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MusicMatch grooves to paid tunes

The online-music company introduces a subscription service that will give music fans tunes without commercials.

MusicMatch, which makes programs for creating and organizing digital music, on Monday launched a beta version of a music subscription service as it expands distribution of digital content.

The San Diego-based company said the streaming-music service, dubbed MusicMatch Radio MX, will let listeners customize playlists using popular songs from their favorite artists. The service also eliminates advertising, interruptions or buffering, according to MusicMatch.

Subscription services are growing popular with online-music companies as the record industry pushes them to pay artists for downloads; free services, too, find themselves coming up short when they rely solely on advertising revenues. Record labels are building their own services, and companies that once offered free music online are tacking on fees. Last month, for example, MTVi Group and infrastructure company RioPort said they would offer paid song downloads through MTVi's Web sites.

MusicMatch "has an interesting opportunity because of its established user base and...no banner ads," said P.J. McNealy, an analyst at research firm Gartner. "Still, it remains to be seen if consumers will pay for something that they traditionally had for free."

The subscription service costs $4.95 per month, $12.95 per quarter or $49.99 annually.

The online-music company said it has 100,000 tracks available from major and independent record labels through a license negotiated by the Recording Industry Association of America and the Digital Media Association. It added that it is in negotiations with the Big Five record labels--BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Universal Music Group and Warner Music Group--for a license that would let people choose individual tracks for streaming. Until such an agreement is reached, MusicMatch only streams a limited number of songs from certain artists or years.

MusicMatch CEO Dennis Mudd said he expects other online-music companies to begin charging for streaming and downloading in the near future.

"Eventually downloadable music is going to have to represent a viable business model where artists get their fair share and consumers pay a fair amount for the music that they're listening to--or else there's not going to be enough money to create the art in the first place," Mudd said. "Now and for some time longer, digital music is primarily a way to promote CD sales. But (that) can't last forever."

Founded in 1997, MusicMatch developed a digital music jukebox that's used by more than 18 million people. In February, the company released the final version of its Jukebox Basic and Plus software for Linux.