Musicbank one step closer to legal online music deal

Conciliatory approach pays dividends as song startup attracts deals not writs

After teaming up with Sony Monday, Musicbank is one step closer to launching an on-demand music streaming service and taking on MP3.com.

Under the arrangement Sony will allow the startup to store its music online. It is the fourth deal Musicbank has signed with a major label and negotiations with EMI are continuing. BMG Entertainment, Universal Music Group and Warner Music Group have already signed licensing agreements.

Musicbank is being careful to avoid the legal minefield currently facing rival MP3.com. It launched a similar service without first agreeing terms and was sued by the big five music labels. MP3.com reached licensing deals with four of the companies, but Universal Music was awarded damages that could reach $250m.

Musicbank will not discuss the terms of the deals it has reached, but some experts believe it will have to charge subscription fees if it is to achieve profitability.

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