glaser Bows MusicNet Before Congress—Lack Of Saigon Kick Tunes Concerns Helms
Amid squabbling between publishers, labels and dot-coms over licensing rates for digital distribution, a key attraction of today’s Congressional hearings on online music was RealNetworks head Rob Glaser’s first public demo of the MusicNet service, the collaborative digital venture between Real, AOLTW, BMG and EMI.

Real holds a 40 per cent stake in the service, while the label groups have 20 per cent apiece. Glaser is the venture’s acting CEO.

Glaser kicked off by restating the necessity of respecting copyright in the online world.

After several rounds of lawsuits and rulings against dot-com scofflaws, he said, Real decided to use its technology and large database to "develop a great consumer service," that would combine "the world’s most popular music," respect for rights-holders and "ease of use" for consumers. He then detailed the success of another Real-backed paid service, GoldPass, which is offering streamed broadcasts of sporting events for a monthly fee.

AOL and RealNetworks will be among the initial distributors of the program, Glaser noted, though licensing of the service will ostensibly go wide thereafter. Consumers would most likely pay $10-15 per month for a preset amount of music.

Glaser ran through a quickie tour of the service during his brief remarks, hitting most of the stops highlighted in today’s New York Times article. As in the private preview described by the paper, he offered a staged—that is, simulated on a computer rather than actually conducted online—demo involving a search for the keyword "love" and an artist query for Atlantic’s Poe.

After "downloading" the Poe track—and mentioning that the music would also be available in streamed form—Glaser noted that users would find themselves required to renew licenses at set periods for music they’d already acquired.

Though he underscored this piece of the service as key to tracking compensation across the licensing "food-chain," the renewal requirement is one of several restrictive characteristics that raise questions about MusicNet’s likely appeal for consumers—especially those who’ve sampled the fruits of Napster.

After this cursory presentation, Glaser reiterated what so many online companies and labels have been saying. "Music-publishing issues stand out as the most significant potential impediment to launching great subscription services," he insisted.

While emphatic in his stated support for artist compensation, Glaser dubbed music-publishing rights "tangled," and called for the voluntary establishment of a licensing system that allows for "one-stop shopping" for all rights. Publishers, he proclaimed, need to offer more "flexible" and simpler licensing—and Congress should step in if an agreement can’t be reached among the parties. Also, Glaser mused, the U.S. Copyright Office could establish "clear rules to facilitate digital distribution."

Naturally, Glaser averred, he hoped an agreement amenable to all parties could be reached without government involvement. "I’m confident with the right rules in place," he summed up, "Real and other companies can create incredible worldwide marketplaces for American companies and creators of content and great products for consumers."

While expertly calibrated to mollify the concerns of both Napster-friendly populists and those wary of copyright infringement, Glaser’s smooth presentation failed to address one fundamental issue: Can a service catering so aggressively to the exacting demands of rights-holders catch on with consumers?

After all, the success of all those notorious file-swapping services came from the formation of communities and unfettered access—for which many said they’d pay. Nobody’s asked those folks how they’d feel about having to regularly renew a "license" for music they felt they’d already paid for.

Meanwhile, though Glaser acknowledges that music is still being compiled for the service, early indicators suggest that the number of tracks to be offered per artist could be quite small. Will this supposed smorgasbord of tunes more closely resemble a tray of hors d’oeuvres?

It’s too early to tell, of course, and Real has beaten the odds before. Meanwhile, Napster, which was not invited to testify before Congress this time, is collecting e-mail addresses from users eager to beta-test its own sub service, which so far is slated to include music from BMG, TVT and edel. The swappery promises to contact would-be participants with details soon.

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