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MusicNet Subscription Partnership

Bertelsmann and EMI announce a partnership with RealNetworks to create an online music subscription service.

In a move that may be the labelsí best tactic in its ongoing fight against Napster, AOL Time Warner, Bertelsmann AG and EMI Group have announced a partnership with RealNetworks to create an online music subscription service.

Called MusicNet, the new partnership will combine an extensive collection of downloadable and streaming music titles from the labels with Realís advanced streaming and download technology. The end result will greatly accelerate consumersí access to digital music from the majors, but unlike services such as Napster and Gnutella, will require them to pay for it.

Rob Glaser, chairman and interim CEO of MusicNet, and also the chairman and CEO of RealNetworks, said in a company announcement, “The launch of MusicNet will catalyze an exciting new era in digital music distribution. 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. This marriage of great technology, incredible content, and worldwide reach is going to be music to a lot of people’s ears. 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.”

The deal marks the first time a majority of the major record companies has licensed music to a venture whose goal is mass subscription distribution over the Internet. MusicNet will offer an extensive collection of popular music content over one platform, and will benefit recording artists by providing new opportunities to reach fans while also protecting the rights of the songwriters, artists and labels.

Under the terms of the deal, AOL Time Warner, Bertelsmann, EMI, and RealNetworks will each own a minority stake in MusicNet. Each label will license music to MusicNet on a non-exclusive basis. RealNetworks will also seek to partner with other labels for content.

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