CONGRESS to see new Internet music sales network

Thursday, May 17th 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Legislators are getting a close-up view of the future of Internet music sales, where customers will pay to download just the songs they like rather than buy entire CDs.

RealNetworks Chairman Rob Glaser planned to demonstrate before the House Judiciary intellectual property subcommittee Thursday a mock-up of the music industry's for-pay alternative to Napster, whose popular free swapping of copyrighted songs has been ruled illegal.

MusicNet, set to debut in August, is a collaboration of three of the big five music publishers: AOL Time Warner, Bertelsmann AG and EMI Group. It promises a cafeteria-style way of purchasing songs.

The goal is to keep people buying music, but with more variety and control over what they own, in exchange for a monthly fee.

``More likely than not we would provide avenues for people to get content on a broader level than just individual titles,'' RealNetworks spokesman David Brotherton said.

While final details aren't set, users can expect to pay around $10 to $15 per month for either a certain number of downloads or more for an all-you-can-download plan.

MusicNet will be sold to consumers through the RealNetworks site, which holds a controlling 40 percent stake in the venture, and through America Online. However, Brotherton said the collaborators are seeking more partners.

The process is more complicated than just digitizing the music and sticking it on a Web server. The three companies won't be able to offer full catalogs immediately, since they have to make sure they have rights to put the songs online.

Artists want to make sure they're compensated for the extra revenue that publishers will make by selling the songs online. To that end, singer Lyle Lovett, representing ASCAP, the group that collects royalties for artists, planned to make his case to the House subcommittee.

The music publishers, too, are scheduled to offer suggestions on how Congress may make the transition easier, possibly through modifying copyright law.

Even with the copyright hurdles, Brotherton said MusicNet will debut with ``tens of thousands'' of songs available.

Universal and Sony Music, the other two large music publishers, have teamed with Internet portal Yahoo to provide a competing service to MusicNet called Duet, also a subscription-based plan debuting this summer.

``The hearing is intended to educate members about the availability of music online and the obstacles to offering digital music for sale on the Internet,'' the subcommittee's chairman, Howard Coble, R-N.C., wrote in a letter to fellow lawmakers.

Together, the five publishers represent about 80 percent of artists, with independent publishers making up the difference.

But consumers may not have to go to competing services in order to download their favorite songs, Brotherton said. The two are in talks to make their offerings compatible.

``We are in active negotiations with both of them,'' Universal and Sony, Brotherton said. ``We are optimistic that more labels will be involved in this deal before it goes public.''