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AOL Launches Test Version of MusicNet Service

America Online, the Internet service of AOL Time Warner Inc., said on Tuesday it introduced a test version of the long-promised MusicNet music subscription service and expects a full launch of the service next month.

The service, which was established by three of the world’s largest record labels – AOL Time Warner’s Warner Music Group, Bertelsmann AG’s BMG Entertainment, and EMI Group Plc, – along with Internet media delivery service RealNetworks Inc., was also launched last week on RealNetworks through its RealOne service.

Similar to RealNetworks’ offering, subscribers to America Online, the world’s largest Internet service provider, will be able to download or “stream” 100 songs a month from a selection of 78,000 songs for a monthly fee of $9.95.

AOL is betting that the MusicNet service will help the service establish a broader music presence on the Internet. One of the selling points of the new version of AOL software, AOL 7.0, is more features like the AOL Radio service.

“The introduction of MusicNet 1.0 will expand our range of music offerings and represents an important starting point for an entirely new way to purchase music online,” said Kevin Conroy, general manager of AOL Music.

The move comes a week after independent online music firm Listen.com rolled out its Rhapsody subscription service. Rival subscription service Pressplay, a joint venture between Vivendi Universal’s Universal Music Group and Sony Corp.’s Sony Music, is expected to launch its service later this month.

After fighting a successful legal battle to stop the unlicensed traffic of copyrighted songs on the Internet that peaked with the court ordered shutdown of the free Napster service in July, the record industry has been criticized for waiting so long to launch its own online services.

At the same time, some industry watchers remain skeptical that the new fee-based services will be able to gain ground against other free file-swapping services that still operate online.

“MusicNet is not something that’s going to change the business overnight,” said Bob Pittman, co-chief operating officer at AOL Time Warner Inc., to reporters at Internet World. “We are realistic about what it is and what it is not.”

But he noted that the new technology could give a boost to a music industry that has been sagging from weaker sales. He noted that the current business environment was similar to the early 1980s. At that time, MTV and compact discs emerged as new ways to promote and sell music, he said.

Pittman was one of the founders of MTV.

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