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Listen.com launches fee-based online music service

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CIOL Bureau
New Update

Sue Zeidler

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LOS ANGELES: Independent music firm Listen.com said on Monday that it will
launch Rhapsody, the first of several fee-based, Web music services to be rolled
out in coming weeks by companies hoping to lure fans who were introduced to
online music through free services like Napster.

Rhapsody and the two services backed by the major music labels, MusicNet and
Pressplay, face the challenge of convincing users to pay a monthly fee without
the unlimited menu of music which was both Napster's strength and the source of
its downfall.

Listen's Rhapsody, a streaming service, will be available for between $5.95
and $7.95 a month. Certain features will be free and users can also sign up for
a free three-day trial via the Listen.com
Web site, the company said.

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Rival MusicNet, backed by EMI Group Plc, RealNetworks Inc, AOL Time Warner
Inc's Warner Music and Bertelsmann AG's BMG, is set to launch on Tuesday at a
monthly price of about $9.95, sources said. The new services will launch without
some music from such major acts as the Beatles and the Eagles, industry sources
said.

"In some cases, these big artists actually hold the digital rights,
while in other cases, the labels are simply hand-holding them because they're so
important," said Erik Flannigan, vice president of music services
programming for RealNetworks.

Another drawback for the new services are the limits some impose on users'
ability to record music onto portable devices. Napster -- which offered music on
its file-swapping service from Judy Garland to Marilyn Manson - was idled in
July due to a copyright lawsuit.

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For companies such as Listen.com, gaining licensing rights to music from the
big labels has been difficult until recently when the music labels finally began
to ease up amid scrutiny from federal anti-trust regulators.

Listen.com has signed several key licensing deals with music publishers and
independent labels and is expected to sign a deal with a major recording company
for sound recordings as early as this week, sources said. Copyrights for both
sound recordings and compositions are needed to launch a secure music
subscription service. Publishers hold rights for compositions, while labels
generally hold the rights for sound recordings.

Pressplay, owned jointly by Vivendi Universal's Universal Music and Sony
Music, is set to roll out later this month. Last week, a Dutch judge ruled that
Internet company KaZaA must stop its users sharing copyrighted music files. The
company said on Friday it could not comply because, unlike Napster, it does not
know who its customers are.

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(C) Reuters Limited.

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