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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.

(C) Reuters Limited.

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