Reshma Kapadia
NEW YORK: Sony and Vivendi Universal, two of the world's top music labels,
will shortly launch their answer to song-swap service Napster in September,
although a dispute with music publishers over royalties remains an obstacle, a
Vivendi executive said on Tuesday.
Pressplay will distribute its Internet-based subscription music service on
Microsoft Corp.'s MSN Network and will offer songs in Microsoft's Windows media
format, as well as use technology from MP3.com Inc., which Universal has agreed
to buy.
Pressplay is owned equally by Vivendi Universal and Sony Music Entertainment,
a unit of Sony Corp. Vivendi is home to artists such as Shaggy and Bon Jovi,
while Sony Music artists include Destiny's Child and Jennifer Lopez. The service
will compete with MusicNet, the music subscription venture between Microsoft
rival RealNetworks Inc. and the other three major recording labels - AOL Time
Warner Inc., Bertelsmann AG and EMI Group Plc
Vivendi executive vice president Edgar Bronfman Jr. told a press conference
that "portability," or the ability to offer the Pressplay service on
portable devices, will be available at some time in the future. He said
Pressplay would be launched in the first half of September.
Many industry analysts have said, and Bronfman concurred, that neither
Pressplay nor MusicNet will be as successful as possible until they offer music
from all record labels. "I don't think Pressplay and MusicNet will merge,
but both will (eventually) have licenses to all music," Bronfman said.
"I do not think it's going to take two to three years, and I don't think
it's going to be tomorrow."
He said disputes with music publishers remain a significant obstacle for
Pressplay because publishers have yet to license rights to both Pressplay and
MusicNet. There is a healthy debate brewing in the legal community about whether
services can launch if they have not fully fleshed out the publishing rights
issues, Bronfman said.
He said music publishers and the music industry have been in negotiations for
months but many of the "comprehensive offers", were rejected by the
publishers, he said. Revenue-sharing pacts with all the parties involved,
including artists, record labels and publishers, remain among the issues that
still need to be resolved for the subscription services.
The fundamental difference between MusicNet and Pressplay will be the payment
models, Bronfman said. While Pressplay will set its own prices, MusicNet will
license the music to third parties, which will determine pricing. Lee Black, an
analyst with WebNoize, said, "(Pressplay) is aligning themselves with big
brand name distributors, so it's looking more like a B2B (business-to-business)
organization than a B2C (business-to-consumer) model."
Bronfman said the industry had to offer users compelling alternatives to
Napster, which he alluded to as "stealing someone's property and giving it
away to someone else." "We have to get out of the mind-set of selling
round things (CDs) and have to sell services," he added.
Reuters/Variety
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