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Tuesday, December 11, 2001
Pressplay to allow users to 'Burn' CDs at launch

When Pressplay rolls out its Web-based music subscription service later this month it will be the first commercial service allowing users to ``burn'' music onto CDs, a critical feature for online music fans, the venture said on Tuesday.

Pressplay, a joint venture between Vivendi Universal Music and Sony Corp's Sony Music, announced a deal with software maker Roxio to provide the CD-burning technology for the service. Pressplay officials have declined to say when the service will launch, only that it will launch with about 100,000 music tracks from Sony, Universal and EMI Group Plc (EMI.L) before year-end. Pricing details were not available. The service will be distributed via affiliates including Universal's, Microsoft Corp's MSN Music, Roxio and Yahoo .

Pressplay would be the third music subscription service launched in recent weeks, following rival service MusicNet, a joint venture of RealNetworks, AOL Time Warner Inc.'s Warner Music, EMI Group Plc (EMI.L), Bertelsmann AG's (BTGGga.D) BMG and Zomba, an independent firm. Independent online music firm also recently rolled out its Rhapsody subscription service.

After fighting a successful legal battle to stop the unlicensed traffic of copyrighted songs on the Internet that peaked with the court-ordered shutdown of Napster in July, the record industry has been criticized for waiting so long to launch its own online services. At the same time, some industry watchers remain skeptical that the new fee-based services will be able to gain ground against the other file-swapping services that still operate online.


In a briefing on Monday, Pressplay chief executive officer Andy Schuon said he believes that having portability, or CD burning, will give Pressplay a big advantage over competitors. Portability has been a big draw to fans who have for years transferred everything from Madonna to Bare Naked Ladies from the Web to blank CDs for free, using services like Napster.

Another potential hurdle facing the online subscription services may be the artists themselves. The tracks of some major acts like the Beatles are not yet available because their representatives have not released these songs for use on the Internet. At the same time, some acts are threatening to block the online distribution of their songs in a contract dispute with the record companies.

``At least 12 artists have sent out letters to their labels saying that in the event they grant these licenses to these services, it is being viewed as a breach of contract,'' said Simon Renshaw, a manager at the Firm, which represents acts like the Dixie Chicks and Limp Bizkit. Entertainment lawyers said labels are given the right to distribute by any means under most recording contracts.

``Record companies generally have a right to distribute how they want to but they have to go back to each and every contract,'' said Jay Cooper, an entertainment lawyer. But, Cooper noted, a substantial number of major artists have negotiated restrictions on the right to distribute via the Internet and added other restrictions. ``It really depends on individual contracts and payment is also determined by individual contracts,'' he said.

Label officials say they are abiding by their contracts.

``It's a shame that this is being turned into a controversy by certain artist representatives. Of course, we have rights. Where we know we don't, we won't authorize the use of the music,'' said Zach Horowitz, president of Universal Music Group.

``The big picture is that right now thousands of sites are illegally using millions of musical tracks without making any payments whatsoever to artists, songwriters or record companies. Record companies are spending tens of millions of dollars to launch legal services that, we hope, will provide new revenue streams and compensate the creators of music. Everyone's energies should be directed against illegal services, not legitimate ones,'' he said.

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