LONDON (Brand Republic) - Three of the world’s major record companies, AOL Time Warner, EMI and Bertelsmann, are to join forces with internet software company RealNetworks to launch a music-downloading business to rival Napster.
The deal, first mooted in the press last week, sees the three companies backing MusicNet, RealNetworks’ online platform for streaming digital audio and video files on to the computer desktop.
Each record company will own a minority stake in MusicNet and will license their music catalogues to the subscription-based online music service.
Between them, the three companies control 60% of the world’s record business and the launch of the new service will allow the three to offer a legitimate music download service which, unlike Napster, will see the artists and music publishers earn royalties.
The venture is expected to rival Duet, a paid-for service from Sony Music and Vivendi Universal, which will be launched in the summer.
Napster could also be a rival if it succeeds in introducing a legitimate fee-paying service. It is currently working on this with Bertelsmann, but is constantly threatened by closure as a result of its long-running legal battle with the record industry.
www.bertelsmann.com
www.aoltimewarner.com
www.emigroup.com
www.sonymusic.com
www.vivendi.com
www.napster.com