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RealNetworks drops MusicNet for Listen.com

Cheaper CD burns, but it's no Apple

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RealNetworks has transferred its allegiance from major label-backed online music service MusicNet to Listen.com's Rhapsody offering. Real's new service will be called RealOne Rhapsody.

What's been grabbing web headlines is Real's plan to charge 79 cents per song, seen as a nod towards Apple's recently launched online Music Store, which charges 99 cents a song.

In fact, the services aren't that similar. Apple's charges for downloads, but RealOne Rhapsody's fee is simply for burning tracks users have already downloaded under through their $9.95 subscription to the service. Yes, 79 cents is below Apple's charge, but the cut is being driven by Listen.com, not Real, and Listen.com already charges 99 cents - the same as Apple.

Rhapsody is also a Windows-only service. Music Store is coming to Windows - by the end of the year, says Apple - but for now it's only available to Mac users.

Finally, all of Apple's songs can be burned to CD. That's not the case with Rhapsody, which restricts burning to two-thirds of its catalogue.

Real's move to drop MusicNet is interesting, but perhaps not surprising. MusicNet was jointly launched by Real and major labels EMI, BMG and Warner. Real CEO Rob Glaser moved over to head MusicNet on an interim basis, but has since ceded the hot-seat to Alan McGlade.

Real announced last month that it wants to buy Listen.com for $36 million. The acquisition is expected to be completed during Q3. Rhapsody, launched in 2001, has proved more successful than MusicNet, and Listen has built up a strong business licensing the service to ISPs, cablecos and the like. They re-badge Listen.com's service, but Listen does all the work behind the scenes.

Forrester Research said earlier this month that the market for downloaded music over the Internet will be worth $24 million in Europe alone this year, ballooning to $1.3 billion by 2007. Already the market is well established in the US, where downloads were worth some $15 million last year alone and are set to grow to $2 billion market by 2007.

Notably, Forrester reckons that the majority of sales will come from individual downloads rather than subscriptions. Forrester forecasts that by 2007 around two million subscribers will spend EUR125 million per annum, which will account for ten per cent of total digital music sales. ®

ElectricNews contributed to this story

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