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RealNetworks, maker of the popular streaming media software, has launched an on-line music subscription service, letting users download songs for $0.79 apiece.

The move from Real comes in the wake of Apple's popular iTunes Music Store, an on-line service launched at the end of April, which claimed to have sold more than one million songs in its first fortnight, at $0.99 per song. The iTunes library had around 200,000 songs available at launch and is set to add some 3,000 more.

RealNetworks is aiming to outflank the competition with a cheaper price and a bigger library of songs: some 330,000 tracks will be available for on-demand listening only, while around 200,000 songs will be available for burning onto CD. But users of the RealNetworks service will need to pay a $9.95 monthly fee to access the service; iTunes requires no subscription fees.

The RealNetworks service is a co-branded offering with Rhapsody, the music service launched by Listen.com back in 2001. RealNetworks purchased Listen.com for USD36 million earlier this year and the deal is expected to be completed by the third quarter.

As well as downloading individual songs, RealNetworks said its subscribers will be able to burn full albums, custom mix CDs and build custom Internet radio stations.

Both RealNetworks and Apple are betting on the growth of digital music downloads, which analysts have tipped as a strong growth market. 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.

But notably, Forrester points out that the majority of sales will come from individual downloads rather than subscriptions. Forrester forecasts that by 2007 around two million subscribers will spend €125 million per annum, which will account for 10 per cent of total digital music sales.

© ENN

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