EMusic offers subscription service

Subscription service to offer unlimited music downloads for a monthly fee
Written by Margaret Kane, Contributor

EMusic.com is launching a subscription service Monday that will allow consumers to download an unlimited number of songs from the Internet for a monthly fee.

In a release, EMusic said the new subscription service offered a "legitimate alternative to Napster", the music site that has gained fame and legal scrutiny by helping users copy digital music from one another.

EMusic already offers a pay-per-download service. "This type of all-you-can-download service creates a unique customer experience by making the content extremely convenient, while feeling free," said EMusic chief executive Gene Hoffman.

"The fact that record labels and artists get financially compensated in this model is also obviously extremely attractive to content owners in this age of Napster," he added.

The issue of free music has caused a considerable uproar in the music industry. Napster is currently being sued by the Recording Industry Association of America (RIAA) over alleged copyright infringement.

Congress has also begun looking at the issue, with the Senate judiciary committee holding hearings earlier this month to decide whether the government should impose regulatory controls on companies like Napster and EMusic.

EMusic said its new service would split subscription fee revenues, after costs, with its artist and label partners. The cost to consumers will be $19.99 for a one-month subscription, $14.99 for a three-month subscription and $9.99 for a 12 month subscription.

EMusic isn't the only company to look to fee-based music as a way to make money off the popularity of digital music.

MP3.com recently signed deals with two major record labels, allowing the online music firm to license their recordings. The deal also settled lawsuits against MP3.com by the record companies.

And in May, both Sony Music Entertainment and Seagram's Universal Music Group announced they would offer subscription plans for digital music services later this year.

The companies have good reason to be getting their ducks in a row with the record companies. A new study issued Monday by Jupiter Communications predicts that digital subscriptions and on-shot downloads of music will account for more than $1.5bn in sales by 2005.

Total online music sales, including sales of physical products, are expected to top $5.3bn by 2005.

"There has been a dramatic change in the Internet music industry in the last year, but it's not in the number of dollars consumers spend, it's in the whole music experience," Jupiter analyst Aram Sinnreich said in a release.

"What we are seeing is the opportunity for a new format of product in the commercial music industry, enabled by digital music service providers who can wrap tools, technology and content around the core library of songs."

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