MusicNet Launched as New Music Subscription Platform

Posted on April 4, 2001

AOL Time Warner Inc., Bertelsmann AG, EMI Group plc, and RealNetworks, Inc. announced a venture which will create a new platform for online music subscription services. MusicNet, the new platform, will accelerate the roll-out of online music subscription services for consumers across multiple distribution networks, including RealNetworks and the America Online family of interactive brands later this year. Real Networks and AOL, have a projected release date of late Summer, 2001.

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. RealNetworks will contribute its media delivery technology. MusicNet will operate as a standalone independent company.

MusicNet, as both a technology provider and a music clearinghouse, will operate as a standalone independent company and will license its ``private-label'' platform to companies seeking to sell music subscription services under their own brands. The company's goal is to distribute music profitably to as many outlets as possible. MusicNet will initially license its platform 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.

The artist rosters of the companies participating in MusicNet include: Christina Aguilera, Bjork, Brandy, The Corrs, Eric Clapton, Dandy Warhols, D'Angelo, Dave Matthews Band, Everclear, Ben Harper, Faith Hill, Whitney Houston, Madonna, matchbox twenty, Brad Paisley, Red Hot Chili Peppers, Santana, Vitamin C, and Robbie Williams, in addition to leading classical, jazz, opera and world-music releases. MusicNet will also seek to license music from other record companies -- major record labels as well as independents. The content licenses to MusicNet from EMI Recorded Music, Warner Music Group, and BMG Entertainment are non-exclusive and each company intends to continue to offer their music to other online subscription and other platforms in the future. In addition, the licensing agreement between America Online and MusicNet is non-exclusive, and America Online plans to provide its members with additional subscription services along with other online music offerings.

Rob Glaser, Chairman and interim CEO of MusicNet, and also the Chairman and CEO of RealNetworks, said: ``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.''



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