RealNetworks will launch an online music-subscription service - MusicNet - with support from
AOL Time Warner,
Bertelsmann (BMG) and
EMI.

MusicNet will use Real's multimedia standards and will consist of an "extensive collection" of downloadable and streaming music.

This is the first time a majority of the major record labels has licensed music to an Internet-based distribution company, and will accelerate the roll-out of subscription-based music services on the Web. Each company involved will own a minority stake in MusicNet, with the musical divisions of the three labels licensing their content to MusicNet on a non-exclusive basis.

Rival's licences MusicNet will operate as an independent company, with each of the four companies involved owning a minority stake. The new company will also seek to license music from other record companies, both independents and the two remaining major labels - Sony Music Entertainment and Universal Music Group.

MusicNet also plans to license its platform to other online-music distributors, such as Napster, "provided such outlets satisfy legal, copyright and security concerns", the company said.

The music industry has learned from the trailblazing work done by
MP3.com and Napster. These companies opened up the world of Internet-based music distribution, despite opposition from the music business.

Napster similarities MusicNet echos the arguments of Napster and its proponents. The company said: "MusicNet will offer distributors an extensive collection of popular-music content over one platform, and will benefit recording artists by providing new opportunities to reach fans and other consumers with their music in a secure and protected fashion."

Rob Glaser, chairman and interim CEO of MusicNet, and also the Chairman and CEO of RealNetworks, said: "The launch of MusicNet will catalyze an exciting new era in digital-music distribution. MusicNet will offer consumers an easy, simple way to get the highest-quality music while also protecting the intellectual property of record companies and artists.