Music giants unveil Napster rival

Music giants EMI Group, Bertelsmann and AOL Time Warner together with RealNetworks launched their own rival to Napster this week in the shape of the MusicNet online music subscription service.

The move coincided with the start of US Congress hearings to discuss online copyright issues.

MusicNet is the first joint venture by the major music labels, but will operate under the auspices of a standalone independent company. It will combine the music assets of the three companies and their subsidiaries, EMI Recorded Music, BMG Entertainment and Warner Brothers Music Group.

Each of the four companies involved will have a minority stake in the business and the music companies will license their offerings to MusicNet on a non-exclusive basis, while RealNetworks will provide the online music delivery technology. The service will then license its "private-label" platform to companies, which will sell music subscription services under their own brands.

Rob Glaser, RealNetworks' chief executive and MusicNet's interim chief executive and chairman, claimed the launch would introduce a 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," he attested.

MusicNet will also license its platform to other online music distributors such as Napster, "provided such outlets satisfy legal, copyright and security concerns", the companies involved said in a joint statement.

Both AOL and RealNetworks plan to provide their own branded online subscription services later this year.