MusicNet Demonstration Set for Hearing on Online Music

MusicNet, an Internet music subscription joint venture backed by three major record labels that waged a bitter fight against song-swap service Napster, will get its first demonstration today at a congressional hearing on online music.

Rob Glaser, chief executive of media software giant RealNetworks Inc. and acting CEO of MusicNet, will demonstrate the service at the hearing, which also will feature testimony from record company and music publishing executives.

Music publishers, who own music copyrights, are at odds with the record labels over music streamed over the Internet, which allows consumers to listen to whatever song they want when they want. The dispute over royalties for the publishers could threaten industry plans to sell music online.

MusicNet--a joint venture between RealNetworks and AOL Time Warner Inc., which owns the Warner Music Group; Bertelsmann, owner of BMG Entertainment; and EMI Group--was announced with much fanfare in April.

One recording executive who has seen a preliminary demonstration of the platform said it enabled users to stream and download content into their personal computers by merely clicking a few times on a mouse.

“At this point, the application is tethered to your PC, meaning users cannot copy songs or take them to other devices,” the executive said.

“Even on a slow modem connection, it worked very well and in some instances it can even simulate a Napster-like experience,” the executive said.

RealNetworks is providing the delivery technology for the service, which will license music subscription technology to other online services, ranging from tiny music sites to giants such as AOL. The venture has two formal agreements already in place with online services AOL and RealNetworks.

A MusicNet spokesman said Wednesday that the platform would be sent to the venture’s two affiliate partners within the next 30 days. The partners will in turn develop the version that will be used by subscribers. The subscription services are on track for launch in late summer or early fall.

Just days after MusicNet was announced, Universal Music and Sony Music Entertainment, which had announced formation of a similar service called Duet, said they struck a deal with Yahoo Inc. to offer subscription services.

Meanwhile, beleaguered Napster, which has seen usage dwindle as it has complied with a court order barring the trade of copyrighted songs on its service, this week started asking users to sign up for the upcoming test of its new secure version, planned for launch this summer.