Can subscription music sites compete?
Eric Scheirer, senior analyst, Forrester Research
The launch signals the latest attempt by the music industry to sell digital versions of copyrighted songs to consumers. The record labels have been in a long-standing legal battle against a flurry of Internet services such as Napster, MusicCity, Gnutella and Kazaa that allow people to swap songs for free.
Pressplay is a partnership between entertainment giants Vivendi Universal and Sony, both of which own record companies. A third major label, EMI Recorded Music, has also offered its copyrighted music to the venture. Executives from the companies affiliated with Pressplay had been publicly stating their belief that it would launch before the year's end, despite several delays.
The launch comes shortly after the service's main rival, MusicNet, began offering its service to RealNetworks and America Online users. MusicNet is a coalition between RealNetworks, AOL Time Warner, Bertelsmann and EMI.
Pressplay plans to offer several pricing options:
Basic: $9.95 for 300 streams and 30 downloads
Silver: $14.95 for 500 streams, 50 downloads and 10 burns
Gold: $19.95 for 750 streams, 75 downloads and 15 burns
Platinum: $24.95 for 1,000 streams, 100 downloads and 20 burns
Pressplay said its download options will expire, meaning the service won't allow unused downloads allotted during a month to roll over to the next month. The service also will not allow songs to be download to portable MP3 devices.
Its technology will be powered by MP3.com, the online music service that Vivendi Universal acquired earlier this year for $350 million. Ironically, Universal Music Group successfully sued MP3.com over its MyMP3.com playback service and was awarded $53.4 million from a consent judgment.
Pressplay's launch highlights the different business plans for the music industry's rival services. Pressplay will market its brand to consumers using the Internet, while MusicNet is being distributed as software that can be packaged into another company's services. Pressplay has also set its own pricing structure, while MusicNet allows its affiliates to create their own price plans.
"It's very interesting. They're clearly doing a pricing experiment to see which price point appeals to the most consumers," Forrester Research analyst Eric Scheirer said about Pressplay's tiered plan.
The Pressplay launch is also important for Web giants MSN and Yahoo, which will offer the service. Both portals view music a key to generating revenue and attracting new online consumers. Yahoo in particular has repositioned its business to focus on diversifying revenues from the souring advertising market and toward recurring subscription fees. Pressplay will pay each company based on the number of subscribers it sends to the service.
Still, there are some elements that are missing. Most notably, Pressplay did not say how many tracks will be available for distribution or whether popular hits will be included.