MSN to Offer Major-Label Music Service

MSN will offer a co-branded version of Pressplay, a fee-based service that will allow users to download and perhaps swap high-quality streaming audio files from well-known artists. Pressplay is being created by Sony and Vivendi Universal, two of the so-called Big Five record labels that dominate the market for audio recordings. The MSN-branded version of Pressplay will offer music exclusively in the Windows Media Format (WMF), although other versions of Pressplay may offer music in competing formats. MSN becomes the second big-name portal (after Yahoo) to announce it would carry Pressplay, which is expected to launch late this summer.

Why the Agreement Was Reached

The Pressplay agreement guarantees that some popular audio content will be available in the WMF, which Microsoft is trying to establish as the preferred format for streaming audio and video over the Internet. (For background, see “Windows XP Gives New Push to Windows Media Format” on page 10 of the July 2001 Update.)

It also responds to the Apr. 2001 announcement that RealNetworks is creating a fee-based music download service, MusicNet, with the help of minority investments from the other Big Five companies-Warner Music Group (owned by Microsoft rival AOL Time Warner), BMG Entertainment, and EMI Recorded Music. Also due to launch this summer, MusicNet will almost certainly offer files primarily in RealNetworks’ audio format, although it may also offer alternate formats such as Liquid Audio. (The three record companies have left open the possibility that they may license their content to other services, in other formats, as well.)