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Universal, Sony name new head of music venture

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CIOL Bureau
New Update

Sue Zeidler

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LOS ANGELES: The online music service formerly known as Duet, now officially

known as Pressplay, on Monday named a chief executive for the year-old venture

between Vivendi Universal and Sony Music. Andy Schuon was named president and

chief executive officer, while Michael Bebel was named chief operating officer

of Pressplay, an on-demand music service set to launch in late summer.

The appointments come as Pressplay negotiates with several technology

companies, such as Microsoft Corp, according to sources familiar with the talks.

Pressplay has been exploring a deal with Microsoft similar to its existing deal

with Yahoo Inc. to distribute songs once the service launches, the sources said.

In an interview on Monday, Schuon and Bebel failed to confirm whether

discussions with Microsoft were underway, but said the venture was negotiating

with several parties. "We already have the support of two of the world's

largest music companies and Yahoo, and we hope to get as many music companies

and online affiliate partners on board as possible by the time we launch,"

Bebel said.

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The world's big five labels have been announcing alignments and acquisitions

at breakneck speed as they prepare to launch music subscription services to fill

the void left by the once wildly popular song-swap Napster, which has seen usage

decline due to a court order barring traffic in copyrighted material.

Pressplay's executive appointments follow a licensing deal announced last

week between Napster and MusicNet, a rival music venture backed by RealNetworks

Inc and AOL Time Warner's Warner Music, EMI Group Plc and Bertelsmann AG's.

Schuon's appointment had been a matter of speculation for months. He joins

Pressplay after formerly leading Jimmy and Doug's Farmclub.com online music site

for Universal Music Group, which was folded into GetMusic.com, another Universal

venture. Bebel previously served as executive vice president, business

development and strategic planning for Universal Music Group's eLabs since 1998.

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Battle for edge over rivals, partners



Several industry watchers have questioned Pressplay's outlook. The venture
was first announced in May 2000, but has yet to demonstrate its platform and

skeptics have questioned its progress. While several analysts have said MusicNet

has an advantage because of its use of RealNetworks' secure technology, Vivendi

Universal last month bought online music company MP3.com Inc, in large part to

acquire its technology.

"We want to meet the demands of consumers and MP3.com provides

technologies that are relevant," Schuon told Reuters. So far, the world's

big labels have announced distribution deals for their subscription services

with Yahoo and two Microsoft competitors, America Online and RealNetworks Inc.

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"We continue to talk to many technology providers rather than tying

ourselves to any particular technology. We have the potential to go to several

technology companies," Schuon said. While Microsoft's security technology

has been endorsed by most of the big labels, they have not licensed their

content to Microsoft, in part because of concern the software giant, which is

feared for its strong-arm marketing tactics, would take over the distribution of

their music.

For its part, Microsoft has said that it is continuing to talk to many

players in digital music about tie-ups with its MSN Internet service but will

not discuss those ongoing discussions more specifically. Universal Music has

primarily provided music in a digital format known as Blue Matter, but analysts

said it has struggled to some extent with the format as most fans are using

Windows Media, Liquid Audio Inc. or MP3 for downloads.

Any deal with Microsoft would presumably signal that Universal and Pressplay

were opening the venture to the Windows Media format. On Monday, Schuon said one

of Pressplay's advantages is its open approach to standards. "One of the

advantages we have is that we have the music and we know how to package that to

consumers," he said. "We have flexibility on the technology side. We

have the ability to go out across the technology spectrum."

Officials from both Pressplay and MusicNet have said that these services

would be best served if they could offer music from all the labels

simultaneously. Schuon said talks with the other labels are continuing.

(C) Reuters Limited 2001.

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